As we’ve moved into Q-4 of 2020, there’s a good bit of conversation and speculation regarding the product side of our business. Encouragingly, I’m talking with many colleagues who have found during Covid that their APT (Average Patient Transaction) is noticeably HIGHER these recent months, and that seems to have folks wondering things like:
-Why is my Average Product Transaction (a subcategory of Revenue-Per-Patient) HIGHER than before the pandemic?
-Will that trend continue after we’ve serviced penned-up demand from being closed or working reduced hours?
-Is there really going to be a new normal, and what will the chains, big box and internet competitors be doing in it?
-What are the vision plans up to, and should we continue participating
-How can I control my practice results in light of all this.
Average Product Transaction
I’m seeing colleague after colleague show record production for the months of June, July, August and September. It’s true. Even in May for some practices. How can that be, given most practices are still operating at a lesser schedule than in the “old normal?”
The simple answer, of course, is that we’re off-setting lost volume by making better, more deliberate use of our time. For the first time in a decade, doctors in many practices have actually had more time (rather than less) to do their jobs. They’ve not only been able to do the prescribing, but actually spend more time making and elaborating on specific recommendations. I’ve talked until I’m blue in the face about this, but a silver (perhaps gold) lining of the “virus era” is that we’ve seen proof positive that we actually do control much of our Revenue-Per-Patient outcomes if we just choose to. Funny how that works. And we’ve had more time to do that.
Will that Trend Continue?
This is an easy answer for me. It can and will continue, if we CHOOSE for it to.
Despite many market forces (third parties, heavier schedules, competition, internet) tending to drive Revenue-Per-Patient down, we’ve always had opportunities and abilities to counter that by making the decision to do so. I’ve talked a good bit lately about what I call The Tale of Two Practices – how two practices a block apart can experience totally different results in any given metric. None more so than Revenue-Per-Patient. Even two doctors in the same practice can show a $200 difference — same competition, same internet, same vision plan world, same economy, same consumer base. Just different decisions made about outcomes, and consequent deliberate efforts in controlling them. Outcomes are more a matter of decisions made than market forces at work. We decide on our outcomes, and we power those outcomes with the right initiatives.
Key to desired outcomes are a strong mission and motive, giving patients more opportunities to vocalize needs and wants, making clear, concise and forthright multiple functional doctor recommendations, the right baton pass to staff, and the right unique selling propositions – all demonstrating incomparable value in the relationship within our products and processes. These are all parts of the proverbial whole … our strategy to control Revenue-Per-Patient metrics.
Is There Really a New Normal?
Yes. Given what our communities, nation and world have been through, how could there not be? However, I like independent optometry’s position in this new normal. Some businesses are not faring well, but optometry relationships that were strong in the old normal seem to be as strong and even stronger in the new normal. Clearly in this normal, consumers are more deliberate, and thinking more about what they value and choose to consume. They also seem much more adamant about it. Perhaps even unyielding. They are choosing to go without some things (perhaps the gym, restaurant or hotel stay), and not letting go of others (their eye exam or that specialty lens they’ve wanted).
Our practices seem to be beneficiaries of their choices in the new normal. The value of service and products we provide, and the relationships within which they come, are gravitating toward the top of their lists. And I wonder how we cannot be encouraged by this? The question, of course, is will our teams respond to this trend with strategies for its continuation? Can we literally make it our new normal? How can we make it a point to teach patients and potential patients what and how to value? Will we make a point to spend more ‘quality’ time while interacting with patients? Can we make clear judgements, and recommended a more strategic course of action? Will we ensure next years schedule, despite the obstacles that arise, by taking time in the exam room to make the pre-appoint? Will we choose to implement controllable initiatives that make our results match our objectives?
Vision Plans
The squeeze is on. Part of the new normal appears to be that the plans aren’t going to make life any easier for private practices.
Overall, I still favor participating under the right circumstances (with exceptions of course), as a patient in the chair is typically better than an empty chair. As we see what life looks likes with “less stuff” packed into the schedule, and the favorable production outcomes that can come with more time to actually do our jobs, we begin to contemplate our options here. It’s still a relatively free country, and we can choose or “cherry pick” plans that are in the patient’s best interest regarding quality of life (remember, what’s good for the patient is good for the practice).
If you’re pondering doing so with certain plans, we need a few things in place first. We need clearly written objectives for certain production metrics. We need consistent, weekly metrics reporting with certain outcomes knowingly being achieved. We need a point-blank patient education curriculum in which the entire team is fully bought in and participating, and in which each team member has a clear educational role. We need the right internal and external marketing initiatives. And we need to choose to control things like clarity of primary and secondary recommendations, capture rate, categoric product and service focuses, etc.
Thirty years ago, the situation in Canada and the USA was basically reversed. Canada was the “managed care” system, and the USA was still the wild, wild eye-care west. Colleagues in Canada had been locked in government systems involving extremely regulated fees (including the inability to mark-up your products one dime beyond what you paid for them – how’s that for managed?!). Then “de-insurance” swept that nation, and it became charge what you will in most provinces for most patients.
Meanwhile, back in the USA, the polar opposite was happening. It was the beginnings of what became known as “managed care,” and it has since evolved steadily in that direction. Funny how we do things in society, then undo them, then redo them. Sure sounds like history repeating itself.
Opposite as those trends are, right now in both nations, certain metrics like Capture Rate are either on (or soon approaching) the endangered species list. One thing I really appreciate about the pandemic is that we’ve learned that they don’t have to be!