In the “Focus on Finances: Budgeting Essentials for Eye Care Professionals” course at the American Academy of Ophthalmology 2025 meeting in Orlando, Bansari Mehta, MHA, chief operating officer of Dr. Black’s Eye Associates, and Elizabeth Monroe, COE, CPSS, PHR, and Andrew Maller, COE, senior consultants of VMG Health, explained the benefits that a budget can provide to practices. For example, they said, a budget provides the ability to accurately predict future practice results by measuring current performance, a sense of financial control, a financial plan that incorporates the goals and objectives of the practice, and the ability to make disciplined and strategic business decisions.

The Budgeting Process

The presenters explained that the budget process can be broken down into 4 main areas: (1) a review of historical financial statements and productivity reports, (2) an assessment of changes likely to impact the practice in the future, (3) a forecast of future productivity levels and operating expenses, and (4) incorporation of the budget with monthly practice management reports. The budget should be part of the strategic planning process, incorporate the short and long-term goals of the practice, involve key stakeholders, provide stimulus for discussion among stakeholders, and provide accountability for the management team.

“A budget gives you the ability to make course corrections throughout the year,” said Ms. Monroe. “If you’re not tracking your budget and understanding how variances are affecting your business, you risk missing the window to respond before challenges become consequences.”

The presenters also explained that budget planning meetings are typically held at the end of Q3 of the fiscal year. As such, they recommended prior to these meetings to send an initial email to stakeholders so that they can prepare ahead of time. Then, gather key stakeholders for a manager meeting (educate, inputs) and a physician meeting (time off, needs/wants).

Common Financial Issues Faced by Ophthalmology Practices

Some of the most common financial issues include increased complexity in business entities and locations, competing priorities across service lines, and the time it takes to budget. Other financial issues, they noted, included discipline over dollars, unpredictable payer reimbursement, lack of financial visibility, and external budgeting factors—such as MIPS, Medicare fee schedule changes, and commercial insurance trends.

Despite these issues, however, the presenters said there are also gains for navigating through the challenges. For example, budgeting will create clarity across the organization and its entities, smarter resource allocation, improved financial discipline (which equals better margins), financial insights by location or service, and it will enhance reporting builds.

“Most practices know they should be budgeting annually. But many don’t—often due to time constraints or competing priorities,” explained Mr. Maller. “With reimbursements declining and costs rising, having a budget and sticking to it isn’t optional anymore—it’s essential for financial stability.”

The Importance of Productivity Discussions

The presenters also discussed the importance of productivity discussions with physicians and optometrists. The benefit of these discussions, they said, is that this aligns clinical output with financial goals, supports fair and transparent compensation models, and identifies opportunities for patient access and operational performance. In addition, they said, these discussions also encourage ownership and engagement, help balance workload and department planning, inform strategic growth decisions, and build a culture of accountability and ongoing improvements.

How to Help Physicians Set Financial Goals

When helping physicians set their financial goals, start with historical data and have them participate in the process. Discussions for MD and OD goals, they said, should include the following 3 areas:

1. Provider Utilization—Evaluate total utilization in comparison to scheduled work hours. This includes total utilization, scheduled work hours, and clinic hours utilized.

2. Revenue Generation—Understand the breakdown of revenue types for each provider. This includes treatment vs retail revenue, surgical revenue, and revenue rate per hour.

3. Trend Measurement—Review current productivity against benchmarks and practice trends to align with set goals.

How to Develop a Budget

The first step in developing a budget, the instructors said, is to gather data. The process should begin 2 to 3 months before the beginning of the next fiscal year. Data to collect should include the following:

• Year-to-date financial statements

• Year-to-date production statistics including CPT volume, revenue, and clinic sessions worked

• Provider salary and incentive compensation plans

• Employee payroll and benefits costs

• Building and equipment lease information

• Estimated capital expenditures

• A marketing plan

"Understanding our budget is critical. It helps me align operations with our strategic goals and ensures we’re making decisions that support the overall success of the group," said Ms. Mehta.

Operating Expenses: Staffing

The presenters also stressed the importance of taking an accurate assessment of staffing-related costs as it is normally the largest expense a practice incurs. A review of staffing, they said, should include a review of current staffing levels by department, salaries and benefits (insurance and pension), payroll taxes, potential wage increases, and potential new hires.

They also emphasized the importance of creating monthly management reports which, they said, should show actual results compared to budgeted and prior year results. In addition, reports will also monitor results in order for management to quickly intervene when issues arise. OM