Biosimilars

COVID-19

Cataract Surgery

Cataract

Cataract Therapeutics

Clinical Diagnosis

Cornea

Dry Eye Awareness

Dry Eye

Gene Therapy

Geographic Atrophy

IOL Advances

Imaging

Glaucoma Awareness

Glaucoma Insights

Therapeutic Glaucoma

Interventional Glaucoma

Ocular Allergy

Ocular Surface Disease

Optic Relief

Optometry

Pediatrics

Pharmacy

Indispensable

Practice Management

Presbyopia

Ptosis

Refractive Surgery

Refractive

Retina

Surgery

Technology

Therapeutics

Understanding Antibiotic Resistance

Workplace

News

All News

Contributors

Money Matters

Media

Expert Interviews

Medical World News

Podcasts

Case Based Roundtable Series

Case of the Quarter

EyeView

Grand Rounds

Insights

Rapid Readout

Viewpoints

What’s Your WhEYE?

Conferences

Conference Coverage

Conference Listing

Events

Publications

Digital Edition

Europe Ophthalmology Times

Modern Retina

Supplements and Featured Publications

Partners

Subscribe

Resources

Job Board

About

Advertise

Privacy

Editorial

Terms and Conditions

Contact Us

Do Not Sell My Personal Information

Ophthalmology Times - Ophthalmology news, articles, and events

Facebook

Instagram

LinkedIn

Spotlight

Clinical

Glaucoma

1rem

In this part two episode of the EyePod podcast, Colin Carr answers some Q&A with 

 executive editor David Hutton, diving into commercial real estate and your healthcare practice. From representation to knowing the market, Carr shares his knowledge on ensuring you as a healthcare provider can have the best deal possible — and grow your networth — through your real estate.

This transcript has been ligthly edited for clarity.

How can healthcare providers win against landlords and commercial real estate?

The best way to level the playing field or win in the commercial real estate negotiation is to make sure that you are adequately prepared for the negotiation. And to do that, you want to start with the proper timing. If you have a lease expiring in two years, and you start negotiating with your current landlord, and they know that no matter what you say, you're on the hook for the next two years, and you have to make that payment, they're not going to give you some some some favorable deal or involuntarily cut your lease rate for no reason. Conversely, if your lease is expiring in one month, and you haven't started the process yet, they're going to assume that you are out of time you missed your window to relocate. And they're gonna hit you as hard as they can with the highest lease rate, the lowest concessions possible. So step number one is you got to time it properly. If you're too early, it shows you don't know what you're doing; if you're too late, it shows that you you fell asleep at the wheel, you don't know what you're doing. So step one is you need to time it properly.

Step two is you need to hire representation that can help level the playing field. You're working against typically a professional landlord who negotiates for a living. When you go into that transaction, as a doctor or healthcare provider or an office administrator, they're going to assume that you don't know what you're doing. No matter how clinically savvy you are, no matter how academically intelligent you are, it's not what you do on a daily basis. And so they're gonna assume that you don't know the ins and the outs, they're not going to treat you the same way. Now, let me be clear about this one, I'm not saying they're going to be a jerk to you, they can still very well be respectful to you treat you with dignity, but they're going to show you terms or assume that you don't know you're doing. And they're going to be pushing you towards a deal that someone who's represented would not accept. And so timing it properly is important, hiring representation is important.

And then we cover this on the former version of our interview, which is they need to go to the market, they need to look at multiple properties, they need to negotiate with multiple landlords or sellers, and they need to know all their options. If they don't, and they pick just one property, they're at the mercy of that one landlord, that one seller, and they're not going to see the best terms. If that landlord knows that you're out there looking at multiple properties, and they're competing for your tenancy or your business, they're going to bring more favorable terms to the table. And that's going to help you win in the negotiation.

What do these landlords know about negotiating that the healthcare providers really don't know?

Well, to start with, the landlord knows that it's going to cost them more money if the tenant moves out of a space or doesn't do the deal and it says vacant, then if the tenant actually has to move. And this is a really interesting dynamic. A lot of doctors will say what, hey, I don't I don't want to move, or it'll cost me my move. True. But it'll cost the landlord more money if you vacate that space and they have to sit vacant for six months, 12 months, a year, and then give the next tenant, a building allowance, free rent to build up, free rent once they move in, pay all the fees of the deal. The landlord knows it's actually going to hurt them more than it hurts the tenant if they have to relocate or find different properties. So when you as a tenant know that the landlord wants you to stay in the property more than you want to stay in the property, it changes the dynamics of the negotiation.

The landlord also knows that if a doctor is not represented, they're probably not serious about getting the best terms possible. If the doctor is talking to the landlord directly, they probably don't have a savvy agent helping advise them to protect their interests, they're probably just winging it. And again, that is the wrong approach.

It's kind of like this, if you went to court, and you got a judge in front of you, and the other side has has their own counsel and you're just winging it, you're not going to have the same level of respect. They're gonna assume that you you obviously don't care, or you're not taking this seriously, because if you did, you would have someone on your side protecting you or helping in the process, same thing. IRS says, "Hey, we're gonna audit you." If you don't get to get a tax advisor involved or a tax attorney, you probably don't care what the outcome is and just you know, winging it may or may not work for you — it's probably not gonna work out for you the way that you want to.

When it comes down to the lease, in advance of a sale or transaction, what should a healthcare provider know to be prepared?

So if you're gonna sell your practice, or you're going to transition out of your practice, you want to know, if you own the real estate, what the real estate's worth, and what a fair market lease would be if you decide to keep the real estate and lease it back to that practice, or if you're going to sell the real estate with the practice, you need to know what that real estate is worth.

A lot of healthcare providers will let a practice broker do that valuation, that practice broker may or may not know the value of real estate. So it's important to get a third party person who only does real estate to tell you what the real estate's worth, if you're going to sell or lease it. Conversely, if you are leasing the real estate yourself from a third party landlord, you need to know do you have a good lease or a bad lease. If you go to sell your practice, and you've got a bad lease, that's going to impact the value of your practice; if you have a phenomenal lease, that's going to also impact the value of your practice.

And so what's very common is people time up when their leases expiring — or about to expire — with when they want to sell their practice. And if there's the ability to renegotiate that lease, and let's say reduce the lease rate by a few dollars per square foot, or get the landlord to put money into the space to renovate, that's going to make your practice more desirable from a sale perspective, and that might actually free up more cash flow to give you a higher level of earnings to give you a higher multiplier when you sell the practice. And so if you have a lease that you can renegotiate it, and you can renegotiate it before you sell the practice, you might be able to increase your your earnings or your spread, or your profitability and make your practice sales price higher by a significant amount of money.

If you're if you're saving on a multiplier of EBITA, or another valuation of profitability, if you increase your profitability per year by 20, 30, $40,000, because of a better lease, and then you renovated the space as well, you might be able to sell that practice for an extra 100, $200,000 depending on how it's valued. So make sure you're not losing money because you don't understand your current lease value or your current property sale value.

How can a healthcare provider actually use commercial real estate to make money for them, maybe increase their net worth by seven figures?

So if you are in a market that has options available for you to either purchase commercial real estate, or for you to buy a piece of land and develop your own property, and you look at the fact that you're going to make a payment one way or the other, you're either going to lease for the next 20, 30 years, or maybe you have 10 years left or what have you, or you're going to purchase and you're gonna make a mortgage payment.

If every month you stroke a check or push a button online, and you're either paying a landlord or paying a mortgage company, if every month you're paying down principal and an ownership scenario by 3,000 a month, 5,000 a month, 8,000 a month, whatever it is, and then you also have the benefits of things like appreciation, huge tax deductions, like depreciation, etc. And an ownership scenario, it's very easy to pick up 30, $40,000 per year in tax deductions, it's very easy to pick up 30, 40, $50,000 per year, in principle, pay down and then pick up even more money and appreciation. And you start adding those costs up over over a 10, 15 year, 20 year period of time. And it's very easy to get to a million to $3 million of net benefit to yourself, you get combination of of increased value principle, pay down tax deductions, and then you go to sell that practice and the property, you get 10 years from now, 20 years from now, it's very common for that real estate to be worth well over a million dollars, it's very common for you to pay it off over a 15, 20 year period of time.

Residential people, you know, pull the equity out constantly, you get little equity, you pull it out, you do these 30year, 35 year notes; commercial real estate, you're doing 15, 20 year notes, and you're not refinancing very often. So if after 20 years of owning a building, it's paid off free and clear, it's worth a million half, $2 million, and you picked up you know a million dollars in tax deductions, real estate is a very tangible and easy way to change your financial perspective by again by hundreds of 1000s at the minimum, but typically you're changing it by a million, $2 million.

Some healthcare providers may think it's okay to go in with their lawyer is that a good idea?

It is a good idea to have a lawyer to review the legal documents, it is not a good idea to have a lawyer negotiate economic terms for you.

It's the same thing we were talking about. You know, you have an attorney that specializes in reviewing contracts, reviewing legal documents, the landlord knows they don't know the market; they're not a market expert, they're not beating the streets every day talking to landlords, sellers, owners, listing brokers. And so they're just basically guessing. They're going to try to get an online database, guess the values, and so when you have an attorney negotiating economic terms, there's a couple things working against you.

Number one is the doctor, healthcare provider, you're paying somebody 300, $405 per hour to do what an agent or advisor would do for you for free. So number one, you're paying someone when you shouldn't be paying them.

Number two, they're not an expert in that area, and the landlord knows that as well. So you're back to the idea of doing something without the expertise that you need. And then ultimately, again, are they going to spend a 30, 40, 50 hours of time to get the deal done the way it's supposed to be done? Not unless they charge you $30,000. So, do you want to pay someone $30,000 in attorneys fees to do what an agent would do for you for free? And then it gives you much better terms and results? The answer's no.

You'd rather go with an advisor, who will do it for you for free, who's going to help you capitalize on the deal. Now, you do need the attorney to review the legal contract. And you should never have a real estate broker offering to give you legal advice, or offering to help you tweak language or draft language. Real estate agents should not practice law. And attorneys should not practice real estate. They're separate parties; you need both. And if they're both good, they'll only operate in their lane. If you asked me to be your attorney, I'm not going to be your attorney. If you ask a good attorney to be a real estate agent, they're gonna say that's not what I do. You need both but not either or.

When it comes down to it, how do you choose the best commercial real estate agent?

The best way to choose is to is to do some research. You can talk to, you know, people in your community that you respect; if you've got a good CPA, ask them who they know that specializes in healthcare real estate on the tenant-buyer side. Ask your equipment suppliers, ask your technology provider, ask your lender, ask people that you trust that you've been working with for a while, who do they respect? Who do they think would be a good fit. And a lot of times you'll start hearing the same names, you'll start hearing, hey, this person or this company does a great job. And then you start there, you put out an inquiry, get them on the phone, get them in person, and then you just ask them questions like, you know, what's your experience working with healthcare providers? What's your experience working in this part of the market? Do you do more work tenant-buyer side for healthcare providers? Or do you do more work on a landlord and seller side for third party landlords and sellers? And you start getting a feel for who's got the right game plan, who you trust, and it's no different than anything else in life, you're going to know very quickly: I trust this person, or I don't trust them; I believe this person has my interest in mind, or I don't, I think they have the expertise or I don't believe they do. And so if you get up there and talk to a few people, you'll know very quickly, this is the person I want to work with, or it's not. And if it's not, then go on to the next person, there's too much on the line for you to settle in this transaction. If you don't trust the person, find somebody else, search online, do your research, do you do your due diligence, but don't lose 100, $200,000 because you weren't willing to take 30 minutes to research people and talk them on the phone or meet them in person.

Again, it's this idea, "Well, you know, I don't have time," and my response would be, "So you don't have 30 minutes or 45 minutes or an hour, and you're willing to lose $100,000 because of that?" Like if I offered to pay you $100,000 for half an hour of your time, I think you find a way to make time for that $100,000 check. It's the same amount of money, believe it or not, you just have to do your due diligence.

How much does it cost to hire this expert commercial real estate agent?

Well, that's the beauty. That's what I've alluded to a little bit here at some of the previous answers. It doesn't cost a healthcare provider anything to hire a commercial real estate agent. And that's because commissions and commercial real estate are paid, just like they are in residential. And that's why the landlord or the seller — so if you're going to sell your house in residential, you hire a listing agent as your advisor, your agent, and you would have a commission agreement for that transaction. And it would be built for two people; it'd be built for your agent, and it would be built for the buyer's agent. And if the buyer shows up without an agent, that listing agent gets a double commission.

So this is not a for-sale-by-owner scenario. This is where a lot of healthcare providers get confused. They think, well, if I don't hire an agent, I'm going to save money. And the reality is you're not the one paying the commission. So there's no money for you to save in this because you didn't determine the commission structure and you're not paying it. If you own the property and you wanted to sell it yourself or lease yourself, sure, you could save one half of the commission. But in a scenario, if you're a doctor or healthcare provider, and you're a tenant or a buyer, that commission is being paid by the landlord or the seller, it's going to get paid either a double commission to the listing agent, or it'll be slipped from the listing agent and then your agent, your representative. So there's no money to be saved by not hiring an agent. So the question is, well, why would I hire someone? And the answer is because you're too busy to hire someone, you don't know how the games played, or you just you just get frustrated and say "I'm just going to sign whenever they put in front of me."

Again, all those are bad game plans. But long story short, it's free to hire an agent as a tenant or a buyer's agent, you should always have representation, and they're going to take a fee out of the owners proceeds or the listing agent's portion, so it's not going to cost you as a doctor or healthcare provider anything.

Do you have a website people can visit, f they want to get more information about you?

I do, yep. Best way to get a hold of us is our website. It's 

. Upper right hand corner of our website, you can click the "Find an agent," we have agents across the country, we operate at every state across the country, you can click to get a free lease or purchase evaluation if you want to know how your lease compares to the current market, if you want to know what it would cost to own and what your options are in your immediate area. We'll do all those things upfront for you, as well just to give you initial information to help you make this decision.

And then ultimately, we also have hundreds of educational resources. We have a glossary, FAQ, we've got hundreds of videos.

If you want to get educated on healthcare real estate, we have more information than you could ever possibly get through. But we will help get you educated so that you can make the best decision possible for your practice, for your future and for your financials.

On this part two episode with Colin Carr, founder and CEO of CARR, we hear more about commercial real estate dos and don'ts when managing the space of your practice. Tune in now for the Q&A with Ophthalmology Times® executive editor, David Hutton.

Commercial real estate and your practice, part two with Colin Carr

Colin Carr, founder and CEO of CARR, chats with 

 executive editor David Hutton in this part one episode of the EyePod.

This transcript has been lightly edited for clarity.

Welcome to EyePod, a podcast series from 

. I'm David Hutton, your host for today's episode. I'm joined today by Colin Carr, the founder and CEO of CARR. 

CARR's team of healthcare real estate agents span coast-to-coast, and the company is a leading provider of commercial real estate services for healthcare professionals. Colin has been involved in commercial real estate since 2000, and has personally completed more than 1,000 transactions. He's here to share his expertise with us today. Thanks for joining us.

First off, how much is really on the line in healthcare real estate negotiation?

It's a great question. And most people would dramatically underestimate the answer. But the answer is there's several $100,000 that are on the line in a traditional commercial real estate transaction. So I mean, break down the numbers, let's say you've got a space, that's three or 4000 square feet, if you are overpaying by three or $4 per square foot, you take 3000 square feet, times $3 per square foot higher rent than you maybe could have paid or should have been paying if you were properly represented, and you had a really aggressive negotiation. And so 3000 square feet times $3 per square foot is $9,000 per year, and excess rent that you could have potentially avoided paying. Take that over a 10 year period of time and all of a sudden you've got $90,000. Look at other concepts like what are your annual increases, if you're paying a 4% annual increase, instead of three and a half percent, or three or two and a half percent, here comes another 20, $30,000 in additional rent that you could have avoided paying. And then you get into other questions like free rent allowances, renovation allowances, or tenant-proven allowances. And you could add up to a couple $100,000s very quickly in a standard negotiation.

What are the top mistakes that healthcare providers make with their office space?

So well, let me start with just maybe the top three or four. The first mistake that healthcare providers make with the real estate, is they try to take the do-it-yourself approach. They either think they're gonna save money by not working with someone, or they don't know where to go find a good advocate or advisor, or good agent, or they just, they all of sudden get a phone call from their landlord or from the property manager, asking them if they want to renew their lease, and they all of a sudden start scrambling and they start the process all by themselves. And the problem with that is several fold.

Number one, when you're dealing with a commercial real estate transaction, that is gonna be worth hundreds of 1000s of dollars or even millions of dollars over a 7-10 year period of time. There's a lot on the line. And if the landlord thinks that you don't know what you're doing, or if you're not qualified, or if you don't have time, they're going to use that against you. They're going to take advantage of you in the transaction. And here's the reality: if Chipotle shows up to do a deal, they're going to have a professional agent right presenting them. If Starbucks shows up, they're going to have an agent. If Charles Schwab or Lockheed Martin, or Visa or any large company shows up to do a deal, they're going to have professional representation. And so when a healthcare provider who maybe does two or three real estate deals in their entire career from the commercial perspective, shows up against the landlord that landlords going to assume they don't know what they're doing, they don't have the expertise, they don't have the time. And the landlords would give them a dramatically inferior deal. And we can break that thing down 10 different ways. But the bottom line is the do-it-yourself approach is going to cost the doctor, or the office manager, 40 to 50 hours of their time, they're going to probably lose 100, $200,000 in the negotiation, they're going to open themselves up to a bunch of pitfalls and complications that they shouldn't have been exposed to, and at the end of the day, they're not going to have any peace of mind that they got the best terms possible. So it is a lose, lose, lose scenario. So I'd say that the do-it-yourself approach, that's the top mistake that healthcare providers make.

Second mistake that we see them making is that they only choose one property to pursue. Maybe they drive by a property and they fall in love with it. Or maybe they've been in the same property for 10-20 years. And they go to do either a new deal or renewal, and they don't negotiate with any other landlords or sellers. That is a huge mistake in commercial real estate, because you have no basis to compare the terms that you negotiate on the one property to the market. And so this is where commercial real estate differs dramatically from residential real estate.

In residential real estate, you might go look at, you know, X number of houses, or you're looking at properties online, you know, via Zillow, or Redfin, or Trulia, what have you. And then when you find the property you like, you submit an offer and a contract, and if the seller says yes and signs, then you're under contract right away. In commercial real estate, there's too many variables to submit a binding offer, if it's a lease; if it's a purchase, yes, you can submit an offer, but typically, even then, you're still negotiating on what's called a non binding letter of intent, an LOI, or an RFP or request for proposal. So in commercial real estate, the top companies in the world, they'll go look at their options. And they'll negotiate on three, four or five properties simultaneously. Like they might look at 20 properties, whittle it down to the top four or five, and then they start trading paper with four or five different landlords. And they might go three or four rounds of negotiations before they finally get to the place where they're ready to choose which property they're going to move forward with.

And the benefit of doing that is they're not wondering if the terms of each property are competitive or aggressive, because they have a benchmark of three or four other landlords that they're all asking for the same, the same concessions are the same terms from so they know, unequivocally, this is either a good deal, this is an average deal, this is a terrible deal, this is a phenomenal deal, because they have all these things to compare it to. It'd be no different than shopping for an item if you went to four different stores and got four different prices. And if you couldn't negotiate it, you would wonder if you got the best deal possible.

Unfortunately, a lot of healthcare providers will just take one property, submit offers and get so far down the road, and they have no clue if it's a good deal or a bad deal. They might be able to compare the deal compared to where they started the negotiation where they finished the negotiation, but they could have started in a really bad place and not known it; they might have thought they're starting at a decend place, and then they end lower, they think they got a great deal. And they could still be overpaying by $200,000 over a 10 year period. And that happens all the time.

How do you decide when it's better to purchase or lease the property?

The best way to decide that is to let the numbers tell you which property, or which option, to choose. And this goes back to what I was just mentioning, if you only look at options to lease or only look at option to purchase, you don't have the ability to compare a purchase versus a lease. If you take the approach that I just gave you, which is you hire accurate representation, that advisor goes to the market and looks at all the properties that meet your top requirements, and then they whittle it down to the top maybe eight properties that best fit your requirements, you tour those properties and then you pick the top three or four to negotiate with. If you've got options, the lease and options the purchase in the running, then the numbers will start telling you very quickly which one makes more sense.

Now, if you like one property better, that's probably what you're going to choose if you love the option to purchase, and the option to lease is not that nice of a building. That's an easy question or scenario. But let's just say the option to lease is every bit as good as the option to purchase. Both are phenomenal locations. Both are beautiful properties and buildings. And you would be happy to either one, the way you decide that are the numbers: What's the downpayment? You know, how much how much money do you have to inject into the deal to get the financing that you want? What is the actual cost of the property after you pay down the principal, how much tax deductions and how much depreciation you get in an ownership versus a lease, and you could end up paying more for the property per month in a mortgage payment, but end up paying less per month or per quarter on taxes significantly. So you maybe pay your lender more, but you pay the government less.

And it actually, you could have a scenario where maybe it costs $10,000 a month to own, $6,000 A month the lease, but once you factor in principle paid on a tax deductions, the effective cost of owning could actually be less to own, even though you're paying a higher amount per month upfront. Once you factor in those benefits, it can be a lower effective cost of owning. And so the best way that you get there is to run a very detailed purchase versus lease analysis or to have your agent do that for you. And then that'll tell you quickly, "Hey, this property makes more sense economically, or financially than the other property does." The numbers speak very loudly.

Everybody likes to save money, how can health care providers save say $100,000 or more on their next lease renewal?

So lease renewals are the number one transaction where healthcare providers lose money, right? Healthcare providers are very good at losing money in a lot of different types of deals, which is not a compliment by the way, but lease renewals are the number one transaction where healthcare providers leave money on the table.

And here's why: A lot of healthcare providers, they're in a space that maybe been there for 5,10, 15 years, and they go into the transaction thinking "I don't want to move," or "I don't have time to move," and the landlords are going to assume that that's true, regardless. Okay, so a landlord's going to go into a deal and say, "This person, he or she probably doesn't have the time, they probably don't want to deal with the inconvenience, they probably haven't hired an expert agent to show them the market. They are in healthcare, which means they want to help people, they're not in aggressive negotiations for a living, so they don't like to be uncomfortable. And if I make it uncomfortable for them, or I don't cooperate within the way they want to, they'll probably just do whatever I say that I need them to do the probably just sign the deal at the end the day, they'll push back a little bit, but I won't get them to leave over it." And so a lot of landlords go into the transaction thinking, "If I charge them a little higher lease rate, they're probably not going to move because of it; if I give them lower concessions, they're probably not going to move over that." And so they just start kind of chipping away at these deals. And ultimately, the deal is so much further in favor of the landlord than the tenant than you could possibly imagine.

So that's me setting the table to say, if you want to save money in a lease renewal as a healthcare provider, you got to go to the market, you've got to look at what your other options are. And you've got to be willing to relocate. I didn't say you have to relocate, but you have to be willing to.

If you showed up at a car dealership and said, "I have to buy that car right there, no matter what the price is, I will pay it," you're not going to get a good price in the car, like this is terrible negotiation strategy right there. And we laugh at that, but that's literally what doctors are telling landlords: I don't have time to move, I don't want to move. It's too inconvenient, I don't have the money. I don't even know where to start. What will you give me? And the answer is you're gonna get a terrible deal.

And so if you want to save money on a lease renewal, you hire an expert agent to represent you, they go to the market and find all your top options: top options to lease, top option to purchase, looking at different square footages, different types of properties, office versus retail, what have you, standalone, multi-tenant, they look at all your options, they whittle it down to the top top five, seven properties. And then you start negotiating simultaneously with three or four of those people.

Once you know what terms you can accomplish, if you were to relocate or go somewhere else, you then have the basis to negotiate against your current landlord, because you know what a competitive deal is in the market. You know if you were to move, what it would cost you, or what you would be offered. And so when you negotiate with your current landlord, you're not going to be taken advantage of, you're not going to pay your current landlord $30 a square foot, if the other top three properties in immediate area are $25 a square foot, you're not going to overpay like that. If your current landlord says "hey, there's no free rent, there's no tenant improvement allowance." And yet, you can get a huge free rent package and a huge tenant proven allowance right next door down the street. You know your current landlord's not offering you a competitive market deal. And so you use other properties to leverage against your current landlord or your current your current property manager. And that ensures that you don't overpay.

And at the end of the day, when the landlord knows that you are serious that you're not going to be taken advantage of, they'll treat you like a respectable company. A landlord is not going to go to Starbucks and assume they don't know the market. They're not going to go to Amazon and assume they don't know the market. They're going to assume these guys are savvy, they've done the research. If I don't come with competitive terms, I'm going to lose the chance even to do business with them. So they come with aggressive terms, competitive terms, you know, fair terms, and the difference between that type of a proposal versus you know, "hey, landlord, send me an offer. What would you do if I was willing to stay there?" That's 100, $200,000 like that.

Thank you for joining us on this episode of EyePod, be sure to tune back in for part two with Colin Carr.

Colin Carr, founder and CEO of CARR, chats with Ophthalmology Times' David Hutton in this part one episode of the EyePod. Carr hits on some hot real estate topics in the healthcare industry, including top mistakes healthcare providers make with their office space, how to decide whether you're going to purchase or lease, and how healthcare providers can save $100k or more on their next lease renewal.

Tips, tricks, what to dos and what not to dos on how you can save money as a healthcare provider on your commercial real estate (Part 1)


Peter J. Polack, MD, FACS, and Zora Harrison, COO at Ocala Eye in North Central Florida, share the protocols and technology their practice implemented throughout the pandemic that has enabled them to safely and efficiently treat their patients.

COVID-19: Year in the life of ophthalmology practice

Find out how one eye care practice has found success in adapting their services to ensure staff/patient safety throughout the pandemic. 

Adjusting ophthalmology practice to a pandemic 

According to data presented this week at the 128th annual meeting of the American Academy of Ophthalmology, being held in Chicago, about three-quarters of medication volume remains in multiuse eye drop bottles tossed in the garbage well before FDA-regulated expiration dates.

AAO 2024: One simple change to boost sustainability in eye clinics: Stop discarding eye drops before they expire

Physicians can use media training, public relations to combat medical misinformation

According to ophthalmologists at the Colorado University School of Medicine, discussing mental well-being is a key part of effective treatment and improving care for patients.

Mental health and ophthalmology 

The campaign will encourage, educate and empower the public to include vision and eye health as a part of their healthcare by asking them to share how eye care services and exams improved their vision and their daily lives.

Prevent Blindness kicks off ‘It Started With an Eye Exam’

Organization eyes green practices, shifting ophthalmology landscape.

Minimizing the carbon footprint of ophthalmic surgeries

Jonathan Tan detials paper focusing on eye drop wastage

Jonathan Tan

 Hello, my name is John Tan. I'm a third year medical student at the Icahn School of Medicine at Mount Sinai. Our paper looked at ophthalmic wastage, specifically from eye drops that were used in the clinic setting. We looked at this because we were noticing that a lot of our clinics follow these expiration dates of 14 or 28 days, where they throw out a bottle of medication, regardless of how much medication is left in the bottle after those 28 days. We were noticing that a lot of this was accumulating. We wanted to see how much wastage there was. We did a study. We found that over the course of these 6 weeks that we looked at, we were discarding around 72% of medication volume from our clinics. And when we extrapolated this out to a year, we found that this resulted in about an $80,000 loss to our health systems. We wanted to do this because societies like the AAO EyeSustain have advocated for helping wastage, improving wastage by following the FDA regulated expiration dates instead.

These FDA regulated expiration dates are based off of guidelines that are based off the preservatives in the drugs, decontamination rates, and should be effective enough to prevent any infection or contamination of the dropper tip. We wanted to just emphasize the amount of waste that is occurring in these clinics, as well as promote the efforts to follow the FDA expiration date to sustain and maintain our eye drops and prevent wastage.

Every clinic has slightly different guidelines of how they follow their jobs. Most clinics will follow the 28-day guideline. We wanted to put this paper out just to give more wide recognition of this problem, to encourage people to kind of put these measures into place, to follow the FDA regulated expiration date. We received good feedback from different clinicians at different sites who have used this paper to kind of motivate their administration to follow these guidelines. There's been nothing official that has come out, but we hope that in the future, that things like these will start to pick up and allow people to really see the waste that's occurring and have a numerical number that can actually quantify how much waste is occurring to encourage the implementation of new measures.

There hasn't been any communication directly with the manufacturers. The expiration date that's actually printed on the bottle is the date that they received from the FDA, so they're on board with it. The 28-day expiration date is something that clinics put in by themselves. It's based off of this guideline that was published back in 2015, also by the US Pharmacopeia, that stated that drugs need to be discarded within 28 days. That has since been clarified that it doesn't involve the multi-use eye drops that most clinics use in their system. It's moreso meant for injections or one-time use drops. And that's been clarified, but hasn't really been far outreaching, and clinics are still using the clinics are still using the 28-day guideline as of now. 

Videos

Ophthalmic wastage in clinics, particularly from eye drops, is significant due to adherence to outdated 28-day expiration guidelines. A study revealed that 72% of medication volume is discarded, leading to substantial financial losses. The FDA's expiration dates, based on drug preservatives and contamination rates, are more appropriate for multi-use eye drops. Despite clarification that the 28-day rule is not applicable to these drops, many clinics continue to follow it. The study aims to raise awareness and encourage adherence to FDA guidelines to reduce waste and associated costs.

In a paper presented at the American Academy of Ophthalmology annual meeting in Chicago, Jonathan Tan, a third year medical student at the Icahn School of Medicine at Mount Sinai detailed the study on ophthalmic eye drop waste in clinics, revealing 72% medication loss due to outdated 28-day expiration guidelines, resulting in significant financial waste. The study advocates following FDA expiration dates.

AAO 2024: Ophthalmic drop wastage due to artificial expiration date

T.Y. Alvin Lu, MD, a retina specialist at Johns Hopkins Medicine, discussed the application of large language models (LLMs) in revenue cycle management (RCM).

Alvin Liu, MD, RCM management

 Hello everyone. My name is Alvin Lu. I'm a retina specialist at the Wilmer Eye Institute, and I'm also on the AI Operations team at Johns Hopkins Medicine, and this newly established team with a purview over all things AI related in the clinical, operational and imaging domains. And later today, I have the honor of giving a talk that focuses on using large language models (LLMs) for revenue cycle management.

As you know, the vast majority of medical transactions in the US are carried through medical insurance, and therefore revenue cycle and management is extremely important. That's exactly how health systems and providers get paid by insurance payers. RCM management, in itself, is a big business. It's estimated that each year, about $150 billion are involved in RCM management. However, this process is also very tedious, with a lot of pain points and inflections. Therefore, one of the most promising use cases of large language models to use LLMs for revenue cycle management such as prior authorization.

We at Johns Hopkins Medicine recently performed a pilot for this exact purpose, and so far, we have been able to demonstrate that we improved productivity by about 25% and in over 70% of all the prior authorizations, all the required documents to be uploaded were, in fact, recommended by this LLM. This is certainly a very exciting area of development for healthcare AI overall, and certainly for ophthalmology, because, as you know, obtaining the correct prior authorizations is important for ophthalmology, especially in the context of intravitreal injections in retina.

The integration of large language models (LLMs) into revenue cycle management (RCM) is proving transformative, particularly in the realm of prior authorizations. At Johns Hopkins Medicine, a pilot program demonstrated a 25% productivity increase, with LLMs accurately recommending necessary documentation in over 70% of cases. This advancement is crucial for medical transactions, especially in ophthalmology, where obtaining correct prior authorizations is vital for procedures like intravitreal injections. The application of AI in healthcare, particularly in RCM, holds significant promise for enhancing operational efficiency.

In a presentation at the American Academy of Ophthalmology’s annual meeting in Chicago, T.Y. Alvin Lu, MD, a retina specialist at Johns Hopkins Medicine, discussed the application of large language models (LLMs) in revenue cycle management (RCM).

Canonical

AAO 2024: Applying large language models in revenue cycle management

Vicki Chan, MD, shares pearls for leveraging the power of social media in health care

to discuss the role that social media plays in medicine (and ophthalmology, of course), such as in patient education and combating misinformation. Chan also touches upon the innovative ways social media platforms can be used to connect audiences with physicians in this interview with Group Editorial Director Sheryl Stevenson.

Editor's note: The below transcript has been lightly edited for clarity.

 We are joined today by Dr. Vicki Chan, who is an ophthalmologist based in Los Angeles, and who also has a very huge passion for social media advocacy, when it comes to health care and especially ophthalmology. And I'm sure many of our audience members have seen her videos on TikTok and Instagram. And so we'd love to just chat a little bit about social media and its role. What are some of the innovative ways that you have used social media to educate, advocate, or engage with your audience?

 I feel like when I got started with social media, I would say, I got started maybe like a decade ago...really got involved with it, maybe 4 or 5 years ago. I felt like social media was the innovation. I mean, just using it. There weren't many doctors on there at the time. And using that platform and using the trends and the audios, I feel like was the innovation. And I think it got a lot of attention. Just being on those platforms and doing those things. And it's been a lot of fun. It's gotten a lot of attention, gets a lot of views. And I really felt like it was a powerful tool to get the word out on what people I think typically find boring, like health care, educational information...when you put it to music or if you put it to a dance or a trend and suddenly people want to watch. It's been really effective.

 Getting the word out, too, regarding any misinformation about health care or anything in general like that I'm sure can be a double-edged sword getting that information out there. How do you address and combat some of those issues on your platforms?

 You're right. I feel like my platform really took off around COVID because there was a lot of misinformation swirling around that time and really combating those. I think that's where a lot of my views came from and how my platform really grew during that time. What I have found, there is so much misinformation out there, not just about COVID, just about so many health care issues. And whenever I talked with my friends, it's like whack-a-mole. I mean, you cannot believe. And I think people understand this. In science there is—and I don't want to say one right way, but like there's a few right ways of doing things and a million wrong, misinformed ways. So if you try to go and combat the misinformation, it's like whack-a-mole. You whack one and another one pops up, and you whack another one and another and you just can't. What I have found is the best way to combat misinformation is to lead with the proper information. If you can put out good information, quality information, evidence-based information...you put that out there that will hopefully counteract the misinformation because it's just too hard. There's just so much out there. You will burn yourself out if you're trying to combat each and every one piece of information one at a time. It's impossible.

 My next question kind of piggybacks off that topic, too. How do you think social media can be leveraged to help promote mental health and well-being, both for health care professionals and the general public?

 With mental health, I think part of the stigma comes from us not talking about it enough. When something is more commonplace, when people are talking about it, when it's out in the open, there's less stigma around it. I've seen so many amazing creators who really focus on mental health. And just talking more about it and putting it out there letting people know that they're not alone. I think that that's a big first step.

 What trends do you foresee for the future of social media in medicine, or how do you see it evolving in future years?

 You kind of see it already. I joke a little bit. I feel like physicians are always kind of on the tail end of trends and things. I remember a time where I'm old enough, like yellow pages, and then when the internet started, I think doctors were a little bit slow about starting websites. I don't even remember this. Websites just weren't a thing.

And then same thing with social media. I feel like doctors were a little slow. I think we're starting more. I see more and more young doctors, people on social media, promoting their practices, talking and sharing information. And I think that's going to be the trend. So the yellow pages and then you've got to like internet website, and now social media is really becoming a powerful tool to educate and advertise and market and get your name out there. And that's just the way it's gonna go. I think it's gonna become the new website. So people aren't really searching your websites anymore. They're searching your social media. Definitely not yellow pages, that's long gone. I think that's just the way it's going to be that you're going to see more and more doctors and professionals on social media using it as everyday marketing advertising tools.

 Sure. And could you break it down what advice would you have for medical students, residents, and younger ophthalmologists as they enter their careers to leverage social media?

 Don't be afraid of it. I do think it's the wave. I think more and more people are finding their information and their doctors and searching on social media. Again, it was yellow pages, and then websites, and then Yelp. When you're going on these and then social media. That's where you're searching for information about medicine and doctors and a lot of professionals that you're looking for now. I was just looking up 'shoe repair' and you're looking on Instagram for that. You know what I'm saying. That's just what the way it's going. I really would encourage young doctors, especially if you have a private practice or you're trying to build a name for yourself, build a brand, really don't be afraid of social media. It is going to be or it is probably the most powerful tool right now that you can leverage.

As far as young doctors and residents, I see a lot of them on social media, and they're doing an amazing job. I guess my only caveat would be is: 'Yes, it's the wave of the future but still be careful about what you put out there.' A lot of the program directors are still kind of on the old wave like I am, and they might be a little bit wary of it. Just be careful about what you put out there because people are watching. And, unfortunately, some of us older folk are more judgy. And so I would be aware of that. But yeah, I mean, social media is, it's here to stay, and we better get used to it.

 Any other key takeaways for our audience in general about social media as they move forward in their careers? Any other pearls for them?

 I think social media...I tell people just to have fun with it. I think that's the most effective. I get questions all the time, like what should I do, how should I do this...I think the most important thing is to have fun with it. While I do think social media is a powerful tool and we just did a whole thing about how I think social media is amazing.

If you don't love it, if this is not for you. I mean, that's fine. There are other ways of getting your name out there, like blogging or podcasting or building your website. There are other ways of getting your name out there. Social media is just one tool, a powerful one, in my opinion.

This Los Angeles-based ophthalmologist and medical creator discusses the role of social media in combating misinformation and building health care practices.

Practice Management

Latest News