Is ‘de-growing’ your practice an option?
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“Any intelligent fool can make things bigger, more complex. It takes a touch of genius — and a lot of courage — to move in the opposite direction.”
– E. F. Schumacher
In this month’s column, I would like to appeal to your likely original training as a biologist. Everything in the natural world, including an ophthalmic practice, grows. But nothing grows permanently.
“Degrowth” — shrinking the energy and natural resource intensity of a country’s economy, or even shrinking the economy and the population itself — is much in the news of late. As the argument goes, humans are the greatest threat to humanity. Large industrial societies need to reduce their destruction of the natural world so that mankind can survive.
Depending on your politics, scientific inclinations and optimism, you may view calls to slow down and reverse our impact on the planet as perfectly obvious and sensible or crazy tin-hat thinking. We are not going to resolve that argument here. But let’s examine the concept of economic reversion at a far smaller scale than Earth or your local power plant. Let’s consider the growth, scale and sustainability of your practice and your current professional life.
Most ophthalmic practitioners can agree that practice life has been getting out of balance for many years.
- With consolidation, practices are getting larger, so the opinion of any one doctor in a group practice counts for less. You have less control over operating policy and strategic direction. And because, to a surgeon, control equals happiness, you may be less happy today than in the past.
- With stagnant fees and rising costs, doctor net income per service unit is declining. Most providers try to counter this by cutting costs or seeing more patients, which can help, but there are limitations and unintended rebound effects.
- Expanding regulations oblige greater time and caution with charting and charging out visits, which, along with growing patient demands, run headlong into the obligation to see more patients every hour.
- The average ophthalmologist is getting older. Up to a point — around 60 years — this is all to the good: greater clinical experience and wisdom. But as every honest retiring ophthalmologist will share, starting at about age 60, capacity wanes. Based on one study by a Norwegian public health researcher discussing general populations, “Productivity reductions at older ages are particularly strong when problem solving, learning and speed are important.”
Frank degrowth is not indicated in all practices. Younger practices are still striving for their first plateau. Entrepreneurial mid-career surgeons blanch at the notion that enough is enough. Corporate practices are obliged by their operating model to grow at the fastest possible pace.
But that still leaves a lot of surgeons for whom something like degrowth may be appropriate. Beyond simply shrinking (as by seeing fewer patients), what are some dimensions of rightsizing?
- Rebalancing resources: The average practice is actually using 90% or less of its lay labor and office capacity. If you have reached a comfortable plateau, trim excess staff hours and sublet excess exam rooms.
- Paring down services: At this point, only a minority of LASIK surgeons are still performing enough surgery monthly to be clinically excellent and economically effective. After significant purchases and training, many practices only perform a fraction of their potential dry eye care. Rather than holding on to vestigial (or less interesting) dimensions of your practice, focus on services that are economically effective and durably intellectually interesting.
- Revising work hours: In the late 1800s, the typical workweek was 60 hours. Today, it is 40 hours. But as a professional, you should be able to nominate your own schedule. We notice that clients are sometimes happier working 32 hours a week into their 70s rather than burning out on 55 hours a week at age 65.
- Reducing satellite locations: Many satellite office locations come into being without a lot of thought. They arise more out of opportunity than a plan. A surgeon can wake up in the middle of her career with several part-time offices, high facility costs relative to cash flow and undue enterprise complexity. If you have more than one office, determine the profit per MD-hour at each location. By that simple metric, one of your satellites is going to be the worst performing and a candidate for improvement or elimination.
- Learn more conveniently: The pandemic taught all of us that it does not take 2 days of travel to continue our educations. Virtual classrooms now abound, and your best teacher may be a generous nearby colleague who is one step ahead of you.
We are so conditioned by economic metrics such as annual collections, patient visits or surgical cases that it can be hard at first to keep score in a way that is satisfying when you decide to “ungrow” one or more dimensions of your practice. Here are some alternative metrics that may be more meaningful to you.
1. Physician net income per hour worked
Surely, earning $300 per hour is more satisfactory and less frustrating than earning $150 or $75 per hour. High income per unit time gives you the freedom to explore a new work-life balance, especially as you shift gears from your go-go 40s to your 50s and 60s. A low income density may keep you on an involuntary treadmill.
2. Sufficiency of income
Studies have shown that a person’s happiness rises with income to a point, and then it plateaus. If you are not yet up to what — for you — is the necessary plateau, your sense of professional progress and satisfaction could be less than ideal. But after that point, enough may be enough.
3. Sense of innate fairness in all partnership matters
Compensation modeling, buy-ins, buyouts, communication and voice in the board room are just the start of a long list of partnership terms that can help an owner, in the aggregate, feel more or less satisfied.
4. Change density
Change, as researchers have learned, results in stress. This is true whether the change is something positive (a new home) or negative (a health setback). Too many practice changes in a year can be terribly stressful. Imagine launching a new clinical service, building a new office, converting to a new electronic health records platform and adding two doctors all in the same year. Great progress on the surface, to be sure, but perhaps over the top in terms of your ability to personally cope.
5. Staying at the cutting edge professionally
This is perhaps the counterpoint of too much change density. It feels rotten to perceive that you and your practice have fallen behind the times. This includes personal and staff training, as well as access to the latest clinical tools and adoption of vanguard business systems.
6. Intellectual satisfaction
Ophthalmologists thrive on learning new things and interacting with other smart people, whether these smart people wear scrubs or business suits. Investing time spent solving problems with colleagues and administration can be just as rewarding as clinic or ASC time.
7. The highest possible surgical density
Most eye surgeons would like to see half as many clinic patients and twice as much surgery. Not only is this economically effective, but it increases professional satisfaction and boosts surgical skills.
8. Stable cash flows and freedom from economic or regulatory anxiety
The practice of medicine was once quite static from generation to generation. Economic sufficiency was assured, and regulations were simple to follow. We are now in an era with tapering profit margins and with far less cushion for business, legal or clinical misjudgments.
9. Pleasant facilities to work in
You spend more waking hours in your clinic than anywhere else. When you walk up to the threshold of your office, do you feel pride or shame? Are the public spaces up to date or shopworn? Do you personally like the art? Is your personal office a comfortable, efficient and calming refuge?
10. A gratifying patient base
There is a reasonable complaint to be leveled by providers who feel locked into serving difficult patients — those who are argumentative, who act entitled or who take an undue claim on your time. Each is vexing in their own way. Some of the most satisfied surgeons I work with serve high-functioning, appreciative seniors in friendly, rural college towns.
- Reference:
- Age and individual productivity: A literature survey. https://www.researchgate.net/publication/259560110_Age_and_Individual_Productivity. Published January 2004.
- For more information:
- John B. Pinto is the author of several books on ophthalmic practice management, including John Pinto’s Little Green Book of Ophthalmology: Strategies, Tips, and Pearls to Help You Grow and Manage a Practice of Distinction, UP: Taking Ophthalmic Administrators and Their Management Teams to the Next Level of Skill, Performance, and Career Satisfaction (with Corinne Wohl), Simple: The Inner Game of Ophthalmic Practice Success, and Ophthalmic Leadership: A Practical Guide for Physicians, Administrators, and Teams. Available now for purchase at slackbooks.com. Receive 20% off with promo code PINTO20. He can be reached at 619-223-2233; email: pintoinc@aol.com; website: www.pintoinc.com.
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