New rules and values for a post-COVID world
As practices reopen, ophthalmologists need to rethink past strategies and plan ahead for the future.
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“Tactics without strategy is the noise before defeat.”
– Sun Tzu
“Denial, anger, bargaining, depression and acceptance.”
– Dr. Kübler-Ross’ Five Stages of Grief
With apologies to Moses, long-time readers are familiar with Pinto’s Ten Commandments, now more than 30 years old:
- Hire the best people you can afford. Treat them right.
- Provide staff with 1 hour of education for every 79 hours of work.
- Keep tomorrow’s appointment book 100% full.
- Treat every patient as though they were your only customer.
- Ask every patient to refer a friend.
- Know your numbers. Cold.
- Find a surgeon more competent than you, and copy what they do.
- Sweat every detail. Even the ones that bore you.
- Financial success is measured in profit per hour, not cases per month.
- Live on less than 80% of your after-tax income. Invest the rest intelligently.
It is only fitting, in the midst of plague, financial distress, partisan strife and urban calamity (can frogs, boils and flies be far behind?), to chisel another tablet or two to accompany these original Ten Commandments for running a better practice.
What have we learned? Here are 10 more commandments.
11. Capital access is king. The most stressed ophthalmologists today are those whose personal and business financial reserves were lean going into the pandemic. Young practices and young doctors were disadvantaged compared with thrifty mid-career surgeons with large personal and practice savings and the ability to borrow their way through many months of dislocation.
12. Mind your profit margin. Practices with higher profit margins (let’s call the line at 40+%) have vastly more flexibility to adapt to a crisis such as COVID-19. If a practice with a 45% profit margin temporarily loses business, the doctor-owners simply have to take their belts in a notch — they still enjoy a positive cash flow. The 30% and lower profit docs may have to boil their belts and eat leather stew to survive if the compounding health-economic-social crises kicked off and accelerated by COVID-19 linger.
13. Anything more than you need is wasted. Despite the abiding background frustrations of being a practice owner (fee cuts, regulations galore, HR challenges, etc), ophthalmology has been blessed with great success and boom times for three generations. This has conditioned the profession to say “yes” to larger, swankier offices, luxuriant staffing levels and $50,000 gizmos of sometimes ambiguous clinical value. In ways none of us were expecting, 2020 is a forced reset on what you really need to run an efficient eye clinic.
14. Project management skills are essential. Responding to COVID-19 has been an excruciating stress test for all practices. Everyone working in your practice already had a full-time job in January and February. Come March, practice staff took on the project of a lifetime. Those practices with preexisting poor communication, poor process documentation and toxic boardroom habits are finding it hard to get back on their feet.
15. Think “resilience” first. This has many components in a practice-business. Cross-training allows you to pare staff down and still preserve all critical skills. Preplanning for disaster is better than making things up on the fly after a doctor is seriously ill or a natural disaster strikes. Stocking a larger supply of critical supplies and materials will help you sleep better at night. Channel your inner “prepper” and stock up for the next time.
16. Always have a Plan B. Let’s say that last year you were a 62-year-old surgeon with plans to practice for 5 more years, by which time your retirement funding would be complete. Then the bottom dropped out this year (it could have just as easily been a severe Medicare cut, a personal disability, a hurricane, the stock market swooning). Your options include a) retiring early or on time and downsizing your retirement or b) working an extra year or two to make up for the business interruption. Always think a couple of steps ahead.
17. Rethink the bright lights and big city. Rural and suburban practices have always been advantaged over urban practice. Competition is lower. Colleagues are more cordial. Third-party payments are more generous. Facilities and staff are less expensive. Patients are less stressed and nicer. Profits are higher. And personal living costs are lower. COVID-19 has proven another strong benefit of rural practice: Folks in Montana and Idaho and Nebraska have been living the social distancing lifestyle for generations; eye clinics have reopened first in these more remote areas because infection rates are much lower.
18. Rethink your work-life balance, up or down. Some clients have said, “This forced time off has allowed me to get my head on straight and discover how much I like my family and hobbies. I’m cutting back my clinic permanently so I can enjoy life more.” Somewhat fewer doctors we know have said, “I can’t wait to get back to a full-throttled practice. I’ve used this time off to make some great business plans.”
19. Reconsider what “freedom” and “luxury” mean. Is it a vacation home in a country they still won’t let you fly to or a new gym in your primary residence? Is it living to the hilt or living on a smaller percentage of your normal income so that savings swell and even a full year of lost business has no impact on your lifestyle?
20. And finally, cheer up. Many practices are now coming back to life at a much faster pace than we all expected back in April. As it turns out, seeing clearly ranks pretty high after air, water, food, clothing and shelter. (I say this as a patient with a delayed 20/50 cataract in my right eye.) Seniors control a disproportionately large share of the national wealth. We were expecting to see LASIK and premium IOL counts pancake in the wake of COVID-19, but early anecdotes are showing somewhat more resilient demand for these elective services. Ophthalmology, in relative terms, will continue to thrive.
- For more information:
- 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, Simple: The Inner Game of Ophthalmic Practice Success and a new book, UP: Taking Ophthalmic Administrators and Management Teams to the Next Level of Skill, Performance and Career Satisfaction. He can be reached at 619-223-2233; email: pintoinc@aol.com; website: www.pintoinc.com.