Running a successful optometry or ophthalmology practice is about more than just providing excellent patient care. With rising costs, maintaining financial efficiency is crucial—and yet, administrative costs often balloon beyond control. What if there were simple strategies to keep those costs in check while also improving operations?
In this post, we’ll explore exactly how you can do that.
Identifying Key Areas of Overspending
Administrative costs can quietly eat away at your profits, leaving your practice less profitable than it should be. So, where exactly do these costs come from? Most often, the issue boils down to two things: inefficient staffing and unmanaged costs of goods.
1. Staffing Inefficiencies
Ever feel like you’re paying too much in salaries, yet still not getting the results you want from your team? You’re not alone. Excessive staffing or underutilization of employees can lead to significant overspending in optometry and ophthalmology practices.
According to industry benchmarks, non-doctor payroll should be around 24% of your total revenue.
If your practice’s payroll exceeds this benchmark, it’s a red flag that you might be overstaffed or not fully optimizing your team’s workload.
2. Losing Control of Costs
Ever wonder if you’re paying too much for contact lenses, frames, or other supplies? Without strong controls, it’s easy to over-order or fail to secure the best pricing from vendors.
The combined cost of labor and goods should never exceed 60% of your revenue.
Practical Strategies for Reducing Costs
1. Right-Size Your Staff
Use the 60/40 rule:
60% of your total revenue should cover labor and cost of goods. If labor costs alone are creeping toward 50% or more, you’re overspending.
Ask yourself:
- Are all employees fully occupied during their shifts?
- Can tasks be reassigned or workflows optimized?
2. Implement Cost Management Tools
Think of your business like a ship—it needs course corrections. Here are a few quick wins:
- Renegotiate vendor contracts: Join buying groups for discounts on supplies.
- Track payroll productivity: Ensure ROI for employee hours.
3. Leverage Global Staffing
Global staffing allows you to outsource non-core functions (e.g., billing, scheduling, customer service) to remote staff at a fraction of the cost.
How Global Staffing Works
Unlike traditional outsourcing, global staffing integrates remote workers into your team. They perform the same tasks as in-house staff but from a different location.
Best Tasks for Outsourcing
- Appointment confirmations and scheduling: Remote staff can handle all incoming calls.
- Insurance filing and billing: Reduce in-office paperwork by outsourcing claims.
- Patient recalls and follow-ups: Follow-up tasks boost revenue while keeping costs low.
Case Study: Classic Vision Care
By outsourcing tasks like billing and follow-ups, Classic Vision Care reduced non-doctor payroll by 30% and increased revenue by 33%.
The Importance of Metrics and Continuous Monitoring
To ensure these strategies work, monitor key metrics like:
- Calls answered per day
- Insurance claims processed
- Patient follow-up completion rates
Conclusion
Reducing administrative costs doesn’t have to be daunting. By:
- Optimizing staffing levels
- Using cost-control tools
- Leveraging global staffing
… you can transform your practice into a cost-efficient, productive operation. Start today with simple adjustments and focus on what truly matters: providing excellent patient care
