Sydney practitioner Jim Kokkinakis has long been a proponent of moving beyond bulk-billing. In the third instalment of our series of articles, Jim explains how his billing scheme takes the focus away from product sales and puts it back on the delivery of quality eye care.
When and why did you decide to move to full-fee billing?
I decided to move away from Medicare billing about 1998. I had been on a journey to provide the best possible care for my patients since 1986 when I trialled the then latest autorefractor and a new instrument, a computerised visual field analyser.
Eye disease was taught at a basic level during my university years and the thought of continuing in optometry was not appealing. Luckily, technology started to move into optometry just as I had started to become disillusioned with the profession.
By 1997, I had invested in an autorefractor, a visual field analyser, a 35 mm retinal camera, a corneal topographer, a digital retinal camera, a digital slitlamp and a computerised phoropter.
I had also completed therapeutic courses in Australia and the USA, and had started a part-time role in the largest refractive laser centre in the country. Without planning it, I had evolved my practice into a ‘medical’ model and had attracted a subset of patients who valued their vision and needed peace of mind about their eye health.
To support such a massive investment, it became necessary to charge fair fees for use of the technology in 1997. Even though many of my patients perceived great value for the higher level of service, there was also massive ambiguity in charging for ‘medically’-based examinations and also bulk-billing—the two did not seem to go together.
In 1998, we stopped bulk-billing and the ambiguity stopped overnight. The public does not expect bulk-billing for specialist care and we were providing specialist care.
How long did the move take?
It took about 12 months to move from charging for ‘medical’ scanning to stopping bulk-billing.
What surprised you about the process?
I was surprised that the number of patients who were questioning the fee structure dropped. In hindsight, it is obvious that having two different billing systems is confusing. Once we stopped this, our patients could finally understand what they were paying for.
What advice would you offer those sitting on the fence?
Sitting on the fence is a recipe for disaster in the long term. It is imperative to position your business around either your product or an exceptional consultation experience. If positioning around your product, it must be either low-price and high-volume, or high-quality and low-volume. If positioning around an exceptional consultation experience, your patients’ eye health takes utmost priority and product is secondary.
Is there something unique about your practice that made the move to full-fee billing more feasible?
Even though our practice is considered unique, it was not like that from its inception. It took more than 10 years to evolve into something that I was happy with. For me, moving away from Medicare billing and charging for high technology is not about making money. It’s about creating an environment that I enjoy working in every day with a group of patients who appreciate the extra level of care that I can provide.
How did you go about setting your fees?
Setting fees is simple maths. We have developed a level of expertise that must compensate the business to allow it to be viable. We do not rely on unnecessary product sales.
Unfortunately, a significant portion of the optical market takes their vision for granted and is only interested in using their health-fund claim. This type of patient we cannot and do not want to attract. Again, it is about positioning. This type of patient wants the bare minimum in consulting and therefore bulk-billing is perfectly appropriate with this model.
What steps did you take to make the transition smooth for patients and staff?
New patients receive a letter to introduce our practice and explain what we do, who I am, my specialities and our fee structure. Existing patients are just billed but every test is meticulously explained. Many optometrists worry about the reaction they will get from their patients if they are asked to pay an out-of-pocket fee.
How did your patients respond?
Five per cent were distressed, five per cent questioned the fees and 90 per cent paid the account with no questions asked. I think it was because I spent a significant amount of time going through each part of the eye in great detail and concluding that their eyes were perfectly healthy. This peace of mind conclusion makes all the difference in perceived value.
What benefits has full-fee billing brought to your practice?
It has differentiated us from the crowd. We are a speciality practice but more importantly, our patients perceive us as a speciality practice. Do we appeal to everyone? Absolutely not. That is why there are two successful sides to the optical market. The patients whom we do not appeal to have no issues with their eyes, so paying for a very comprehensive analysis is not for them.
The patients whom we do help make the working day great. You are attracting people you can help very much and most importantly, they appreciate what you can do for them.