Introduction: The Pinto/ASOA Practice Viability Index
Disclosure: As with all educational tools provided by the Societies, this tool has the limitation of being generalized. Results from this Practice Viability Index can be used to gain insights about the strengths and weaknesses of your practice, but should not be considered a substitute for specific analysis and advice from your accountant, consultant or other professional advisors.
If you have ever had a child, then you are probably familiar with “the Apgar”. The Apgar score was devised in 1952 by Dr. Virginia Apgar as a simple, repeatable way to assess the overall health of newborns. In medicine, the Apgar score evaluates the newborn on five simple criteria, each with a score of zero to two. The sum of the five values results in a composite Apgar score ranging from zero to ten.
The Pinto/ASOA Practice Viability Index ("PVI") works the same way and considers the competitiveness of your market, your practice's profit margin, patient visit and revenue statistics, and your practice's market tenure all combined into a composite PVI score to help you and your colleagues better assess your practice's relative strengths or weaknesses. Developed by ASOA author and consultant John Pinto, this tool is now available free of charge on the ASOA website.
As you begin to click through the data entry screens, you will see that there are only seven primary data points for you to collect:
- The Total Population of Your Practice’s Natural Service Area
- The Number of Ophthalmologists Practicing in this Area
- The Annual Profits Generated by Your Practice
- Your Practice’s Annual Collections
- The Number of FTE's in Your Practice (A "FTE" is a Full-Time Equivalent. A provider working 5 days per week--combining clinical, surgical and administrative time--should be considered 1.0 FTE. A provider working a shorter schedule is less than one FTE. For example, a provider working 3 full days per week would be 0.6 FTE.)
- Annual Patient Visits in Your Practice
- How Long Your Practice Has Been in Operation
The data entry form also asks for a few SECONDARY statistics about your practice. These will help us develop impressions about which factors are the most critical drivers for practice success.
The first time you use the PVI tool, we estimate that it will take you approximately 45 minutes to pull the data you will need to generate a set of results. Using the tool subsequently should require less time.
After you complete the data entry process, the PVI tool will generate a report that you can print out and share with your colleagues. In addition to helping your practice, you will be contributing to an important ASOA research project, which we believe will eventually allow us to correlate factors like a practice’s size and location with its practical business viability.