A privately owned ophthalmology practice with two MDs and two optometrists was concerned about high operating expenses and provider efficiency.
Situation
While VMG Health offers full-service benchmarking, the practice had a financially skilled administrator capable of managing the process in-house. After consulting with a VMG Health Senior Consultant, the team subscribed to Ophthalmology Connection (BSM Connection for Ophthalmology), an online membership platform offering over 600 tools and resources. The consultant recommended regular benchmarking to track revenue versus expenses and assess how major costs—like payroll, medical supplies, and occupancy expenses—impact profitability. To support this, the senior consultant provided training sessions focused on using Ophthalmology Connection’s pre-made benchmarking templates for general ophthalmology practices. These sessions equipped the administrator to begin tracking key financial and operational benchmarks independently on a monthly basis.
Solution
To monitor progress and ensure accountability, the consultant, physicians, and administrator held monthly meetings to review the benchmarks completed by the administrator. Early benchmarking revealed that, while operating expenses were high, staffing levels and payroll costs were consistent with VMG Health benchmarks for similar practices.
Further analysis showed that the core issue was insufficient revenue generation by the physicians, rather than excessive spending. Additionally, the practice’s net collections ratio was only 85%, significantly below the industry standard of 95–100%. Deeper investigation uncovered that the external billing company was severely delayed in submitting claims, creating additional administrative burden and contributing to cash flow issues.
Success
Through monthly benchmarking meetings, the practice quickly realized that their high operating expenses weren’t due to staffing—payroll and staffing ratios were actually in line with industry benchmarks. Instead, the issue was on the revenue side: The doctors weren’t generating enough income to cover costs. With guidance from VMG Health, the administrator developed a plan to improve clinic efficiency and provider productivity. Having consistent benchmarks in place gave the physicians more confidence and helped them make informed, data-driven decisions.
The practice also began tracking revenue cycle metrics more closely using VMG Health’s proprietary Connection Billing Department Dashboard Report. This gave them better insight into their billing company’s performance and revealed significant delays in claims submission. These delays were creating extra work for the internal team and hurting collections. Eventually, the practice made the decision to switch to a new billing company.
As the administrator became more confident in managing the benchmarking process, VMG Health’s consultant was able to step back. The practice now handles their monthly reviews independently and reaches out for VMG Health’s support only when specific questions arise. This outcome reflects the core value of Ophthalmology Connection: equipping practices with the tools, resources, and knowledge to drive sustainable improvement from within.
