By the NumbersPublication Exclusive

An alternative measure of practice success

Ophthalmology may benefit from a new metric of achievement.

“Money never made a man happy yet, nor will it. There is nothing in its nature to produce happiness. The more a man has, the more he wants.”

– Benjamin Franklin

“Be happy with what you have and are, be generous with both, and you won’t have to hunt for happiness.”

– William E. Gladstone

A few years ago, in a column on these pages, I discussed how maybe, just maybe, we were measuring practice success the wrong way. I drew an analogy between the superficial approach countries use to gauge success by measuring the gross domestic product, or GDP, and what we have done for years in ophthalmology looking at mere surgical case, revenue or profit growth.

While economic metrics are still important for both countries and ophthalmic practices, there must be more, especially as we are all experiencing natural limits to growth.

That is why economists developed a new metric, the “genuine progress indicator,” or GPI, to supplement GDP.

Genuine progress indicator

Wikipedia says that, “GPI is an attempt to measure whether the environmental impact and social costs of economic production and consumption in a country is a negative or positive factor in overall health and well-being. … GPI advocates claim that it can more reliably measure economic progress, as it distinguishes between the overall ‘shift in the ‘value basis’ of a product, adding its ecological impacts into the equation.’”

Perhaps the same GPI concept could be useful in thinking about ophthalmic economics. Even if your practice collects more revenue and generates more profit today than in the past, are you truly better off as a surgeon-owner? Is growth good? Some of the happiest surgeons I know are soloists in boutique practices. Is a high-volume career good? Some surgeons have found that the tortoise’s moderate 35-year career of 4-day weeks is more enjoyable than the rabbit’s 30 years (attended by chronic burnout.) Is a pure subspecialty practice the way to go? Comprehensivists report that handling a wider range of presenting conditions is more professionally interesting and gratifying.

Well-run ophthalmology practices measure their economic performance as diligently as countries measure their GDP, and most of us agree on what constitutes great benchmarks. But even though practice dollar growth, like national economic growth, is the common metric confirming real progress, there can be diseconomies and inefficiencies of rising scale and fast growth.

There is not yet an ophthalmic equivalent of the GPI. However, coming up with a GPI-like measure in ophthalmology is increasingly important as fee cuts eventually come to pass and surgeons search for ways to communicate with their management staff — and each other in the board room — about whether the practice is truly progressing or just racking up bigger numbers along with bigger headaches.

Attributes of success

Here is a scorecard that may help you objectively measure your professional and practice success.

For each of these 12 measures, put down a score from 1 to 5 based on the following scale:

5: This attribute of practice and professional success is present in abundance.

4: This attribute of success is more abundant than in most practices but could be greater.

3: This attribute of success is present at barely acceptable levels and should be boosted.

2: This attribute of success is present at unacceptably low levels.

1: This attribute of success is essentially absent.

___ A favorable balance between income and outgo. It matters little if you make a $1 million income if your expenses are $1.1 million: You will be unhappy, frustrated and left grasping for more. Successful surgeons have the discipline and work ethic to be economically fruitful combined with the self-restraint to live within their means.

___ Your fitness for retirement. By prudently investing 10% to 20% of your annual income over a 30+ year ophthalmic career, you can painlessly save for your post-professional years. As importantly, by being on track with retirement savings, you will have greater peace of mind knowing that you are cushioned for any pre-retirement emergencies.

___ A sense of forward progress and improvement. Are things getting a little bit better every year for you professionally? Do you freely shed irksome and noncompliant patients? Do you continuously add clinical skills and meaningful instrumentation?

___ Innate fairness in all partnership matters. Compensation modeling, buy-ins, buy-outs, communication and voice in the boardroom are just the start of a long list of partnership terms that can help an owner, in the aggregate, feel wonderfully satisfied or very unhappy.

___ A comfortable, adaptable change density. “Change density” is a term I coined some years ago to express the compressive force of changes in a practice. All change, as researchers have learned, results in stress. This is true whether the change is something positive (a new associate) or negative (a contract loss). Too many practice changes in a single year compound stress because stress arises faster than you can adapt.

___ Staying at the cutting edge professionally. This is linked to change density, especially at a time when clinical and surgical techniques are advancing at a rapid pace. It is unpleasant to perceive that you have fallen behind your peers.

___ A gratifying surgical density. Most eye surgeons would like to see half as many clinic patients and twice as many surgery cases. Not only is this economically effective, but it increases professional satisfaction and accelerates the development of surgical proficiency.

___ Intellectual satisfaction. After 25 years or more of formal education, most ophthalmologists are skilled autodidacts, learning avidly throughout the rest of their lives. You thrive on learning new things and interacting with other smart people, whether they wear scrubs, business suits or mechanic uniforms. Your professional life is more satisfying to the extent you are not getting intellectually stale. This can be a challenge in a profession such as medicine where most patients present with the same old boring conditions and most of your conversations throughout the day are with people well below your level of intelligence.

___ Pleasant facilities to work in. If you work full time, for 30 years or longer you will spend more weekday waking hours in your clinic than in any other place. When you walk up to the threshold of your office, do you feel pride or embarrassment? Are the public spaces up to date or shopworn? Do you personally like the art? Is your personal office a comfortable, efficient and calming refuge?

___ Predictable cash flows. The practice of medicine was once quite static from decade to decade. Even as procedures changed, economic sufficiency was assured. We are now in an era with tapering profit margins and far less cushion for business, legal or clinical misjudgments.

___ Self-agency and freedom from undue oversight or regulations. In the space of two short generations, the private practice of medicine has gone from being “easy peasy” (at least once your education was completed) to “fuggedaboutit.” Given these modern encroachments, it is unlikely anyone taking this self-test will score high here unless they have a purely elective practice or work in a very large institution insulating them from the challenge of staying on the right side of the line.

___ A gratifying patient base. There is a reasonable complaint leveled by providers who are locked into serving some patients populations: noncompliant public assistance patients, HMO patients with a sense of undue entitlement in accessing your care, or snooty affluent patients. All of these can be vexing in their own way. Some of the most satisfied surgeons I work with serve high-functioning seniors and families in polite, friendly college towns.

Add up your score. How close did you come to a perfect score of 60 points? Which of these areas, or other areas that are important to you, could you influence for the better?

For more information:
John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. John is the country’s most-published author on ophthalmology management topics. He is the author of John Pinto’s Little Green Book of Ophthalmology, Turnaround: 21 Weeks to Ophthalmic Practice Survival and Permanent Improvement, Cashflow: The Practical Art of Earning More From Your Ophthalmology Practice, The Efficient Ophthalmologist, The Women of Ophthalmology, Legal Issues in Ophthalmology and a new book, Ophthalmic Leadership: A Practical Guide for Physicians, Administrators and Teams. He can be reached at email: pintoinc@aol.com; website: www.pintoinc.com.

“Money never made a man happy yet, nor will it. There is nothing in its nature to produce happiness. The more a man has, the more he wants.”

– Benjamin Franklin

“Be happy with what you have and are, be generous with both, and you won’t have to hunt for happiness.”

– William E. Gladstone

A few years ago, in a column on these pages, I discussed how maybe, just maybe, we were measuring practice success the wrong way. I drew an analogy between the superficial approach countries use to gauge success by measuring the gross domestic product, or GDP, and what we have done for years in ophthalmology looking at mere surgical case, revenue or profit growth.

While economic metrics are still important for both countries and ophthalmic practices, there must be more, especially as we are all experiencing natural limits to growth.

That is why economists developed a new metric, the “genuine progress indicator,” or GPI, to supplement GDP.

Genuine progress indicator

Wikipedia says that, “GPI is an attempt to measure whether the environmental impact and social costs of economic production and consumption in a country is a negative or positive factor in overall health and well-being. … GPI advocates claim that it can more reliably measure economic progress, as it distinguishes between the overall ‘shift in the ‘value basis’ of a product, adding its ecological impacts into the equation.’”

Perhaps the same GPI concept could be useful in thinking about ophthalmic economics. Even if your practice collects more revenue and generates more profit today than in the past, are you truly better off as a surgeon-owner? Is growth good? Some of the happiest surgeons I know are soloists in boutique practices. Is a high-volume career good? Some surgeons have found that the tortoise’s moderate 35-year career of 4-day weeks is more enjoyable than the rabbit’s 30 years (attended by chronic burnout.) Is a pure subspecialty practice the way to go? Comprehensivists report that handling a wider range of presenting conditions is more professionally interesting and gratifying.

Well-run ophthalmology practices measure their economic performance as diligently as countries measure their GDP, and most of us agree on what constitutes great benchmarks. But even though practice dollar growth, like national economic growth, is the common metric confirming real progress, there can be diseconomies and inefficiencies of rising scale and fast growth.

There is not yet an ophthalmic equivalent of the GPI. However, coming up with a GPI-like measure in ophthalmology is increasingly important as fee cuts eventually come to pass and surgeons search for ways to communicate with their management staff — and each other in the board room — about whether the practice is truly progressing or just racking up bigger numbers along with bigger headaches.

Attributes of success

Here is a scorecard that may help you objectively measure your professional and practice success.

For each of these 12 measures, put down a score from 1 to 5 based on the following scale:

5: This attribute of practice and professional success is present in abundance.

4: This attribute of success is more abundant than in most practices but could be greater.

3: This attribute of success is present at barely acceptable levels and should be boosted.

2: This attribute of success is present at unacceptably low levels.

1: This attribute of success is essentially absent.

___ A favorable balance between income and outgo. It matters little if you make a $1 million income if your expenses are $1.1 million: You will be unhappy, frustrated and left grasping for more. Successful surgeons have the discipline and work ethic to be economically fruitful combined with the self-restraint to live within their means.

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___ Your fitness for retirement. By prudently investing 10% to 20% of your annual income over a 30+ year ophthalmic career, you can painlessly save for your post-professional years. As importantly, by being on track with retirement savings, you will have greater peace of mind knowing that you are cushioned for any pre-retirement emergencies.

___ A sense of forward progress and improvement. Are things getting a little bit better every year for you professionally? Do you freely shed irksome and noncompliant patients? Do you continuously add clinical skills and meaningful instrumentation?

___ Innate fairness in all partnership matters. Compensation modeling, buy-ins, buy-outs, communication and voice in the boardroom are just the start of a long list of partnership terms that can help an owner, in the aggregate, feel wonderfully satisfied or very unhappy.

___ A comfortable, adaptable change density. “Change density” is a term I coined some years ago to express the compressive force of changes in a practice. All change, as researchers have learned, results in stress. This is true whether the change is something positive (a new associate) or negative (a contract loss). Too many practice changes in a single year compound stress because stress arises faster than you can adapt.

___ Staying at the cutting edge professionally. This is linked to change density, especially at a time when clinical and surgical techniques are advancing at a rapid pace. It is unpleasant to perceive that you have fallen behind your peers.

___ A gratifying surgical density. Most eye surgeons would like to see half as many clinic patients and twice as many surgery cases. Not only is this economically effective, but it increases professional satisfaction and accelerates the development of surgical proficiency.

___ Intellectual satisfaction. After 25 years or more of formal education, most ophthalmologists are skilled autodidacts, learning avidly throughout the rest of their lives. You thrive on learning new things and interacting with other smart people, whether they wear scrubs, business suits or mechanic uniforms. Your professional life is more satisfying to the extent you are not getting intellectually stale. This can be a challenge in a profession such as medicine where most patients present with the same old boring conditions and most of your conversations throughout the day are with people well below your level of intelligence.

___ Pleasant facilities to work in. If you work full time, for 30 years or longer you will spend more weekday waking hours in your clinic than in any other place. When you walk up to the threshold of your office, do you feel pride or embarrassment? Are the public spaces up to date or shopworn? Do you personally like the art? Is your personal office a comfortable, efficient and calming refuge?

___ Predictable cash flows. The practice of medicine was once quite static from decade to decade. Even as procedures changed, economic sufficiency was assured. We are now in an era with tapering profit margins and far less cushion for business, legal or clinical misjudgments.

___ Self-agency and freedom from undue oversight or regulations. In the space of two short generations, the private practice of medicine has gone from being “easy peasy” (at least once your education was completed) to “fuggedaboutit.” Given these modern encroachments, it is unlikely anyone taking this self-test will score high here unless they have a purely elective practice or work in a very large institution insulating them from the challenge of staying on the right side of the line.

___ A gratifying patient base. There is a reasonable complaint leveled by providers who are locked into serving some patients populations: noncompliant public assistance patients, HMO patients with a sense of undue entitlement in accessing your care, or snooty affluent patients. All of these can be vexing in their own way. Some of the most satisfied surgeons I work with serve high-functioning seniors and families in polite, friendly college towns.

Add up your score. How close did you come to a perfect score of 60 points? Which of these areas, or other areas that are important to you, could you influence for the better?

For more information:
John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. John is the country’s most-published author on ophthalmology management topics. He is the author of John Pinto’s Little Green Book of Ophthalmology, Turnaround: 21 Weeks to Ophthalmic Practice Survival and Permanent Improvement, Cashflow: The Practical Art of Earning More From Your Ophthalmology Practice, The Efficient Ophthalmologist, The Women of Ophthalmology, Legal Issues in Ophthalmology and a new book, Ophthalmic Leadership: A Practical Guide for Physicians, Administrators and Teams. He can be reached at email: pintoinc@aol.com; website: www.pintoinc.com.