The economic forecast for retina specialists this year is a troubling one, according to Julia Haller, MD. With the increase of patients aged more than 65 years, with macular degeneration and diabetes, the growing demand for intravitreal injections, and further reimbursement reductions in the future.
New Orleans-The economic forecast for retina specialists this year is a troubling one, according to Julia Haller, MD.
With the increase of patients aged more than 65 years, with macular degeneration and diabetes, the growing demand for intravitreal injections, and further reimbursement reductions, she asked, "What is the role of our professional organizations in strategic planning for the future?" during a presentation at the annual meeting of the American Academy of Ophthalmology (AAO). Dr. Haller discussed the actions of the American Society of Retina Specialists (ASRS) to help the retina community adapt to these changes and also talked about the findings of a practice economic study to examine the effects of these conditions and to identify a strategy to address them.
"The ASRS is responding to this changing environment by providing education. We found that many-in fact most-retina specialists lack formal training or expertise in the area of practice economics," said Dr. Haller, chairwoman, Department of Ophthalmology, Jefferson Medical College, and ophthalmologist-in-chief at Wills Eye, Philadelphia. "We believe that improving practice efficiency will be critical to meeting patient demand and ensuring high-quality patient care, and that by understanding the economic drivers of a practice's sustainability, retina specialists will be better able to adapt to the changes ahead and ensure that patients receive care from vitreoretinal specialists when and how they need it."
The study consisted of two elements: a broad review of the trends and uncertainties facing the retina community, and a focused analysis of practice economics.
"The methods whereby this study was conducted included private practice visits and data collection from representative practices across the country, using the practice financial data to develop models of practice economics and analyze key metrics affecting the businesses. This was supplemented by a Web-based survey," Dr. Haller said. One of the high points of this study is that the best-performing practice is 2.5 times more profitable than the lowest-recording practice, she said. According to Dr. Haller, this finding suggests that most practices have a significant opportunity to improve their business health.
The study also found that three levers influence the financial performance of a practice: service mix, productivity, and cost control. The service mix encompasses all of the services performed by the practice.
"Where a practice gets its profit is not always the same place it gets its revenue," Dr. Haller said. "Surgery . . . and procedures . . . together generate 38% of revenue but fully 67% of profit. Not all profitable services are equally efficient. If we take out the clinical procedures . . . they only take 8% of the retina specialist's time but generate 30% of the profit."
The retina specialist's time is the strongest lever to improve financial performance, she said. One metric for comparing profitability of these services is earnings before interest and taxes (EBIT) per retina specialist per hour. EBIT is a standard term used by consultants and accountants to measure profit.
"Surgeries are the highest absolute profit-per-individual service, but if we look at procedures, we find that they generate 3.3 times more profit per retina specialist hour than surgeries," Dr. Haller said.
These results can be used to affect efficiency. For example, Dr. Haller said, the potential annual impact of reducing a retina specialist's time to complete injections from 45 to 30 minutes increases the number of injections from 500 to 750, with a net increase in profit of 3%.
According to Dr. Haller, any practice can improve its performance by deciding which changes are appropriate to make. The analysis shows several different ways to improve performance.