Advice on Dispensary in MD's office

[vkanev1]

I have an optometric store front practice and am considering expanding to an ophthalmic dispensary in an ophthalmologists office. Does anyone know what the customary financial arrangements are in NYC?

[optiqueen]

they want the gold mine, you get the shaft!

[chip anderson]

You won't have to work too hard. But you will get tired of grabbing your ankles for little reward and no respect.

[Johns]

Last month, I interviewed an optician, and ended up hiring someone else because he said he had a tentative offer from a large MD (cataract mill) practice in the area. He would be doing more tech work, but that's what he wanted. He called me back later to see if our job was still available...

This optician is 48 years old, has a BA, as well as 22 years experience.

The MD, who is probably pulling down double digit millions a year made him the following offer:

40 hour work week.

2 week vacation after 1 year.

Some health benefits (more than we offer)

And the amazing sum of...











$8.50 per hour!!!!!!

This is the honest truth. I was tempted to call the MD and tell him (on behalf of opticians everywhere) just what I thought of his offer. I still might.

Probably one of the most well-known ophthalmologists in the Cleveland, Ohio market.

[GOS_Queen]

:drop: Last month, I interviewed an optician, and ended up hiring someone else because he said he had a tentative offer from a large MD (cataract mill) practice in the area. He would be doing more tech work, but that's what he wanted. He called me back later to see if our job was still available...

This optician is 48 years old, has a BA, as well as 22 years experience.

The MD, who is probably pulling down double digit millions a year made him the following offer:

40 hour work week.

2 week vacation after 1 year.

Some health benefits (more than we offer)

And the amazing sum of...











$8.50 per hour!!!!!!

This is the honest truth. I was tempted to call the MD and tell him (on behalf of opticians everywhere) just what I thought of his offer. I still might.

Probably one of the most well-known ophthalmologists in the Cleveland, Ohio market.

[Snitgirl]

That post really bugs me about $8.50 per hour... what a freakin insult to the optician and a waste of the opticians time..

[Fezz]

they want the gold mine, you get the shaft!

:D

Classic...but true!!!


Fezz
:cheers:

[LENNY]

In NY OMD and OD can not be partners!
PM me if you want more info!

[Happylady]

I can't believe he can find a decent optician for $8.50 an hour. The doctor I work for paid my then 16 year old daughter that much to work on Saturday as a receptionist 5 years ago!

[drk]

Sad fact is that the optician would make beaucoup bucks for the OMD.

[chip anderson]

You might offer to clean the office, I'm sure he pays more than $8.50 hr. for this. My receptionist makes $12.50. Of course I don't always average that my self.

Chip

[CCGREEN]

Now let's think of it this way. Could that of been the MD's way of saying you were to qualifyed for the postion? Your qualifactions are more then I want to pay for. It is sad that people cannot come right out and say what is on their mind. Being politacly correct fell by the way side a long time ago. Come right out and tell me what you mean, I might be hurt for a short time but in the long run you will be much more respected by others.

[ilanh]

As an M.D with a dispensary here is the arrangement that I would suggest:

-A base salary for the optician. If the optician is actually running and managing the dispensary ie: selling, fitting, ordering,vsp billing etc I would suggest $12-14/hour.
-An additional incentive program for the optician eg: 5-8% of NET sales depending on the circumstances. By "net" sales I am referring to gross optical sales minus the cost of all materials. I also subtract from gross sales a fixed amount each month that represents the optician's salary, rent, benefits etc. Using Net and not Gross profit as the basis of the commission is the only effective way to both reward good sales and penalize excessive spending. It strikes the perfect balance.

example: Gross optical sales for the month are $40,000
cost of frames and lenses: $10,000
fixed expenses related to optician (rent, phone, salary etc):$6,000
Net profit is $24,000.
Optician's commision is 8% of net profit, or $1920 (added to base salary)

If the optician is involved with actual sales the commission is a crucial part of the equation and should be generous. The emphasis on Net and not Gross profit encourages the optician to manage the overhead judiciously. In this way, the optician functions as a partner in the outcome of the dispensary.

[Barry Santini]

$120K/yr. for just running the dispensary.

Cost of saving the MD's *** from their bad rxs: PRICELESS!

Barry:)

[Snitgirl]

As an M.D with a dispensary here is the arrangement that I would suggest:

-A base salary for the optician. If the optician is actually running and managing the dispensary ie: selling, fitting, ordering,vsp billing etc I would suggest $12-14/hour.
-An additional incentive program for the optician eg: 5-8% of NET sales depending on the circumstances. By "net" sales I am referring to gross optical sales minus the cost of all materials. I also subtract from gross sales a fixed amount each month that represents the optician's salary, rent, benefits etc. Using Net and not Gross profit as the basis of the commission is the only effective way to both reward good sales and penalize excessive spending. It strikes the perfect balance.

example: Gross optical sales for the month are $40,000
cost of frames and lenses: $10,000
fixed expenses related to optician (rent, phone, salary etc):$6,000
Net profit is $24,000.
Optician's commision is 8% of net profit, or $1920 (added to base salary)

If the optician is involved with actual sales the commission is a crucial part of the equation and should be generous. The emphasis on Net and not Gross profit encourages the optician to manage the overhead judiciously. In this way, the optician functions as a partner in the outcome of the dispensary.

If I did the math correctly, this yearly sum (average $53k per year) would be a bit low for someone with 22 years of experience, don't you think? If this Optician has 22 years of experience and is "running" your Optical, IMHO:rolleyes: you're short by atleast $12k

[HarryChiling]

The most effective way s to come in and make an offer for that portion of the doctors practice if you think you are that valuable. Don't work for a commision he gives you give him a commision for refering patients to you. I worked for an ophthalmologist not too long ago that was constantly telling us that we were not making any money for him after all expenses. What he didn't realize was that when you have only 2 optician that are running 1 full time location 3 satelite locations and a lab, that handle all aspects of the business for him it was never a matter of not making money it was always a matter of greed. He made a net agreement with us, but always played with the numbers. I left him at the most inconvinient time, and offered to stay if he sold me a part of his failing business. He almost jumped down my throat.

I have learned my lesson demand a better salary and work hard for it, and remember you don't owe your employer anything except a hard days work equivalent to what he pays you for.

[vkanev1]

Thank you for all your advice, but what I actually meant was this: I am offering to come into an ophthalmologists' practice and set up a new dispensary (not run a pre-existing one). I will hire an optician, do all the frame buying, lens edging etc. Do I just pay him rent or is it customary to have him pay the optician's salary and no rent - just split the profits somehow? I am still working full time in my own practice - this would just be a sattelite dispensary...

Anyone have this kind of arrangement and care to comment?

And please, no bashing of ophthalmologists - I have never really worked with an ophthalmologist I didn't find to be honest, scrupulous and trustworthy. Perhaps one reaps what one sows?...

[Johns]

Thank you for all your advice, but what I actually meant was this: I am offering to come into an ophthalmologists' practice and set up a new dispensary (not run a pre-existing one). I will hire an optician, do all the frame buying, lens edging etc. Do I just pay him rent or is it customary to have him pay the optician's salary and no rent - just split the profits somehow? I am still working full time in my own practice - this would just be a sattelite dispensary...

Anyone have this kind of arrangement and care to comment?

And please, no bashing of ophthalmologists - I have never really worked with an ophthalmologist I didn't find to be honest, scrupulous and trustworthy. Perhaps one reaps what one sows?...


I didn't intend to bash ophthalmologists, this one was a bash on cheapskates in general. We can leave the occupation out of it!

As far as the dispensary...

Ideally, if you could agree on a flat fee for rent, you are not obligated to the MD, nor they to you, in any other way. You can run your business any way you want, and they can do their thing. Otherwise, the MD will own you, and you'll have no control.

[vkanev1]

As an M.D with a dispensary here is the arrangement that I would suggest:

-A base salary for the optician. If the optician is actually running and managing the dispensary ie: selling, fitting, ordering,vsp billing etc I would suggest $12-14/hour.
-An additional incentive program for the optician eg: 5-8% of NET sales depending on the circumstances. By "net" sales I am referring to gross optical sales minus the cost of all materials. I also subtract from gross sales a fixed amount each month that represents the optician's salary, rent, benefits etc. Using Net and not Gross profit as the basis of the commission is the only effective way to both reward good sales and penalize excessive spending. It strikes the perfect balance.

example: Gross optical sales for the month are $40,000
cost of frames and lenses: $10,000
fixed expenses related to optician (rent, phone, salary etc):$6,000
Net profit is $24,000.
Optician's commision is 8% of net profit, or $1920 (added to base salary)

If the optician is involved with actual sales the commission is a crucial part of the equation and should be generous. The emphasis on Net and not Gross profit encourages the optician to manage the overhead judiciously. In this way, the optician functions as a partner in the outcome of the dispensary.

In NY, a qualified, experienced optician in a high-end retail store, makes a base salary of anywhere between 60 and 80k, plus health care benefits, plus incentives/commissions. The above scenario would be about 50,000 per year - I would never be able to get a decent, knowledgeable optician for that salary. That's just the optician - then I have to make a significant profit for ordering, managing, stocking the inventory... How would that compute?

[vkanev1]

I didn't intend to bash ophthalmologists, this one was a bash on cheapskates in general. We can leave the occupation out of it!

As far as the dispensary...

Ideally, if you could agree on a flat fee for rent, you are not obligated to the MD, nor they to you, in any other way. You can run your business any way you want, and they can do their thing. Otherwise, the MD will own you, and you'll have no control.


I didn't mean you - there were some other tart comments...
Do you think just rent would do the trick? Perhaps a low base rent and then some profit sharing - that way there is an incentive for the MD to encourage patients to fill their Rx on site? Is this legal or is it like a kickback?

[vkanev1]

I thought that was just in Jersey? Is it legal for an optician and MD to partner? Can the MD rent space to the OD?

[chip anderson]

Even if it's legal, it's a kickback.:finger:
The public rightly or wrongly feels that precribers are honest men and give referrals of any kind based solely on the quality of services of those referred to.
Sad the profession no longer has the same concept.
Would you as an optician refer a candidate for surgery to a lousy surgeon because he split fees, was a friend, referred work back to you or happened to be close by?

Chip

[LENNY]

Good luck in your new venture!

[LENNY]

I thought that was just in Jersey? Is it legal for an optician and MD to partner? Can the MD rent space to the OD?
A MD can only partner with MD in NY!

[LENNY]

OD can partner with anyone I think! Exept MD
I am not 100% shure about this legality!

[Johns]

I didn't mean you - there were some other tart comments...
Do you think just rent would do the trick? Perhaps a low base rent and then some profit sharing - that way there is an incentive for the MD to encourage patients to fill their Rx on site? Is this legal or is it like a kickback?


I wouldn't feel comfortable with profit sharing or any other arrangement where someone else has access to my financial records. What if the MD see that you're making $500K and he decides you're making too much ? He can boot you out and hire someone himself, after you've done all the legwork. Suggest a rent that might be slightly higher than other rents in the area. Also, let him know that your dispensary will be an asset to his practice.

Profit sharing? Not on a bet!

[chip anderson]

Lenny:
In many states an O.D. cannot partner with an optician, in some they cannot even work for a corporation. Hense, "the doctor convienently located next door."

[fjpod]

OD can partner with anyone I think! Exept MD
I am not 100% shure about this legality!
What the law in NY really says...It prohibits anyone who is not an MD from profiting from the practice of medicine. So, let's say a dentist, or an optometrist, or WalMart thinks that the practice of medicine in NY is lucrative and wants to buy in to, or set up a medical practice. This is illegal.

However, on the other hand, it would not be illegal for say, an OD and an OMD to partner in running an optical store or an ice cream parlor ...because this is not the practice of medicine. Taking it one step further...anyone...a hairdresser, a lawyer, or Walmart can open. and profit from a practice of optometry or opticianry. All they have to do is hire a licensed person, but they could not do this as it relates to the practice of medicine. They could not hire a physician because they are not physicians themselves. (Hospitals and other entities are exempt.)

Only Medicine has this protected status (in NY anyway)...that no one else can partner with an MD as it relates to the practice of medicine, not optometry, not opticianry). This law was enacted many years ago (not sure when) ostensibly to prevent corporations, charlatans, carpetbaggers and the like from controling physicians and how they treat their patients. Some would say it was written to allow physicians to control their own medical monopoly.

Optometry in several other states (not NY) has sought similar protections by enacting rules about corporations not being allowed to employ ODs, side by side "independant" ODs, etc.

Hope this helps.

[chip anderson]

Lenny:
Are you sure the law says M.D.? Or does it say: Physician?
Now that many O.D.'s want to practice medicine, or call themselves "Optometric Physicians" and use and prescribe drugs, they might be restricted in your state now.

[LENNY]

Thats what they WANT!
Unfortunately!

[ilanh]

These were very rough numbers simply to illustrate a point. The point being that anyone in charge of both sales and purchases should be rewarded handsomely on sales and dinged on purchases. Naturally, there are months where the sales volume is higher than my example and the purchase volume is lower. In such cases the commission would be markedly higher. In my particular case the optician certainly does not have 22 years of experience and is not licensed. One would adjust percentages and base salaries accordingly.

[Chris Ryser]

In NY, a qualified, experienced optician in a high-end retail store, makes a base salary of anywhere between 60 and 80k, plus health care benefits, plus incentives/commissions.


As far as I know NY has higher wages in just about any field. You also have to consider the geographical location and State average income.

[Johns]

As far as I know NY has higher wages in just about any field. You also have to consider the geographical location and State average income.

Exactly! The cost of living is way up there. I hired a NY optician, at quite a bit less, but after he looked around and saw the houses he could buy for $120k and less, he was satisfied.