BLOG: The fine art of quitting: How to make a strategic retreat, part 2

ByJohn B. Pinto

In my last blog post, the first in a three-part series, I discussed the occasional wisdom of beating a hasty retreat when conditions indicate. We continue here.

There are many such strategic retreats in modern practice. One of the most common today is the retreat that lower-volume refractive surgeons are making from vision correction surgery. Hundreds of ophthalmologists who thought it would be both professionally interesting and highly profitable to add a modest LASIK service to their largely geriatric businesses are realizing that it’s easier in most circumstances to grow by adding services of interest to your existing customer base rather than finding an entirely new pool of customers.

The same can be said about the shopping basket of cosmetic and aesthetic services like dermabrasion, facial peels and even elective cosmetic (as opposed to functional) blepharoplasty. These are services that seem intuitively sensible to add, right? But they end up being empirically wrong in almost every setting. With very few exceptions, the profitability of these services is terrible compared with mainstream ophthalmic care. Most minor cosmetic procedures offered in ophthalmic practices are break-even at best and at worst are an expensive gift to your staff and your spouse’s social circle.

Remember that the acid test for adding a new product or service to your practice is: “Will this either measurably improve the quality of care we offer our patients or increase our profit per surgeon-hour?” Exchanging $100 net per hour cosmetic services for $300+ net per hour classic ophthalmic care may be temporarily interesting if you’re getting bored with geriatric ophthalmology, but it’s a prescription for financial decline. In your own setting it may be better to beat a retreat today to the most profitable segments of eye care and leave behind a battle with dermatologists and boarded plastic surgeons that you can certainly wage but you are unlikely to win.

What other battles should you quit? Let’s turn to low-profit and no-profit managed care contracts. These are signed innocently enough when you sense your clinic is not busy enough. (Have you ever noticed that contract signing time often coincides with those times of the year when practices are less busy?) After all, better to fill those empty appointment slots and enjoy a little marginal revenue, right? Wrong! Unless you’re desperate for a near-term capital infusion, accepting ultra-low-fee and low-capitation contracts will only lull you into a sense of practice satiety, just like eating wood chips might give you a sense that you’re well fed. Instead, such contracts devour the time needed to improve service quality and to plan and execute the marketing and outreach necessary to attract, over time, a higher-yielding patient base.

Thanks for reading. In the last of three installments of this blog, we’ll continue the theme.