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Profit margins creeping ever lower
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Economic historians posit that companies and markets commonly sink when there is a collision between falling prices and the rising cost of inputs (labor, raw materials, etc.). Depending on the twin trajectory of health reform and future Medicare fee adjustments, surgeons will continue to accommodate to higher cost margins and lower profits. Gross mitigation, in the form of optical shops, ASCs and related ancillary development, is a tapering opportunity — most practices that can readily develop such entities have already done so, which means that raw efficiency and marginal output gains (seeing 60 patients, when you once maxed out at 45) are the easiest strategies still under your direct control. Adding optometric providers as durable associates, while harder and riskier, remains the most under-utilized mitigation opportunity at present, along with the acquisition of local competitors.
Get more expert perspective from John Pinto live at Hawaiian Eye 2010, to be held January 17-22, 2010 at the Grand Hyatt Kauai. Learn more at OSNHawaiianEye.com.