Today on the podcast, I am joined by Dr. Eric Baas and Dr. Robert Steinmetz who are the co-founders of their consulting company, iCare Advisors. iCare Advisors have successfully helped over 250 eye care practices with their cold starts. They focus solely on private practice creation and laying the groundwork for a successful, profitable practice from day one. iCare Advisors believe in personal interaction to better understand their clients’ needs and practice environment. We had an awesome discussion about the discussion of their consulting conception and all the things they are doing to help their clients. 

Podcast

Episode 186: iCare Advisors

Dr. Christopher Wolfe: [00:00:00] Hello and welcome Christal podcast and ICO media to them have a great conversation with Dr. Boss and Dr. Steinitz and I’m really excited to discuss with them. Their conception of eyecare advisors will probably delve a little bit deeper into the kind of ins and outs of what they’re doing. I’m super excited about that conversation because most people know who iCare advisors are at this point, but I want to kind of dive a little deeper into some of the things that they’re doing to help their.

Really start warm start practices and hit the ground running so that they can accelerate and grow their practices, uh, to a level that they’re, they’re expecting, uh, within a reasonable time period. So as always, please ensure, be sure to subscribe to this podcast, write a review, share it with your friends and.

Support those who support us. I wanna talk about the, my day multifocal for a sec, we had the opportunity to do a [00:01:00] preclinical trial with this lens this last summer. And there were a couple things that I thought were really helpful. The first one is that it is different than a lot of the multifocals that we’ve used before in our practices where patients, especially early emerging, presbyopes really managed the, it didn’t cause a lot of additional, uh, distance blur for them.

And the other thing that was really helpful. Because we’ve never been involved in a clinical trial before was to understand, uh, the sort of questions that we might ask our patients. And we ask a PA our patients, a lot of questions about their patient, about their satisfaction with a contact lens. But what we weren’t doing was actually having them score that themselves.

So one of the parts of this that was really interesting to me was asking patients on a scale of one to 10, how they would score their vision, how they would score their comfort in their current lenses, and then how they would do the same. On their, uh, new lenses. And it showed me a lot of times where patients would say they were happy, might rate their vision as a six or a seven.

And, um, and then it also [00:02:00] reframed their thinking about their current satisfaction in their lenses and allowed me to open up the door to offering other solutions. So if you haven’t tried something like that in your clinical practice, I would encourage you. And I would also encourage you to try the might a multifocal for your patients.

What do you think about your macular degeneration supplements for patients in category one through category four, you feel you have a really good way to distinguish between what type of supplement you’re using and why you’re using it. I’d encourage you to check out the evidence behind MACU health.

We’ve used it in our practice for a number of years now. And we have a real great solution for patients in category three and four, as well as supplements for patients who don’t need the full a reds formulation. We’ve been really impressed in our practice, by the way it performs. And also by the patient acceptance of those supplements and Mac health has also been a great partner in our practice to help us with resources and tools to help us describe and define why their supplements are more bio available than some of the things that.

Can [00:03:00] find at a supermarket or a drug. And the most important thing for me about having a supplement in our practice for patients to have access to is I can know whether or not they’re getting exactly what I’m prescribing. So that seems to be really helpful for my patients because they’re not scouring through the aisles, trying to pick up something and having that 10 minute evaluation of.

What type of supplement they need. So if you haven’t started using Mac health in your practice, yet, you can find all their information in the show notes and they definitely have something that is worth your patient’s time and worth your patient’s patient. So Dr. Boss, time notes. Welcome. Thanks for doing this.

Thanks for having us. Thanks for being flexible too. You’re welcome. It’s um, I’ve heard so many great things about all the stuff that you’re doing, and I think you and I, we’ve all sort of like passed at meetings and basically sort of done one of the like, Hey, how are, how you doing? Good to see you. And then you’re kind of onto the next thing.

I always see what I notice you guys, [00:04:00] there’s sort of like this, this group of, of sort of people that are sort of traveling with you throughout an exhibit. And, uh, and then you go to one, one, uh, one vendor and you talk about this and this is how we do things and we’re gonna use this, and this is how you do these.

So talk about the kind of conception of iCare advisors and why this structure works so well. And how you’ve been able to kind of replicate this without making a practice feel cookie cutter. Sure.

Dr. Eric Baas: So if we want to kind of just start from the foundational beginnings of eyecare advisors, um, it, it really was an organic, an organic invention that became kind of a circumstance for Bob and I.

So I was teaching full-time at the optometry school. I had cold, started a practice in Chicago and was operating that as well. Uh, Bob was on his second cold start practice at the time. And. We had a, a number of individuals, whether they were new grads or, or people that were in the process of starting a [00:05:00] practice or had already started a practice that were, were coming to us for advice.

And unfortunately, they, they typically didn’t come to us until they had already, uh, run into some roadblocks or, or had a few missteps along the way. And it, it always put us in a difficult position because we were trying to unring bells that couldn’t be UN. And so we

Dr. Christopher Wolfe: were trying to, can you gimme an example of that?

Give an example of the type, cuz I see this too, where, um, and from, I see it from a vision source standpoint, we, we have we’ll have a new member and they come in and, and it’s like, man, if you could have just joined nine months ago, you’ve already gotten on this path. But gimme an example of the type of stuff that you see that are, are common mistakes that you’re, you wish you could unring that bell.

Dr. Eric Baas: Sure. I would say that the most common mistakes either would center around picking a poor location. You know, maybe they had the mindset that they wanted to practice medical optometry, which we certainly encourage. And so they went into a, you know, buried in the third floor of a medical building with no visibility where no one really knew that they were there.[00:06:00]

Or a lot of times on the financing side, they may have a local lender that they’re working with or, or have an individual that, uh, they first get connected to that offers them financing terms that they sort of just take what they can. Without actually stepping back and first defining exactly what they need and what the total project is going to cost.

And so they might have a lender who just gives them straight terms on a, you know, $150,000 loan and suddenly they realize, oh my gosh, this isn’t nearly enough for me to get the project done. Repayment is already starting. I’m not even open for business. And, and then, you know, on that same accord on the financing side, many of them like to just run wild on the, on the equipment side of things and, you know, spend, spend, spend, and they basically try to build their 10 year practice in day one.

And there is no ROI on some of those pieces of equipment. If you don’t have patient volume and don’t have the right types of patients or, or haven’t educated the patients on the value of those services. And so those are the things that tend to [00:07:00] stack up against them. And so they would come to us and say, You know, effectively I’m in trouble.

What do, what do I do? And interestingly enough, Bob and I had become good friends at the time. And we would see each other most often at, at bear’s tailgates, Bob was always holing tailgates. And so there was always a group of ICL students there and new grads and, and optometrist. And so we would just get to talking and it was interesting how much overlap there would be.

It would be like, Hey, did soAnd so reach out to you? Yeah. They just called me last week and it’s kind of. They would talk to one of us. And when we didn’t have the ROS of picture to paint based on where they were at, I think they would just go to the other guy and be like, hopefully get a different answer.

It’s like your parents. Yeah, exactly right. You don’t

Dr. Christopher Wolfe: get the right. What Bob say? What did Bob say? What do you ask him?

Dr. Eric Baas: If you don’t get the answer you want ask your mother, you know? And, uh, so we kind of sat down and we said, listen, if we’re, if we’re really gonna help these people, we need to get in before these decisions are made so that we can help them avoid, you know, some of the pitfalls we made ourselves and [00:08:00] certainly help them avoid a lot of the pitfalls that we’ve been able to learn over time.

Ownership of our own multiple cold starts. And you know, now at this point he cold started, uh, opened an in process of, of well over 250 practices. We certainly have learned where the missteps happen, you know, where the landmines live and are able to kind of help guide them a around those accordingly.

Dr. Christopher Wolfe: Bob.

Why are you guys so committed to, you know, in an era where practices are growing so massively and trying to be offloaded to private equity, which is kind of the common story. Um, I get the sense that, that these I, and, and, and I’m kind of in this boat as well is, and you guys, I’m sure you guys are where you’ve grown your practice, you grow it so large that you think, man, how, how, how can I bring another doctor in as a partner, uh, and, and get out some of the equity, um, versus just selling to private equity always [00:09:00] seems to be the easy button where I look at that.

And I, I think. So what, what I’m thinking through is like, to me, what you all are doing is a, is a very private practice, propri practice, future. Of how our profession continues to grow and continues to be strong. And I look at my practice it’s, it’s older and it’s bigger. And my practice is actually at risk of, of, you know, going down the path.

When I say at risk, it’s not, but like when a practice gets so big, like mine and it’s not massive. Right. But it’s a, it’s a relatively big price would be very expensive for somebody to buy. and, uh, and how would, and, and it’s, it’s a hard thing for me to transition. Unless somebody comes in and says, look, we’ve got outside financing.

We don’t need to worry about banks. Here you go. So I actually view my practice as if there is a riskier practice for threat of, for threat of private practices. It’s way more my practice than the type of practices that you’re set. You’re helping to set [00:10:00] up. You know, private, equity’s not gonna wanna buy those practices right away, but, um, kind of is there this, Bob, if I was gonna ask a question in that, in that long diatribe statement would be, is there sort of like this underlying pride for private practice and the strength of the profession, kind of, um, hinging on that private practice that drives you, drives you at all.

Dr. Robert Steinmetz: Yeah, it’s good. It’s a great question. And, you know, I think, you know, this all goes back to when I was a student and, you know, we’ve had a lot of external threats over the years. I think that have kind of evolved, you know, just in the last 15 years, you know, when you look at it, when I was president of the student association, I, I was bothered by the fact that.

All of the solicitations I got in the mail were from very large corporate conglomerates, um, that were attempting to be able to hire these graduates right outta school with maybe a little bit of misinformation and throwing significant amount of money at them, basically stating that private practice is dead and that commercial optometry is [00:11:00] kind of taking over.

And this is really your only option. And so, you know, my goal as a student was to prove that, you know, it could be done that you could go out and start your own private practice. And you can do it with very little money. I had the third highest loan debt in my class and went out and did it in a very small space, knowing that I was gonna grow it, you know, beyond what it was initially.

And so you look at that over time and same time we were going through some of the battles that, you know, you’ve fought and, and others have fought in other states of, you know, acquiring oral medications and kindergarten examination laws. And so optometry was continuing to evolve into this. Medical based profession.

And so, you know, part of what we were doing is generic as well, was proving that it can be done, you know, no one thought it could be done that you could just open up cold, right outta school without an angel angel investor or, you know, being personally wealthy. And so part of our early mission was just to prove that you could actually do it.

And I think once we [00:12:00] proved that, um, everything exploded from there. And to be honest with you, I mean, private equity has become so aggressive. It’s become one, a huge pipeline, uh, for clients to be feeding in to wanting the cold start because they understand what kind of culture, uh, that is within private equity, no matter how they try to spin it.

Um, so that has been fantastic for us because we get to define that competition. um, but two, you would actually be shocked at how many of our clients in year two and three are being approached by private equity actually acquire their practices cuz they grow so quickly. And so it it’s a phenomenal, um, position to be in right now.

I think, um, originally when we thought there was a threat, we looked at it as an opportunity. And so I think a lot of our clients have realized the same thing.

Dr. Christopher Wolfe: Yeah. I mean, I think, um, I think when I view what you’re doing, I view it as very, um, You know, profession for it. And I, you know, I have, I’ve kind of reserved a very harsh stance.

I, I, I, I’m a very [00:13:00] critical stance again. Uh, For private equity, right? I’ve been very critical of private equity. I always say I can’t blame a doctor that sells to private equity, but when I look at what you all do, I think this is, this is a major way of how we keep private practice, um, thriving. And I, and I actually do, and I’ll say it I’ve said it before, and I’ll continue to say it that I, I actually do think that private equity is a threat to the profession largely.

Because I think it takes out, uh, docs who, uh, have been historically very involved in the profession and it takes out their practices where all of a sudden now what, and I’ve seen it docs that have been very involved. Uh, all of a sudden, they, you don’t, you don’t hear from them for anymore. And, um, and you know, you can’t always know it’s this versus that.

But, um, you know, we now are, are dealing with a pool of, of doctors who are smaller. That have been involved in our state of organizations. And when you go through scope of practice battles, or even just [00:14:00] regulatory battles for, for parody, um, we’ve gotta have those people, uh, to, to, to be involved. And, um, and I that’s, that’s my take of it.

I think it’s, I think when I look at it from that lens, it generally speaking is not great for the profession. And ultimately my most, my biggest concern is that it hasn’t been great for. And, and maybe in the short term, it’s fine. But, uh, and, and as a business, you know, to sell out, I think it’s been, you know, I, I can understand why somebody does it, but, um, and I could even, I, I, I wouldn’t say that I would, I, I think at this point I could say I would never do it, but you, you know, you never know.

Right. Obviously. , uh, we all have a price. I think I would be remiss if I said I didn’t. Um, but, but the reality is is that, uh, the, it, it just isn’t great in my opinion for patients. And I, I think that’s because it takes really good doctors who are thinking about how to best care for their patients. It sort of sidelines ’em a little bit, and I view what you’re doing.

I, I, I say all that to [00:15:00] say, I view what you’re doing as a very positive thing for the future of our profession and the best care of our patients. So kudos to you. Talk about a little bit, uh, about some of the other, um, as you get into this and as people start building, so they, they go through your process.

What are the common pitfalls that they see after? So they, they, they listen to you, um, where are they struggling after they go? Like, what’s the process of like, okay, now you gotta do this. You take these insurance, like, walk me through that. Okay. You have the conversation with. Okay, well, you want to take these insurance plans and then they get to that point where they’re growing so fast.

Then do you work through some of that within like you drop insurance plans? Do you, do you use those insurance plans more for what they are? Talk about that a little bit.

Dr. Robert Steinmetz: Yeah. I think, you know, overall when you take a look at a Coldstar practice and that’s some of the things that individuals on the introductory call with Eric, you know, have to realize.

You know, this isn’t easy, [00:16:00] this isn’t for everybody. We certainly don’t encourage everyone to cold start. Um, it’s a very difficult journey. You have to have a unique personality in order to be able to do that. You have to be in the right financial circumstances to be able to know what you’re getting yourself into.

But, um, we firmly believe that, you know, accepting all third party insurance plans in the beginning. Is the absolute best way to get off the ground. Um, but we do that because we back it up with metrics. Um, we are very obviously optometric specific orientated. I’m still in this trenches and practicing just like you are.

And so we go through every single third party insurance, every single lens, every single coding and option you could possibly get in frame. And we’ve got thousands of spreadsheets to back up how you can be profitable on these particular. But not only how to be profitable, but also how to be ethical. Um, how to bill and code properly, which is obviously your expertise.

We do direct our clients, you know, towards your site. It’s incredibly valuable. And we wanna be able to let them know that when you [00:17:00] start a practice and they don’t have any billing and coding experience, we show them how to file all these different, you know, vision claims and get them through that, that there is gonna be a time we have to fill exam chair one before we can purchase exam chair.

And then we look at it as time goes on, which plans are not as profitable as others, or is there a gateway plan that allows us to access a medical insurance that is actually more important in your particular area? And I think there’s a lot of misinformation out there about, you know, trying to drop, you know, as many plans as possible, where we are just in a completely different environment.

What’s good for my practice and your practice is not good for our clients. And we solely look. From a cold start perspective and we have the experience in metrics, you know, to show that there’s not a single plan out there that we’re gonna lose money. We’re gonna tell ’em how to do it properly the first time and make sure they’re profitable on every single patient that walks in their door, no matter what type of insurance they have, because they don’t have any patients.

And you gotta remember some of these [00:18:00] plans, even though you’re bringing in these patients with maybe a poor plan, they are also gonna attract other patients and friends and family that may have Medicare. They may have better plans. Um, you need to access every single human being that could possibly come into your practice in order to grow that as fast as you.

before you can actually have the ability to make that decision on whether or not to drop one.

Dr. Christopher Wolfe: Do you think that, um, that there is a, uh, you brought up the do it ethically. So can you expand on that a little bit about the perception that if I, if I take this plan that pays me X that I think is too low, that I’m gonna have to, somehow in order to make that plan financially viable, I’m gonna have to somehow bend on my.

What is the struggle that you think? Um, cuz obviously that’s a struggle that we all would have and we don’t wanna bend on it in ethics or uh, or a standard of care. But how would you kind of work through that with, with a doctor to kind of show ’em like, you don’t have to bend, right? This is how, this is how you can [00:19:00] integrate this plan and still be profitable.

What does that sound like? Where, where I guess where are the struggles that they have? That, that, that, that is a pushback for, I can’t take this because I can’t provide the care I wanna provide.

Dr. Robert Steinmetz: Yeah, there’s a lot of misinformation out there. I think just on a lot of different groups out there or chat rooms, you know, in regards to this particular topic.

really, there is not a lot of gray area, uh, because you sign a contract with that vision provider, there’s a manual that we go through. That’s a hundred pages long that tells you exactly what needs to be done. If you don’t wanna follow those rules and don’t sign the contract. So the way I look at it is.

If that was my mother, my sister, brother, or child in that chair, what would I do? You know, what’s the most ethical way to be able to approach this condition? Are we gonna do a bait and switch with a medical in a, in a vision plan when you signed up for that vision plan, you have to provide that care. The vision plan did not tell you.

You to only [00:20:00] refract that patient. They expect you to look at the front and the back of the eye and you sign that contract. And so we want to be able to look at it from a manner that’s not only just considered to be ethical, but it’s just what should be done. And so we look at it as listen, you are a Coldstar practice.

You’ve got plenty of time on your hand. You’re pouring cash and you’re rich in time. You can have these people back and educate them and develop a relationship with them to just let them know, listen, this is the condition that you have inside of your eye. Sometimes that’s the first time they’ve ever been told about the health of their eye and how that relates to systemic issues down the road.

You could always have them back and use their medical insurance, uh, down the road, but it provides cold starts an opportunity because they have to develop a bond with that patient because they haven’t had any interaction with them prior to that. So when I talk about ethics, it’s not only. You know, following what your vision and your medical plans state, you have to bill and code properly, but you also have to make sure that you are educating the patient on [00:21:00] why you’re doing what you’re doing in order to develop that bond and trust.

Cause there could be a happy patient, never comes back, you know, but might bill their medical insurance. And they just came in for a pair of glasses and all of a sudden, they’re not on your schedule next year. They might have found something different because maybe they didn’t like that. They had to pay their deduct.

But their chief complaint obviously dictates things like that, that you talk about all the time. Um, but that kind of gives you a little bit of a synopsis on kind of what we’re dealing with. Cause we have to educate them from zero usually, cuz not a lot of ’em have

Dr. Christopher Wolfe: that experience. Yeah. I think that’s, you know, that’s, that’s my been my observation as well is that um, new doctors come out and.

Uh, I agree with you. I think you’ve signed a contract and you also, you know, you don’t want to have a bait and switch with a patient. It’s not worth the hassle in, in your practice and it’s not worth, as you said, an unhappy patient, um, look, patient comes in and they, and they, their cheap complaint is they want, they want new glasses, right.

Or they want, they have a, you know, even if it’s a glaucoma patient and you say, look, we can do all. You can have that conversation with people. And I, I talk about this all the time and it’s like the, [00:22:00] the most common sticking point. Well, how do I know when to use the, what if a patient comes in, who has glaucoma and, and like, they’re not really routine anymore.

It’s like, you just have a conversation with them, right. And, and it should be permeated to your practice. You have the opportunity. I can see it twice. Right? We can do all your glaucoma testing and we can delve into your glaucoma and really get specific about it and your treatment. And I can also provide you with a refraction on the same day, if you’d prefer to do that.

Um, but if you don’t prefer that and you want to use your vision plan benefits fine while I’ll do a great comprehensive exam. We’ll we’ll note that you have glaucoma, that you’re gonna come back at some other time to, to evaluate that deeper. Uh, and I’m gonna also find anything else you have, right? Any, anything else that, that it, that concerns me or that concerns you.

I’m gonna find those things. And, but I’m gonna address the main reason you came in your chief complaint, and that’s gonna go to your vision plan. We can do that. We can do that all day long. It just means you’re gonna have to come back more and I’m fine with it. It’s okay with me. If, if, if that’s how you wanna do it.

Um, and, and it can be a positive [00:23:00] experience for the patient. It doesn’t have to be negative. It doesn’t have to be this kind of like really hard back and forth with people. You are there to be their advocate. And part of that being their advocate is navigating, uh, you know, navigating their insurance. Um, so I think that’s the, the other hard part is that in, in school we’re trained a lot of times to, to sort of do everything.

And then if there’s some abnormal finding, go back and do it again, figure out why it’s wrong in that one visit. And how often do you find yourself training out that one annual visit per year is what we do. How often do you find that you have to really work with people on that in, in your cold starts?

Dr. Robert Steinmetz: Again, not to take Eric’s, uh, thunder

Dr. Eric Baas: here. This is an, this is an unusual interview. Usually, usually I’m dominating the airwaves and Bob’s trying to get an, a word in edgewise. Oh, Eric, you can, you can I’m I’m I’m happy. I’m no, go ahead, Bob. This is his area. I’m, I’m happy to, uh, to give him the air time.

Dr. Robert Steinmetz: [00:24:00] You know, they I’ve been on the board, uh, at, at I ICO for, for several years and recently came off and, um, you know, we have this conversation quite frequently because, you know, obviously the, the colleges optometry are our, their main goal is to allow you to be able to educate you inside of the exam room, what you need and the skills you need to pass national boards, billing and coding isn’t, you know, necessarily on national boards.

And so, uh, the schools don’t focus on that and that that’s goes across the country and. You know, a lot of times we’re, we’re educating them, you know, on the first time. And as we all remember doing those two hour plus eye examinations, you know, back in school, they’re very medically focused. And so, um, we use a lot of resources that are available, you know, even that you put out there.

Um, and just some lectures that I’ve given over time, just educating them on the basics. But the importance is, is we’ve got a whole team behind us. It’s not just Eric and I, um, we’ve got a staff that’s been doing this. You know, over 30 years, every single member of our team, every doctor on our team has cold started [00:25:00] one or multiple practices.

Um, every member of our team that’s in support has started other Coldstar practices as either office managers or optometric technicians or assistants. So they understand the billing and coding and the ethics behind it and have taken and educated the courses. And so we can get on live and, and go through it with them and, and how to.

You know, bill and code and why we’re doing what we’re doing. Um, but those conversations usually happen. Um, after I, I can honestly say, I mean, we’re dealing with the best educated doctors that have ever come out. I mean, Best educated inside the exam room, Eric and I very rarely answer treatment questions.

You know, they are the best at what they do and it’s our job to, to supply support kind of on the, on the outside. And so explain to them and how to do things properly so they don’t get audited. And going back to your point about the chief complaint, you know, reviews drive Coldstar. Is when you look at Google reviews and [00:26:00] Yelp and other platforms out there, you can have very few reviews in the beginning.

If you get one or two negative ones, it can really plummet you, um, significantly because patients are paying attention to these things. So very important to treat the patient and respect and addressing their chief complaint, to make sure that you’re providing five star service at all time with information, not only about their health, but also about their insurance.

That’s important.

Dr. Eric Baas: That’s one of the advan, I was just gonna say to tie tie off that thought. I think that’s one of the advantages that cold starts have as well is they have the time to spend a little bit more on educating that patient and helping them understand their insurance benefits. We have the time to work with them in real time to navigate how to properly handle those patients and sort of set good practices in place right out of the gate.

So. As the practice becomes busier and they get higher volume and they’re seeing more patients and they’re seeing different types of insurances. It’s a little bit more automatic for them, and they’re more [00:27:00] comfortable with it and feel more, feel better versed in the topics to be able to explain it to patients.

Because we, I mean, we have a lot of clients in the beginning where they potentially have never even had to have the discussion of fees with a patient before. And, you know, their optician may be very comfortable in talking about money and cost and fees and insurance, but the doctor isn’t and something as simple as, you know, a patient demanding as we we’ve all experienced numerous times demanding why they have to pay for a contact lens fitting, you know, we have some docs who have never even had that conversation.

And so helping them navigate that and get comfortable with it early, when volume is low, is, is tremendously beneficial to them as their practice starts to grow. And then they’re they’re at that point more

Dr. Christopher Wolfe: and more comfortable. Eric. Can you tell me about one of the things that, um, that is kind of a unique, maybe even a unique story with a struggle that somebody had that that was kind of, oh, because of this thing that we saw while they were building [00:28:00] their cold start, we now need to do things differently in your, in your program.

Has there been something that, like, that kind of sticks out in your mind where you’re like, we think we thought we had it figured this way out for every. But then we had this situation and we had to, we had to change. Tell me about anything like that.

Dr. Eric Baas: I think, I mean, I think there’s a number of overarching things that are just evolving over time.

And so a lot of what we have to continually evolve with and pivot right now is the ever changing cost of construction. I mean, construction’s more expensive now than it’s ever been. And so we’re having to. Adjust budgets in real time. Landlords are behaving far differently today than they were a year ago and three years ago.

And what they’re willing to offer the leverage that they have, the requirements that they’re taking on are all leading to expanded discussions on the front end that we’re having about the fact that if there’s a spouse involved, there’s a good chance that spouse is going to [00:29:00] have to provide a guarantee.

The timeline of projects are being extended because a lot of cold starts are going into. New construction, ground floor retail. And it used to be pre COVID that these, you know, developers, they might sign leases on the first 50% of building one and they start construction right away. And they’re already building, building number two or phase two before they even fully lease out phase one.

They’re not doing that anymore. And we’re seeing markets. Scottsdale’s a good example. I mean, they’re signing leases on new construction and it might be two years before they even deliver the space to the doctor. We have to make sure that we can help them navigate the financing over a year to two year period.

They have to navigate their associating scenario over a year to two year period. You know, everything gets stretched out. From that perspective on the financing side, we, we continually learn things that. I mean, I, I think we’ve kind of become our own underwriters in a way, in the sense that we’ve really started to learn what raises red flags [00:30:00] internally versus yellow flags versus green flags for approvals.

And you know, what that dynamic looks like as well. And so, you know, the good news is pretty much everything within the Coldstar process actually became more favorable through COVID and, you know, interest rates are still very low, even though everyone has seen them rise of. They’re still at historic lows.

If you even go back two, three years, they’re lower now than they were then. Uh, certainly they weren’t as low as they were when they bottomed out, you know, six months ago. But lending and financing is still very favorable. The, the needle that we’re just seeing moving is the average cost of these projects are, are going for same size spaces.

They’ve gone up about 40 to 50,000 per project, purely for construction, and it’s completely manageable. We just have to prepare for it on the front end so that we’re not in a position where that costs. We don’t want that to cost them a piece of equipment in order to finish their build out. And so we’re just continually navigating.

And so tho those are the lessons learned certainly always in real time. And [00:31:00] then things that happen with practices after is really just trying to. You know, safeguard as much as possible with ample working capital and implementing lines of credit. When we have the opportunity to, and really kind of keeping them cash flow strong for as long as possible and creating more vendor relationships that allow them to gradually, uh, pay their way on those vendor relationships rather than full payments upfront that, you know, deplete that working capital right out of.

Dr. Christopher Wolfe: do you think that, um, so there’s no way if I were gonna come to you and O and, and use you all as a cold start, what I’m hearing from you is that it’s still, so I, I I’ve, I’ve looked at kind of re um, building a new building and all this sort of stuff, and I’ve sort of gone down the path, uh, with, with, uh, buying the land and those sorts of things, but it always baffles me that I can’t just say, okay, construction guy.

Here’s what you’re gonna commit to, and you’re gonna commit to it be [00:32:00] even though you can’t build it for the next year and a half or year, right. This is what you’re committing to. Like, what’s that process. How, how does the, how do those contracts allow so much flexibility and cost? It would seem that you could lock that in and you can’t right.

Why is that? They

Dr. Eric Baas: won’t, they, I mean, just the, the call. So it’s always an, it is, I mean, we, we’ve gotten to a point now where GCs are providing bids and the bids are only valid for 14 days at a time. That’s how that’s how quickly. And if you even go back nine months, They were, they would be valid for three months, six months, you know, somewhere in there, literally every two weeks pricing is changing and inventory’s changing too.

And so some of it is not just a matter of, okay, I priced it at a and now it’s priced at B it’s. I priced it as a, at a, and it’s no longer available. So now, you know, what’s the alternative. And so on those new construction projects, we intentionally kind of hold off on making the selection of the finishes and going through the scope set and the permit.

We, we basically say, okay, [00:33:00] landlord delivery is scheduled for September 1st we’re and we’re sitting in January. We’re not even gonna dive into that part of the process. We’re gonna navigate all the other aspects, but we’re not even gonna dive into that process until, you know, July, August 14 days before you got it.

Yeah, exactly. So that you can then hit the ground running and that’s really kind of happening across the board. I mean, it used to be, you could kind of just credential whenever you wanted to. And once you were credentialed, you were on that panel until you. These insurance companies will not allow you to do that anymore.

They want credentialing aligning as close as possible with day of operation as they can. And if you call them and say, Hey, I’m gonna open in the next, you know, six to nine months. I wanna, they say absolutely not. We won’t even accept your application at this point. And so it’s really just a lot of maneuvering and there’s a lot of behind the scenes logistical steps that take place.

We obviously get to see in real time doing as many cold starts as we’re doing that, you know, unfortunately, a doctor would just have no way of knowing that unless, [00:34:00] unless they connected with someone who’s going through it, because it it’s not like it used to be where you could phone a friend that did it two years ago.

It’s a completely different process today than it was two years ago,

Dr. Christopher Wolfe: you know, brings up an interesting concept for me and Bob. I want to hear your thoughts about that too. As I’m just listening to you talk, you know, um, I, I, I know that over the last couple years, telehealth services have gotten a lot of like a ballooned kind of airplay, but the reality of what I see is that, um, I think there are a great opportunity for patients to have access to me who already have access to me who are already my patients.

It allows me to kind of expand my reach, but you actually bring up a point that would almost make some sense to start that way. So I’ve got a friend. Um, is in Fort Collins and she is in the process of moving to, um, I’ll just say, uh, she’s kind of building a practice in Nebraska in a very underserved community with a, it’s gonna be a great opportunity for her.

[00:35:00] Um, but she is, is kind of in this transition process where she has a physical location in Fort Collins. And, uh, but she also has this virtual practice and she understands how to do it. And, um, and so she’s gonna be transitioning where she’ll have some stuff that’s remote and virtual in the new town in Nebraska.

And then as she transitions into Nebraska, while she’s kind of selling off and having, uh, leaving the physical location in Fort Collins, that will have. The ability to be virtual there until she, so she can kind of be back and forth between them. The point I’m bringing up is I wonder in all of this, most insurance companies has have provisions for the delivery of telehealth services.

Could there be a mechanism where you’re using that as you’re kind of, okay. I, I, I can’t get fully credentialed on these PA PA plans, but maybe I could use the delivery of telehealth services to acquire an initial. And even kind of after hour red eye types of things where I could actually, if I needed to go see that patient with mobile devices in their house, those sorts of things [00:36:00] in order to get on panels.

Have you ever thought about that? It’s just, I mean, it just came out of like, while you’re talking about it, like that seems like it might be a valid, valid, uh, prospect, any

Dr. Robert Steinmetz: thoughts of it? You know, it. It brings up an interesting point because we actually, you know, because this market has now grown, um, we have had individuals kind of reach out to us, um, about having our cold starts, which always need to associate at another place.

You cannot spend five days in your practice as a cold start and expect to see, you know, a full schedule of patients. It’s, it’s not possible. So you have to associate two and a half days somewhere else. And it it’s a requirement sometimes for the lender, depending on which lender you’re doing. But most of the time.

Is. So we have had individuals that have contacted us about, you know, possibly looking into working for a company that provides those telehealth services. Um, they already have this in place, but they don’t accept a lot of insurances. And I think you kind of know what I’m talking about and serving underserved areas and kind of doing things from home.

[00:37:00] That the problem we have with, uh, the model that you just suggested is that, you know, our Coldstar clients are a pretty unknown quantity. It’s very difficult for patients to be able to find them on Google when they don’t have a presence, uh, within the community itself. Quite yet, it does take a while to organically move up that list.

I think they would have to be able to do it in some way where they’re working for an individual that’s already connected within that network, which becomes a little bit, you know, more D. One of the main reasons we want, you know, our cold starts being available 24 hours a day to attract that emergency care is cuz a lot of those, uh, practitioners and a lot of the, a lot of the older practitioners and a lot of those private equity firms don’t really care about the 24 hour emergency care where we can step in and save the day.

And so we do want to have that access, but as far as telehealth goes, we do incorporate that, you know, certainly. Um, you know, our practice is now, um, because of what happened with COVID, it’s a good example of what you were talking about in terms of the switch and what I was talking about earlier, as far as [00:38:00] piggybacking on what you were saying and what Eric was saying with construction costs.

I mean, it’s insanity. I mean, uh, I, I source the equipment and the, the cool thing about, about us is, you know, we, you already know this. We don’t, we don’t take any kickbacks from much of these vendors, so there’s nobody paying a premium or a gift card or anything to us or a. Um, we can pivot and move as quickly as possible.

And so when we have a trusted vendor, we can go ahead and source this equipment and know it’s gonna be there when they open. They don’t have another lane that, that is their lane. That is the lane. So. It can’t be on a shipping container in a port somewhere on the west coast because the supply chain issue is hung up.

We gotta make sure that gets delivered. And like Eric likes to say, you know, clients don’t know what they don’t know. So it’s sometimes good to protect them from that to let them know that you know, their, their chair and stand may maybe at risk of not being delivered in time, but it’s a real thing. And so COVID presented a lot of issues.

You know, one, we switched to almost exclusively digital proctors to get six feet away from our. [00:39:00] They dropped the price tremendously. So it gave our doctors a tremendous amount of street credit because they now have this incredible technology in their practice. And so we’ve moved our recommendations from one to the next, as the times have changed.

And as prices have actually been able to be stable for our cold start clients. So we worked out deals where listen, our bank approvals, necessitate that their equipment budget. They need to stay within X and we will continue to deliver these cold star clients to you, but you have to hold the pricing. You can’t give us a 30% increase.

The difference is, is they don’t open, then you don’t sell any equipment. Right? And so it’s been an interesting adventure just over the last couple of years, you know, particularly with shipping and where these things are being made. So American made products are becoming more important and, uh, just being in tune with supply chain and Eric does a great job.

You know, on the, the lending side and all the different regulations that have changed, and we all have kind of our own, um, area of [00:40:00] expertise. Insurance is another example that’s changed quite a bit. Rebates have changed. Reimbursements opt in opt out states have always changed. You’re constantly in a state of flu it’s it’s it’s unreal.

You

Dr. Christopher Wolfe: know, it also brings up the, the idea of. staffing. Right. Even if we’re talking about inflation and I know that, you know, we, I, we’ve been really fortunate and I, and when I say fortunate, I think it’s, it’s intentional, right? Like I think even good offices struggle to find new teams, but if you have a really good culture and you work on your culture and you work it on it from the beginning and you kind of commit to that culture, um, I think it’s easier to at least retain.

um, but, but what sort of things have you, have you seen in, in some of your cold starts now where, you know, you can go down, I mean, you can go down the street to Chick-fil-A in Omaha and make 17 bucks an hour. Right. So like that automatically pushes up everybody else, like in their minds. I mean, there’s obviously advantages hopefully of working for my practice versus working for Chi [00:41:00] for Chick-fil-A, but if you’re new to the game, um, and, uh, then you know, we gotta train.

I mean, we’re pay, we pay more than that, but my point is, is that. Uh, have you seen that become an issue in these Coldstar practices where they’re looking to hire their first employee and that cost is, has increased so much that they’re, that, that they’re having to think about about that, or compete with places that you wouldn’t think they’ve had to compete with before?

Dr. Eric Baas: Absolutely. You know,

Dr. Robert Steinmetz: it’s, uh, we have, we’re fortunate. We have a member of our team, Dr. Kristen O’Brien who handles a lot of the HR. We use a lot of metrics and data, uh, to be able to look at what the average optician and optometric technician is making in a, in an area across the. And this data is outdated.

Um, you can pretty much add, um, a several dollars an hour, uh, to each of them plus benefits just over what’s happened in the last couple of years. You’re absolutely right. Um, this is where we also tap into the benefits of private equity, uh, [00:42:00] because when private equity comes in, it completely changed the culture.

Uh, you have employees and doctors that all of a sudden are not part of this private practice mission in this. Uh, personal experience. And so that is freed up quite a few employees to be able to move over into Coldstar private practice, which has been incredible. Um, but to your point, and, and you, you kind of nailed it as far as Chick-fil-A goes.

I mean, they’re very well trained

Dr. Christopher Wolfe: employees. And they’re and it’s, and it’s good culture, right? They’ve got a good culture.

Dr. Robert Steinmetz: Yes. Yeah. They, they have a great culture and you know, our cold starts don’t have a defined culture just yet, but they all have incredible personalities. I mean, they’re, they’re risking everything on the line.

And in order for an employee to join that type, you know of culture, you have to be somewhat like minded and be willing to take risks, to be part of something special and new. And so we have a lot of our, you know, clients that are able to attract kind of those employees that wanna start something new and fresh and [00:43:00] special.

And, you know, be part of building something that is, that is there. So once they take almost an ownership, you know, type role in it, but, um, as far as for established practices, though, and just to bring up your Chick-fil-A point, if I have a Chick-fil-A, uh, you know, server that is very attentive, um, I’d slip my business card because, uh, they’re, they’re trainable.

Um, you can bring ’em on over and, uh, same things with Starbucks or local baristas and things like that. Um, I, I think it’s a good opportunity for us to recognize that, you know, personality and culture is super important and you can’t train a lot of personality sometimes, you know, we can train them how to do optometric things.

Um, but personality is very difficult to train, but in our case for cold starts, we do want them to have experience and private equity is just perfect for us to be able to pull ’em.

Dr. Christopher Wolfe: and so how then, I guess probably one of the, cause I want, I do wanna be respectful of your time. And, and I know that, um, that I, I kind of, you guys have a, a firm jump off [00:44:00] time, but, uh, how do you compete with, so this is the other thing that always boggles my mind.

So we always, uh, have, um, uh, why am I drawing a blank, you know, health insurance, and some of the other benefit packages that, uh, we’ve had in as part of our offering to our employees for a long time. But I have a lot of doctors that will reach out to me. Like we’ve never done this and we need to do it because we’re losing our employees for X, Y, and Z benefits.

So there’s, so I, I’m always amazed at some of these big practices that have never have gotten by, without offering benefit packages. But it seems to me that that’s not your advice to cold start prac practices. So can you help me understand how you navigate that? When, when a lot of people think, well, how can I, how can I do benefits?

And how can, like, what does that look like?

Dr. Robert Steinmetz: Sure Eric, you wanna drop off the call? I’ll just keep talking.

Dr. Eric Baas: great.

Dr. Christopher Wolfe: Eric, tell me a question. I need to ask you Eric.

Dr. Eric Baas: Eric, Eric, tell me

Dr. Christopher Wolfe: what you do here. What, what do you, what do you actually do? Eric? How many bosses do you have? [00:45:00] Did you get the TPS memo?

Dr. Eric Baas: Yeah, there you go.

Exactly. I’m gonna need that on my desk by, by 9:00 AM.

Dr. Robert Steinmetz: it’s so funny cuz Eric usually handles most of the, the entire process front there’s. Sometimes I don’t talk to, you know, a client about, you know, things that are in the trenches for five months after Eric’s been talking with them and knows everything about their family.

And uh, I served as. Sometimes their own personal therapist through their journey, and then they meet me. So, uh, this, this is, uh, a great question though, as far as, you know, insurance benefits and attracting quality candidates. And, uh, we’re fortunate to have some partners that, you know, do provide those services as one off, and it’s very state specific.

So it has to be researched. Um, the exchange in each state as you know, is very different. Um, but at the same time, we do budget for having an experienced employee, but this is what cold starts have to understand is. Um, you are the manager, you are the janitor, you are the head bottle washer, the doctor, uh, sometimes therapist, you you’re gonna be wearing a lot of [00:46:00] hats and it’s good because you need to understand all the processes inside of your office, but we only account for, you know, 1.5 FTE.

So we’re looking at a full-time optician and then we’re looking at a, uh, receptionist that’s half time to answer the. Fortunately technology has enabled us, you know, to realize some efficiencies just as it has in, in all of our practices. And so, um, using, you know, things such as weave and certain EHR systems to send out, you know, forms that automatically go into the EHR is pretty incredible.

So that, that helps us. But when it comes to benefits, we also want to be able to make sure that they get trained in culture. And so there’s spiffs that are. Why are you bundling these specific lenses? We don’t put a hundred lenses into their EHR for our clients. We put in eight, you need to prescribe this lens for this patient that has this insurance that has these needs.

And then you train the employee or the optician in order to be able to check those boxes. So not only you get the rebate, but you’re also maximizing [00:47:00] value and profit for the. And then we spit them on top of that hourly rate so that we train them initially. So they don’t make any mistakes in the future.

They can’t go rogue. They’re not gonna go out and prescribe a lens that they were familiar with with their old practice. This is what you’re going to do. And we use money in order to change their behavior. We also do stipends too. You know, some of them prefer to find insurance on their own. So we’ll just do stipends on a monthly type of a basis.

And that works out pretty well, but it, it all varies, uh, on each individual package. And it also varies on each area. I mean, it varies significantly from Texas to the Northeast and Northwest in terms of what these opticians are, are demanding, but we certainly encourage benefits and we do have the opportunity to offer, you know, IRA type programs, not quite 401k yet.

Um, but that’s all presented early on so that they’re thinking about it as, as time goes on. A majority of these PA a majority of these clients and the opticians that choose to join them really just want to be the part of something special. I mean, these clients [00:48:00] have an incredible magnetic personality to ’em.

I mean, we’ve got, we have a client that went and saw patients yesterday that just had a baby four days ago. I mean, they’re UN unbelievable. I mean, it’s the cold start. She just opened up her practice and started seeing kids just after she delivered. Who wouldn’t wanna get behind leadership like that.

It’s pretty

Dr. Christopher Wolfe: cool. Yeah. Yeah. I think we under, we, I think we undersell ourselves a little bit. Eric, I’ll bring you in for this last kind of point that, that Bob just brought up is, I mean, I, you know, I’m always amazed at, um, And how, not just well trained, but the vision that, that new doctors have for our profession, you know, as, as I’m kind of getting into the middle of our, of our, of my lifetime, right.

As a, as a practitioner, um, you know, you just look at it and it’s like, wow, they have all this vision. And, and I had that vision in fire and, and all that kind of drive. And maybe I still have it a little bit, but you, but it’s really inspiring. And we can’t, we can’t sell ourselves short [00:49:00] as a profession to.

Like, we’ve got a lot of people in the profession that are gonna be able to drag us along. Like the three of us, they’re gonna be able to drag us along in the future. And how do we empower them? It seems like you have been able to empower those people really well. Tell me about, um, parting thoughts, uh, related to that, Eric, any, anybody that you’ve you’ve said holy cow, like.

You should do this. Right? You found somebody like, why don’t you cold start? Right?

Dr. Eric Baas: You need to do this. Yeah. I mean, I think to kind of bring the discussion full circle from where we started. I mean, the core of our mission is the preservation and promotion of private practice. And we truly believe that it is the foundation of our profession.

We do believe, I mean, no one going back to the PE discussion. No, one’s truly been able to demonstrate to me how this is going to be sustainable for decades to come. I mean, and no one, no one’s answering the question of how it ends. And, you know, we, we firmly believe that many of those PE models are going to crumble.[00:50:00]

And the, the last practice is standing are going to be these private practices that have sort of stayed the course committed to the profession, doing it the right way remaining ethical. Doing right by the patients. I mean that, that’s what builds these practices over time. And I think we will see, uh, you know, the value of these practices continue to, to maintain.

And I think if anything, the private buyer side of things, as far as lenders, I mean, they’re taking notice, you know, everyone in optometry used to just be stuck to this 60% of gross. And that’s what a practice is worth. And. Lenders are actually stepping back and saying, well, maybe it, maybe the number is higher than that.

And maybe there is more value here. And, and how can we, how can we bridge that gap and vision source with their next program is saying, how can we bridge that gap to keep things. In the hands of, as you said in the beginning, the leader, people who have been the leaders of our profession, both on a political level and on a professional [00:51:00] level who sort of disappear overnight because they’ve sold their practice to PE and in many cases, quite frankly, I think they don’t really want to tell people they did it.

Um, because maybe they sat in a room a year earlier and said, I’ll never do it. And I agree they, everyone should do what’s best for their family and their best, you know, financial scenarios. I think also what we’ve seen over time is the money grab. Doesn’t always play out the way that people think it’s going to.

And when you talk to a lot of these docs in year two and year three, it it’s a much different story than it was in year one when they’ve just cashed that check. Um, and so we try to kind of keep people’s eye on the, on the long game, as opposed to the short game and helped them realize. You guys are the future of the profession and the, you know, you’re the best trained, you’re the widest of scope and you have everything that it takes to succeed.

We’re giving you the toolkit. We’re giving you the guide. We’re giving you the support to, you know, hit the ground sprinting. And to, you know, maximally [00:52:00] succeed at it. But at the end, at the end of the day, make no mistake. And we make this clear to all these doctors. You are the owner, you’re the one driving, we’re the advisors.

We’re the ones that are telling you, you know, what we would do, why you should do certain things, what the benefits are, but the decisions are yours to make. And we then just pivot our strategy accordingly based on the decisions that you’re making as a practice owner.

Dr. Christopher Wolfe: Okay. Last question. That’s I should have left.

I should leave it there, but. Inspirational story. Okay. So last question. Do you, you don’t have to tell me who it is, but the fastest growing practice, zero days, day, zero opening day to one year. How, how big did it get in one year? Do you guys know? That you’ve helped you do. Yeah. You don’t wanna say who you can’t, there’s a couple other,

Dr. Robert Steinmetz: there’s great examples.

And there’s people that, you know, probably gonna listen to you that, that would know that. But, um, so one thing to bring up is it’s not always about money. Of course, you know, [00:53:00] of course it’s, it’s about happiness and so. All of our clients have a different and unique mission. Some are pediatrics, some are geriatrics, some want to do ortho ology, and some want to do, you know, a specialty lens.

And so some want it is a hobby practice. Some are moms with four children that just don’t want to work for anyone else anymore. And so, um, they each define happiness differently. So as far as growth in terms of financially, um, we have had practice over the $750,000 mark in year one. Wow. Which is tremendous.

That’s unbelievable. But Chris, you have to remember, we are not opening up practices that are 2,500 plus square feet. These are practices that are in smaller footprints because one construction costs are high we’re limited by the rent amount in terms of restrictions placed on by the banks. And so, um, we’re able to maximize what we are doing inside a space that’s right around 1500 square feet.

Yeah. And so it’s been pretty incredible, uh, to kind of be. [00:54:00] You know of this journey, but, um, these practices that have done that well, uh, in year one have actually gone on to start a second one, uh, in, in year two. And we’ve even have, uh, some that have been profiled in, you know, vision source, uh, Gazette. Um, we have one individual that, that Eric likes to, uh, affectionately refer to as the rocket man, as he was, uh, Uh, in, in the print a couple of months ago, uh, but these guys are incredible.

And the other cool thing is that they help our other cold starts. They’re all part of this same culture. They all want to be able to share their stories with one another. And I think, you know, vision source has done a good job too. We’re gonna be bringing them all together to help kind of share their stories and their success, um, to kind of pull everyone else up to, to that level.

Uh, it’s certainly a million dollar practice in year two is achievable and, uh, it can be done. And it all depends again on, on what makes you happy?

Dr. Christopher Wolfe: Yeah, I think that’s a really great point to, to end on is [00:55:00] that obviously I asked about the numbers, um, because I think, I think people don’t understand how, how, uh, rapidly it can be done if that’s what your, what your sole goal is.

And if you follow the. But to your point, you know, I, I like to do a lot of different things. If, you know, if I stayed and saw patients in my practice five days a week, I would feel the grind and I, and I would not enjoy seeing patients. But I see patients three days a week and I love it. My practice serves that purpose for me.

Right. I get done, uh, you know, on, on Sunday, I’m ready to see patients on Monday. I’m excited about it by Wednesday night. I am glad I can have a cocktail and, and do something else on Thursday and Friday. Right. And so for me that the practice serves my personality of, of liking, to think about a lot of different things in a lot of different ways, as deeply as I can.

So that’s my practice, but. but’s your point, right? Like, uh, I think your practice needs to work for you, and it seems like you all [00:56:00] allow pretty good clarity coming into it about what that practice is gonna serve. So kudos.

Dr. Eric Baas: We do that. We, we make it very clear to clients. We say, you know, there there’s a difference between survival and success.

I think we all share the relatively same definition of survival. And, you know, year one is about survival for a cold start and years two and three and beyond are, are more about success. And everyone’s definition of success is different. Is it hitting a million dollars? Is it having multiple locations? Is it building an empire?

Is it working two days a week? And you know, we believe our job is to ensure survival and foster success. And, you know, that’s kind of the approach that we. In these cold starts is we’re gonna help you navigate through survival. For sure. We’ve never had a practice fail and certainly don’t plan on having one in the future.

And, but when it gets to that success point, there’s not a roadmap any longer. It’s now your roadmap and, and we’re just fostering that and sort of giving you the, the launch point. To [00:57:00] to get there.

Dr. Christopher Wolfe: Eric Bass, Bob Steinitz. There’s no better way to end into that. Thanks for being on guys. I appreciate it. This

was awesome.