Growing public health demand for vision, medical, and elective eye care has spurred the evolution of many fascinating specialties across modern optometry. But how do independent practice owners actually implement myopia management, dry eye, aesthetics, or sports vision? And for practitioners heading up a cold start or recently purchased practice, what are the unique considerations from financial, marketing, and practice management standpoints?
The Economics of Modern Optometric Specialties
While the list of specialties is vast and continues to grow, the economics of modern optometric specialties share three key characteristics that can potentially have a tremendous impact on practice financial performance:
- Optometric specialty care involves more direct pay revenue than routine methods of care. Once upon a time, the economics of managed care were rather simple, connect patients and providers. However, through consolidations, vision care plans have adopted sophisticated revenue models that now include owning various segments of the supply chain (materials, labs, etc.), and in some cases, optical chains operating in direct competition with private practice. With a specialty included in their scope of care, new optometry practice owners are less reliant on managed care and can reduce their practice’s exposure to exhaustive rules and regulations of panels, costly credentialing processes, and deteriorating reimbursements.
- Private practice comprises the largest segment of early adopters of emerging and specialty care. This can be seen at various points throughout the evolution of modern optometry, including the adoption of medical care and surgical co-management models and daily disposable and specialty contact lenses, among many others. Free of the rigidities of bureaucracy and operational commitments that constrain larger corporations, small enterprises remain agile, positioning them to adapt and implement change rapidly. Private practices can benefit from these economic principles of organizational behavior to grow a thriving specialty scope of care where corporate, network, and hospital-based practices struggle to compete.
- Practices providing a modern specialty enjoy a higher net profit. Specialty care is not a commodity, therefore the practice benefits from a variety of economic principles that allow for sizable returns, facing minimal competition for those willing to go for it! Specifically, given the lack of competition and the outrageous demand for these specialty and emerging care methods, enterprising providers have enormous profit potential.
How to Add and Grow a Specialty in Your New Practice
Planning, development, and launching a sustainable optometric specialty in your new practice involves implementing a strategy optimized across five key areas: financial analysis, office and flow, technology and equipment, operations and people, and marketing.
Creating a financial pro forma is critically important to determine the financial feasibility of any area across the scope of your practice. With regard to growing a modern optometric specialty, your financial analysis should include: an itemized list of all startup costs associated with the specialty, including equipment and technology, furniture and design elements, construction materials and renovation costs, team training, and marketing; cash flow projections of the specialty over a minimum of three years, carefully including overhead and COGs relevant to the service area; and realistic volume projections to establish clearly defined benchmarks to ensure long-term success (these targets will later inform your marketing strategy conversion goals, discussed later in this article). When conducting your feasibility analysis, also be sure to take into consideration realistic capacity when identifying benchmarks. Lastly, include debt service requirements for any startup costs that will be financed to clearly identify break-even targets and establish an accurate cash flow forecast.
Office and Flow
The physical office space is another critical factor in the success of your modern specialty. Your ideal location should be optimized across three considerations. First, your office location and buildout should suit the marketability of your specialty. Geo-spatial analysis includes robust local market and demographic research empowering you to select a site optimized to your ideal patients and households. Second, your interior design and spatial elements should be optimized for ideal patient flow with an emphasis on patient experience and operational ease. Lastly, the costs of your space, both startup costs of buildout and ongoing occupancy expense (rent, NNN, etc.), must be accurately reflected in your financial pro forma to ensure financial feasibility of the specialty in your practice.
Technology and Equipment
Utilizing technology across your practice presents a radical opportunity when establishing a specialty in your new optometry practice. For the modern practice, these technologies include a host of digital solutions, advanced diagnostics, and specialty clinical equipment necessary to delight patients and systematize workflows when growing your specialty practice. When compiling the technology requirements for your specialty, be sure to include all equipment and diagnostics necessary for delivery of the care, digital workflows and tech solutions to streamline standard operating procedures, and patient engagement and self-service solutions to enhance the patient experience (and differentiate your practice!) both in and outside of the office. Also, accurate itemization of technology and equipment costs is critical in your financial projections to determine feasibility of adding the specialty.
Operations and People
Establishing a thriving specialty in your modern optometry practice requires numerous operational considerations. Cold-start practice owners often have an advantage here because they are not limited by “the way we’ve always done things” when implementing a new strategy. To optimize your operations and team to grow a specialty, start by defining and documenting the specific standard operating procedures (SOPs) associated with the specialty. Next, identify the equipment, technology, and personnel requirements through each step of the journey. Third, incorporate this specialty SOP map into your procedures manual and train your team. And last (but perhaps most important): follow up, follow up, follow up in your weekly team meetings, and through regular touches with your key people involved in delivery of the specialty.
World-renowned marketing researcher Philip Kotler, PhD, defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market.” Growing a modern optometric specialty warrants creating a sound marketing strategy composed of three primary areas: pricing, promotion, and presentation, each optimized utilizing data analytics. Your pricing strategy should ensure that the specialty is priced appropriately to be a profit center for your practice (never undermining your bottom line, i.e. “opportunity cost”). This involves optimizing any vendor-suggested pricing strategy with your local geo-spatial analysis and the benchmarks quantified in your financial pro forma.
Promotion refers to all external touchpoints with a goal of engaging and effectively communicating the value proposition of your specialty to existing and prospective patients. Utilize digital, geo-spatial (yet again!), and industry analytics to inform a sound promotional strategy that attracts your target audience. Also, be sure to incorporate digital, community, and in-office channels to maximize your omnichannel exposure and engagement. The presentation elements of your marketing strategy refers to when, where, and how the need is identified, treatment is prescribed, and the patient is committed to receiving care. This stage is where it all comes together and is heavily reliant on your team’s alignment and ability to effectively communicate with the patient.
What Are You Waiting For? GO FOR IT!
The robust and growing scope of specialty care in modern optometry provides much needed care to patients and tremendous opportunities to new private practice owners.
Implementing a strategy to add a specialty to your cold-start or newly purchased practice by optimizing financial analysis, office and flow, technology and equipment, operations and people, and marketing will set you on a path for sustainable growth.