This article is more than 5 years old. Information may no longer be current.
BLOG: The importance of liquidity, practice operating reserves and contingency planning as ophthalmology profits soften, part 1
Novelist W. Somerset Maugham once wrote: “Money is like a sixth sense, without which you cannot make a complete use of the other five.” Most ophthalmologists are reminded of this in the first few months of every year. The first-quarter profits in the majority of practices tumble with a slew of seasonal adversities:
• With the onset of winter and the departure of snowbirds from northern latitudes, about half of the country’s eye surgeons have a drop in elderly patient volume. (Of course, this is offset in southern practices, where the snowbirds roost.)
• Snow days can slaughter an entire week of patients in the toughest climates.
• Physician vacation time is often at a peak in the winter, not only for legal holidays, but for vacations south (for some) and to the ski slopes (for the rest.)
• Practice costs tick up a notch, with year-end lease escalations, cost-of-living staff raises, increased utility costs and vendor price hikes.
• Physician draws from the practice increase to catch up with underfunded tax deposits and holiday vacation spending.
• Medicare payments slow down as patients try to delay as long as possible the cost of the new year’s deductible.
• Optical sales are sluggish as the buying public shakes off its holiday spending hangovers.
None of these individual hits are all that traumatic. But taken together, they can shove weak practices over the cliff and nudge even the strongest practices into a short-term deficit.
John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. John is the country’s most-published author on ophthalmology management topics. He is the author of John Pinto’s Little Green Book of Ophthalmology, Turnaround: 21 Weeks to Ophthalmic Practice Survival and Permanent Improvement, Cashflow: The Practical Art of Earning More From Your Ophthalmology Practice, The Efficient Ophthalmologist, The Women of Ophthalmology, Legal Issues in Ophthalmology, Ophthalmic Leadership: A Practical Guide for Physicians, Administrators and Teams and a new book, Simple: The Inner Game of Ophthalmic Practice Success. He can be reached at pintoinc@aol.com; website: www.pintoinc.com.