How do you stay independent?

[Steven Nelson]

Defining Independence

Independence. What does that term mean? I get asked occasionally how I’m able to maintain my level of “independence” within the Wal-Mart system given that I charge considerably higher than standard rates, practice full-scope optometry, have advanced instrumentation and have livable hours (in 3 different offices with a couple of doctors under my employ).

The truth is that I have done everything I can to create a private practice inside of the Wal-Mart locations and they have been very supportive in every possible aspect. To me, it all comes down to responsible freedom. I think it’s important to recognize the nature of my relationship with WM. I’m not an independent contractor; I’m a leasing entity. This is an important distinction because it defines the separate nature of the businesses. That having been said, I recognize that I am part of a symbiotic relationship and that the decisions I make affect more than just my office. Fortunately, almost all of the decisions I have to make from a practice management perspective lead to achieving similar goals and I can’t imagine a scenario where one would be successful without the other.

The biggest and best business decision for my practice was to internalize as many aspects as possible (given the nature of Texas law, it was unavoidable but even the law allowed I would still maintain the same system). First and foremost, I hire my own staff. By directly employing my staff, I’m able to keep a better hold on how my patients are treated by making sure that the employees are following MY guidelines and procedures. This also allows me to handle my own bookkeeping and insurance filing which leads to better control of fees and accounts receivable. By controlling those aspects, I have made sure that there is adequate cash flow to allow for the purchase of advanced instrumentation (which leads to an even healthier bottom line) to allow us to further utilize the medical insurance on which we file.

I wanted to keep my office hours simple so that patients would have no problems, so I have them open 5 days per week from 9-5 (one Mon-Fri, two are open Tues-Sat). Our staff members are always available to assist patients and make appointments and the doctors have after-hour contacts for emergencies. I tried opening different hours and found this to be the most conducive to patient flow. We tested staying open a little later a couple of days per week and found this to be wasted time since there were almost never patients after 5:00. Basically whenever I changed my hours, I simply called my DM to let them know what the change was going to be.

In short, every decision I’ve made has been with the sole purpose of increasing my business in a professional manner with the goal of growing both businesses. In my patient interactions, I try to conduct myself in a way that is a credit to my profession and to Wal-Mart as well since our respective successes are tied together. I think my experience with WM has been positive because I recognize that a suggestion is just a suggestion and I’m not led by my ego meaning I’ll listen to what other people have to say and judge it on it’s merit and not dismiss it because of the source. Thus far, my offices have grown exponentially and referrals are becoming more the norm than the exception despite our higher than average fees (which I think is fair given that our level of patient care is considerably higher than average for optometric care at large). It’s not hard to be independent; you just have to show the respect you want in return.


Independent Contracting Rules

There seems to be a lot of buzz about the differences between those direct employees and independent contractors (or those incorrectly classified as such). This is an important distinction for both the people contracted and those doing the contracting. There are state laws that come into play as well as tax implications that in some cases can be devastating. In our profession, there are many situations where we are incorrectly classifying our by-definition employees as IC and put ourselves at risk. Many ODs express how little we understand those rules on a daily basis by doing it the wrong way, but there is no reason to guess as there are some good resources and the definitions are most of the time quite clear. I’ll try to give some good guidelines to follow when deciding how to classify those contracted for work. A lot of the following comes directly from the IRS, so I’ll apologize in advance because it’s a bit dry and wordy.

I generally go by the IRS rules for classification as this seems to be the litmus test with the most consequences. The IRS basically defines an independent contractor as someone that achieves some agreed upon end by their own means. In other words, we are “hired” to achieve some end result and the methodology is left to our discretion. It is a violation of this definition to attempt to control the contracted person. There are three levels of control that the IRS considers in making this decision.

Factor One: Behavioral Control
The first factor is behavioral control which addresses the level of allowed instruction, evaluation and training. This component addresses the question of whether or not the person maintains their freedom in what and how they do their job. Instruction is somewhat of a grey area, but basically the more detailed the instruction (how, where, when and with what to do the work), the less likely it is to be classified as contracting. It is allowed to place certain limits i.e. paying someone a certain amount for an agreed upon number of hours, but where it breaks down is that you can’t designate what’s done during those hours…only what the end point needs to be.

For example, you hire someone to perform 50 examinations for $2000 and they have 40 hours to do it (you can see how difficult it is make the IC definition model work for optometry). This person legally has the levity to do those fifty exams in 10 hours and play video games for 40 hours if they choose and they’ve still met the agreed upon terms. To ask someone to perform as many examinations as possible in a 40 hours period technically constitutes controlling how they spend their contracted time. It is possible to put an evaluation system in place, but only if it applies to the end result and not the process itself. As far as training, if the contracted entity needs to be trained by the contractor, it implies a method of control by detailing or outlining the process thereby making it more of an employment situation.

Factor Two: Nature of the Compensation
The second is whether there is the nature of the financial compensation. This addresses issues such as expensing, investment, equipment and method of compensation. An IC generally has a significant investment in the equipment (although this isn’t a requirement as such) and as such there is the possibility of loss for the IC in the compensation. Most ICs are paid a flat fee for their work, although it is common in a professional setting like medicine or law to pay a contractor an hourly fee. It is important to recognize the difference between paying someone by the hour and telling them how to spend those hours. The IC also generally has the ability to make themselves available for outside opportunities and have the possibility to advertise their services and maintain a visible independent business location.

Factor Three: Nature of Relationship
The third factor addresses the nature of the relationship. Although there may be a contract in place stating the worker is an independent contractor, it is not enough to satisfy the definition. It is how those parties work together that determines that status. Benefits are not generally extended to an independent contractor, but incorrectly withholding those benefits can put the employer at risk should the IRS decide that the worker was actually an employee rather than and IC. There should also be a specified time limitation to the work performed. If it’s implied that the worker will remain for perpetuity, it suggests more of an employer/employee relationship. There is also matter of whether the contracted services are a key aspect to the overall business. The more the services represent the core of the business, the more likely the owner is to “control” the method of delivery, therefore making it more of an employment arrangement.

You’re probably asking yourself why this is an important enough issue to warrant correspondence. In short, paying someone incorrectly can be very expensive for the employer and in some cases the employee…and we, as a profession, use independent contracting as the prevailing method of employment even though it almost never legally fits. This applies mainly to ODs that bring on associates for part-time or full-time employment. Be mindful that the longer it’s done incorrectly, the more expensive it is. If you are paying someone that fits the definition of an employee as an IC, you will be held liable for the employment taxes on that person for the duration of their employ.

Should your employee decide to test this, it is a simple matter of filling out a form with the IRS and they will audit to determine the nature of your professional relationship. Should they decide that it was actually an employment arrangement, the business owner will be responsible for paying those employment taxes plus any penalties. To the best of my knowledge, there is no statute of limitation on those types of claims and it doesn’t take long for those amounts to hit tens of thousands of dollars. This is also important if you are an IC that really fits the definition of employee as your employment taxes should be paid by the person contracting you. Many of these issues come down to the level of control exercised by the contracting entity. There has to be autonomy on the part of the contractor in performing the tasks for which they are hired. It is possible to contract someone to perform examinations, but you cannot detail how those exams will be done. For more information, feel free to contact the IRS or go to IRS.gov. You can also talk to your accountant or tax attorney to check your level of compliance.


Steven Nelson, OD is a a Wal-Mart lessee in Portland, TX. He is a frequent contributor to ODwire.org.

[Kathleen Ammel, O.D.]

It's nice to see a well written article by an independent OD in a corporate setting. I find that most OD's outside of the true "2-door states" don't understand how we function separate from Walmart and still in a Walmart setting.
The only time I have any problems in this setting is when I come across a Vision Center manager who doesn't understand my role and because they're under pressure as an employee of corporate, think that I should be, too. Occasionally, Walmart is slow at taking care of maintenance issues but that can be true of any landlord.
I've been an independent contractor and a private practitioner before and truly like my current situation better than anything else. It truly is a symbiotic relationship.

[Eugene Allen Gus Guthrie]

"How do you stay independent?"


...or at least maintain the illusion that you are....

Aren't we all delusional???

[Kathleen Ammel, O.D.]

In Kansas, there is no connecting door from the doc's office to the vision center. I'm forever explaining to patients that I am not Walmart--I just rent the space.
The illusion of being the same often brings the patients in. Then it's up to me to keep them.

[kristinlarson]

Incidently, there is a 3 year statute of limitation to challenge employment status with a Form SS-8.

What is the explanation for every "independent" WalMart OD in the Dallas area to have a $39 eye exam? Perhaps chance is the fool's name for corporate influence.

[Kathleen Ammel, O.D.]

What is the explanation for every "independent" WalMart OD in the Dallas area to have a $39 eye exam? Perhaps chance is the fool's name for corporate influence.[/quote]

Sounds like corporate bluff to me. If all the ODs said I'm not charging that little, which they have every right to do, maybe...

[Ron S. Roper]

When I worked at a Sam's Club in Salt Lake City, the regional manager stated at his recent corporate meetings, it was determined that any doctor that did not keep his exam prices competitive with like competition (I am assuming he meant Costco, Shopko and other chains) was in jeopoardy of losing his contract with Sam's Club.

There was one doctor in the area who had been charging $39 for the previous six years and decided to raise his price to $49 which would include the price for dilation whether or not the patient accepted it. Sam's Club nipped at him over this until he finally quit a couple of months later.

I am not an attourney, but it seems that Sam's Club here is stepping on the position of independent contractor.

[Michael Morris]

When I worked at a Sam's Club in Salt Lake City, the regional manager stated at his recent corporate meetings, it was determined that any doctor that did not keep his exam prices competitive with like competition (I am assuming he meant Costco, Shopko and other chains) was in jeopoardy of losing his contract with Sam's Club. There was one doctor in the area who had been charging $39 for the previous six years and decided to raise his price to $49 which would include the price for dilation whether or not the patient accepted it. Sam's Club nipped at him over this until he finally quit a couple of months later. I am not an attourney, but it seems that Sam's Club here is stepping on the position of independent contractor.

How long ago was that, Ron? The outliers that McDaniel speaks of will tell you that Wal-mart/Sam's club has "changed" since then. They will say this type of stuff used to happen but in the last few years, they haven't done this type of stuff.

Now, it is said, they are more doctor centered. "Concentrate of Medical Eye Care, Doctor. Do what's best for the patient, Doctor. Run your "independent" practice the way you want to, Doctor". Can you believe it?

[Kathleen Ammel, O.D.]

I think a lot depends on what state you practice in.

Walmart corp is going to do whatever they can get away with that's in their best interest. It even depends on what area in any given state. The docs in larger cities get trampled on more because there's a long line of new grads or inexperienced corp docs waiting to take over an office.

There was a rumor going around here recently that Walmart was only granting 1 yr leases now, but come to find out, it's on a case-by-case basis. Walmart discovered some private docs were taking the contract for a Walmart office and then not staffing the office or only opening minimal hours in order to quell the competition for the doc's primary office in the area.

I guess two can play games.

[Ron S. Roper]

How long ago was that, Ron? The outliers that McDaniel speaks of will tell you that Wal-mart/Sam's club has "changed" since then. They will say this type of stuff used to happen but in the last few years, they haven't done this type of stuff.

Now, it is said, they are more doctor centered. "Concentrate of Medical Eye Care, Doctor. Do what's best for the patient, Doctor. Run your "independent" practice the way you want to, Doctor". Can you believe it?

This happened in 2003.

He is another story for you: In 2004, I learned that my optical manager filled a prescription for someone who did not want to have an eye exam, so the manager simply bypassed me and filled the patient's old expired prescription without my knowledge, but I later found out by mistake. Uh, that is how I make my money . . . . by giving eye exams.

This manager knew better because he fired someone that did this same thing to me 18 months prior. I complained about it to his superiors and ended up losing my contract over this 2 months later while he still is employed to this day.

I have little respect for Walmart. I am not dissing the doctors, I am dissing Walmart.

[Michael Morris]

This happened in 2003.

He is another story for you: In 2004, I learned that my optical manager filled a prescription for someone who did not want to have an eye exam, so the manager simply bypassed me and filled the patient's old expired prescription without my knowledge, but I later found out by mistake. Uh, that is how I make my money . . . . by giving eye exams.

This manager knew better because he fired someone that did this same thing to me 18 months prior. I complained about it to his superiors and ended up losing my contract over this 2 months later while he still is employed to this day.

I have little respect for Walmart. I am not dissing the doctors, I am dissing Walmart.

Thanks for sharing that, Ron. i've seen similiar things.

[Steven Nelson]

How long ago was that, Ron? The outliers that McDaniel speaks of will tell you that Wal-mart/Sam's club has "changed" since then. They will say this type of stuff used to happen but in the last few years, they haven't done this type of stuff.

Now, it is said, they are more doctor centered. "Concentrate of Medical Eye Care, Doctor. Do what's best for the patient, Doctor. Run your "independent" practice the way you want to, Doctor". Can you believe it?

Well, given our relative access to how WM does things I would have to say that I'm probably a better judge than most of you. In addition to having three contracts myself, I know several upper-level professional affairs directors quite well (actually graduated with one of them) and all I can tell you is what my experience has been. There are several WM ODs that will tell you a totally different story than what those more anti-commercial folks will tell (most of whom have little to NO experience and speak mostly rhetoric).

The problem is that there are several on this forum that will try to pigeonhole you with their all or nothing philosophy. Never believe ANYONE that only deals in absolutes. There are bad stories in almost ALL modes of practice and some of the worst I've heard or personally experienced were in private practice. Is there the potential for abuse? Sure, but where isn't there that potential? Unless everyone is going to be private solo practitioners that open cold (and all lenders have to be forced to give equal terms), there will always be someone that has an "I got screwed" story.

[Michael Morris]

Well, given our relative access to how WM does things I would have to say that I'm probably a better judge than most of you. In addition to having three contracts myself, I know several upper-level professional affairs directors quite well (actually graduated with one of them) .

What does this have to do with it? You know them, therefore all is "cool"?

[Steven Nelson]

What does this have to do with it? You know them, therefore all is "cool"?

Nope...it means that I have a lot more conversations with them (both in a professional and personal capacity) than you have and I have a better feel for what their goals are.

[Paul Farkas]

This is the public articles section. Petty bickering cheapens not only the article in question that was well written but castes a negative image on optometry that has enough public image problems.

Please use the PM for these side comments that add little to to the topic.

[Steven Nelson]

I think that if you want to take issue with the article (honestly, its so well written I don't see how you could ), you should probably bring some specific examples to the table as the doctor above has. I will admit that it doesn't surprise me that it's at least 4 years old.

I also think that the independence has some responsibility on the part of the associate doctor. If there is some coersion/manipulation, I feel the OD has the responsibility not only to not aquiesce but also bring those tactics to light so that they can be appropriately dealt with.

[Greg Ray, O.D.]

I've worked at WM for five years now, with zero problems.

I practice how I want, the hours and days I want, etc. with no corporate input. I was in private practice for ten years prior, and enjoy WM much more.

Not everyone wants to be in PP (nor can everyone BE in PP), and obviously alot of pts don't want to go to a PP, so we fill that niche. To each his own-practice in whatever mode you're comfortable with and do the best for your pts that you can.

All OD's get the same basic education, so no matter where you practice, use that knowledge to the fullest.

[jonathan gordon]

My experience with Walmart was horrible...two times. The first was in 2002 in Boca Raton where I was told I would be "helping" the primary O.D. by working Fridays and Saturdays. If I did well, I would be rewarded with my own store as soon as the next one was available. Once I started, I realized Walmart was trying to force a six day week on the poor O.D. who had been there for 10 years. I felt bad about it and after 3 months, and 2 new stores that I didnt get, I quit. That store is now closed.

The second time was last year at the Melbourne Sam's Club. I had a successful Lenscrafters practice but was having trouble getting a part time O.D., so I attempted to secure a full time O.D. by taking the Sams as a second location (about 20 miles away.) The manager and support staff were HORRIBLE. They didn't follow any directions I gave. They violated HIPAA multiple times a day. When I tried to teach them about anything, they resisted and said they already knew everything they needed. The manager could not control the staff. The DM didnt care and I couldnt even get the pretesting equipment to work. The trial contacts were expired and had a layer of dust over them. The manager and DM made no attempt to help me clean or get new lenses. The staff frequently gave trials without my permission and dispensed spectacles and contacts with no licensed optician on premises. I eventually quit and, unfortunately, was not able to continue employing my associate. That location has not has a permanent O.D. since.

My take home message is Walmart treats O.D.'s just like any other minimum wage employee. The work them as hard as they can, dangling the carrot just out of reach and then, after they have sucked all your blood, they make it miserable enough that you quit.

The only reason to be in corporate practice is to get the "instant" cash flow and then, if you are smart, save the money and open/buy a private practice.

[Howard J Kass]

Good Morning to All,

Perception is merely a 10 letter word that magicians use during their act.

Once found out, perception becomes reality and that is only an 8 letter word which has much more meaning in fact than the original 10 letter word delusion, which is also a 8 letter word.

Time, which is a 4 letter word will bring out the reality of perception which unfortunately you will not be happy in the long haul.

Regards,

Howard

[Paul Farkas]

Many ODs have used Wal Mart epithets that seem to be four letter words.

Thank you all for controlling yourselves on this public forum.

[jonathan gordon]

Howard,

You are 100% right. The future of our profession is private practice and I would like to use this forum to reach out to the older generation of O.D.'s and let them know they really need to be proactive in phasing out as they reach retirement age so the new O.D.'s won't get sucked into corporate practice. I have been searching for a private practice worth buying for 4 years and the pickings are SLIM. Too many private practitioners either:

1. grossly overestimate what their practice is worth(in part due to brokers)

2. wait until their practice is on the decline

3. want to just hand over the keys

Does anyone have any thoughts?

[Paul Farkas]

Howard,

You are 100% right. The future of our profession is private practice and I would like to use this forum to reach out to the older generation of O.D.'s and let them know they really need to be proactive in phasing out as they reach retirement age so the new O.D.'s won't get sucked into corporate practice. I have been searching for a private practice worth buying for 4 years and the pickings are SLIM. Too many private practitioners either:

1. grossly overestimate what their practice is worth(in part due to brokers)

2. wait until their practice is on the decline

3. want to just hand over the keys

Does anyone have any thoughts?

Take advantage of Marketplace@ODwire.org classified to look for or sell a practice....http://www.odwire.org/marketplace/wanted_ads.php

[Kathleen Ammel, O.D.]

"Perception is merely a 10 letter word that magicians use during their act.

Once found out, perception becomes reality and that is only an 8 letter word which has much more meaning in fact than the original 10 letter word delusion, which is also a 8 letter word.

Time, which is a 4 letter word will bring out the reality of perception which unfortunately you will not be happy in the long haul."


This applies equally to corporate and private practitioners.

[Stephen McDaniel]

"


This applies equally to corporate and private practitioners.

Yes, yes of course it does. Just like private and commercial docs have an "equal" chance of losing their lease.

[Steven Nelson]

Yes, yes of course it does. Just like private and commercial docs have an "equal" chance of losing their lease.

And equal amount of initial financial investment?

[Jorge F PerezVelasco]

Steve Nelson is a great example of having a successful corporate practice. However, he has several things going for him that young OD should note to be successful:

Have high connections in the corporation or at least get to know them.

Practice in a state that has good laws to provide you with some independence.

Have a polite but very forceful personality. Protect your rights like a lion.
i.e. Don't have a huge ego but don't be a push over either.

Be a good doctor and practice to the highest level.

[Ron S. Roper]

Practice in a state that has good laws to provide you with some independence.

I whole-heartedly agree with this. Steven, I respectfully say that if you worked at a Utah Walmart for an extended period of time, there is a great chance you would be singing a very different tune. If you give Walmart an inch, they will take a mile (in Utah at least). It seems that the optometry laws in Texas have a much stronger bite. I complained to the State of Utah about my manager filling invalid prescriptions and I he got a tiny slap on the hand by the State and Walmart. And before you place the whole mantle on me, please spare me the line of "Well get the laws changed." Again, I am not dissing any doctors, just Walmart and Sam's Crap.

[Steven Nelson]

I whole-heartedly agree with this. Steven, I respectfully say that if you worked at a Utah Walmart for an extended period of time, there is a great chance you would be singing a very different tune. If you give Walmart an inch, they will take a mile (in Utah at least). It seems that the optometry laws in Texas have a much stronger bite. I complained to the State of Utah about my manager filling invalid prescriptions and I he got a tiny slap on the hand by the State and Walmart. And before you place the whole mantle on me, please spare me the line of "Well get the laws changed." Again, I am not dissing any doctors, just Walmart and Sam's Crap.

I have no intention of laying anything on you. I think that the State laws have a HUGE impact on how a situation like mine can turn out. One of the the things that completely drives me off the deep end is when a State allows direct employment of an OD by a non-medical facility. I think that ANY state that allows direct employment has a worthless Association (no offense intended to any individual OD) that is completely dropping the ball.

Please don't think I feel the corporations are out to do anyone any favors or operate out of altruism. They operate with profit in mind and I realize this; however, I don't think that their desire for profit necessitates that I compromise my practice or patient care. In my offices, the opticals do VERY well despite the fact that I do full-scope medical Optometric care.

The point of my article was to outline the criteria for being an IC and to give a little background on how my situation has worked. I think the law can have a dramatic impact on that and I could never be directly employed by a corporation. I don't have the personality for it (I know that's hard to believe ).

[sanjay kumar]

es, yes of course it does. Just like private and commercial docs have an "equal" chance of losing their lease.

Steve Nelson is a great example of having a successful corporate practice. However, he has several things going for him that young OD should note to be successful:

Have high connections in the corporation or at least get to know them.

Practice in a state that has good laws to provide you with some independence.

Have a polite but very forceful personality. Protect your rights like a lion.
i.e. Don't have a huge ego but don't be a push over either.

Be a good doctor and practice to the highest level.