In their unending quest for success, many chiropractors have had their curiosity piqued by advertisements from DCs who claim to do virtually no work and make a fortune. Even those of you who would instinctively resist responding to such an ad probably have seen examples of such marketing and wondered if it indeed were a possibility.
If you have seen interviews with Mr. Ferriss or caught a description of his actual lifestyle since the book sales have skyrocketed, it is immediately clear that the author is burning four midnight candles at four ends and is furiously promoting his empire anywhere and everywhere he can. Four-hour workweek? Not by my time clock! Before you dismiss the book entirely, I will concede that The 4-Hour Workweek concept is a brilliant marketing strategy and book title, but that many miss the take-home message.
Driven to Distraction and Destined for Disaster
Perhaps the most useful insight Mr. Ferriss delivers is that we are presently in an age of information overload. We are driven to distractions that have us headed for financial and/or personal disaster. To accomplish anything noteworthy in the business or personal arena, we must overcome this by going on a strict "info diet" that limits our consumption of e-mails, meetings, nonessential phone calls and all other unnecessary micro-management tasks that sprout like weeds around the lawn of our daily lives.
I could not agree with Mr. Ferriss more. In regards to chiropractic, I believe that the gem one finds in reading such a book is not that you can utilize some magic formula to perform no work and still strike it rich. In fact, it may not even be entirely accurate to conclude that the "less is more" theory is totally applicable to the chiropractic setting.
Rather, I believe Mr. Ferriss has hit upon a universal truth: Ultra-successful, high-producing chiropractors accomplish tremendous feats by developing discipline and focus on the right things in their business. Conversely, they quickly farm out or delegate tasks that do not require their technical expertise or business acumen. For tasks that require a skill set they do not possess (billing, bookkeeping, etc.), the wise DC realizes their weakness and gets professional help.
Interestingly, in doing this, many entrepreneurs (chiropractors included) notice that they actually free up more of their time and achieve more at the same time. It's not entirely true to report that less is done. After all, the work still needs to be accomplished. It's just that the savvy businessperson realizes that they do not have to be physically responsible for performing all the tasks necessary to get the work done. Furthermore, the chiropractor interested in working smarter actively looks for ways to increase their income that do not necessarily require an increase in personal efforts.
Chiropractic Applications of Business Wisdom
So, how can we immediately apply this mode of thinking and business wisdom to our chiropractic practices? For starters, we need to approach our practices like a business; it is most certainly not our baby, nor is it a hobby that produces income. We need to evaluate the business with an objective eye that looks to increase areas that generate profit and eliminate loss.
Unfortunately, most chiropractors are blatantly unaware of the inner workings of their business and the only statistics they can typically cite are numbers related to new patients, patient visits or services. Some can't even do that. While these are certainly meaningful statistics, they don't tell the whole story or provide enough data to make many decisions that could be critical to business success.
I am a firm believer that you cannot manage what you cannot measure. Consequently, I have found that it is very important to measure where a practice stands financially by examining specific metrics surrounding the generation of services and collections of revenues. Today's economy has caused a progressive tightening of many financial belts, but with careful preparation there is still time to turn the ship around and ensure that one's business is as profitable as it can be.
When I perform a practice analysis for my clients, if the chiropractor's compensation is below average, it is typically due to low practice income or high overhead. In severe cases, both of these items are contributing to the problem. Some chiropractors try to remedy this by tightening that belt a notch more. Certainly you could start reusing face paper, forbidding long-distance calls and skimping on the ultrasound gel, but I wouldn't recommend it.
Instead, why don't you ask some simple but significant questions? Are you maximizing your reimbursements or do you let potential services (and income) slip through the cracks due to poor systems, coding ignorance or a fundamental lack of good billing strategies? Conversely, are all the collections flowing through the clinic pipeline or are they getting stuck in the system due to denials, errors or poor management? Fortunately, the process of answering these questions is a learnable, hard science. I typically start with the following five metrics:
- gross practice income, expenses and doctor compensation;
- performance compared to previous years;
- charges to collections;
- collections as a percentage of charges; and
- charges, collections and contractual write-off adjustments
Defining Acceptable Chiropractic Benchmarks for Success
If you calculate these metrics, your next question will be, "What is an acceptable benchmark?" Because your practice style, technique, size and even location can make a significant difference on how benchmarks are calculated, unfortunately there is no one-size-fits-all answer.
To give a simplified example, let's say you calculate the first metric and determine that your practice income is $400,000, expenses are $300,000 and your compensation is $100,000. This last figure may sound like a fantastic income to a doc in rural South Dakota who can purchase a 3,500-square-foot home on 5 lakefront acres for $150,000. On the other hand, the Southern California DC may be disappointed in the same $100,000 salary, which won't even qualify to buy a home that is 3,500 square feet or on 5 acres - whether it is on a lake or 5 miles from a lake!
However, don't let this dissuade you from calculating these simple metrics. Many docs find they are revealing. If you are unsure of whether your calculation means good news or bad news for your business, of if you would like to see a benchmark comparison of how your metrics stack up in comparison to other similar, healthy practices, feel free to e-mail me (
), noting that you read this article in Dynamic Chiropractic.
One thing I can assure you: Regardless of whether your financial outlook is bright or grim, simply knowing where you stand is a vital step in achieving a healthy business. You may not ever get to the point of practicing only four hours per week and generating the income you wish, but with proper planning, you can develop a working strategy to make practice both highly enjoyable and profitable.
Dr. Tom Necela maintains a private practice in Washington state. He is also the founder of The Strategic Chiropractor, a consulting firm for chiropractors. Dr. Necela can be contacted with questions or comments via his Web site, www.strategicdc.com.