Doug Reynolds has a lot to think about this next year. Mr. Reynolds, a fourth-year student at Nova Southeastern University College of Optometry in Fort Lauderdale, Fla., would like to work as an associate for a year or two in a private practice and transition into ownership.
Those couple of years would allow me to learn more about the business aspects of optometry, he says.
But like many of his peers who are about to enter the profession, he must balance this desire for independence with the financial realities of massive student debt plus everyday living expenses. Can he afford to go to a private practice, or should he start in a commercial practice? Also, where will he practice (and where are more optometrists needed)? Finally, can he acquire the business skills necessary for private practice?
I want to work with a practice that is willing to invest in new tech-nology and where the doc-tors have stayed current in their think-ing." -Doug Reynolds, NOVA Southeastern University College of Optometry.
Many of these grads will look to you for support and guidance. These young optometrists could be assets to your office as well. For example, todays optometry students are well-educated on clinical and technological advances. Of course, some of you are concerned about having someone to continue the practice when you retire.
But in order to attract a qualified associate to your practice, youll need to address his or her concerns. Here, well look at what some of these new optometrists want from you.
Pass That Buck
One of the top concerns of recent optometry school grads is student-loan debt. Most students graduate with $100,000 or more in student-loans to repay. (See The Rising Cost of Higher Education, below.) Mr. Reynolds, who is class president, says he has heard that the average debt when leaving Nova Southeastern is around $140,000. We need to have a salary that will pay those loans and living expenses, he says.
But, these young O.D.s also understand that youve worked hard to build your practice, and theyre not expecting a handout. I realize that senior O.D.s take a lot of risks when taking on an associate. I dont expect a senior O.D. to offer me part of their hard-earned practice right out of school, says Neil Hook, a third-year student at Nova Southeastern. His plan: Work at various private practices upon graduation and hope one O.D. will trust him enough to offer him an associate position.
Several young O.D.s will look for similar situations in a private practice, provided there is a possibility for long-term involvement. Its hard for new grads to take less when they know they can make more in a commercial setting, Mr. Reynolds says.
According to AOA statistics, the average O.D. in private practice earns $120,000 in net income (after many years in practice). Mean-while, an O.D. taking the commercial route can expect to earn from $75,000 to more than $200,000 in net income, depending on whether he or she practices full or part-time.
If I am comfortable that I have a future with a practice, then I can better justify the sacrifices I would have to make initially, Mr. Reynolds adds.
Some optometry students plan to enter a residency program first. For example, Arun Kaistha, a fourth-year student at State University of New York State College of Optom-etry, hopes to obtain a residency at a hospital in New York. He believes a residency will allow him to enter academia in the future. I just like the idea of having more options in the long run, he says.
Change of Heart
O.D.s, Timothy and Anna Milburn, practice both private and commercial optometry to reap the rewards of both.
Every one of these new grads at one time thought of starting their own practices immediately after graduation. All have since reconsidered (although they still hope to have their own practices in the future). Now that Ive actually seen what it takes to do that, Im a bit more realistic, Mr. Hook says.
Adds Mr. Kaistha: Four years of indebtedness have helped me realize that starting up cold may be something to consider four or five years out instead of immediately after school.
Not everyone plans to wait this long, however. For example, Timothy Milburn, O.D., of Medina, Ohio, graduated from Ohio State University College of Optometry in Columbus two years ago. He looked for an associate position with a private practice, but when nothing was available he went to work for a commercial practice.
Then, he and his wife Anna, whos also an optometrist, purchased a fixer-upper private practice. The Drs. Milburn both work part-time in a commercial setting to supplement their income and pay their bills while they build their own practice. The advantage to doing so: We are able to re-invest the profits from our private practice back into the business right now because we live off the income earned in commercial practice, he says.
An added bonus: Because both work part-time in commercial practice and set their own private hours, the Drs. Milburn never have to put their child in day care.
Get Into Business
When new graduates look for an associate position with a senior O.D., they look for certain qualitiesboth in a mentor and a practice. Of paramount importance: some level of commitment on your part. Mr. Reynolds says hes heard of situations in which a senior O.D. alludes to a partnership possibility for a young graduate, but never comes through.
Thats why Mr. Reynolds would like to work with the O.D. to develop a long-range plan. This plan would address how he can help the practice, when he would make the transition to partner, and what his starting salary and expected salary will be. Adds Mr. Kaithsa, I would like to know the reasons the O.D. wants an associate as well as what the one-, five-, even 10-year outlook will be.
You should also be prepared to offer a certain amount of guidance to these fledgling optometrists. Although I felt the courses we had in practice management were well taught and very helpful, I feel they were not sufficient in preparing me to enter the real world, Mr. Kaistha says.
I realize that senior O.D.s take a lot of risks when taking on an asso-ciate. I dont expect a senior O.D. to offer me part of their hard-earned practice right out of school. -Neil A. Hook, NOVA Southeastern University College of Optometry.
Mr. Hook agrees. The business side of optometry is a whole new ballgame, he says. Some things he would like a senior O.D. to teach him: how to write a business proposal, hire and fire employees, market the practice, lay out an office floor plan ... the list goes on.
Mr. Reynolds has had some experience in running an office. Before entering optometry school, he worked as a clinical supervisor and office manager at several ophthalmology practices. Even with experience, it can be difficult to know what you want until you see the opportunities first hand, he says.
These new members of the optometric community will also have clinical questions. The senior O.D. I choose will have to be an excellent clinician whom I feel I can learn from and turn to for advice. And, just as important [is] someone who is open-minded enough to give my ideas a fair shake, Mr. Kaistha says.
Environmental Concerns The Rising Cost of Higher Education
Todays young graduates also want to see you using technological advances to your practices advantage. I want to work with a practice that is willing to invest in new technology and where the doctors have stayed current in their thinking, Mr. Reynolds says.
Consider: The Drs. Milburn have invested heavily in technology for their budding practice. They routinely take digital photos of all patients and have a complete in-office finishing lab. In only our second year, we are seeing close to 40% growth for 2002 vs. 2001. A large part of that is because of our philosophy to only offer premium care, premium products and high-tech equipment, says Dr. Timothy Milburn.
The average student-loan debt upon graduation of a four-year institution has nearly doubled in the last eight years, according to the 1999-2000 National Postsecondary Student Aid Study (NPSAS). The survey was conducted by the U.S. Department of Educations National Center for Education Statistics and based on information collected by the U.S. Census Bureau.
Some other findings:
Some 64% of college students took out federal student-loans for the 1999-2000 term, up from 42% in 1992-93.
The percentage of graduates with more than $20,000 in debt increasedfrom 5% in 1992-93 to 33% in 1999-2000.
Almost 40% of student borrowers graduate with unmanageable levels of federal student-loan debt. (NPSAS defines unmanageable as more than 8% of a persons monthly income before taxes.)
About 78% of students underestimate the total cost of their loans by $4,846.
In addition, the Journal of the American Medical Association, estimates that medical school graduates have an average of $100,000 in student-loan debt. Also, the Association of American Medical Colleges 2002 Graduate Questionnaire found that the average education debt of graduates, including pre-med borrowing, was $103,855, up 5% from last year. Almost 54% of 2002 grads carry a debt of $100,000 or higher, and 21% have a debt of $150,000 or more.M.B.
New O.D.s will also look at your practice environment, particularly the manner in which you treat your patients and your staff. Fourth-year optometry students generally visit local private practices as part of the curriculum. Theyre particularly impressed when employees and patients seem content. I feel a practice and its employees truly reflect the doctors personality, Mr. Kaistha says. I would ideally like to be in a practice where integrity and respect are the most important aspects.
Location is also a key issue for most of these self-described newbies. Of course, what makes a location desirable is a matter of individual preference. For example, Mr. Hook had the opportunity to buy a private practice in south Florida but declined. He knows that he wants to practice and raise a family in a small town. Mr. Reynolds, however, plans to look for a practice in an area that is expanding and will eventually have a greater need for his services.
When you consider the rising cost of student debt and other practical concerns of those who recently graduated and about to graduate, its no wonder that Mr. Reynolds and his peers have some tough decisions to make. They may need to sacrifice more independence or financial security, depending on where they choose to practice.
If youre looking for someone either to share your experience with, or to eventually take over the practice when you retire, you may have to make some concessions of your own. You may need re-think what you consider an ideal salary and invest more heavily in new technology.
Even so, you and your potential new associate have one thing in common: Youll both want to work for the good of your profession.
