hidden power of staff, The

Optometric Management, Sep 2000 by Kattouf, Richard S

How well do you know your staff and their level of training?

Your staff may have more power over you and your practice than you could ever imagine. You may think you know and trust them, but could one of them be taking advantage of you?

Their level of training can also have a powerful impact on your practice's bottom line. If something seems "off" to you, maybe it's time to assess the situation. The following account reveals two staff issues that became major problems for one doctor and how they were resolved.

Identifying the problems

When I met Dr. Lomberg, he had a 34% cost of goods. This number should really be no more than 29%. He also had a very low net income - 20% of his gross. Typically, you want your net income to be 38% of your gross. These distressing numbers are what prompted Dr. Lomberg to contact me for advice.

Once I had time to study his practice, I found that his fees on the optical side were low compared to the average in his region. Dr. Lomberg also wasn't marking his frames up as much as the national average. For example, he was offering quality progressive lenses for $150 dollars, compared to the national average, which was $185. Sometimes he was less than doubling his frame costs, while most doctors double theirs plus add 10% or 20%.

After I evaluated his fee structure, I revamped it by teaching him to be aware of commercial fees, but not to compete with them. He was offering two-for-one and buy-one-get-one-free deals, but I explained to him that independent practitioners can't do that kind of thing.

Bundling fees

Not only did we raise Dr. Lomberg's optical fees, but we did it so that his patients weren't even aware of it. This is often referred to as "bundling fees." I also taught him how to present the complete fee.

Usually, the patient doesn't know the bottom line until they've chosen a frame. Then the technician adds up the individual fees for the frames, lenses, tinting, etc., and the patient hears all these numbers, which don't match up to the final number they hear at the end of the visit. This is the old way of presenting fees - a common practice, but one that causes patient erosion because of sticker shock.

Dr. Lomberg had quite a bit of patient erosion. His patients were getting their exams, but not their eye wear. To prevent future patient loss, I taught Dr. Lomberg a new way of presenting fees (by bundling).

I instructed him to present his fees by giving a complete fee every time he put a frame on a patient's face. By doing so, they never hear and think about the individual fees, which can be misleading. They only care about the final cost.

Nurture your business savvy

Another issue I found to be a problem in Dr. Lomberg's practice was that his staff had not been adequately trained to increase unit sales. In fact, they weren't doing this at all.

Once they were properly trained how to up-sale each patient's base visit costs (by selling them tints, multiple eye wear, etc. and getting them to increase the amount of money spent on one visit), the numbers really turned around significantly.

Found out

After helping Dr. Lomberg clear up fee issues, we next tackled the other and biggest - problem. One of his opticians was embezzling goods from him. Assistants can get away with embezzlement if you don't have a system of checks and balances, something Dr. Lomberg was clearly lacking.

I asked Dr. Lomberg for lab bills, patient schedules and patient records for the past 6 months. I traced every patient record with a spectacle prescription and lab bill, and found many holes - there were lab bills, but no patient to match them to.

Once we identified the embezzler, we contacted Dr. Lomberg's attorney and told him about our evidence. The attorney told us to go ahead and confront the female optician and see what her reaction was.

Sara broke down crying, saying that she needed the money and didn't think she was being paid enough. In trying to justify her actions, she was actually confessing to the crime.

Stop thief!

Dr. Lomberg and I informed Sara that we'd figure out the total amount of embezzlement, bring the attorney in and have her sign an agreement that she'd pay the amount back with interest and that she'd leave the practice. If she agreed, she'd lose her job and nothing more. If she didn't agree, however, we'd go the legal route. Sara agreed, and we terminated her.

We discussed the situation with the staff, which served as a learning experience for both them and Dr. Lomberg. We didn't tell staff members how Sara had managed to embezzle from the practice, or how much was taken - we simply stated that it had happened. We also told them that we were instituting a checks and balance system to ensure that this couldn't happen again.

Checks and balances

Regardless of whether or not you have a system of checks and balances, it may be tempting to staffers when they see a day's deposit of money, but not what goes to expenses. But as busy as you are, protecting yourself from theft really doesn't take up that much time.

The following are my suggestions for a system of checks and balances to help you avoid a situation such as Dr. Lomberg experienced.