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
 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
Surgeons lunch and breaks totaled two hours

5
2
8
No of procedure 3
Avg payment per procedure 1338
direct variable non staff cost 480
mortgage, taxes, and utilities (per month) 5500
rent from another company 2000
one time payment for expansion 60000

Income Expenses
from procedures 7068654 variable non staff 642240
from rent 24000 mortgage, taxes, and utilities (per month) 5500

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
 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 days 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

Receptionist & PSR Technicians Cleaning emp Surgeon

Salary 38000 48000 31000 411320
Benefits 10640 13440 8680 115170
Total 48640 61440 39680 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

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, lets 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.
 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.