Opticenter - The Voice of Vision West - Fall 2014 by Vision West

VARIABLE FOCUS EYEWEAR

THET HNEW CATEGORY FOR INSTANT E VOICE OF VISION WES T Fall / 2014

www.vweye.com

IN THIS ISSUE: FROM THE PRESIDENT’S DESK:

T H E V O I C E O F V I S I O N W E S TYour Practice - How Well Do You

Deliver Eye Health and Vision Care? By Joseph C. Mallinger OD MBA FAAO ICD-10 Delayed, But Not Dead By Peter Cass, OD Optometric Business Solutions 1-Hour Quick Bites Technology Review By Dr. Dubick

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Adjustable Eyewear By David Eichelberger Grow or Die: Complacency is a Practice Killer By Bob Schultz

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FROM THE PRESIDENT’S DESK

Your Practice - How Well Do You Deliver Eye Health and Vision Care? When did you last ask yourself this question? Seems like a simple question, yet how often have you taken the time to review your strategic vision for your office? As you approach the beginning of a New Year, this is a perfect time to ask yourself this question (and other questions just like this). Maybe you recall one of your business classes teaching about Strategies in business. For certain, one of the first concepts taught in Business School is the overall idea of setting a Strategy (you might call this a Mission Statement or a Vision for your office), designing the Tactical concepts necessary for success and finally creating the Operational ‘actions’ necessary to accomplish the Strategy (Vision ) being created. Every article written by CEOs of businesses - eventually touches on the importance of the Confidence the CEO exhibits when discussing the business with his or her team. This starts with the one person in your office that is closest to you (your Number Two). You know that person, the Office Manager, the Associate OD, that employee with you the most number of years. As 2014 comes-toa-close meet with this person and discuss the idea of setting the Strategy (Vision) for your Optometric Business in 2015. Prepare before you hold this meeting. Have your Strategy for 2015 clearly defined. Present the Strategy to your Number Two in a succinct and positive manner - being completely confident regarding the Tactical concepts and Operational actions that will be necessary for its success. Once this person is on board with the concept of conducting business in 2015 within the structure of a Strategy –you will be able to present this plan to your team with the measure of confidence they expect from their leader and your Number Two. Your staff will buy-in to your Strategy (Vision) for 2015 only if you truly exhibit the confidence they expect from their leader. Should you have any doubts about the success of your office, its future or any other aspect of the business --- your staff will immediately feel that, know that and respond with fear rather than a positive buy-in to the concepts you are requesting they implement. Set forward the Tactical Concepts you view as necessary to achieve this Strategic Vision for your business: ‘Your Office Name’ will achieve this Vision for 2015 by implementing new Tactics including changes in policies and procedures in the areas of:

1. Informing patients of the availability of Medical Eye Care 2. Improve all forms of Insurance Billing and Coding 3. Improve Contact Lens Availability 4. Improve profitability of Optical Dispensary Finally, with your Office Manager – insert the Operational Actions necessary for your team to attack these Tactical ideas for improving the economic performance of your office. Actions such as: 1. Informing patients of the availability of Medical Eye Care a. Action: broadcast emails to all patients regarding the availability of Medical Eye Care and the treatment of eye diseases available for all patients 2. All forms of Insurance Billing and Coding available to patients a. Action: billing Staff to attend an Billing and Coding Education Program within the first 6 weeks of 2015 3. Contact Lens Availability a. Action: revamp the website to include a competitive online contact lens ordering page 4. Optical Dispensary a. Action: limiting the frame vendors to 4 or 5 with brands aligned with the patient demographics of our area b. Action: returning frames not suited for our demographic Do all this with Confidence in yourself, your Manager(s) and your team. You will be surprised how well you are received when you present yourself each day as a Confident Leader – one who knows what his or her business is designed to achieve. Remember the Only Constant in Life is Change – remind your staff it is time for a Change! Now, Go and Conquer with Confidence!

From the President’s Desk: Joseph C Mallinger OD MBA FAAO President / CEO Vision West

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ICD-10 Delayed, But Not Dead

I would strongly caution you otherwise. A professional consulting firm hired by 11 health care organizations studied the expected impact of ICD-10 and estimated it at approximately $27,000 per provider. These costs included: · Increased documentation costs · General cash flow disruption

By Peter Cass, OD Optometric Business Solutions

· IT Costs

By now most optometrist are at least aware of the hype surrounding ICD-10, and if you are wondering if it is something you should be concerned about, the answer is absolutely yes. While the government has given you a ‘pass’ for this year, you should use that extra time to prepare instead of just resetting the panic button to next spring.

· Changes to Superbills

ICD-10 will be a massive change to the way we code and bill exams to insurance payers. It will affect nearly all payers (including Vision and Medical) and all providers. Lack of preparation for the change could be enough to put you out of business because claims that are not coded correctly in ICD-10 will be denied and could create a massive backlog of unpaid claims severely restricting cash flow. ICD-10 will be such a big change in part because of the massive increase in the number of codes. Currently in ICD-9 there are 13,000 codes, of which 1,080 are valid for eye care. In ICD-10 there will be 83,000 codes, of which 5,000 are valid in eye care. There are also another 8,000 codes to for the cause of injuries! Additional rules and changes to ICD-10 include: · 7 digits - instead of 5 digits · Laterality - almost all eye diseases now include the option of right, left, both, or unspecified · Coding for encounter type – the seventh digit in ICD-10 actually codes things like encounter type, stages of healing, severity, etc. and must be used in certain cased but not at other times. · Placeholders – there is now a special character to be used when a seventh digit is needed but the code is less than 6 character long. · Combination codes – disease like diabetic retinopathy are now coded with diabetes and macular edema all in a single code. These are just a few of the major changes in ICD-10 and demonstrate why preparation beyond thinking that your EHR vendor will “take care of it” is a must. If you are delaying preparations, because you think that maybe it won’t happen,

For more information or to order please visit: http://www.vweye.optometricbusinesssolutions.com

· Process Analysis

· Education The switch to ICD-10 is currently scheduled for October 1, 2015 but it has been delayed twice. The first delay was given by Health and Human Services (HHS) to allow providers more time to prepare. The second delay however, took an act of congress and was opposed by HHS. Further delays are unlikely and a strategy of hoping for yet another delay is a recipe for disaster. CMS recommends 12 months of preparation, so you should consider beginning your preparations in October of this year, or January of 2015 at the latest. If you need help, Vision West has partnered with Optometric Business Solutions to get exclusive discounts for Vision West members on materials to help walk you through the process and make sure that you are prepared for the change when (not if) it happens. The ICD-10 Compliance Package from Optometric Business Solutions includes: · The complete ICD-10 transition manual with sections covering the changes occurring in ICD-10, preparing for ICD-10, and case studies in ICD-10 · A timeline for planning · A quiz to test you and your staff’s understanding of ICD-10 · An Alphabetical index of commonly used eye codes · A Tabular index of commonly used eye codes · 3+ hours of DVD video training · PowerPoint training slides that can be used in staff meetings · Three copies of our easy one page Quick Reference Guide that converts the top 10% of codes used in eye care · Sample letters to send to payors, intermediaries, and EHR vendors · Full eye codes sets in excel format that can be imported into EHRs or used to locate less common eye codes · SuperBill conversion – send us your superbill (in excel format) and we will convert all your codes to ICD-10

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VW0714OA

1Q-HOUR uickBites

THE BUSINESS OF PRACTICE

Next in a series of easy, quick management tips that you can implement in your practice today in less than an hour, by Fred H. Dubick, OD, MBA, FAAO.

1Q-HOUR uickBites

One Hour Quick Bites: Technology Review

Fred H. Dubick, OD, MBA, FAAO

Hopefully your office is using the latest technology and software to operate in the most efficient manner on a daily basis. Many times after a long, expensive and painful implementation, we fail to revisit those systems on an annual basis to upgrade both the application software as well as the data that we initially entered. Perhaps the most important of this data is preloaded fees associated with procedure codes in our office billing program. A thoughtful review of professional fees should be conducted at least annually. Further, a complete look at the fees being charged for goods and services in the optical boutique must be completed. These two items will take some time; however should the fee structure be inappropriate, the entire business model is at risk. Other systems (and some examples) in use in the operation that should be reviewed are: • • • • • •

Patient education software (Eyemaginations) Recall and patient contact (Websystems, Constant Contact) Website and email programs Operating systems and hardware on all office workstations Diagnostic Instrumentation (OCT, Visual Fields, OPTOS) Payroll and credit card processing

Obviously this is not a one hour project taken in total. This sounds like an entire business review of operations and in an hour the management team should be able to list all the projects and calendar a schedule of when and who will address each topic. If the management team consists of the ECP only, then help is in order. Seriously consider delegating pieces out to different staff members or hiring an outside consultant familiar with your business structure for assistance.

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Adjustable Eyewear BY DAVID EICHELBERGER, SENIOR VICE PRESIDENT ADLENS

FINALLY people are starting to understand……YES ADJUSTABLE EYEWEAR is here to stay. Not only is it here to stay but it will get better, and better, with more new products and more new ways for Optometrists to make money. The important thing is that this product does not take away from existing optical sales, is easy to sell and will get you ready for the future! Many Optometrists are recognizing that this is purely incremental business to anything they are currently selling. The BIG question is how to sell it. The BIG and simple answer is to simply get the patients to try it on….that is RIGHT….show it to everyone that comes through your door. Eighty percent will say, “WOW, how cool is this??!!” Even if someone is just there with a friend, show it to them. They have parents, they have relatives, and they have friends and WOW, what a great gift. So do the math, if 50 percent of your patients spent an extra $30.00 to $40.00 what would that mean to you as an owner? A bonus for the staff, a new car, some renovation? How long did it take you to start showing everyone Anti-Reflective lenses? Too long, you probably wish you had gotten on board earlier…..get on board with Adjustable Eyewear. Make it part

of every encounter with the patients in your dispensary………in fact maybe even start in the exam room. Also, think about fluctuating vision and how Adlens Adjustable Eyewear can help these people and their quality of life. What about contact lens wearers who get an eye infection, diabetes patients, and monovision contact lens patients? The list goes on and on. Oh, by the way, everyone that buys a pair of Adlens Adjustables or Sun Dials will tell friends, relatives and neighbors about these cool new glasses and tell them where they got them. How much is a new patient worth or a few new patients over their lifetime. If you get just one new patient per month because of Adjustable Eyewear it will be more than worth the effort. Folks this is the tip of the iceberg, the future holds high-end optical quality Adjustable Eyewear. In fact the first generation of this new category called Adlens FOCUSS will be unveiled at Vision Expo West at the Adlens Booth. The Adlens Variable Power Optics train is leaving the station. WOOOO-WOOOO, get on board, do not be left behind. Find out more, go to www.adlens.com Vision West members enjoy the best discount in the industry! Adjustables only $15 and Sundials only $17.

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BUILD A BRIDGE BETWEEN CURRENT PRACTICE AND FINANCIAL GOALS

GROW OR DIE: Complacency is a Practice Killer If you get accustomed to making a comfortable income from a practice with flat growth, you may face a sobering reality when it’s time to sell. Execute a detailed financial plan for continued growth—and reach your financial retirement goals. Human nature tends to suggest we can relax when we have achieved our goals. This works if our goals are set properly. The principle applied to independent optometry has created too many complacent doctors, unable to retire or compete with commercial optometry. Private optometric practice owners’ goals are often deficient or non-existent. Sound harsh? Follow the logic. Most doctors work to the point of making adequate income based on their desired lifestyle, relative to the cost of living in their community. Once achieved, they focus on other goals or outside activities and stop driving practice growth. Competitive advantages of a large practice are not fully realized. The practice may be precluded from: utilization of multiple doctors that could offer specialty services; ability to open nights and weekends; the advantage of quantity discounts on frames and other materials; and other advantages related to economies of scale (also known in the business world as “operating leverage”).

Here are tips to set the financial plan you need to successfully compete. Determine Current Practice Value Since practice value is a multiple of practice net cash flow, practice value does not increase when there is no growth in net cash flow. When the doctor reaches retirement age, too often the practice value is insufficient to fund retirement. Example: A practice with $600,000 gross collected revenue (“gross”), $162,000 net cash flow and no debt will provide a nice living for an independent practice owner located in most cities. Net cash flow in this example represents 27 percent of gross (“net to gross ratio”) which is the industry verage. At this point, many doctors tend to focus on lifestyle and stop growing the practice. This practice generally will be valued somewhere between $300,000 and $400,000 assuming there are no major deficiencies. Sale of the practice alone will not fully fund retirement. By continuing to grow the practice properly and managing expenses, you should be able to increase your personal income, practice value and retirement funding. Since a $600,000 grossing practice requires about five OD days per week to operate, any growth should

require additional doctors in the practice. This can allow you the scheduling flexibility to take time off without sacrificing practice growth or income. For example purposes, let’s say over time the practice doubles its gross and the net to gross ratio remains at 27 percent. The practice value would double to between $600,000 and $800,000 due to the increased net cash flow. But other net cash flow improvements generally occur as volume increases due to economies of scale. Material costs should come down due to larger vendor discounts, reducing cost of goods sold as a percentage of gross. Since the practice gross has increased with the same rent and utility costs, the percentage of occupancy expense to gross goes down. The result, in this example, is the net to gross ratio improve from 27% to 30%. Therefore, the value of the practice in this example could increase to between $720,000 and $900,000 ($1.2 million Gross x 30% Net to Gross Ratio x 2.0 to 2.5 value multiple estimate). Determine Difference Between Wealth Target and Current Value of Assets You may need third-party assistance determining the difference between your wealth target and current value of assets. Vision One Credit Union can provide tools and support to help a doctor

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transform their practice into a pathway to personal wealth. Understanding the relationship between practice net cash flow, value and wealth is a start. For example, we take ODs through our Private Banking Services to establish what we call “Your Personal Plan,” a process that involves wealth goal setting and creating a plan specific to your situation to achieve it. A valuation of your assets will be performed, including the practice. The difference between your wealth target and the current value of your assets will determine the amount of wealth that needs to be created (also known as the “GAP”). We have the resources to help doctors develop and implement wealth strategies both inside

and outside the practice. A practice growth plan can be designed to fit the remaining term of your career. In addition, Vision One Credit Union can provide the capital to qualified practices for needed practice wealth building investments. Opportunities Open When in Control By establishing your overall financial plan you will create the context to operate your practice and transform it into a pathway to wealth. Sticking with the plan will avoid the complacency trap. The resulting practice growth should create economies of scale, reduced costs and enhanced service levels to help out perform commercial

optometry….and you just might make more money in the process. This article was written by Bob Schultz, President & CEO, Vision One Credit Union, and originally published in the Review of Optometric Business

Bob Schultz President & CEO, Vision One Credit Union

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CMY

THE VOICE OF VISION WES T

HAVE AN IDEA TO MAKE OPTICENTER BETTER?

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15970 Bernardo Center Dr. San Diego, CA 92127-1828 www.vweye.com Change the World… please recycle this newsletter

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