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There was an interesting article written at the AmateurEconomist.com about “Why Doctors Are Not Good Businessmen.”

Hat tip to Kevin, M.D. who commented on this story and said,

“This is why the private practice model of medicine is dying. More practices are being bought by hospitals where the physicians are salaried. This relieves the burden of administrative tasks and supervising ancillary staff, so that the doctor can focus on medicine.”

Rob at VSP says that “[private practice doctors] provide the best care.” Well, if I’ve got the weight of a business on my shoulders, doesn’t that detract from patient care? Additionally, in our field where the private practice doctors sell what they prescribe, can you totally rule out any conflicts of interest which potentially detract from patient care?

Again, independent doctors of optometry in a Wal-Mart setting don’t have the conflict of interest and their administrative duties are much less than private practice.

What’s funny to me is that every CE event I’ve been to always has some talk about why optometrists should start the “medical model” in their practice and watch the money role in. Well, how is adding more third party payers going to help you make more money? Primary care medicine is dying according to Kevin M.D., and yet the roboconsultants are telling us to join more insurance panels. I think getting rid of insurance companies in your practice is the way of the future.

The roboconsultant woos you buy saying that for one case of dry eye you can milk an insurance company for $500-$800 in office visits and procedures. Well, do you do that for every dry eye patient, even the poor self pay patient or the patient with insurance but poor benefits? I would think that doing it just for those with good insurance would be unethical as well as probably insurance fraud.

I think the more your appointment book is filled up, the more you should be able to charge for your services. It’s the old supply and demand of free economics. I think a better system would be for patients to have to front the money to pay the doctor for office visits at the time of service. The patient would have to get reimbursed what they can from their insurance company. Maybe then insurance companies would be forced to have a faster turn around time on processing claims for their patients and be watched more closely for just rubber stamping a denial based on some frivolous billing exercise (or at the least the patient has to worry about it instead of me.) I simply provide the best care for the patient, recommending only the products and services that they need, since now I don’t have to worry about getting paid.

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So Rob’s Blog has this to say to people about getting yearly diabetic eye exams. As if optometrists in a commercial setting don’t do the same thing, he tells a big lie here:

…these [private practice] doctors consistently have the longest relationships with their patients and provide the best care.

Rob, people aren’t buying what you’re selling anymore. I see VSP beneficiaries out of network all the time in my Wal-Mart setting. I guess they aren’t loyal to a practice setting, but rather they factor in price and convenience while assuming, correctly, that any doctor they see in my area is competent.

Oh, and I remember when Intel in the Hillsboro/Beaverton, Oregon area was buying your VSP, and then they switched to EyeMed. Does that mean they thought your private practice network of doctors couldn’t “provide the best care?”

But I see what he’s trying to do. Any roboconsultant will tell you that you need to differentiate yourself from the competition; however, I take exception when he lies.

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The Independent Urologist has an excellent post about surviving your first 1-2 years of private practice, should you be insane enough to try. I think he makes a great point, you need much more money in working capitol than capitol equipment. That was part of my problem, I ran out of money, had to get a job 4 days a week outside the practice just to pay the bills, and that left much less time available to grow my own practice.

My financing company wouldn’t give me very much money as working capitol. They capped it as a percentage of the total loan. You’ll note that a urologist has less equipment costs than an optometrist with an optical. If I were to do it again, I would find out all the companies like Altair that give you frames on consignment. I also wouldn’t buy fancy digital phoropters and Officemate Exam Writer. I would go cheap as possible on everything- bootstrap. That’s the only way you’ll survive until the break even point.

And I wouldn’t hire a practice consultant that takes $13,000 of your borrowed money either. Practice consultants will make you think that if you build it, they will come. It’s pretty expensive flavor-aid to be drinking. You’ll get all the information you need from internet searches and free resources like the Management and Business Academy. Also, a good buying group like C&E Vision has excellent resources to help you see what numbers you should be putting up.

By the way, did you know Wal-Mart docs have the Optometric Business Academy? I hope that you didn’t really think that vendors (like Ciba, Essilor, Topcon, and Transitions) only look out for private practice docs.

Also the IU notes that while he now has a positive cash flow, he estimates that he has lost ~$200,000 in income by starting up his own practice. If you start off practicing in Wal-Mart, then you have income from the get-go. I know of doctors working for other optometrists for ~$50-60K pre tax salary for a few years with the hope of buying into the practice. Even if they are allowed to eventually buy in, what about all the income lost? They could have been making $120K+ pre tax net while working with Wal-Mart.

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