"In law, malpractice is a type of negligence in which the professional under a duty to act fails to follow generally accepted professional standards, and that breach of duty is the proximate cause of injury to a plaintiff who suffers harm. It is committed by a professional or her/his subordinates or agents on behalf of a client or patient that causes damages to the client or patient." (Wikipedia)
With respect to this definition, most chiropractors are committing "revenue malpractice" and running their practice more along the lines of a nonprofit corporation without the 501(c)(3) benefits or legal registration. Unfortunately, we have failed to follow generally accepted standards set by other professions such as dentists, orthodontists or medical doctors – all of whom typically see fewer patients, work less and profit more than chiropractors. Our "breach of duty" that causes potential harm is not to our patients or employees. In most cases, we are the recipient of our own neglect in financial matters.
Our chiropractic "revenue malpractice" does not result in a loss of license, disciplinary measures or other punitive damage typical of traditional malpractice. Instead, we find ourselves progressively working more and enjoying less. We put in longer hours, process more paperwork and have to see more patients than we did in years past, and we are now making less money and showing less profit.
Because most chiropractors enter the profession with a genuine desire to help others, we frequently place our own financial well-being on the back burner for far too long. It's not all about money; however, if your business fails to generate significant revenues or profits, then your doors will close and you won't be helping anyone because they will be forced to go to another chiropractor or some other health care provider.
Therefore, creating adequate income within your practice is a basic necessity, and the failure to do so should be viewed with the same sense of responsibility that you carry for your clinical skills in order to avoid medical malpractice. With that in mind, here are the six most common things you need to avoid so that you do not commit chiropractic "revenue malpractice."
Degenerative Doctor Disease
One of the most deadly conditions that affects chiropractors as business owners is the unwillingness to change. Just as spinal joints tend to degenerate over time without healthy, fresh input, our practices follow a similar pattern. Not everything that worked well for you (or other chiropractors) in the '80s will produce success today. Far too often, I find doctors are billing for services based on nothing more than "that's the way we've always done it." Worse, some fail to notice that their strategies aren't even working, as they have been billing for services with obsolete codes or utilizing outdated information. Other items such as marketing and patient care all follow the same degenerative pattern.
"Business Side" Sidestepping
Many chiropractors share a common shortcoming in how they run their practice: They admit they are not good at the "business side" of chiropractic. Quite frankly, this excuse doesn't sit well with me. Business skills are not some sort of an innate gift given to one DC at birth and withheld from the other 99 percent of would-be chiropractors.
Face the facts: None of us learned business skills in chiropractic college (regardless of when you actually graduated). However, we are all blessed with the same 24 hours in a day. So, when you tell me that you are not good at the "business side" of things, what that really means is that you have chosen to make other things a higher priority.
This may be acceptable for those who go into chiropractic research or academia, but if you are planning to run a business and make a profit, then at least some of your time needs to be dedicated to advancing skills that will enable you to do this. Fortunately, the basics of running of the business can be learned just like any other skill set, and perhaps more quickly than some skills you currently possess.
Fee Fears
Many chiropractors possess a disproportionate fear of increasing fees or even charging for what they are worth, mistakenly believing patients will run away. Consumer research has proven this to be false, but unfortunately chiropractors operate as if every patient bases their entire decision to choose your office on your fees. If that were the case, since so many chiropractors routinely give away free exams and X-rays, you would have to actually pay your patients to compete with your neighboring DCs.
Most of you would recognize this as nonsense, but you apply the same nonsense to your current fee structure. Furthermore, a basic cost analysis of what it actually takes to run your business can reveal that your current fee structure is improperly aligned for profitability. In other words, you may wish to see 50 patients per week, but your overhead and fees require you to see 100. No matter how high or low your volume, your fee structure needs to match your overhead if you plan to have anything left to take home.
Collections Crimes
Many DCs need go no further than their own backyard for a viable source of profit potential due to the fact that their collections procedures are so sloppy they should be considered a crime. Routinely waiving co-pays or deductibles is not only a dangerously non-compliant practice, it's also just plain foolishness. Failing to have adequate systems in place to make sure balances are collected over the counter and through other means, however, is even more commonplace and equally as hazardous.
I have seen offices with accounts receivable that could catapult the business into profitability, buy a waterfront home or allow the doctor to start paying themselves a livable wage – if only the time, attention and systems were developed to actually collect. Face it: Not every patient pays willingly or promptly. Most do, but you need solid systems in place for when they fail and you need to track this vigilantly. Every patient you let slide 60, 90 or 120 days comes closer to work you have done for free. Worse, taking into account your overhead, you probably paid that patient to come see you. What kind of crazy business strategy is that?
Passive Revenue Paucity
Those familiar with the E-Myth undoubtedly recognize the need to work "on" our business rather than simply "in" it. While these phrases are catchy and true, few chiropractors dedicate significant time and resources toward developing passive income streams. The good news is that there is no "one way" that you must do this; the bad news is that all forms of passive income are not created equal, nor are all appropriate for your practice.
Evaluating which opportunities may fit your current needs is not exactly as simple as asking your buddy which orthotics they carry in their office. There is a science to income stream selection that takes into account your practice style, patient volume, cash-flow requirements, how much time or money you are willing to invest, and strategic goals for the opportunity.
I find that most DCs who failed in developing profitable passive revenue streams with things like supplements, massage therapy, weight loss, and even associates have all jumped in without fully analyzing the whole scenario and its possibility for a healthy ROI. On the other hand, well-researched and well-structured programs continually impress me in just how profitable they can be – without requiring much extra work on the chiropractor's part.
End-Game Goofs
As I discussed in a recent article ("How Will You Leave Chiropractic?" Jan. 15 issue), perhaps the ultimate chiropractic goof is the failure to create a viable exit strategy. Chiropractors are notorious for our 11th hour planning in this regard and some flat-out have no plan at all. Again, there is no "right way" to do this; instead, it requires developing the correct plan for your needs and desires.
For some, that will mean selling the practice and heading toward traditional retirement. Others wish to keep going and simply slow down. Still other DCs may be interested in creating a partnership or hybrid approach that allows them to maximize time off while maintaining income – even early in the game. No matter which route you choose, you must plan.
Which of these strategies should you focus on first? That depends on where your particular challenges are! However, for those of you who wish to develop your passive income streams, I am willing to share some of the "science" that I use with my consulting clients in helping them choose which opportunity best fits their practice. Take the free "Passive Income Test" at www.strategicdc.com/passive. Although your practice may be unique, I will be glad to make some recommendations based on some general categories that will help you decide how to best proceed.
I hope this article has given you a friendly prod toward focusing on some of the dangerously neglected areas of running a chiropractic business. Too many good doctors have either closed their doors or suffered financially by failing to take proactive steps in addressing these issues. In the present state of health care, profitable chiropractic practices, happy doctors and healthy patients are badly needed,so acting now will help you and your patients toward a better future!
