As a follow up to the pro forma part 1: revenue projections post, I’ll go over what really happened in year 1 & 2.
When I was creating my pro forma, I thought I was being conservative with my projections. Apparently, I wasn’t being conservative enough. I don’t have my notes from 2010 anymore, but I recall that my attending was seeing around 20 patients a day by the end of year 2. As I had mentioned in my prior post, I revised my projections downward by 40% because I had expected my ramp up as a brand new practice to be slower. I think I had myself seeing 2 patients a day on month 1, 10 patients a day at the end of year 1, and 15 patients a day at the end of year 2. I counted any post-op visit or procedure (office and OR) as an encounter as well. I assumed each patient encounter would average out to approximately $150 with 70% being Medicare and 30% being commercial payors.
I worked 8 hours a day, 5.5 days a week (Monday to Saturday) or 46 clinic hours a week. I operated 0-2 half days a month, mainly because I had little surgical volume. I didn’t give myself any dedicated admin block, and just worked after hours instead. We took Memorial Day, Labor Day, Independence Day, Thanksgiving (2 days), Christmas (2 days), and New Year’s (2 days) off. I took an additional 3 days off for AAO, and 1 other day for a wedding. I averaged 22.75 clinic days per month.
In terms of volume, I averaged 2.3 patients a day in month 1, and finished the year at 8.5 patients a day. For the entire first year, I averaged 7.07 patients a day. On average, each patient encounter paid $134.40 per patient, which included all procedures and diagnostics. 55.7% of revenue came from Medicare, 35% from commercial payors, and 9.3% from self-pay.
As for diagnostic testing ratios:
- Cataract Surgery: 66.5 to 1
- Lasers (YAG,LPI, PRP, focal): 64.3 to 1
- OCT macula/RNFL: 8.1 to 1
- Visual fields: 22.9 to 1
- IOL Master: 66.5 to 1
- Fundus photography: 41.0 to 1 (I should have done more of these in retrospect)
- Gonioscopy: 10.2 to 1 (I have a lot of Asian patients with narrow angles)
- Pachymetry: 18.5 to 1
After a year of working 6 days a week, I couldn’t handle it anymore. In addition, I realized that working less days didn’t necessarily translate into lower patient volume. Instead, they all just get squeezed into the other work days. So, I decided to take Wednesdays off and add another 2 hours to my Saturday clinic, reducing my total clinic hours to 38 hours a week. Because I operate on Tuesdays, I would still have to go in on Wednesdays for an hour or so to see my post-ops. I still operated 0-2 half days a month in year 2. We took the same holidays off, and I also took 4 weeks off for 6 or 7 weddings, trip to Korea, and AAO. I averaged 20.9 clinic days per month.
In terms of volume, I started with 8.63 patients a day in month 13, and finished the year with 12.94 patients a day. For the entire second year, I averaged 11.0 patients a day. Each patient encounter paid $146.00. 49.0% of revenue came from Medicare, 40.5% from commercial payors, and 10.5% from self-pay.
As for diagnostic testing ratios:
- Cataract Surgery: 58.6 to 1
- Lasers (YAG,LPI, PRP, focal): 95.0 to 1
- OCT macula/RNFL: 5.6 to 1
- IOL Master: 58.6 to 1
- Visual fields: 19.5 to 1
- Fundus photography: 37.7 to 1 (I still should have done more of these in retrospect)
- Gonioscopy: 17.2 to 1 (I got better at evaluating narrow angles without gonio)
- Pachymetry: 19.7 to 1
FYI, I treat the majority of medical retina and glaucoma for my patients.
Overall, I think I got pretty close to my estimates. Although, I should have revised my volume projections lower by 50 to 60% instead of 40% compared to my new attending’s numbers. Also, my revenue per encounter estimate should have been 10 to 15% lower. I really didn’t market myself as much as I should have because I CANNOT stand networking and schmoozing. If I had gone out and shaken a lot more hands, I probably would have been spot on with my pro forma estimates. Not bad huh? 🙂