Weighing the costs and benefits of outsourcing customer service in ophthalmology and optometry

We increased our revenue per patient by 33% because we took the phones out of the office. We took the admin tasks out of the office too. And we started doing recalls. But we didn’t set out to be experts in outsourcing customer service in ophthalmology and optometry. We began by focusing on things like reducing staff turnover. And we wanted to spend less time supervising and managing staff without hurting our patient experience. To make those areas more efficient, we focused on process improvements. Once we had refined things into a tight, well-documented process, it was apparent that we could outsource the repetitive admin tasks.

When we first started, we weren’t planning to go all in on outsourcing our business processes, or BPO for short. The first thing we did was brainstorm the stuff we could streamline. We broke it down into the work that was specific to eye care clinics and the tasks that are common across businesses. 

Unique to an Eye Care Practice:

1. Patient Scheduling and Confirmation: While appointment scheduling is common to many businesses, in the eye care industry, it often requires an understanding of the varying lengths and types of eye exams and procedures, and managing these efficiently can significantly impact a clinic’s operations.
2. Medical Billing and Coding: This requires knowledge of specific codes used in a medical billing process for eye care, and dealing with vision and medical insurances. Billing errors in this area can lead to claim denials, delayed payments, or potential legal issues.
3. Patient Follow-ups and Satisfaction Surveys: Post-exam follow-ups may involve specific instructions or information related to an eye exam or treatment.
4. Insurance Verification and Claims Processing: Processing vision and medical insurance claims is unique to healthcare businesses, requiring an understanding of eye care specific insurances, codes, and procedures.
5. EMR/EHR Management: This involves managing records that contain sensitive medical information related to eye health, and require compliance with healthcare-specific regulations like HIPAA.
6. Inventory Management: This pertains to managing inventory of eyewear, contact lenses, ophthalmic medications, and other eye care-specific supplies.

Common Across Various Businesses:

1. Financial Services: Tasks like payroll processing, updating the books, accounts payable/receivable, and financial reporting are common across many industries.
2. Human Resources: Staff recruitment, training, and management are applicable to all kinds of businesses.
3. Marketing and Social Media Management: While the strategies may differ, the concept of promoting a business and engaging with customers online applies across industries.
4. IT Services and Support: Almost every business today needs some level of IT support, be it for software management, hardware maintenance, cybersecurity, or general tech support.

Then, we listed the costs and benefits of outsourcing our optometry clinic.

In-House Staffing for Front Office

Benefits

• Direct Control: With in-house staff, you have complete control over your employees, their training, priorities, and how they represent your brand.
• Deep Knowledge: In-house staff, particularly those who’ve been with the clinic for a long time, typically possess extensive knowledge about your specific processes, patients, and needs.
• Immediate Availability: They are readily available to handle issues or answer questions, offering more direct and timely communication.

Costs

• Higher Expenses: In-house staff entails higher costs in terms of salaries, benefits, office space, equipment, and training.
• Management Time: You or your management team have to spend significant time supervising and managing staff, which takes time away from patient care.
• Staff Turnover: Recruitment, training, and staff retention can be tricky, and staff turnover often leads to disruption and inconsistency in service.
• Limited Scalability: Scaling up or down quickly based on demand can be challenging and expensive with an in-house team.

Outsourcing Eye Care Front Office Work

Benefits

• Cost-Efficiency: Outsourcing can significantly reduce operational costs as you’re not responsible for the employees’ full salaries, benefits, training, and equipment.
• Expertise and Training: Professionals with extensive training and expertise in customer service, specifically for optometry and ophthalmology clinics.
• Scalability: You can scale up or down based on your clinic’s needs.
• Time Management: Outsourcing frees you and your team time to focus more on patient care.
• Improved Efficiency and Revenue: Focusing on key performance metrics increases your clinic’s efficiency and revenue.

Costs

• Less Direct Control: Outsourcing can mean you have less direct control over the individuals providing the service.
• Transition Period: There might be a transition period as the new team adapts to your specific needs and processes.
• Data Security: Outsourcing entails trusting patient data and other sensitive information to a third party.

Seeing the type of work we could outsource and the costs and benefits was exciting. After we made our list, we made the leap. We cut our labor in half in the office, and now we can pay them better. We solved our in-office problems and have better staff on the other side.

We like helping other optometry and ophthalmology clinics make the transition. But everyone needs to make their own decision about outsourcing. Over time, we learned that people considering outsourcing generally consider several factors.

Decision-Making Factors for Outsourcing in Optometry and Ophthalmology

Sometimes practice owners don’t see themselves as an operational expert and find managing the front office tasks challenging. BPOs are compelling because they have a lot more expertise and operational knowledge that can be used to improve efficiency and performance.

A business owner will analyze operational costs, including staff salaries, benefits, training, and overheads. When these costs significantly drain the practice’s resources and profitability, they are much more likely to choose outsourcing to improve their bottom line.

Another variable is how much time the owner or the management team spends supervising and managing administrative tasks. If administrative work is taking away from time that could be spent on patient care or business development, outsourcing could be a more effective use of time.

Depending on the market, a practice might deal with high staff turnover, which makes recruitment and training a higher cost. Or they might need help to maintain staffing levels during peak times.

Quality of patient care is a big factor. When administrative tasks are taking time away from patient care, then outsourcing can help alleviate this problem. In-house staff can focus more on delivering top-quality patient care with a dedicated team handling front-office tasks.

For practices planning to expand, reduce, or change their operations soon, a flexible staffing solution can better adapt to these changes. 

Finally, clinics that are more passionate about offering their patients the latest technology are more likely to consider a BPO. BPOs typically have access to the latest technologies and systems for managing tasks efficiently and securely.

Tips for Analyzing Non-Doctor Labor Costs

We learned from working with hundreds of clinics that practice owners and managers weren’t always sure how to analyze their costs. We can relate to that. Learning the ropes of running an efficient optometry practice wasn’t an overnight process for our team. It came from facing challenges head-on, and figuring out firsthand how to improve the bottom line. This experience was what led us to uncover the substantial benefits of improved processes and strategic outsourcing.

Now that we’ve had the opportunity to work with a broader set of practices, we could see how they have these unique operational hurdles. We learned how different variables—location, practice size, the range of services offered, overhead costs, and more—can significantly impact the bottom line. Viewing these factors through the lens of individual clinics enabled us to provide the most effective and tailored strategies for each.

Our experience has taught us that enhancing profitability is rarely about focusing on a single metric, such as profit margins. Other critical parameters, like revenue per patient and patient retention rates, also paint a comprehensive picture of a practice’s health.

There’s a myriad of strategies to explore. Regardless of their chosen strategy, most practice owners decide to do something because they have pain around profit, patient experience, and turnover/recruitment costs. Some of the common ones we see are:

• When a practice’s profit margin is decreasing or lower than industry standards, it indicates that costs, including staffing and operational expenses, are too high. We tell people that non-doctor labor should be between 20 to 24% of your revenues. Some clinics are getting above 30% now.
• Comparing the revenue generated per employee against industry benchmarks can help a clinic identify inefficiencies in its staffing structure.
• Similarly, a high overhead rate suggests that costs can be managed more efficiently.
• Long waiting times can lead to patient dissatisfaction and potentially lost revenue. So if patients wait for extended periods, it’s likely due to needing more staff or more efficient administrative tasks.
• Practices experiencing high staff turnover are constantly recruiting and training new staff. These costs can quickly add up and drain resources.

Depending on the clinic, they may care about their performance compared to other clinics. They might compare their cost structure and financial health with industry standards or similar practices. In our experience, non-doctor labor should be between 20 to 24% of your revenues. Also, if a significant portion of the owner’s or practitioners’ time is spent on administrative tasks rather than patient care, it could indicate that the clinic could use its resources more efficiently.

In our upcoming posts, we will detail the options available to eye care clinics. We’ll cover using virtual assistants vs BPOs. In the meantime, don’t hesitate to ask if you have any questions about outsourcing admin work for your eye care clinic. We like to share tools and best practices. We’re constantly giving tips, advice, and tricks that we should all be discussing more in our industry.