Case Analysis Clear Eyes

Services Marketing

“Case Analysis V – ClearEyes Cataracts Clinic”

Submitted By: Group2 FT1741 03 Vishesh Agrawal FT1740 Rituraj Singh 72 Girnar FT1720 16 Ankur Rao FT1740 87 Smruti Dash FT1710 17 Ankit Makan

PROBLEM STATEMENT      

Dr Julia Connors – Owner of ClearEyes Cataract Clinic Whether to expand her business & how Nieves Morales – best employee – suggests they should not expand – extra hours and more work will dilute the good they have already done No clear information on how customers knew about the clinic How to convert potential patients into actual patients – YIELD PROBLEM initial calls and event visits never turned into real w ork for the clinic – no number available

CATARACT SURGERY PROCEDURES Cataract    

Cataract - a progressive deterioration in the corneal lens within the eye that makes the normally transparent lens cloud y. Can lead to blindness Aging is the most common cause of cataracts Other risk factors - obesity, diabetes, smoking, and exposure to UV rays

Procedure     

Phacoemulsification (phaco) – most common procedure Cloudy lens in the eye is broken down and vacuumed out through an incision – new lens is inserted Takes 10 to 15 minutes Straight forward, clear, mature procedure Low rate of failure and medical complications

CATARACT SURGERY MARKET    

3mn cataract surgeries in US every year New equipment and technique constantly being developed Considerable competition Attractive characteristics to the provider organizations: o Recognized as a “medical necessity” - therefore, reimbursed by medical insurance companies o diagnosis was quick and easy o surgery could be done on outpatient basis - extensive patient care before or after the procedure were not needed o inexpensive equipment o relatively simple operations to maintain

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o malpractice insurance was relatively low because there were rarely complications or failures. Prices ranged from $1,500 to $3,500 - Average price was about $2,188.1 Reasons for growth o Baby boomers – born between 1946 & 1964 were becoming senior citizens Age o Immigration to US bringing millions of people to American health care system – people who has worked in extremely bright sunlight – exposure to UV rays o Inexpensive surgery - people could pay for it out of their pockets even if they were uninsured o Obamacare (2010) - passage of the Patient Protection and Affordable Care Act - expanded access to health insurance for millions of previously uninsured Americans o Increase in Obesity, Diabetes o Smoking, another factor that led to the formation of cataracts, was decreasing, but remained high among some population segments

PROCEDURES AT CLEAREYES CLINIC Cleareyes operations - Year 2014     

5283 procedures carried out Average payment: $1338 – prices adjusted according to competition – to be the preferred low cost clinic 5 days a week – 48 weeks a year – 9am to 6pm - Closed on Sundays & Mondays All staff other than the staff surgeon had a half-hour lunch and two 15-minute breaks during the day Surgeon’s lunch and breaks totaled two hours

No of procedure Avg payment per procedure direct variable non staff cost mortgage, taxes, and utilities (per month) rent from another company one time payment for expansion Income from procedures from rent

7068654 24000

5 2 8 3 1338 480 5500 2000 60000 Expenses variable non staff mortgage, taxes, and utilities (per month)

Expansion   

Possible by ending tenants lease and expanding into additional space Would cost a onetime payment of $60000 On a 3-month notice

Current layout

642240 5500

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Waiting area: 600-square-foot waiting area - 40 seats (each seat taking up about nine square feet and equipped with an 8" x 10" screen for individual viewing) Receptionist area Two private intake rooms (each 10' x 10') where patients, friends, and family members could sit with a patient services representative (PSR)

PROCESS

CHALLENGE To reduce the No Show rate – Only A=approximately 70% of insurance patients and 53% of cash patients showed up for their surgery  Deposit system could not be implemented because of o High percentage of patients paying through insurance o Reluctance of cash-paying patients to make any non-refundable deposit majority of whom were lower-income

Reasons of no show from the survey

Steps Taken:    

Developed a set of questions to be asked during reminder conversation designed to determine the probability that a patient would appear on the day of surgery – each conversation was scored Overscheduling - to compensate for each day’s mix of probable and weak appointments - successful Made up for delays over an hour by giving out ‘we are sorry’ goodies Connors felt that her PSRs varied in their ability to get patients to attend intake appointments. Gabriela was doing better than others.

CLEAREYES PERSONNEL Compensation in top quartile in Boston area Salary Benefits Total

      

Receptionist & PSR 38000 10640 48640

Technicians 48000 13440 61440

Cleaning emp 31000 8680 39680

Surgeon 411320 115170 526490

Offered regular, normal hours of a full-time position with good pay and benefits Contributed to very low turnover among staff, good morale, and deft management of patient interactions Staff comfortable with each other and knowledgeable about ClearEyes and their tasks Steady workforce developed through training, experience and positive attitude towards employees Good reviews from patients Involved staff in hiring decisions Anonymous peer feedback and annual performance reviews

Other Expenses and Break Even Analysis

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Currently the firm is performing well above the Break Even Point and hence even if there is an increase in cost in some of the aspects, such as increased number of staff, higher incentives, etc. then also there should not be a major monetary issue.

EXPANDING THE CLINIC Three expansion options, but understood that each presented major obstacles. OPTION 01: To expand clinic hours to include Mondays and add an additional two hours to the working d ay. Employees objected to this option OPTION 02: Increase the physical size of the clinic  Difficult and expensive  Would require moving her tenant out; rehabbing the space; getting permission from the City of Boston to do the work; and investing in furnishings, telecommunications, HVAC, and equipment  Would also disrupt operations in her current space  Might have to close the clinic for at least a month Connors did not want Dr. Zinicola to work more hours. Even if Connors expanded the clinic, it would not have enough work for another full-time surgeon and she had mixed feelings about hiring a part-time surgeon Also Zinicola would not be able to calm the patients and relatives post-surgery. OPTION 03: To expand at a new site within the greater Boston area.  Did not like the option herself - Would need her to spend even more time at the clinics  She carried out surgeries herself and pitched in as needed  family members often insisted on speaking with “a doctor” or owner of the clinic  Busy with the decisions, tasks, emergencies, communications, meetings with vendors etc Gabriela Herrera  One of the PSRs - bright, energetic, well-liked, and respected by the other employees  A natural leader  Outgoing and talkative

RECOMMENDATIONS     

Increase the working hours in a step-wise process, let’s say by 30 minutes in the initial phase and then by 1 hour. Hire few more staff members so that the average work distribution does not deviate much. Announce additional bonus for the employees exceeding the current working hours. To resolve the No-Show issue, analyse the feedback of the newly improved survey and take corrective measures. The biggest reason for No-Show has been the lack of funds (33% for Intake and 27% for Surgery). Collaborate with a mid-size bank, which gives loans at a highly economical interest rate to the patients.

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Since, ClearEyes has a positive Word-of-Mouth advertising among the customers, it can curtail the amount dedicated to core marketing and advertising strategies. Hence, the cost of each surgery may reduce to some extent.