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Ophthalmologists in private practice face unprecedented challenges to the financial success of their practices. In the current state of medicine and reimbursement, practices may struggle to make ends meet--let alone turn a profit. In the next few years practices will have to make substantial changes in and be open to new business opportunities to stay profitable.
Ophthalmologists in private practice face unprecedented challenges to the financial success of their practices. In the current state of medicine and reimbursement, practices may struggle to make ends meet-let alone turn a profit. In the next few years practices will have to make substantial changes in and be open to new business opportunities to stay profitable.
They will also need fresh financial strategies to stay in business.
Today's ophthalmologists cannot rely solely on the power of their medical skills-they need business savvy to navigate the complicated waters of practice management successfully. The second annual Medical Practice Monitor by OPEN from American Express, the company's small business team, reveals the severity of the business management and profitability issues that private practice ophthalmologists face.
The vast majority (88%) of ophthalmologists in private practice describe maintaining the dual role of practicing medicine and running their businesses as "challenging," according to the survey by OPEN from American Express. They also believe that managing the financial aspects of their practice is a challenge that will heighten over the next few years (89%). In fact, according to the survey, 30% of ophthalmologists said they would not have opened their practice had they known about the difficulties of maintaining and growing a practice, and 23% would have chosen not to practice medicine at all.
The Medical Practice Monitor by OPEN from American Express is based on online interviews conducted by International Communications Research (ICR) from July 18, 2005 to August 13, 2005 with a nationally representative sample of 360 medical doctors in private practice (regardless of specialty). Additionally, 100 oncologists, 102 dermatologists, 100 urologists, 101 ophthalmologists, and 116 dentists in private practice were surveyed. The results have a sampling error of +5.2% (for the sample of 360) or +9.8% (for the specialty samples).
Challenge of running a business
Ophthalmologists in private practice face serious issues when it comes to maintaining and growing their practice. They are particularly concerned about implementing patient records (55% of respondents), managing third-party reimbursements (63%), collecting payments directly from patients (59%), and managing malpractice insurance costs and coverage (38%).
Ophthalmologists are spending more time on the management of their practice, which is time they would rather spend on practicing medicine. According to the survey, more than half (54%) of all ophthalmologists in private practice report spending the equivalent of at least 1 full day per week (defined as 7 hours) managing their businesses, and 14% say that either they or their partners spend the equivalent of at least 3 business days on practice management.
Many ophthalmologists say they would like to develop better business skills, which includes financial management (77% of respondents), business management (74%), and information technology (57%). Nearly all ophthalmologists (96%) also agree that it is extremely important for medical students to learn business skills in medical school. However, this dearth of training, along with the stresses of being both a good physician and a good businessperson, can create an unhappy environment and a frustrating career path for many these days.
Due, in part, to challenges such as those highlighted above, private practices may struggle to be profitable. However, physicians can act now in response to these practice management challenges. Following are some tips to make easy business changes that can trigger significant financial benefits.
1. Financial Management and Cost Controls
Consider exercising greater controls over budgeting and monitoring expenses. Every well-run business must have a budget. But more often, the key to controlling overhead is to review expenses regularly against budgets. Running a tight ship does not mean that the practice has to run on a shoestring. It just means the people responsible for managing expenses must be accountable for their actions. Controls should also be in place to prevent losses through fraud or pilfering. Common-sense safeguards to manage cash and purchasing make good business sense.
Accuracy and timeliness of financial reporting is also essential for good management and practice success.