Since the approval of laser-based refractive surgery in late 1995, the measuring stick for a refractive surgery practice's success has been ?the big V,? (monthly patient procedural Volume). We have all had discussions about volume on the phone, at national meetings, and in strategic planning sessions. The question on everyone's lips was, ?How many LASIK eyes per month is our practice performing versus our competitors??
In my experience, most practices use V as the single measurement for success. I believe this system became popular because it met the LASIK industry's needs at a time when we were all experiencing a boom market. Measuring a practice's success by monthly procedural volume was acceptable in the year 2000 when volumes were at all-time highs. Measuring solely by volume is marvelous if you as a business owner like the numbers being reported. The core problem with using V as your sole measurement is that a low volume number is not something a surgeon, administrator, or center owner can act upon to improve next month's, next quarter's, or even next year's procedural volumes.
WHAT THE SECRET FORMULA IS NOT!
In order to succeed, it is important to look at the variables that drive monthly procedural volume, not simply the volume value itself. When a practice achieves and maintains acceptable goals for each of these variables, everyone will be happy with V.
Let's start by looking at what the secret formula is not. Many people I speak with believe the lone variable that affects volume is G (lead Generation). This erroneous opinion makes a practice's volume vulnerable to present world events and low consumer confidence as a result of the sluggish economy.
I refer to that belief system as the “jellyfish refractive management approach,” which labels all of the factors affecting monthly procedural volumes as outside of the practice's control. These practitioners and their staffs are content to let their Vs go wherever the external tides take them. In order to control your own destiny, it is important to understand one key fact: the secret formula is not G = V.
G &Mac173; V
Which variables affect a practice's procedural volume? Lead generation is one. G represents the ability to generate an inbound inquiry from prospective patients through marketing and sales efforts. Most of us are very familiar with the ways a practice can effectively generate inquiries. These methods include advertising, patient-to-patient referrals, business-to-business networking (including comanagement), and marketing such as direct mail, brochures, etc. I purposely label these inquiries as prospects, not patients. Most practices believe that every time the phone rings, a patient is calling.
In refractive surgery, prospects do not become patients until a practice succeeds at accomplishing the next two variables: Capture (C1) and Conversion (C2). Capture is accomplished when a practice convinces a prospect to commit to the first face-to-face meeting in the refractive surgery decision-making cycle (eg, seminar, consultation, examination) (Table 1). I like to call this step ?getting them into the showroom.? Studies show us that 98% of consumers will not purchase an automobile without test-driving it first. The same is true in refractive surgery. The vast majority of prospects will not commit to surgery if they do not first visit the office where the procedure will be performed.
Conversion is accomplished when a practice successfully moves the prospect from the Captured event to the next step in the cycle (seminar to examination, or examination to surgery). Only after a practice's surgeon and staff fully understand their levels of success with these three essential variables will they be able to improve their monthly procedural volume. The correct combination of these variables results in the elusive refractive secret formula: G X C1 X C2 = V.
G X C1 X C2 = V
Producing five inquiries per day for refractive procedures will yield 115 inquiries per month (assuming there are 23 working days in 1 month) (Table 2). Let's assume this practice also successfully convinces 50% of its inbound callers to commit to a seminar or consultation. From there, the conversion-to-surgery rate for this practice averages 75%. G X C1 X C2 = V allows the practice to predict its monthly practice volume on a regular basis. In the above scenario, this practice should expect to be averaging a V of 86 refractive surgery cases (eyes, not patients) per month.
G, C1, and C2 Are Actionable
If any of the variables in the equation do not meet expectations, the practice's management will need to work with the proper staff members in order to improve that area of the refractive patient production cycle. For example, a less-than-desirable G may mean better marketing and advertising is required. Alternatively, more work may be required to build a successful patient referral program. On the other hand, an undesirable C1 directly relates to the manner in which staff members handle inbound telephone inquires. Finally, the C2's at most practices I have come in contact with are overly optimistic. When practices run the real numbers, they are often surprised at their actual conversion rates.
The key to developing the correct formula is collecting accurate data. The reality is that most LASIK coordinators and surgeons really have no idea what their practice's G, C1, and C2 are on a daily, weekly, or even monthly basis. Many will make an educated guess, but there is clearly too much at stake in the business of refractive surgery to let guesses dictate your future. There are really only two ways to get the accurate numbers that a practice needs to fill in the variables to the equation: (1) diligently track each and every action and step in the refractive cycle by hand or (2) commit to purchasing and using a customized software product that accurately and automatically fills in the equation.
Our firm makes both options available to a practice. To obtain information on how your Refractive Coordinator can track these numbers, visit www.refractiveware.com/equationsteps. The good news is that the material is free; the bad news is that every month a staff member must perfectly calculate more than 5,500 steps for the equation to be accurate. The other option is the refractive-specific software tool our firm has developed: RefractiveWare. The program is available for one low monthly subscription fee to your practice. RefractiveWare can accurately fill in the important G X C1 X C2 = V equation with a few simple mouse clicks.
However you choose to keep track of these variables, there is no doubt that they are the key to greater success for your refractive surgery practice.
Mark Danzo is a refractive surgery practice consultant and the CEO of RefractiveWare. He may be reached at (800) 204-1989; markd@refractiveware.com. G X C1 X C2 = V is a copyright of RefractiveWare, Inc.
