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Practice Management
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Practice Management
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Written by Ron Short, D.C., MCS-P
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Tuesday, 25 May 2010 00:00 |
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Well, the dust has settled and the reports have been published, The Chiropractic Demonstration Project is finally over. So, how did we do? Well, we won and we lost.
The key points of the demonstration project were:
• "Section 651 of Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)
• Centers for Medicare & Medicaid Services (CMS) to conduct demonstration evaluating feasibility and advisability of expanding coverage for scope of services that chiropractors are permitted to provide
• Four sites: 2 urban, 2 rural; one of each must constitute a Health Professional Shortage Area (HPSA)
• Demonstration will operate for two years and must be budget neutral" i
 The entire profession expected to do well under these conditions. We expected to demonstrate savings to the Medicare program by offsetting the increase in chiropractic payments with decreases in hospitalizations and surgeries.
When the final report came out, we found that we were over budget by a substantial margin. Depending upon which calculation you use, we were either $50 million over budget or $114 million over budget. That requires some explanation. The results of the demonstration project were calculated in two ways: 1) chiropractic only patients and 2) all Neuromuscularskeletal (NMS) diagnoses patients. There were flaws in both methods.
"The All NMS User and Chiropractic User each has strengths and limitations. The former avoids selection efforts by including all beneficiaries who were potential targets for chiropractic services under the demonstration. At the same time, its results are affected significantly by changes in the cost of care for the 86 percent of individuals who did not receive any chiropractic services. The Chiropractic User analysis, on the other hand, directly reflects the impact of expanded coverage for chiropractic services but may miss unintended effects of the demonstration on services provided by other types of health care professionals." ii
In other words the Chiropractic User analysis would show an increase because Medicare is paying for more services and the All NMS User analysis would show an increase because only 14 percent are under the care of a chiropractor.
The analysis also included a breakdown of the geographic areas. The demonstration project was conducted in four distinct geographic areas: the entire state of Maine, the entire state of New Mexico, 26 counties in northern Illinois, plus Scott County in Iowa, and 17 counties in central Virginia. The cost analysis by both user groups was broken down into each geographic area.
"The breakdown of All NMS User results by state indicates that Illinois counties accounted for all of both total and per-person increases in costs. Increases in costs in Illinois were offset by significant reductions in Maine, New Mexico, and Virginia. Within Illinois, Chicago and its suburbs accounted for 88% of total increase in costs." iii
"The positive net impact of the demonstration (i.e., increase in costs) was completely due to the $240 per beneficiary effect of Chicago (t = 13.7, p<.01); while the effect of the other demonstration counties was a negative $31 (t = 2.1, p<.05)." iv
In other words, Chicago increased the per-beneficiary cost to Medicare by $240.00 while all of the other demonstration counties realized a savings to Medicare of $31.00 per beneficiary.
The beneficiaries were surveyed and "reported good relief of symptoms and high degrees of satisfaction with the chiropractic care they had received. Nearly 70 percent of the survey respondents indicated that they had insurance, in addition to Medicare, that covered chiropractor services." v
So, overall there is good news and bad news from the Chiropractic Demonstration Report. The bad news is that we were overbudget by a significant amount and Medicare has focused on this one aspect by reducing chiropractic reimbursement by between 2% and 3% starting in 2010.
The good news is that we realized a notable savings to Medicare in 4 of the 5 geographic areas of the demonstration project. The patients reported a high degree of satisfaction with the care that they received from their chiropractors.
To highlight the good and ignore the bad would be to invoke that oft-used metaphor of rearranging the deck chairs on the Titanic. We, as a profession, need to urge those responsible to determine what happened in Chicago to cause such an uncharacteristic increase in costs.
The end result is this: You can pretty much find something in the report to support any position on chiropractic that you wish to take. We will have to watch to see what position CMS takes.
Dr. Ron Short is a certified Medical Compliance Specialist, a certified Peer Review Specialist and a certified Insurance Consultant. He consults with doctors regarding Medicare and office compliance programs as well as presenting seminars on Medicare, documentation and compliance. You can send your question or comments to Dr. Short or join his mailing list at
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References:
iChiropractic Demonstration Power Point Presentation
iiReport to Congress on the Evaluation of the Demonstration of Coverage of Chiropractic Services Under Medicare, Page 18
iiiReport to Congress on the Evaluation of the Demonstration of Coverage of Chiropractic Services Under Medicare, Page 14
ivAnalysis of the Budget Neutrality of the Demonstration of Coverage of Chiropractic Services under Medicare, Page 10
vReport to Congress on the Evaluation of the Demonstration of Coverage of Chiropractic Services Under Medicare, Page 19
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Practice Management
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Written by Tom Owen III, and Todd Osborne, D.C.
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Tuesday, 25 May 2010 00:00 |
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Over the years, we’ve listened to the stories of hundreds of chiropractors who have asked us to help them make a living doing what they love to do, which is change lives through the healing art of chiropractic. These doctors come to us with a myriad of situations. Some of them seek us out because they are opening their doors for the first time and want to do it right and avoid costly mistakes. Others arrive at our meetings desperate for advice because, if they don’t increase their profitability soon, they’re going to have to close their doors and find another career. There are others who come to us with solid practices, but they’ve hit a plateau and can’t move past their current level of collections, despite repeated attempts to do so. And yet others call upon us because they’re doing well and growing but they need advice on expanding or hiring associates. These doctors are aware that there are chiropractic business principles they lack and they’re willing to do whatever it takes to learn those principles and see their desired outcomes.
 However, there’s also a segment of the chiropractic population that call us, but then try to convince us that they really don’t need our help. We love to talk to doctors who are doing well (and wish there were more of them), but it’s a little disconcerting when a doctor calls us for help, because they know they need it, but then proceed to tell us how well they’re doing.
Even before these doctors give us their stats, nine times out of ten we know what their situation involves. They usually have a high volume practice with impressive collections, but their overhead is so high that, at the end of the month, they’ve worked their tails off for little to no profit and they’re on the cusp of burnout. They think they’ve got a successful practice because they see such a large number of patients but, deep-down, they know something isn’t right because, despite those high numbers, they’re unbelievably stressed.
We’ll hear a chiropractor boast that they’re producing $60,000 or more a month. However, after we look at their situation and see that their overhead is $55,000 or more a month, we try to help them understand that it’s not about collections, it’s about profitability. It’s about working smarter, not harder.
We recently worked with a doctor who was doing a lot of insurance and personal injury business. He was proud to report to us that he was collecting an average of $97 per patient visit. That’s an extremely high average. However, once we took a look at his stats, we found that each visit actually cost him an astounding $89 per visit! His profitability was really only $8 per visit! Remember, it’s about practicing smarter, not harder.
Compare that to another doctor with whom we’ve been working who is only averaging collections of $40 per visit. However, his overhead is $14 per visit, so he makes $26 profit per visit. Which doctor is working harder and which doctor is working smarter (and making more money). Profitability comes down to what you’re really making after overhead is figured in. Don’t confuse motion with progress.
There are many variables that make a chiropractic office successful. There are a lot of things the doctor has to do well. It’s so frustrating when we see them get most of it right, but allow poor financial decisions to sabatoge their sucess.
We’ve noticed a disturbing trend: The more money the doctors collect, the more they allow overhead to increase. Why do they do that? This is just common sense; a practice that’s producing $35,000 a month with a $15,000 overhead is much more profitable than a practice that is producing $60,000 a month with a $55,000 overhead. Yet one of the first things a lot of chiropractors do when they begin to make a little money is start buying new gadgets. They buy new cars, new houses, and new equipment. As a result, instead of looking at their net worth, they now have to look at how they can afford to make those new payments.
For some reason, there are many people who think like this: "I can’t necessarily afford that car, but I can certainly afford that payment." This type of thinking starts adding to overhead and will eventually turn into a debt nightmare. The best way to deal with a problem is to never have it in the first place. Understanding basic business principles would solve the aforementioned problem before it becomes one.
The worst thing about making financial mistakes is usually not the mistake itself; it is the consequences of that mistake. Unfortunately a willingness to work hard is not enough to undo past financial blunders. You’ve got to know how to work hard and smart!
Just because you’re seeing high numbers of patient visits, doesn’t mean your overhead is low enough that you’re netting what you would be if you were running the practice effectively and efficiently.
Do the math. Take a look at your collections and overhead. It may explain where that stress is coming from. Learning how to work hard and smart will require you to change some things. Decide today that you’re going to take action and change your situation. What’s the definition of insanity? Doing the same thing over and over and expecting a different result. Today is the day to learn how to do it differently!
Tom Owen III, President of AMC, lectures extensively from coast-to-coast to thousands of chiropractors and students annually. He is the author of Chiropractic from a Business Man’s Perspective, and has spent the last 25 years in the day-to-day trenches of the chiropractic profession. He lives by his quote that "In the end, all that is left are the lives we’ve touched and to what extent they were changed."
Dr. Osborne, a 1989 graduate of Palmer College, ran a successful high volume multiple doctor practice, and is currently Vice President of AMC, Inc., as well as an author and lecturer. Visit www.amcfamily.com or call (877) AMC-7117 for more information.
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Practice Management
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Written by Tom Owen III, and Todd Osborne, D.C.
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Sunday, 25 April 2010 00:00 |
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One of the areas in business management that is consistently overlooked is staff development. Most chiropractors dislike the management side of running a chiropractic business because their hearts are dedicated to serving their patients. The reason why so many doctors continue to improve their clinical skills and techniques long after graduation is that they are designed by nature to be passionate healers. However, they are not necessarily inwardly driven to improve their business skills or knowledge in practice management and, as a result, the business side of their practice usually has room for improvement..
 Staff development should be a priority for every practicing chiropractor. There will never be a practice that will outgrow the development of the people who work within it. Many chiropractors are ignoring the most valuable commodity they have, their staff.
Development of yourself and others is one of the most rewarding privileges that business ownership provides. Staff should feel they are developing daily or they will become disengaged and bored or, even worse, treat their positions like a job rather than a career.
Does this sound like your practice environment? Here are five warning signs of staff under development.
1. High staff turnover
2. Your greatest source of internal referrals is not your staff
3. Your patients would score higher than your staff on chiropractic knowledge
4. Your services/collection ratios average less than 90% per month
5. You would rather have a root canal than an office staff meeting
Simply put, you are not leading anyone if you are not developing someone. If you are only known as the "check signer," that makes you the boss, not the leader. Once a doctor has taken an active role in leadership and mentoring his staff, the production or revenue in that office increases. In fact, you will never reach stress-free production levels without good staff, and that only comes from staff development.
People are starving for leadership. Nobody wants a dead end job. However, in environments where there is a lack of leadership, this is exactly the result. If you make an effort to become a leader within your practice and require accountability from your staff, you will be surprised with the results. Regularly we hear, once a doctor has taken an active role in leadership and mentoring his staff, the production in that office has a substantial increase.
We realize there are many chiropractic doctors struggling to pay their bills and keep their practices afloat. With those valid concerns on their mind, leadership skills may be the last thing they care about right now. Nevertheless, taking an interest in developing staff and their leadership skills may be the very thing that provides the growth that practice so desperately needs.
Doctors, you owe it to your staff and your practice to take charge. In fact, your practice will never reach its full potential without staff development.
Find someone who can mentor you and provide some leadership skills in practice management. Once you gain some confidence, you will find there is a motivating, self-confident and worthwhile leader lying dormant within you who is ready and able to share this skill with other members on your team.
Give me a great doctor and a poorly developed staff and you will get mediocre results. Give me a mediocre doctor with a highly developed staff and the practice will flourish! You may be surprised to know that it’s not you that determines the outcome of your production, it’s your staff. An investment in your staff is an investment in your practice. Help them develop personally and professionally. With your help they can thrive and, when they thrive, so does your practice!
Tom Owen III, President of AMC, lectures extensively from coast-to-coast to thousands of chiropractors and students annually. He is the author of Chiropractic from a Business Man’s Perspective, and has spent the last 25 years in the day-to-day trenches of the chiropractic profession. He lives by his quote that "In the end, all that is left are the lives we’ve touched and to what extent they were changed."
Dr. Osborne, a 1989 graduate of Palmer College, ran a successful high volume multiple doctor practice, and is currently Vice President of AMC, Inc., as well as an author and lecturer. Visit www.amcfamily.com or call (877) AMC-7117 for more information.
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Practice Management
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Written by Gerard Hinley, D.C.
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Sunday, 25 April 2010 00:00 |
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As chiropractors, we all strive to accomplish bigger and better things throughout our careers. One of the dilemmas is how can I best grow the practice?
To answer this, many DC’s think the only way to accomplish this is to emulate other successful doctors in the field. We study what they say, their mannerisms, personalities and simply try to "be them." Unfortunately, being someone else 8-hours a day, year-after-year can create internal strife, foster unhappiness and, potentially, lead to feelings of living a lie.
Personality-driven practices, solely based upon your mission or acting out what others say, lead to patients gravitating toward the personality in the practice versus the power, process and principle behind the chiropractic adjustment in a true business setting. A personality-driven practice may build income, but it will not build equity.
 One day, after 19 years of practice, I looked out on a roomful of patients waiting for their adjustments and realized if I was not the doctor there that particular day, they may not be there either. This may be a great feeling for one’s ego, but not a great approach to growing a practice.
If the delivery of chiropractic in your office is based on external emotion only, you have based the success on your mood, energy level and your attention to the practice or your feelings that particular day. This is the main reason why some practitioners fail to achieve consistent and sustainable growth.
Each year, on review with my accountant, I am told that my practice is worth 3-6 times the last year’s net. I always wonder to myself, Is it really?
There will be a time when I will walk away from active practice. I want to think that what I have worked for made a difference in thousands of my patients’ lives and that my practice is actually worth something sellable and on-going for the next generation.
Take a look at your practice now and ask yourself, What is it really worth when you are not there delivering the care on a day-to-day basis?
Personalities, your own driving the practice or your imitation of another, also make sustainability and reproducibility a major problem for our profession. A practice that simply produces when you produce can also lead to lives that tip out of balance. If balance is an issue, move toward proper process. Find work-life balance by examining equal parts: Family-Faith-and Fulfillment.
Faith means growing into a person of assured ethics and unwavering honesty in order to connect with your purpose. Family balance only happens when we grow to value the important relationships in our lives and this only happens when our spouse, family and loved ones never fall second in line to our practice. Fulfillment is attained when we reach our greatest potential, provide for our loved ones, caring for our patients and enjoying the rewards of a work-life balance.
This morning, I experienced, first-hand, the importance of a self-sustaining practice. As I arrived at the office, I fell on the ice and immobilized my shoulder. After a few adjustments, the pain intensified and I shifted my role to Administrator, as my Associate Doctors kicked in without missing a beat.
A self-sustaining practice allows us all the freedom of never "falling" (no pun intended!) out of balance and, at the same time, builds equity in the business. By having a process in place for sustainability, you create a practice based on delivering the power and principle of chiropractic to be valuable and bullet proof from any variable. As well, proper delegation, through a well documented training process and a curriculum, is how to turnkey your employees to produce regardless of personality, emotions or economic variables.
To transition to a business model, from merely a practice, one must first examine the following:
1) exactly what you want;
2) how you intend to proceed;
3) what is important to you;
4) what you want the practice to be; and
5) how you want to get there.1
A battle between Doctor as owner vs. employee must be determined to get you working through solid processes ON the practice—not just IN the practice.2 Resolve the conflict by determining the most effective way to do the job you are doing and then document that job. Once you have documented the job, create a strategy for replacing yourself with someone else (another Doctor or paraprofessional) who will then use the documented system exactly as you do.3 Use your new employees to manage the newly delegated system. Improve the system by quantifying its effectiveness over time and repeat with any process where you are acting as employee rather than owner.4
In addition to these recommendations, I encourage the most repetitious and time consuming procedures be replaced by blue-ray video. By doing so, you pre-frame value and education into the patient process as patients will find videos cutting-edge, more authoritative, and factual than most doctor-driven processes. This type of educational process, tied in with solid care plan options and financial recommendations, produces exceptional outcomes in a process-driven chiropractic business.
The chiropractic families that we see now are amazed, excited, and in awe with superior service and clinical outcomes. They refer friends and family because the systematic process anchors them to the principle of chiropractic and not just the practice owner.
Dr. Gerard Hinley is a 20-year practitioner and co-owner of Infiniti Group, LLC, a company created to cultivate the power in chiropractors’ lives, by building purpose-driven, profitable, reproducible, self-sustaining businesses that enrich and balance the doctors’ lives, as well as those they serve. Dr. Hinley is co-creator of the Care Plan Calculator, which simplifies care plan options and financials for the chiropractic office. He may be reached at www.infinitigroupllc.com or to master financial care plans at www.thecareplancalculator.com.
References:
1. The E-MYTH Physician, Gerber, Michael E., page 113
2. The E-MYTH Physician, Gerber, Michael E., page 28
3. The E-MYTH Physician, Gerber, Michael E., page 28, 29
4. The E-MYTH Physician, Gerber, Michael E., page 29
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Practice Management
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Written by Tom Owen III, and Todd Osborne, D.C.
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Thursday, 25 March 2010 00:00 |
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We’ve never met a chiropractor who came out of Chiropractic College with the business wisdom that they needed. The average chiropractor or chiropractic student has spent anywhere from $150,000 to $200,000 to be educated in the philosophy, science, and art of chiropractic but, upon graduation, they still come out with little to no business education or experience. It’s not that a chiropractic education isn’t worth that amount of money, it certainly is; it’s just that our colleges don’t teach complex business principles.
From the initial decision to go to chiropractic school through the entire education and degree process to the licensing and board review process, most chiropractors never thought about the fact that they had to be a businessman or businesswoman once they graduated and started their career. The average mindset of the new graduate is, "If I open my doors, they will come;" and once they figure out that it doesn’t work that way, they become disengaged with the prospect of running the business, because they simply want to love and treat the patients, not run the day to day operations of a self-employed business.
In the chiropractic world today, the CCE requirements and restraints that the universities are put under make it nearly impossible for our schools to teach the business principles necessary to succeed as a practicing chiropractor. Let me take this opportunity to say that most universities do a great job at preparing students in the philosophy, science and art of chiropractic but, because of the lack of business education, we find our profession in a state of disillusionment about what it takes to operate a chiropractic practice. Statistics show that 82 percent of our practicing chiropractors nationwide struggle to pay their bills or don’t pay them.
Over all the years that we have been around chiropractic, we have gone to many graduations at various chiropractic schools. As we sit there and watch the graduates walk across the stage, we always ask ourselves, "Which two out of each ten graduates are actually going to be successful?" Of actual graduates, 50 percent of them fail, and nearly 20 percent of them never even use the diploma, itself.
We believe that this failure rate is due to the lack of business training. The principles that a businessman utilizes to make his or her business flourish are so foreign to the chiropractic profession. Over the years we have seen that most chiropractors have a tendency, regardless of their background, to envision the operation of their practice completely differently than how the business world would approach such an endeavor. Most doctors, upon graduation, think they know how to pick markets and locations, how to manage the practice, staff it, equip it, market it, etc. But, once they get out and start practicing, they realize that knowing how to run an efficient, proficient, productive, and profitable chiropractic practice is not as simple as they thought.
Obviously, we can’t address all the nuts and bolts of running a practice in one magazine column, but we can tell you that, if you’ll remember these three things, it can help put you on the road to being successful as a chiropractor. If you get these three things right, it’s hard to fail. If you make a mess of any one of these three factors, you’re going to have hard times. It’s like a three-legged stool. Leave one of those legs off and you’ll probably end up on your tail.
What are the three things to remember? Get the right LAND, use the right PLAN, and be the right MAN (or WOMAN). With that formula, it is hard to fail.
What happens nine times out of ten in today’s world is the chiropractors are picking the wrong land. They’re choosing the wrong markets for the wrong reasons. They’re picking the wrong locations for the wrong reasons. They have no idea what goes into choosing a good market for a chiropractic practice.
To add to those mistakes, the doctor doesn’t have the right plan. Many doctors don’t utilize any type of business system at all. In today’s world, overhead is too high; marketing is too expensive; you can’t afford to shoot from the hip any longer. You have to have a genuine system from A to Z that answers how to run a successful chiropractic practice.
And, even if the right concepts and procedures are in place, the doctor still has to exemplify the right attitude, be willing to put action behind the right attitude, and be committed to being a life-long learner. When you’ve decided you know it all, you’re on the wrong road! Be willing to learn and grow as a person.
You don’t know what you don’t know. Commit to finding out what it is that you don’t know, commit to learning, and change your situation. Remember the definition of insanity? Doing the same thing over and over and expecting different results.
Get educated on the business of chiropractic and let 2010 be the year that you help more people with the power of chiropractic than ever before.
Tom Owen III, President of AMC, lectures extensively from coast-to-coast to thousands of chiropractors and students annually. He is the author of Chiropractic from a Business Man’s Perspective, and has spent the last 25 years in the day-to-day trenches of the chiropractic profession. He lives by his quote that "In the end, all that is left are the lives we’ve touched and to what extent they were changed."
Dr. Osborne, a 1989 graduate of Palmer College, ran a successful high volume multiple doctor practice, and is currently Vice President of AMC, Inc., as well as an author and lecturer. Visit www.amcfamily.com or call (877) AMC-7117 for more information.
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