Developed by the AOA Community Health Center Committee Revised July 2008 Two Optometrist OD Practice at Maturity 2008 Eye Servic

							Developed by the AOA Community Health Center Committee
Revised: July, 2008
                              Two Optometrist (OD) Practice at Maturity
                                   2008 Eye Service Business Model
   Eye Clinic = 2000 Gross Sq Ft: 2 Exam Rooms, Special Testing Rm, Optical/Waiting, Office
Note: For the areas of the spreadsheet shaded in orange, you may enter numbers which are relevant
to your region. Due to the Federal Trade Commission rules and regulations, we are not able to supply
these financial numbers.


                                                     FY 1              FY 2               FY 3
Visits and Capacity
Gross Charges Comprehensive visit 92000 code
Professional Visit Average Payment
Ophthalmology Visit Average Payment
Other Visits Average Payment
Eyeglasses Average Payment

Total Health Center Visits                               35,000           38,500              42,350
Comprehensive Visits (10% of Total Health Center)         3,500            3,850               4,235
Ophthamology Visits                                         350              385                 424
Other visits (walk-ins, consults, etc)                    1,050            1,155               1,271

Projected % Utilization                                       60%               80%               100%
Projected Comprehensive Eye Visits                          2,100             3,080              4,235
Projected Ophthalmology Visits                                210               308                424
Projected other visits                                        630               924              1,271
Total Visits                                                2,940             4,312              5,929

Eyeglasses (50% of primary eye visits)                      1,260             1,848              2,541

Uninsured Visits                                            1,176             1,725              2,372
Reimburseable Visits                                        1,764             2,587              3,557
Total Visits                                                2,940             4,312              5,929

Net Revenue
Uninsured reimbursement (e.g. 30% gross charges)               $0                $0                 $0
Professional Service Fee Payment                               $0                $0                 $0
Eyeglasses                                                     $0                $0                 $0
Total Net Revenue                                              $0                $0                 $0

Operating expenses
OD
MD
Billing Clerk
Receptionist
Optical Assistant
Total Payroll                                                 0                0                   0
      Benefits eligible payroll                               0                0                   0
Benefits                                                      0                0                   0
Utilities                                                10,000           10,300              10,609
IT/Data                                                   4,500            4,635               4,774
Maintenance/Janitorial                                    4,000            4,120               4,244
Cost of Goods Sold                                            0                0                   0
Supplies                                                 10,000           10,300              10,600
Start up supplies                                        10,000                0                   0
Credit card fees                                              0                0                   0
Occupancy Cost                                           10,000           10,000              10,000
Total Expenses                                           48,500           39,355              40,227

Net Income (Loss)                                        (48,500)         (39,355)           (40,227)
Capital Spending
Startup Equipment costs                                           $150,000
Build out/lease hold improvements                                 $110,000
Optical start up costs                                             $50,000
Total capital investment                                          $310,000

Capital spending per year, amortized over three years:            $103,333

Assumptions
           60%   = % Visits resulting in eyeware purchase
           40%   = Uninsured Care % of patient pool
           60%   = Fee for Service % of patient pool
           30%   = Average payment reimbursement for Uninsured Care
            3%   = Rate of annual salary increases
                 = OD base salary
                 = Monthly cost for MD (2 sessions per month = 8 hours)
                 = Base salary for Billing Clerk
                 = Base salary for Receptionist / Optical assistant
       $10,000   = Utilities in year 1
           24%   = Benefits as a function of payroll
           60%   = COGS as a function of eyeglass sales
        10,000   = Cost of standard supplies
        10,000   = Cost of fax machines, computers, copier, printers
          1.2%   = Credit card fees as a function of sales
           50%   = % Sales that will use credit cards
           $55   = Build out cost per square foot
            3%   = Annual increase in operating expenses
       $10,000   = Annual occupancy cost
       $10,300   = First year utility cost
         2,000   = Gross square feet


 FTE of Staff Optometrists
 Year 1
 1st Year OD's 1.0
 Year 2
1st Year OD's   0.6

2nd Year OD's    1.0
 Year 3
 1st Year OD's   1.0
 2nd Year OD's   0.0
 3rd Year OD's   1.0