In today’s competitive optometry landscape, understanding and effectively utilizing key performance indicators (KPIs) is essential for practice growth and patient care. Recently, I had the opportunity to discuss these critical aspects with Aaron Werner, an expert in optometry management. Our conversation delved into how metrics can inform decisions, the importance of internal data management, and the specific KPIs that can transform an optometry practice. Here are the highlights from our discussion, which provide valuable insights for any optometry practice looking to optimize their operations.
The Importance of Knowing Where to Look
Managing an optometry practice is no small feat. One of the challenges Aaron highlighted was the impact of a temporary absence in the revenue cycle management team. When their main revenue cycle manager was away for three weeks, the accounts receivable began to balloon. This situation underscored the necessity of knowing where to look for potential issues and being prepared to address them proactively. Without this knowledge, it’s easy to get lost in the metrics and feel overwhelmed by the financial pressures.
Introducing New Metrics
When it comes to deciding which metrics to track, Aaron compares it to bringing on a new piece of equipment or adding a new management system to the practice. He emphasizes the need to evaluate the return on investment (ROI) and how the metric will contribute to both patient care and business health. For instance, Aaron doesn’t pull the numbers himself; instead, he has his team do it. This approach not only fosters a sense of discovery among his team but also ensures that the data is reviewed thoroughly.
Practical Application: Dry Eye Workup Referrals
One innovative metric Aaron’s team started tracking was the percentage of comprehensive exams that lead to a referral for a dry eye workup. With his business partner focusing heavily on dry eye treatments, it was crucial to ensure a steady flow of referrals to maintain the clinic’s schedule and efficiency. By monitoring this percentage, they could predict potential dips in the dry eye clinic’s patient load and adjust their strategies accordingly.
The Value of Personal Spreadsheets
Despite the availability of sophisticated tools like GPN, Aaron prefers to maintain his own spreadsheet for tracking certain metrics. This manual process of entering data allows for deeper engagement and understanding of the numbers. It also helps him stay focused and ensures that the data is not just another report to glance over. This hands-on approach promotes accountability and can lead to valuable insights that might be overlooked when relying solely on automated reports.
Key Metrics for Optometry Practices
For practices looking to start tracking their performance, Aaron recommends focusing on a few fundamental metrics:
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Revenue per Exam and Revenue per Doctor Hour: These metrics provide a clear picture of the practice’s financial health and productivity.
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Revenue per Staff Hour and Revenue per Payroll Dollar: These metrics help evaluate staffing efficiency and payroll expenditure, ensuring that the practice is neither overstaffed nor understaffed.
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Capture Rates for Lenses and Frames: By separating lens and frame capture rates, practices can identify specific areas for improvement in their optical sales.
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Contact Lens Exam Penetration: Tracking the percentage of comprehensive exams that result in contact lens prescriptions can reveal opportunities for growth in this segment.
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Material Revenue per Contact Lens Patient: Instead of just tracking annual supplies or boxes sold, Aaron focuses on the overall revenue generated from contact lens patients. This approach accounts for different purchasing patterns and provides a more comprehensive view of the practice’s performance in this area.
Adapting Metrics to Practice Needs
One key takeaway from our discussion is that metrics should evolve with the practice’s needs. For example, Aaron’s practice had a high OPTOS capture rate, so it was no longer a primary focus. Instead, they shifted their attention to medical KPIs, which offered new opportunities for growth and patient care improvement.
Behavioral Change Through Data
Ultimately, the goal of tracking these metrics is to foster behavioral change within the practice. When team members are responsible for pulling and analyzing data, they gain a deeper understanding of how their actions impact the overall success of the practice. This hands-on involvement can lead to more proactive decision-making and a stronger commitment to practice goals.
A Balanced Approach to Practice Management
Aaron shared an insightful analogy from his experience with Ironman racing. Initially, he relied on a bike shop to maintain his equipment. However, after facing an issue he couldn’t fix during a race, he took it upon himself to learn the nuances of bike maintenance. This extra effort paid off, as he could handle any problems that arose during subsequent races. Similarly, understanding the inner workings of your practice’s metrics ensures that you can address issues promptly and effectively, without relying solely on external tools.
Recommendations for New Practices
For new or growing practices, Aaron suggests starting with the basics and gradually expanding your metrics as you become more comfortable. Key starting points include revenue per exam, revenue per doctor hour, and capture rates for lenses and frames. Over time, as you gain confidence and insights, you can incorporate more specialized metrics, such as medical KPIs or contact lens penetration rates.
Conclusion
Effective metric tracking is a powerful tool for any optometry practice. By understanding and leveraging the right KPIs, practices can enhance patient care, optimize operations, and drive business growth. Aaron Werner’s approach highlights the importance of both quantitative analysis and hands-on involvement in the data collection process. Whether you’re a seasoned practitioner or new to the field, these insights provide a solid foundation for improving your practice’s performance through informed decision-making.
For more insights and tips on practice management, be sure to listen to our full conversation with Aaron Werner on our podcast. Don’t forget to subscribe, leave a review, and follow us on YouTube for more valuable content.
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