By: Tyler Judkins, Member Business Advisor
As an advisor to Independent Eye Care Practitioners, I often hear how it can be overwhelming to monitor all of the different metrics that can be tracked within a practice. Attempting to measure performance and boost revenue all across the board will leave you with a heap of data at the end of the day and little direction on how to interpret it or use it to better your practice. Instead of combing through mounds of data, ratios, percentages, etc., focusing your efforts on the priorities of your specific practice needs will be your best bet for long term growth.
You should begin by figuring out what your goals are. Where do you want your practice to go, or where do you want to prevent it from going? Do you want to increase revenue per patient? Do you want to decrease staff expenses? Perhaps you just want to leave the office stress free at the end of the day! Whatever your goal may be, prioritize which ones are the most important to you in the moment and begin by evaluating your performance in those areas first. If you’re not sure where to start – start somewhere. One of the worst things you can do is to do nothing. To begin, I suggest monitoring only a handful of Key Performance Indicators (KPIs), so you can gather data associated with your key objectives and then re-evaluate your delivery in those areas. If you don’t measure it, you can’t improve it. Depending on what your metrics are telling you, you can then initiate an action plan that will lead to increased productivity, reduced expenses, and ultimately, more profitability.
So, where should you begin? A good place to start is easy to track KPIs that give you the most “bang for your buck.” I always advise doctors to start with these five KPIs to get a solid understanding of their practice performance. After you have these metrics on hand, you can begin developing action plans to improve these metrics and soon enough you can start tackling more KPIs to grow your practice.

1. Revenue Per Patient
On average, how much revenue is generated for every patient that walks through your door?
Calculation: Gross Production / Total Number of Patients
Example: If you generated $52,700 last month and you saw 96 patients during that same time period, your revenue per patient would be $549.
National Average: $497.
Points to Consider:

  • When was the last time you reviewed your fees?
  • Are you missing out on services that could generate revenue?
  • How many of your scripts are walking?

Once you figure out your average revenue per patient, you can begin formulating ideas on how to increase that number.

2. Revenue Per Doctor Hour
Your time is valuable, so let’s make sure you are using it effectively!
Calculation: Gross Production / Total Number of Doctor Hours Worked (during the same time period)
National Average: $330
Points to Consider:

  • Are you spending too much time with patients?
  • Are you doing things yourself that could be delegated to staff?

Once you are using your time efficiently, you’ll see that number start to increase. The key is to identify ways to improve your time management during patient visits.

3. Eyewear Percentage of Gross Revenue 
On average, 43% of gross revenue comes from eyewear sales. How does your optical department compare?
Points to Consider:

  • Have you tried to focus on selling multiple pairs? Do you offer discounts on second pair sales?
  • Do you offer a good, better, and best selection?
  • Does your optical staff know the stories behind the lines that you carry?

With nearly half of practice gross revenue coming from eyewear sales, it’s important to be implementing strategies that will maximize revenue in this area.

4. Contact Lens Percentage of Gross Revenue
You can expect 16% of gross revenue to come from contact lens sales.
Points to Consider:

  • Have you tried offering more contact lens trials to patients who currently only own eyeglasses?
  • Do you sell annual contact lens supply packages when patients have their yearly exams?
  • How often do you upgrade patients to high value or specialty lenses?

With contact lens technology constantly advancing, there are plenty of methods you can be implementing to help you boost revenue in this area.

5. Percentage of Cost of Goods Sold
This is always important to track in your practice so you are minimizing expenses whenever possible. 
Calculation: Frames Cost + Lens Cost + Contact Lens Cost / Sales
National Average: This should be anywhere from 28% to 30% of gross sales
Points to Consider:

  • Are you capitalizing on your vendor discounts and rebates?
  • What is your revenue per doctor? The most profitable use of time is patient exams because there is virtually no expense associated with this.
  • Are there other revenue streams that you are missing out on?

If you find ways to lower your cost of goods sold, that will make your practice performance more effective and ultimately, more profitable.
Don’t take too much notice into industry averages, your practice is unique and your metrics will be, too. In order to maximize the opportunities available to you within your practice, these 5 Key Performance Indicators are a good place to start tracking your performance.

Questions on how to get started tracking KPIs in your own practice?
E-mail me at Tyler@pecaa.com or call the PECAA office at 503-670-9200.
Thank you!

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