Ophthalmology Business

MAY 2013

Ophthalmology Business is focused on business topics relevant to the entrepreneurial ophthalmologist. It offers editorial, opinion, and practical tips for physicians running an ophthalmic practice. It is a companion publication of EyeWorld.

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continued from page 9 could conceivably be quicker to make decisions and commitments, so that might have an advantage. Having a smaller practice allows a bit more flexibility with management. It's not uncommon in one, two, and three doctor practices that the physician is the manager as well as being a doctor, Mr. Pinto said. That can save some costs if the practice possesses a physician who has some business instincts and the desire to handle the business aspect of things. Some doctors prefer to be in a small practice where they can have more influence on the decisions that are made, Mr. Preece said. "When you get into a practice of 10 doctors, you only get 10% of the vote. If you're in a practice by yourself or just one other doctor, it's just people talking to each other," he said. Some physicians feel a need to have more control or influence over what happens in a practice and may feel limited by a larger practice, he added. Surgeons in a smaller practice are more likely to practice a more comprehensive span of services because there may not be subspecialists on staff to pass along glaucoma or retina patients to, Mr. Pinto said. On the other hand, there are times when subspecialty practices like a retina practice with two retina specialists may find that a larger practice doesn't meet their needs very well; they may find it more beneficial to become independent and break off into a smaller practice, Mr. Preece said. For some physicians, it could make financial sense to join a smaller practice. 10 Case in point James Salz, MD, Los Angeles, was a partner at a practice with four partners, two to three independent contractors, and a staff of 20 or more for about 13 years before he decided to move to a smaller practice. Dr. Salz said he was getting to the age where he would soon retire, so although he wasn't unhappy at his previous practice, he had a sizeable overhead responsibility. There were staff overheads, which included parking and some health benefits, and he couldn't take two weeks off and not pay any overhead, he said. The smaller practice only had two partners and three employees in total. Where his previous practice employed five or six people in the billings department, this new practice outsourced its billing services. The new practice already had an electronic health records system in place, which his previous practice did not, which would eventually be another big expense. The large overhead in his previous practice was not met with large cash flow either, Dr. Salz said. While they did a good amount of regular cataract surgery, there weren't a lot of premium lenses being implanted. In addition, Dr. Salz said he does more LASIK than cataract surgery and hardly anyone in his previous practice was doing LASIK. Moving to a smaller, more efficient office was the right choice for him. "The positive to me is [the new practice] is a very efficient office, we're not usually behind like we were in the big office with six or seven doctors working at the same time. It's more of a boutique kind of practice, which lends itself well to my LASIK practice," he said. Ophthalmology Business eZine • May 2013 Dr. Salz now has a favorable overhead formula where if he doesn't go into the office for two weeks, like this summer when he's taking time off to play golf, he won't make any money but he won't lose any either. "I won't be paying any overhead. I'm only paying on a percentage of what we collect in my name so if I don't collect anything, I don't pay anything. That wasn't true in the bigger practice where I was responsible for a percentage of overhead even if I wasn't there," he said. "This was a very attractive way for me to phase out my practice." Dr. Salz is now 73 years old and still doing surgery. "I'm still doing OK but I'm obviously not going to do this forever and at some point, I'll probably give up the surgery and just do medical ophthalmology. If my mind stays sharp I can do that for a long time," he said. Most of his 7,000 patients from the previous practice followed him to the new one. Many of them have early cataracts and will eventually need surgery, and his new partner will gain those patients. OB Editors' note: Dr. Salz, Mr. Pinto, and Mr. Preece have no financial interests related to this article. Contact information Pinto: 619-223-2233, pintoinc@aol.com Preece: 801-227-0527, dpreece@bsmconsulting.com Salz: 310-444-1134, drjjsalz@gmail.com

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