Ophthalmic practices The Indian scenario

Ophthalmology Practices - The Indian Scenario

      Ophthalmic practices in India are in variety of shapes and sizes. They start from single ophthalmologist working in a small room to large enterprises with hundreds of branches who are planning their IPOs. There are places where a patient is brought from their home and after treating them fully sent back free of cost. There are other places where for a minor chalegion treatment patient pay thousands of Rupees (more than Rs. 25000/-). I am describing here few of the common practice models. These models can help you plan out your career and practice development options.There are hundreds of variations on how you can practice ophthalmology, such as  Large practices or small business-like practices and Practices offering only a narrow subspecialty like retina/refractive only or ones offering every conceivable eye care services.

The kind of practice you join or build is under your control. And yet relatively few young surgeons I have met, thought deeply about where and how they would like to spend their 30-50 years career. Even fewer middle-aged surgeons already in practice draw up plans to achieve one particular endpoint model.

While everyone knows there are lots of potential practice models, no one has thought of the varieties of practices and laid out their similarities and differences, the advantages and disadvantages of each. I would like to enumerate that for you here, so that one can choose one or the other way of practicing ophthalmology. Don’t think too much about theses arbitrary categories. There is a lot of overlap and mix-and-match potential among these alternatives, and the boundaries between one type and another can be blurred. I have concentrated on the most common private practice models and their various scales and variations, this does not include governmental, military, educational, and similar institutional settings, where the ophthalmologist is a full time associate and with  no entrepreneurial opportunities.

Small solo practice

For the sake of this discussion, let’s arbitrarily set this as a practice with less than Rs. 24 lac in annual collections. Such a practice may either be kept small intentionally for peri-retirement or lady ophthalmologist, who wants to work less to stay more time at home, and give time to family and kids. Or may be held back by marketplace or limitations of the ophthalmologists to provide just OPD care or not able to provide full services.

Strengths: From a lifestyle perspective, nothing beats a small solo practice, unless you are in such a practice involuntarily. With just two or three loyal staff and a slow clinical pace, I have seen few surgeons in such practices who relish what they can do with their time off and who are perfectly comfortable with the accompanying low income.

Weaknesses: Given the high fixed costs of modern practice and the need for a minimum number of patients to cover these costs, the profit margins are much lower in this setting. But in small cities where expenses are very less (where a good compounder takes any thing between 1500/- to 6000/- and other staff is also less paid) they survive easily.

Earning potential: May be as low as Rs. 40000/- to 2.0 lacs per month

Larger solo Practice

You are on your own, you are the only boss and you have to answer no one. In India most of the happiest surgeons I know are in this category, with no partners to interfere and a comfortable business that usually does not exceed Rs. one to two crore in annual collections.

Strengths: The chief strength of this practice model is control, you have on every thing. On the fees you want to charge to the patients, number of patient you want to see daily, hours you want to work may vary accordingly. You can make management decisions on a whim, by adding employees, ophthalmic assistants or even ophthalmologists, you can preserve control while still ramping up the scale.

Weaknesses: In addition to the unshared fixed costs of a solo practice of any scale, even the most robust solo practices are really solitary. And beyond this subjective feeling, the objective reality is that as a solo practitioner you are vulnerable to the encroachment of larger practices in your practice area, it is also difficult to maintain good health and continued enthusiasm to pull yourself up all the time. Prolonged illness or just a little extra time away can be economically punishing.

Earning potential: Pre-tax income typically lies between Rs. 50 lacs to 2.5 crore. Dispensary, optical dispensing and other sources of passive income are also exploited

Visiting Ophthalmologist Practice

You need not have a single setup. A large number of subspecialists and even generalists practice largely, out of many clinics (visiting many Nursing homes or hospital to provide Eye care). Using the facility, staffing, marketing, and patient resources of such hospitals, you can avoid the complications of business ownership and still enjoy the pleasure of independence. This career approach can be unsettled as you don’t have anything of yours.

Strengths: Like a clever parasite, such eye surgeons move in and use the host’s resources to provide patients, staff, facilities, and systems etc. basically everything. Some of these are doing very good business.

Weaknesses: With this approach to practice, even after several years you will feel like a permanent visitor everywhere you work, except perhaps for your personal office at home. You will not be an employee, but not a free agent either. And since your host practice is likely to change visiting providers on a whim, you are susceptible to loose an important part of your income overnight.

Earning potential: You share the earnings in that set up. This can be any thing like 50-50 to 75-25(If instruments are yours). It is typical as a long-term visiting provider for many years in the same practice, either you have to pay a fixed rent or share the profits. As such, your income will be proportional to your personal ambitions. You will probably make significantly less than if you run your own fixed-site practice, but you will have fewer headaches and lower fixed expenses.

Single subspecialty practice

 This is a practice with just retinal care or just glaucoma subspecialists or only pediatric ophthalmology. Unless in a large metro market or high referral practice, such practices are difficult to survive without bread and butter - cataract surgery

Strengths: In a pure subspecialty practice for example, a pure retinal or oculoplastics or glaucoma setting, margins are higher. This is not like a multi-subspecialty practice, where the naturally higher profit margins of retinal care, as one example, are often not accounted for, resulting in a financial subsidy flowing from subspecialists to generalists.

Weaknesses: The most prominent weakness of this practice model can be access to patients. With multiple subspecialists to feed in a single group, it sometimes becomes necessary to stretch satellite locations hundreds of miles from the main office, reducing both efficiency and profits.

Earning potential: When it works and there are enough patients to care for, this is the most profitable setting for any subspecialist ophthalmologist.

Larger, All subspecialty practice

 You will find at least one of these practices in most of the large cities of the country. These are typically the practices with virtually all primary care, general ophthalmology and subspecialty services available under one roof, with ancillary medical and optical coverage. A hub office with many spoke offices may be there. Most practices are more than 20 years old; many of them are multigenerational.

Strengths: These are the largest eye care Institutions in the market. It is a relief to become an associate in these larger organizations because, once developed, they are hard to dislodge from their primal position. Such practices will be first in line at the managed care if efforts to limit provider panels resurface with any vigor in the years ahead. These positives are potentially outweighed by the weaknesses.

Weaknesses: There is a tendency for practices on this scale to be elephantine in their decision-making and execution. New ophthalmologists who join such large practices, often take some time to settle into a bureaucratic tempo that can be unaccustomed and frustrating. And if you think you have joined the big boss and now every thing will be well than you are wrong. There is a lot of internal competition for surgical cases as there are many specialists for each sub-speciality. At the end of the day, with proper management these largest practices can be made smarter enough to stay durably in the lead.

Earning potential: Being a provider in such practices is often gratifying; with colleagues galore and a sense of secure tenure in the community, but this is not the most profitable setting.  Typically, on higher overhead levels and somewhat slower management decisions, which can allow smaller and more nimble competing providers to pull ahead. In the long run, the security of the income of doctors in this model can make up for the somewhat lower year-on-year earnings.

Multi specialty Medical Practice

 It is hard enough working with five or 10 fellow ophthalmologists in a mid sized eye clinic. Imagine the complexities and conflicts that arise when a few ophthalmologists are just one department in a 50- or 500-doctor group. Despite the extensive growth of multi specialty practices in most parts of the country since the advent of prepaid health care and the tendency for such practices to skip adding eye departments due to high costs and difficult recruitment, this opportunity is still open to you if you are looking for a job today.

Strengths: The chief advantage is access to contracts and a tendency in larger clinics for the doctors to be blissfully un www.practicesolutions.inengaged with the business details of their practices, which is great if you hate management burdens.

Weaknesses: As a provider in such settings, your voice is limited, and any policy you influence is influenced slowly. Your favorite saying has to become “I can live with that.”

Earning potential: The greatest concern among specialty doctors in multispecialty clinics is high overhead and the almost inevitable subsidy that flows from specialists to primary care providers. There can be a profound diseconomy of scale that leaves many general ophthalmologists and subspecialists in such settings taking home only 20% to 30% of their personal collections.

Small Charitable Practice

Small charitable Practices are usually opened by some organization to get some fame in the general public. To fulfill the aim, they invest some money collected from public as infrastructure. In religious organizations most of the infrastructure is usually present, so they invest in some instruments/equipments. But now a day’s many new practitioners are opening this type of practice to avoid competition. Initial registration is low, then they charge extra for everything.

Strengths: Ophthalmologists join these charitable hospitals in initial days (just after their post graduation) to practice surgery and get some experience of practice in private setup. If patients number is good in such charitable hospital, ophthalmologists join this so that they get some fame in the city, which help them, later when they open private practice. You have nothing to loose in this setup. 

Weaknesses: Some times in these setups, number of surgeries is very low and instead of learning surgeries you forget good practicing habits and your attitude becomes “every thing is OK”

Earning potential: Income in this set up is usually only salary, which is also very low.

Large Charitable Institutions

     These are old Charitable Institutions which are providing quality

     eyecare at affordable price to poor as well as to those who can

     pay. And I tell you they are minting money like any private

     institution. Basically these are volume players. If a practitioner is

     doing 2-3 surgeries a day he has to fulfill all expenses, his salary

     and bring return on his investment from these, so he has to

     charge more. But when you have  lot of surgeries than cost is

     distributed in all, so pricing can be kept moderate or even low and

     even then you can earn more profits.

Strengths: Founder/ Initial eye care providers of these institutions were very smart and hardworking. They used their surgical as well as entrepreneur skills to develop these practices from public money and donations and most of these have become giants and giving all private eye care providers run for their money. These are volume players most of them are charging nominally but numbers are so much that these are earning hand fully. But established senior ophthalmologists here are now getting salaries at par with private players.

Weaknesses: Junior ophthalmologists get poor salaries here. They have to work more hours per day, this may be anything between 10 to 14 hours a day.

Earning potential: Incomes are fixed and usually less than their private counter parts.

Using this informal guide, you can see that some practice models are more profitable while others are more secure. If you are ready to build, join or re-engineer a practice, use the broad categories above to guide your thinking. Don’t settle unconsciously for whatever opportunity happens your way. Plan and dream your way to the practice setting you deserve.

Dr Vipin Sahni

drsahni@practicesolutions.in

www.practicesolutions.in