CONTACT LENS PRACTICE PEARLS
PARETO PRINCIPLES (AKA THE 80/20 RULE) IN PRACTICE
DAVID L. KADING, OD
One of my favorite things to contemplate in business is the Pareto Principle, more commonly known as the 80/20 rule. This principle states that around 80% of the effects come from 20% of the causes. This has been used to explain land ownership to gardening and is oftentimes referred to in business to show that 80% of your business comes from 20% of your clients.
Every time that I am reminded of the Pareto Principle, I try to look at my practice and find a way to make it better. I want to make sure that my optical is functioning well, I want to make sure that my patient time is being managed efficiently, and I want to make sure that that my finances are as properly run as possible.
As contact lens fitting professionals, we should look at our contact lens practice and patient base through the 80/20 lens. One of the best examples of the rule in play has to do with our specialty practices. If you do some or many specialty lens fits, would you feel safe saying that 80% of your contact lens business comes from 20% of your contact lens fits (i.e., your specialty patients)? I would venture to bet that at least 80% or 20% of you would answer yes.
The Specialty Side of Things
If we consider our specialty side of contact lens fitting in a primary care practice, we quickly can see that these patients have the potential to make up less than 20% of the contact lens patients whom we see. Yet, they make up nearly 80% of the contact lens revenue. If this is not a statistic in your practice, you may be missing the mark on specialty patients. I can assure you, those patients are out there and are seeking your help.
Due to the complexity of their fit and their high cost of goods, custom contact lenses are generally reimbursed higher by insurance companies or in private pay situations. As such, we need to highlight these patients in our practice. More than any other contact lens wearers, this subgroup of patients needs to maintain compliance with their lenses and care solutions to be able to wear contact lenses for years to come. As such, they should have regular check-ins with the office. If all is going well for patients, they may forget about your office and forget to come in and see you for a regular visit. And, for many of us, we spend 80% of our time dealing with the the patients who generate only 20% of our contact lens revenue.
By the Numbers
Run these number as an example. Let’s say that you have 100 specialty patients from whom you gross $500 per patient; hopefully you make more than this per patient, but this is just an example. Then, next year, 50% of these patients feel “fine” with their lenses and elect to not come into the office for their annual visit. In this example, you would need to generate 50 new patients, or $25,000 in gross revenue, just to hit the benchmark of the previous year.
However, if you can recall 80% of your specialty patients back into the office (gross revenue of $40,000) and still be effective at getting 20 to 50 new patients, you have the amazing potential to grow the gross revenue of your practice year over year.
Most of us spend significant amounts of time trying to recall our patients, and I would encourage you to utilize one of the fantastic systems available to digitally recall your patients into the office for their annual or regular specialty lens visit. But, if any of these methods fail and you have not seen your specialty patients in the last 14 to 18 months, consider a personalized phone call. Any of your contact lens technicians can call and share with specialty lens patients the importance of maintaining their ocular health so their eyes stay healthy in lenses for years to come. It is a small amount of time (20%) that has amazing potential to really impact the outcome (80%).
Of note, only 20% of you reading this will use this in your practice, but you will most likely help 80% more patients and generate 80% more revenue in doing so. CLS
Dr. Kading owns the Specialty Dry Eye and Contact Lens Center in Seattle. He is the co-owner of Optometric Insights with Dr. Mile Brujic. He has received honoraria for consulting, performing research, speaking, and/or writing from Alcon Laboratories, Allergan, Bausch + Lomb, CooperVision, Johnson & Johnson Vision Care, Oculus, OptoVue, RPS Detectors, Paragon Vision Sciences, TearScience, Valeant Pharmaceuticals, Valley Contax, VSP, ZeaVision, and Zeiss. Follow him on Twitter @davekading.