Practical management EP 13: Things to look for in a practice when purchasing

Maria Sampalis, OD, owner of Sampalis Eye Care in Cranston and Providence, Rhode Island, sat down with Optometry Times®' editor Kassi Jackson to talk all-things practice management.

Editor's note: This transcript has been edited for clarity

Jackson:

What do you look for initially when you're in a position to make a purchase? What are those initial things that you want to see?

Sampalis:

My thing is—and I think a different approach, some doctors want to have it [be] a million dollar practice. And I think those practices are good, but how much growth is there in some areas or things like that? So I like to have a mid-range practice , [a] doctor that was kind of doing routine eye exams all these years, because now there's ways that I can expand it with medical eye care.

I like the fact that some of these older doctors have real estate, because you can kind of control your own destiny, kind of pay down the principal, pay your own self, have control and your own strategy with the building. For me, that was a great point when I bought my practice. I wanted to buy the building, and I was fortunate that he wanted to sell it to me.

So for me, that's important because ... as things change, I don't really have that fixed expense in my practice for that overhead—that rent, and I am able to carve out an area in my building, or I can rent out. So the renter is going to basically pay my taxes and my insurance and things like that, that the revenue is coming from renting now is going to help that. So I don't have all these expenses that it is to have a building—it's really paid by the renter, and it's additional income I'm inheriting every year from this renter. So that was important, as well.

The other thing that I kind of looked at is the EOBs and just saw how they bill what they billed. That kind of gives you an insight of, you know, if it's a bit more routine care, if it's more medical, and what was their schedule. How many days a week were they seeing patients? Are they seeing patients on an hour? Are they working Saturdays? Where are there areas of improvement that I can see? And then what the goodwill of the practice was. How long have these patients been with this doctor? So if they've been here for 30-40 years, for me to take over, patients most likely will stay with the practice because they've been here for a while, just from a recommendation for the doctor.

A lot of doctors want the older doctor to transition the practice and that's great if you can have that. But sometimes that kind of breaks into your cash flow right away to start paying off that loan on the building or the practice. For me the doctor was older and decided that he just wanted to retire, and most of the patients stayed with us. You get some patients that might have just switched out because they were like half an hour or 45 minutes away and was seeing the doctor for a while; but got a lot of new patients, too, because we had a new panel of insurances and we were taking new patients, where the older doctor was not seeing any new patients.