Maintaining Productivity in the Dispensary
There's more to this than just the size of your staff. Try these strategies to keep quality -- and profitability -- where you want them.
By Arthur De Gennaro, Lexington, S.C.

As a teenager, one of my first dispensing positions was with a very busy, low priced, high volume chain based in the financial district of New York City. The opticians stood behind a counter while patients sat on stools, much like a lunch counter. The patients were spaced so that each optician had three patients in front of him or her.

We were expected to work quickly. I have a vivid recollection of the day my boss took me aside to tell me that I was spending too much time with the patients. He said that if I wasn't able to help a patient within 5 minutes then "we just weren't communicating."

Contrast that situation to a job I held in the late 80s. By then I was working for a Guild dispensing firm in midtown Manhattan that was more than 100 years old and had one of the finest reputations in the United States for quality and service.

At this firm we filled prescriptions for quite a few Park Avenue ophthalmologists, whose patients were generally

The $10,000 question

Why am I sharing these experiences? Because when doctors become concerned about productivity in the dispensary, the question they most often ask is, "How many full-time employees should I have in my optical shop?" This is an important question, and it sounds like an easy question to answer. But -- like most benchmark questions -- it's not.

Many doctors believe that the number of optical employees you hire should be tied to your gross sales figure or the number of units sold in your dispensary. In reality, as the stories above illustrate, individual dispensaries have different "personalities" or working styles. The more "high touch" you expect your dispensary to be -- i.e., the higher the level of individualized, personalized customer service you expect your staff to provide -- the more staff you'll need to handle the same number of patients and maintain the same level of unit sales. On the other hand, if you're not trying to emphasize extensive individual attention, fewer opticians will suffice. (For an example of another popular myth, see "In Search of a Magic Formula" )

During the past year or so I've read several articles that discuss the issue of maximizing productivity in a dispensary. Most of them make the mistake of oversimplifying the issue and perpetuating ideas about productivity that don't work consistently in actual practice.

Here, instead of offering a formula for success, I'd like to suggest some practical strategies for increasing productivity and offer some advice on monitoring productivity -- and responding to problems when they arise.

Keeping productivity high

Productivity hinges on the interaction of several factors:

• the level of customer service and quality you want to offer

• how many employees you have relative to the workload they manage

• whether your opticians are doing work that a less-qualified employee could do

• how much you pay your optical employees relative to the work they perform, and how you let them earn it

• how you schedule their hours during the week.

Here are a few practical strategies that will help you keep both productivity and quality high in your optical.

• Tie employee earnings to productivity. One issue that affects salaries (and the percentage of gross income that they represent) is the fairly common practice of giving employees an annual raise -- greater than a simple cost-of-living raise -- that isn't related to increased productivity. If your practice does this, staff members who've been with you for many years will be making considerably more than new employees.
  Most doctors assume that a highly compensated optician will generate significantly more revenue and profit than an optician receiving a smaller salary. I can tell you from experience that this isn't always true. I've seen situations in which a new employee was far and away the most productive member of the staff.
  Giving meritless raises will slowly increase the percentage of income you're spending on salary, without raising productivity or increasing income. This will eventually impact your bottom line. (However, an annual cost-of-living raise is perfectly reasonable. This preserves your employees' buying power and won't affect your bottom line, as long as your fees also take changes in cost-of-living into account.)
  Instead of giving automatic raises:

  • Base future raises on productivity.

  • Determine reasonable floor and ceiling salaries for the position in question. Once someone reaches the ceiling, offer only cost of living raises.

  • Create a bonus program that rewards extra effort and high productivity. This allows more productive, but less-well-paid employees to catch up to higher-paid but less productive employees. It also provides a way for someone who's already at the salary ceiling to increase his income.

• Don't just hire opticians. Selling eyeglasses is not an optician's only responsibility, as those of you who have created job descriptions have learned. Your optician also has to place orders, check the orders for quality when he receives them, call patients to notify them that their eyewear is ready, file reports, meet with frame vendors, keep up the merchandise mix and manage numerous other tasks as well.
  Many of these tasks could be handled by a person with less training and fewer qualifications. So, in a busy dispensary, a licensed optician shouldn't be placing orders, addressing postcards or filling out reports. As long as you have enough patient volume to justify it, these and similar tasks should be delegated to a second, less highly qualified individual.
  For example, the high-volume, low-priced company I mentioned at the beginning of this article used delegation quite effectively. In most cases, opticians didn't help the patients select frames. Instead, this was handled by what we would call "frame stylists." Opticians also didn't fill out reports or paperwork; these tasks were managed by a designated office clerk.
  Please don't misunderstand. I'm not suggesting that your optician shouldn't be helping patients select appropriate frames. I am suggesting that you rethink who in your dispensary does work that doesn't require a professional license to perform. And, when you find that you need to hire another person to maintain quality of service, don't automatically hire another optician. Instead, consider hiring a clerk.

• Use flexible scheduling. One of the things I learned a long time ago is that making every job in your practice nine-to-five is likely to have a negative effect on your bottom line. Instead, vary the amount of hours dispensary and lab employees work, based on the flow of available work over the course of a typical week, as well as fluctuations from week to week.
  Using this model, each employee is asked to work overtime when enough work is available, and allowed (or asked) to leave early when the workload is light. For example, you might need longer hours on Monday to manage the work generated over the weekend. So, try scheduling a 10-hour day on Monday and a 5-hour day at another point in the week. As long as you don't make frequent, extreme changes in the schedule, employees are usually happy to have the variety.
  This is a simple idea that can have a profound effect on productivity, but few practices do it.

Monitoring productivity and quality

Productivity is often thought of in terms of quantity -- how many patients are being served, or how many glasses are being sold. The flip side, however, is quality. If productivity (in terms of quantity) increases because too few people are doing too much work, quality of product and service will suffer.

To avoid this situation (or the opposite situation in which productivity drops and undercuts your bottom line) I recommend taking three steps:

• Get patient feedback. Getting as much patient feedback as possible is essential if you want to maintain high productivity and quality. Three methods can be used to elicit feedback from the patients who use your optical:

  • Hold focus groups. This means regularly inviting a group of patients to your practice to talk about their experience in your office and dispensary. Usually, you'll need to offer an incentive to get them to come. (An outside firm can be hired to manage the event, if you prefer.)

  • Have an outside service call patients who use your optical and administer a survey, approved by you, asking about their glasses, quality of service, and so forth.

  • Ask patients to fill out a written survey to be mailed back to you. This is the least effective alternative, because most patients will simply throw it away. Also, feedback gathered in this way will usually be more positive (and less useful) than feedback obtained by other methods.
    In the case of an in-house lab, the "customer" who may complain is the dispensary optician, not the patient. So, the first symptom likely to indicate a drop in quality in the lab will be complaints from the optician.
    (Note: From time to time you may also get feedback from your optician indicating that his or her own workload is too heavy. You should look into this, but remember that it may be a matter of personal perception: Work expands to meet the time available, so your optician may feel very busy even when productivity isn't very high.)

• Track key numbers. Keep tabs on two key factors: percentage of gross income being spent on payroll, and units per hour for each staff member. (In the dispensary, "units" refers to how many patients each staff member services in an hour. In an in-house lab, it refers to the number of glasses being produced). The purpose is not to judge these numbers against some absolute, but to compare them to the numbers that go along with high productivity and quality in your own particular practice -- and to monitor how they change over time.
  Tracking units per hour being generated by an in-house lab is usually easy to do. Each job processed can be counted as one unit, and most lenses go through a nearly identical series of processes (layout, blocking, tracing, edging, checkout, and so forth). Tracking the number of jobs processed per person per hour will help you predict the number of units your lab can handle, and the number of man-hours your lab needs to handle a given workload.

• Pay attention. If the workload has increased to the point that productivity is high but quality is starting to suffer, you'll begin to hear complaints from patients (especially if you're encouraging patient feedback). You may notice that the opticians stop checking the incoming orders. Sales numbers may indicate that you're selling fewer second pairs. Conversely, if you have more staff than you need for the amount of work being done, you'll see staff members standing around. If either symptom appears, further investigation is called for.

Tracking in the real world

Here's an example of how this system might work. Suppose you start the year with a 20% payroll percentage and a productivity rate of 3 units per person per hour in the dispensary. Then sales begin to rise. Tracking the numbers, you note that the payroll percentage drops. No one is standing around, and the unit per person per hour ratio is rising.

This is okay for a while. But then your patient feedback begins to show more complaints; being rushed, having to wait, glasses not ready on time "and no one called to warn me." The numbers show that your optician is selling fewer second pairs. Your optician complains about the glasses coming from your in-house lab.

At this point productivity is high, but quality of service is starting to suffer, and you should consider adding more staff. (The exact point at which you decide to do this depends on the level of service you're trying to maintain.)

Conversely, if customer complaints are minimal but salary percentage is rising, units per person are dropping, and you start to observe staff members standing around, you need to focus on getting more patients into your optical.

Laying off staff is probably not the way to go when this happens, unless you have reason to think that patient volume can't be increased. (For more on this, see "Responding to a Productivity Problem")

Mastering the process

In the final analysis, managing dispensary productivity and payroll is an art as much as a science. Mastering the process will take time and experience working with your particular circumstances and goals.

In the meantime, try employing some of the strategies I've outlined here. Even without a magic formula, your dispensary should continue to be a source of patient satisfaction -- and a profitable part of your practice. 

Arthur De Gennaro is president of Arthur De Gennaro & Associates, LLC, an ophthalmic practice management firm based in Columbia, S.C., that specializes in dispensary profitability issues. He can be reached at (803) 359-7887, or via e-mail at IsForU@aol.com.