With reimbursements decreasing and shifting managed-care plans sometimes fracturing a practice's patient base, many ophthalmologists are seeing their overhead go up and profits go down. By far, the majority of physicians and practice managers with whom I spoke at last October's American Academy of Ophthalmology meeting were interested in learning how to add lines of revenue to offset declining profits. This article focuses on the time-honored practice of offering additional services to your established patients.

New Patients vs. Current
If you have the resources, you may be able to offset a decline in profits by attracting new pa-tients. Ways to bring in new patients might include recruiting additional doctors that offer different services (typically subspecialists), adding in-office LASIK and/or creating new marketing efforts. These types of expansion efforts carry more risk and associated costs, however, such as more staff, equipment, office remodeling and increased advertising. Since tighter budgets are often the force driving practices to seek new sources of revenue, the monies needed to expand in these ways may not be readily available.
It is an old but proven rule of business that it is more expensive to gain a new customer than it is to service a current one. It is typically less time-consuming, less expensive and more effective to offer additional services to your established patients. With that in mind, following are expansion efforts that don't require too great a capital outlay or substantial changes in a practice's basic format.

Expand from Within
The key to expansion among existing patients is to identify those services that are most in de-mand but can be added without taking the practice's focus too far from its core business or alienate a practice from its referral base. For example, if a practice receives substantial referrals from optometrists, opening an optical dispensary may not be wise, because it could put barriers between the practice and its referral base.

The past several years have seen an increase in on-demand cosmetic services and a greater awareness in "whole-health" or "holistic" treatments. As such, it's likely that a fair percentage of patients will come into the office with questions about these topics on their minds. As a physician, the ophthalmologist is well-positioned to respond with authority regarding the patient's overall health in general and his ocular health in particular. The primary attraction in adding these cosmetic or nutritional services is that they are typically not covered by insurance plans, meaning those patients who want the service pay for it themselves. Such "cash-in-hand" services can provide an immediate boost to a practice's revenue stream without a substantial investment in products or time on the practice's part.

Cosmetic services. A fair number of my ophthalmology clients now offer at least a small range of cosmetic procedures—not the least of which is Botox treatments. Many ophthalmologists are familiar with the use of Botox to treat blepharospasm, and their knowledge of the neuromuscular and orbital anatomy of the face makes cosmetic Botox in-jections an easy next step. Physicians who offer Botox treatments can attain reasonably high profit margins, since pa-tients can come back as often as every three-to-four months for retreatment. By my estimates, if a practice can get 75-100 patients signed up and committed to Botox treatments, it could reasonably realize an annual net profit of $50,000. 

Other cosmetic services that might be easily added to the ophthalmology practice include laser hair removal, laser skin resurfacing and spider vein treatments. Training courses are readily available, as is equipment that can be used for several skin procedures. Depending on the interest from your patients, you may wish to hire an esthetician or paramedical practitioner to provide these services, much as other practices hire an optician to work in their dispensary. Remember to investigate your state's regulations to determine which personnel are required by state law to perform these services.

Product Resource
As a physician, you can be patients' sole resource for medical-grade, high-quality "cosmeceutical" products such as skin creams, lotions, cosmetics and soap. One of my clients, J. Alan Rappazzo, MD, of Chandler, Ariz., provides cosmetic services via two staff estheticians and is a trusted resource for cosmeceutical products. His male and female patients will stop by the practice as needed to replenish personal care products that they can't obtain at the local drug store. As Dr. Rappazzo puts it, "By simple internal marketing, we were able to develop an entire esthetic practice. This has enhanced the services we provide to our patients while creating the benefit of a new profit center to offset our revenue losses due to reductions in reimbursement from managed care." The key is to have an experienced and qualified person, usually an esthetician, who can manage the inventory for optimum profitability. Too much inventory decreases profits while too little results in lost profits and dissatisfied patients.

Nutritional Care
Some of my ophthalmology clients are seeking ways to tap into the increased patient awareness of nutrition by of-fering supplements that assist in visual and whole-body health. Just as with cosmetic products, patients will come back time and again to obtain these from a trusted source.

The key here is not to get involved in a situation wherein you tie up cash by purchasing products and maintaining an inventory. A good way to achieve this is by establishing a relationship with a provider of nutritional supplements that you believe in, such as supplements based on the data from the Age-related Eye Disease Study, and allowing your pa-tients to order the supplements from the distributor through you. In this model, you receive compensation for the sale of the product but you don't have to spend time managing inventory. Your practice doesn't have to create displays or free up storage space, and a patient can conveniently order on-line or over the phone. I have been able to work out such a relationship with a provider of supplements for my clients, and it works well.

Offering cosmetic services, cosmeceutical products or nutritional supplements to your established patients can typically be done at less cost than in attracting new patients to your practice. By expanding the services provided to each patient, you take one additional step in cementing patient loyalty and have provided that patient with the motivation to augment your practice with word-of-mouth referrals. With declining reimbursements wreaking havoc on many practices' bottom lines, it makes good business sense to increase your lines of revenue to maintain or grow profitability. 

Mr. Ruden of MedPro Consulting & Marketing Services assists group and solo ophthalmology practices throughout the United States on a variety of health-care management issues regarding cost, value, practice acquisitions, mergers and marketing. Contact him at (602) 274-1668 or