Young Ophthalmologists- Understand ROI!
March 31, 2009
Here’s something they don’t teach you in medical school but is something we all learn sooner or later- so I hope the young ones out there take my advice and learn it sooner.
Here’s a good example. I was once hemming and hawing at the Academy meeting over whether I should buy an HRT. $32,000 was a lot of money, I thought. The salesman looked at me like I was insane. “Doc!” he said, “If you lease this machine, it’ll cost you about $700 a month. You’ll get about $100.00 each time you use it. Don’t you think you’ll use this more than seven times a month?” “Of course”, I said, “probably closer to thirty”. “So what’s yer problem, doc? That’s at least $$2,300 profit a month.”
That’s when I realized how clueless I was about business- don’t focus on how much something costs. It’s almost irrelevant. Focus instead on how much money it will make for you! That’s ROI.
Thinking of hiring an optometrist for your offfice? He might cost you $50,000 a year- is that worth it? Well, if an optometrist frees up, say 15% more time for you to see more patients, then you might increase your income 15%, and therefore the optometrist pays for itself. Again- don’t look at the cost; look at the ROI for each scenario, and you’ll make much better business decisions.
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2 Responses to “Young Ophthalmologists- Understand ROI!”
I just reread Dr. Weitzner’s comment regarding ROI (Return On Investment). It is true that most of us have no basic understanding of business economics, for instance, ROI.
It just occurred to me, however, that most of us have a career based upon the very concept of ROI. While we have not purchased a piece of equipment, we have financed our education through loans (aka the investment). Our degree allows us to generate income, which is used to gradually pay off the loans, while the rest is “profit” in terms of our gross salary.
My loans are done,
Randall V. Wong, M.D.
Retinal Specialist
http://www.TotalRetina.com
Excellent advice! ROI, by the way, means Return On Investment.
I just returned from an internet/web 2.0 meeting and much of what was discussed is the return on investment for a new marketing campaign, i.e. advertising, a new piece of equipment, etc.
The beauty of the example of above with the HRT is that the whole transaction is trackable, that is, you know precisely how much you spend on the lease per month and how much you get in accounts receivable. It may become a no-brainer with this simple business concept.
A less tangible, or “softer”, example might be radio advertising for laser vision correction. It is harder to know if the $XX,000 you paid for advertising is paying for itself, i.e. you don’t know your ROI!
Good luck. Great idea Dr. Weitzer!
Randall V. Wong, M.D.
Retinal Specialist
http://www.TotalRetina.com
