The Inside View With Nathan Hayes

Eyecare Business connects with Nathan Hayes, director of financial services at IDOC, for The Inside View—a video series dedicated to exploring overarching conversations taking place across the eyecare industry. Here, he describes growth areas to focus on beyond revenue and profit that can ensure your practice is delivering all of the care your patients need.

The transcript below has been lightly edited for clarity.

My name is Nathan Hayes. I'm the director of financial services at IDOC, and I run our books and benchmarks accounting program for independent optometrists.

Eyecare Business: What are the most important financial metrics every practice owner should be reviewing on a regular basis, beyond just revenue and profit?

One of the things beyond financial metrics that I think owners ought to track is focusing on patients as the sort of building block of your practice. If you think about it, your financial results, your revenue, your expenses, [and] your profits are downstream from how many patients you care for. So tracking things like, “is my schedule full?” and “am I getting new patients in the door?” can be really helpful to drive growth, drive profitability, and focus a practice on what matters the most.

Another thing to be looking at is underneath just filling the schedule with patients: your revenue per exam and thinking of that as the outcome of the standard of care for patients. We have them in our chair; are we delivering all the care they need from medical eye care to eyewear solutions and contact lenses? The more care patients consume from your practice—which means you're prescribing everything that could benefit them—the higher revenue per exam is going to be. If you think about revenues overall, it really is an outcome of how many patients came in the practice and what the revenue per exam was for those patients.

EB: Can you share an example of a practice that used its financial data to make a strategic decision that significantly improved profitability or efficiency?

One of the things most owners come to me and ask is, "Is there something I'm spending too much money on?" My experience is that actually most ODs don't spend any more money than they have to in the practice, so maybe instead of looking for expenses that are high and that you can cut, ask yourself, "Are there areas where we're not spending enough to serve our patients?" This often shows up in determining whether your practice needs another staff member, more optometrists, or more space.

There's one really great case where we looked at the overhead and some of it was actually high. Their non-OD staff was expensive relative to other practices. Their space costs were high and it turned out that they just had the capacity to have another doctor in the practice seeing patients. This was a single owner who was generating $1.6 million by himself, which is kind of the limit for a single owner. By having him bring an associate doctor into the practice, the patients were there and the revenues jumped about $700,000 in the first year of that new doctor. If you think about expense ratios as evaluating whether things are normal, everything fell in line with growth in this case. So the issue was not that he was spending too much. It was actually that there was one area of the practice where they didn't have enough capacity to serve all the patients that needed to be cared for. Once we filled that gap, profitability skyrocketed. So sometimes—in fact, often—counterintuitively to drive future growth, we actually have to increase expenses and invest into our ability to see more patients and deliver great care.