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Practice Management
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Practice Management
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Written by Tom Owen III
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Tuesday, 23 August 2011 21:44 |
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 When confronted with the full weight of running a practice, a chiropractor’s reaction is often:
- Why didn’t they teach this to me in chiropractic school?
- Can I hire someone else to run my practice for me?
- Isn’t it possible to just practice chiropractic and not worry about the business?
After reading the book, The E-Myth, by Michael Gerber, we couldn’t help but marvel at its applicability to chiropractors. Many in our profession often feel overwhelmed with the business side of their practice because they run it with the “entrepreneurial myth” or “E-Myth” that says, “If you understand the technical work of a business, you understand a business that does that technical work.”
It’s okay to love the technical part of chiropractic, but the aforementioned thinking confines you to running your practice as a technician. This leads to frustration, because you need more than a technician’s skills to run a practice successfully. The answer to this conundrum is to discover the possibilities open to you, not only as a technician, but also as an entrepreneur.
The truth is that for any practice to be successful, the chiropractor/owner must be able to blend and balance not one, but two roles effectively. It’s not just about being the good “technician” and giving quality adjustments. It’s also about being an aspiring entrepreneur.
What is an entrepreneur? According to Michael Gerber, “It is the dreamer in us, who sees a vision different from the present and is the catalyst for change.” Entrepreneurs would run a practice by implementing new systems, skills, technologies, and setting goals. Entrepreneurs dream about where they want that practice to be in the future and meet those goals by thinking outside the box and being creative.
The technician is the doer and loves to do the work. His or her focus is not dreaming about things, but doing them. As long as the technician is working, he or she is happy. Therefore, the technician lives in the present. The entrepreneur plans and directs the future of the practice by setting goals and creatively meeting those goals.
In order to grow a practice, chiropractors need to shift their focus from working in the business to working on the business.
Most likely, you are already a good technician. You know how to adjust. You get good results with your patients. You learned all of that in chiropractic college. But what about the entrepreneur in you? Have you allowed that part of you to come into focus?
The entrepreneur is the inventor, goal setter, visionary, and dreamer within us. Begin by dreaming and creating new and better ways of providing chiropractic services, caring for patients, and reaching new successes. Allow yourself to be more than “just” a chiropractor, understand that you are an entrepreneur, and be mindful of these two factors: momentum and stagnation.
Have you ever known, early in a particular month, that it was going to be a bad one, with frustration, inefficiency, low production, and high stress? It seems the practice in general is moving in the wrong direction, but the momentum seems so overwhelming that you simply cannot apply the brakes? In times like that, imagine how you would react if someone said, “Wait a minute. Take a step back. Think about new ways to schedule, so that the month doesn’t have to be bad.” It would be easy to respond, “Leave me alone. I’m too busy doing what I’m doing to think about how to do it better!” If this sounds familiar, you’ve been taken by the force of momentum, the unhappy state of speeding in the wrong direction, yet feeling unable to stop yourself. Momentum challenges us all, but, by recognizing it and redirecting the momentum, you can take on a new direction in which to steer your life and practice.
Someone who has been taught to view creativity as risky simply stops being creative. Don’t let this happen to you. Invest in new skills, goals, and visions for your practice. Invest in yourself. When stagnation gets in the way, it becomes more comfortable to cling to the status quo. Are you caught in the rut of being unhappy with your practice, doing the same thing while wanting different results? How many times do we hear chiropractors complain about an insurance issue or a staff problem—only to learn that they have been plagued by the same problem for years and have never taken steps to resolve it and move on. Stagnation prevents you from taking risks; it stops you from finding new pathways.
If you have been in practice for many years and have accepted the routine, the safe, and the comfortable, there will come a time when you will feel unfulfilled and uninspired. You will wake up one morning to find that you have lost your passion. Focusing on the entrepreneurial spirit in you means creating and pursuing new possibilities that you really want to achieve. Allow yourself to dream about your future, whether you’ve been in practice two months or twenty years. Once you are ready to enter the world of the entrepreneur, you can begin to build the kind of practice you would really like to have.
by Tom Owen III, and Todd Osborne, D.C.
Dr. Todd 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 Peter G. Fernandez, D.C.
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Tuesday, 23 August 2011 19:52 |
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 The tandem associateship: 2 doctors successfully treating the same patients.
In the previous article of this, "How to Start a Practice" series, I discussed the "Associateships from Hell." Unfortunately, most starting doctors get trapped in bad associate arrangements like these. However, this article describes an associateship structure that's very successful, an associateship in which both the established doctor and the associate doctor benefit. It’s called a "tandem associateship," an arrangement where two doctors treat the same patients.
In a “tandem associateship,” the established doctor's practice is so full that he finds himself skipping procedures, turning away new patients, prematurely stretching out the care of existing patients, etc., because he quite simply has more patients than any one doctor can handle. To alleviate this problem, he hires an extra set of hands (an associate) to take care of all the patients he can't get to. By doing so, the established doctor can grow his practice larger. This type of associateship works well for both doctors.
"Tandem associateship” criteria
In this type of relationship, the established doctor, being very successful, is willing to teach the associate doctor everything he knows. The associate doctor, in a “tandem” relationship, must be an extremely willing student and learn everything the established doctor has to teach. The associate doctor must swallow his ego in order to welcome and accept constructive criticism. How else is he going to learn? The associate doctor must totally agree with this concept, otherwise the tandem associateship will not work.
The “tandem associateship” is a teacher-student relationship. All good teachers want their students to learn everything they have to teach. All good students want to learn everything the teacher has to teach. When this symbiosis occurs, the associate relationship will become successful.
The associate doctor must understand that he’ll have to work hard, go the extra mile and work more hours than the established doctor; however, the associate will still be working fewer hours than if he owned his own practice.
Financial arrangements for a tandem associate practice
In a “Tandem” associateship, the associate usually receives a guaranteed weekly or monthly compensation amount, which is a draw against commission. The commission is usually a percentage of the services or collections the associate doctor renders.
The associate doctor should expect to make 25% of collections on his services. An associate who feels he should make 50% or more is totally unrealistic. The average chiropractic practice has a 50% to 60% overhead, which leaves an average net profit of 40%. The established doctor must earn compensation for the time he dedicates to training his associate and for the patients he turns over to his associate. The established doctor can only share the net of his practice, and it's fair that he make 15% for his efforts, while the associate makes 25%.
Non-competition agreements
There is always a genuine and legitimate concern on the part of the established doctor that, after he provides an associate with valuable training, experience and patients, the associate will leave him and open a practice next door. If this happens, it will rob the established doctor of patients and income, while at the same time his overhead will not decrease, thereby forcing the established doctor into an unfavorable financial situation. To keep this from happening, the established doctor will require a non-competition agreement from his associate.
Believe it or not...non-competition agreements are in the best interest of both the established and the associate doctor. This type of agreement will help eliminate any hesitation the established doctor may have in turning over a large volume of his patients to the associate doctor. After all, the entire purpose of the “tandem” associate arrangement is for the established doctor to increase and improve his practice by using his associate's skills while, at the same time, the associate wants to be filled with patients, learn correct and successful practice habits, including how to run a large practice, and earn a respectable living in the process. The only way all of this can happen is if the associate doctor signs a non-competition agreement.
More information on becoming an associate is available online at www.practicestarters.com.
When you're through being an associate and are ready to start your own practice, hire a consultant who specializes in starting practices to guide you. Don’t think that you now have the experience necessary to start and build a new practice…. You don’t! Yes, you’ve gained the experience of caring for patients and learned some good office procedures, but that’s not enough knowledge to start a successful new practice. You still have to learn how to find a great office location, effective bank negotiating strategies, cost-cutting remodeling negotiations, how to market a new practice, etc. It’s the lack of this specialized knowledge that dooms new practices, not the lack of knowledge regarding patient care.
Dr. Peter G. Fernandez is the world’s authority on starting a practice. He has 30 years’ experience in starting new practices, has written four books and numerous articles on the subject, and has consulted in the opening of over 3,000 new practices. Please contact Dr. Fernandez at 10733 57th Avenue North, Seminole, Florida, 33772; 1-800-882-4476;
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or visit www.drfernandez.com
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Practice Management
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Written by Tom Owen III
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Tuesday, 19 July 2011 19:53 |
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M ark Cuban, owner of the Dallas Mavericks, once said about his basketball franchise, "Everyone has thousands of entertainment choices and we don't want to create any excuses for them to go and spend their money somewhere else." This is the way every chiropractor must think in a 21st century, service oriented, practice.
Consumers have more choices for which they can choose to spend their money, today, than ever before in our society. These opportunities range any where from flat screen televisions, to new cars, to plastic surgery. The chiropractor down the street is no longer your biggest competitor. Every retail store and service provider is now competing with you for the discretionary income of your patients. You need to make it a priority to have the best customer service, the best staff, and the best results, to make sure there is no excuse for anyone to walk out your door and never return.
Of course, the attrition of some patients due to death or relocation is to be expected, but losing patients because of less than stellar service is unacceptable. Your patients have money they are going to spend somewhere and, if they’re your patients, that means, at some point in time, they were willing to spend it with you. Don't give them an easy reason to change their mind and go somewhere else.
Most chiropractors realize that, if they are to be profitable, retention rates must be kept at a high level. In order to do that, doctors must have loyal patients. What many chiropractors fail to realize is that those patients need to be highly regarded as an integral part of the practice. Returning patients don’t just add value to your practice; those patients are the most valuable asset you have!
We see many chiropractors that are more worried about where the next patient will come from and when the next dollar is going to come through the door; all the while, ignoring the dollars that have already walked in and out of their door several times.
As chiropractors reflect on the worth of their practice, most likely they think of items that are listed on a balance sheet, or a profit and loss statement. However, the most valuable pieces to any practice aren’t “pieces” at all, they are patients. Every other piece of equipment in your office can be replaced but, if you lose the patients, none of it really matters.
Think of this as patient equity. The amount of investment in time and quality work you put into that patient is considered an investment in your patient equity. Like a house, having more equity in your patient base leads to a more successful practice. Also, like a house, your patient base can truly be considered an asset. When you look at returning patients as an asset that add equity to your practice, it is easier to understand why they should be valued and every effort should be made to keep them coming back. Following are a few ways to do that:
Ensure that you are maintaining the patient/doctor relationship. Protect yourself from losing your patients to the many other products and services vying for their money.
Another way to protect that equity is being mindful of quality in customer service (both on the phone and in person) and in the service you provide them with─chiropractic care. If you think there is a problem with an established patient, it may be forgivable, but with a new patient, it may lead to a rocky future or no future at all.
Also, find ways to keep your current patients involved and lock in patient loyalty when they aren't physically in the practice. Social media is one such method that excels in this area. The more you can entwine your practice into their life, the harder it will be for them to go anywhere else.
Never underestimate the value your patient base adds to your practice. It is one of the most important assets you have. Understanding this concept will enable you to continue to invest in your patient equity which, in turn, will make your practice more successful.
Dr. Todd 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 Peter G. Fernandez, D.C.
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Tuesday, 19 July 2011 17:01 |
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The 5 types of associateships to avoid…and why.
Becoming an associate doctor is not a demeaning career move. Trying to open a new practice when you or your finances are not ready…is. Being an associate should be an honorable, rewarding and learning experience. You will hit net profit your first week in practice (your paycheck), you will work fewer hours, and you will have much less responsibility and stress than if you had your own practice. For example, an associate's main functions are to diagnose, adjust and occasionally do some paperwork. These tasks are the easiest part of any doctor's workday. Being an associate is easier and it's profitable.
I'm sure you have heard stories about "Associateships from Hell," associates who were taken advantage of, paid "slave wages," etc. While these types of associateships occur, they can be avoided. This article will explain what you should look for in an associateship, what you should accept and what you should reject. I was an associate for three years and had a great boss and mentor. I owe the majority of my success to him. Just as I was able to find an "Associateship from Heaven," the next article in this series will show you how to find yours.
Should you become an associate?
An associateship is appropriate:
» If you are insecure and unsure of your skills in finding and reducing subluxations.
» If you've declared bankruptcy, have a terrible credit rating and no alternate way of getting the money needed to start a practice. Continue in an associate position until you have corrected your credit problems and saved enough money to start your practice.
» If you're looking for specialized knowledge, i.e., if you want to learn the flexion distraction technique and have the opportunity to practice with Dr. James Cox, the originator of the technique, you'd be wise to do so. You'll learn ten times more about the technique by working for him than you ever would by attending seminars.
If your motive to become an associate is not supported by any of these three criteria, you are better advised to hire an experienced a consultant to teach you how to successfully start and run your own practice.
There Are 5 types of associateships
The word "associate" is defined many different ways by chiropractic professionals. It can mean employment, sharing another doctor’s overhead, or starting your own practice in someone else’s facility. The following scenarios are brief descriptions of some of the various types of “associateships.
Salaried Employee
This type of associateship occurs when an established doctor pays a junior doctor $1,500-$2,000 a month to do as he is told. The junior doctor is not given any opportunity or incentive to increase his salary. The junior doctor is basically a “gofer” or a “flunky”. Of course, this type of relationship fails quickly. If you are offered an associateship like this, pass on it.
Starting a practice in someone else’s office is a pseudo-partnership, and pseudo-partnerships do not work.
Time-sharing
Sometimes, an established doctor practices Monday, Wednesday and Friday and wants a junior doctor to practice Tuesday, Thursday and Saturday. Or, the established doctor practices in the mornings and wants a junior doctor to practice in the afternoons. Most time-sharing relationships blow up due to the following reasons:
» The doctors are in competition with each other. When you are in competition with your partner (this is a pseudo-partnership) the partnership won’t last.
» Time restraints restrict practice growth. When the junior doctor’s practice fills up, he will attempt to encroach on his pseudo-partner’s time or, if the established doctor’s practice grows and he needs the extra practice time, he’ll encroach on the junior doctor’s time. Either way, the junior doctor will be thrown out.
» There's no managerial strength in a time-sharing practice. Managerial strength is what builds large practices. In a time-sharing scenario, you've got two doctors with a 50-50 vote, no tie-breakers. It can't work.
Income-splitting
In this practice, two doctors practice together—place all their money in one pool—and share income and overhead 50-50. Unfortunately, there are no two doctors with the very same goals and levels of ambition regarding overhead, hours to be worked, marketing, number of patients to be seen, etc. Inevitably, one doctor will be more ambitious and work harder than the other doctor, but the income will still be split 50-50. The partner that does most of the work will eventually call an end to this cash-splitting relationship.
Expense-sharing
This arrangement occurs when an established doctor brings in a second DC to help him pay his overhead expenses. Think about it. If the established doctor’s location and practice is not good enough to support one DC, how is it going to support two?
This type of practice is also doomed by the competition it creates between the two doctors. Competition between two partners destroys a practice…and a friendship. In addition, there’s no managerial strength in an expense sharing relationship. And, without managerial strength, a practice flounders and soon dies.
There is an exception to this rule: This type of relationship can work when family members practice together. However, even a family practice will fail if the senior doctor is so set in his ways that he refuses to consider any changes suggested by the junior doctors, i.e., modernizing equipment or instituting new and improved office procedures. The senior doctor who does not acknowledge and respect his children’s learned and professional abilities soon kills the family-run practice.
Renting space
Beware of this type of arrangement. When an established doctor rents space to another doctor, it's usually because he has a very small practice that leaves him with unused space that he rents out to help him cover his expenses.
If the practice location is not good enough to fill up one doctor, why would you think it would fill up two? It won't.
This arrangement is similar to the "time-sharing" associateships described in a previous article, except that both doctors can schedule patients seven days a week. This type of relationship usually fails because the office's location can only support one DC, there is competition between the two doctors, and there is no managerial strength.
If you decide to rent space in an established DC's office, make sure that you do not sign a non-competition agreement. Eventually these relationships break up and you want to be able to move your practice with no restraints. Also, immediately start saving money. When this pseudo-partnership breaks up (as it most certainly will), you'll need money to build-out an office space, etc.
(This is similar to the “Independent Contractor” style of practice, which I will discuss in a future article.)
Caution: All of the previously described methods of practice, while being called associateships, are not true associateships. Starting a practice in someone else’s office is a pseudo-partnership, and pseudo-partnerships do not work. If you choose to enter into practice utilizing a relationship of this type, immediately start saving your money. You will either be evicted or will walk out and need money to remodel another facility.
If you choose any of these unfavorable types of practice relationships, you need to make sure you are not restricted by a non-competition agreement. If you are evicted (chances are you will be), you’ll need to quickly relocate nearby. If you have to relocate outside of a non-competition radius, your patients will transfer to the established doctor. In addition, in choosing one of these relationships it is important that you make sure you can put up your own outdoor sign. If any of these criteria are not met, don’t practice there.
“Associateships from Hell” not only don’t work, but will trap and hurt you. In the next issue I will tell you how and where to find a successful associate relationship.
More information on becoming an associate is available online at www.practicestarters.com.
Dr. Peter G. Fernandez is the world’s authority on starting a practice. He has 30 years’ experience in starting new practices, has written four books and numerous articles on the subject, and has consulted in the opening of over 3,000 new practices. Please contact Dr. Fernandez at 10733 57th Avenue North, Seminole, Florida, 33772; 1-800-882-4476;
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or visit www.drfernandez.com
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Practice Management
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Written by Peter G. Fernandez, D.C.
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Saturday, 25 June 2011 00:43 |
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 These 8 questions will help you decide if you should become an associate or start your own practice.
1. Are you inexperienced, but don’t want outside help?
2. Is your ego too big to pay for - and listen to expert advice?
3. Can you raise the money?
4. Are you willing to work 70 hours a week?
5. Are you too scared to open a practice?
6. Do you lack self-motivation?
7. Are you a passive person?
8. Is your spouse going to be supportive?
Every DC has a vision of starting their own practice, becoming extremely successful and enjoying the riches of life. Reads like a fairy tale, doesn’t it? Realistically, this scenario is a fantasy to the many DC's who aren't destined to start and operate their own practice. How do you know if you have what it takes to start a new practice—or if you'd be happier as an associate? Your personal answers to the following questions will tell you.
1. Are you inexperienced in starting a practice, but don’t want outside help?
Do you know how to find, hire and train the best person for a chiropractic assistant (CA) position? The American Management Association tells us that it costs over $12,000 to hire and train a good CA. Frequently having to replace CA’s can sink a new practice. Unfortunately, the average new DC goes through three CA’s his first year in practice.
Most DCs who fail in practice have violated some major practice-starting principles such as starting their practices with inadequate financing, not effectively or adequately promoting, or not finding and properly training the right staff. These doctors will offer a thousand and one excuses for their failures. The truth is most of them did not know how to efficiently and successfully start a new practice and were not willing to get the practice-starting education they needed.
2. Is your ego too big to pay for and listen to expert advice?
A major reason why DC’s fail when starting a new practice is ego. Yes, ego! You’ll hear them say, “I’ll show them how,” or “They haven’t seen anything yet.” This is the attitude displayed by the egocentric DC as he dashes headlong into failure.
I’ve never understood how a DC with no experience in starting a practice, no knowledge of what works and what doesn’t work, no knowledge of the intricacies of insurance, marketing, patient processing, overhead control, etc., has the audacity to think that he can successfully perform these tasks without the advice of an experienced consultant. Audacity … no, delusional would be a better description.
Would a prospector find gold wherever he chose to look? Most didn’t. Now, let’s assume there is a consultant who knows where gold is buried and has drawn a map of how to find it. Wouldn’t it be wise for the prospector to pay for that consultant’s map (advice)? Wouldn’t you hire a consultant who can show you the most direct route to a financially successful practice? Sure you would, unless you are one of those who allow themselves to be deluded by an over-inflated ego.
Wayne State University, the University that specializes in starting new businesses, reports that, “There is only a 4% chance of failing, if the start-up person seeks out and gets the correct answers (“a map of how to get what they want”).
3. Can you raise enough money to adequately start and finance a new practice?
The number one reason for new practice failure is the doctor didn't have enough money (or enough borrowing power) to last until his practice hit net profit. If you don't have the money to start and succeed in your new practice, do you have the ability to motivate people (bankers, loan companies, parents, in-laws, etc.) to lend you the money? Do you have this ability? If you don’t, perhaps an associateship is going to be the better choice for you.
If you have a terrible credit rating or a bankruptcy in your background, an associate position is recommended until you can clean up your credit history and save enough money to finance a new practice.
How do you know if you have what it takes to start a new practice—or if you'd be happier as an associate?
4. Are you willing to work 60 – 70 hours a week?
Are you lazy? Heck no! Who is going to admit to being lazy? However, you must be willing to work 60 to 70 hours a week for five years to establish your practice. No, I’m not kidding about working 60 to 70 hours a week.
The Journal of the American Chiropractic Association (JACA) reported that the average established practitioner works 46 hours a week; the Wall Street Journal reported an average of 50 hours per week. A doctor starting a new practice must be willing to work 20 or more hours per week more than the established practitioner. This additional time is needed for the new doctor to participate in activities that will attract the number of new patients needed to build a successful practice. If you are not able or willing to work these hours, become an associate – you’ll work fewer hours.
5. Are you too scared to open a new practice?
It's normal to be scared when attempting to do something you've never done before. Considering today's statistics from the Small Business Administration (SBA) that only 20% of new businesses will still be there in five years, it's natural for you to be scared. However, being "too scared" means you do not have the self-confidence you’ll need to overcome the usual apprehensions and challenges of starting a new practice.
6. Do you lack self-motivation?
Do you wake up in the morning slowly and proceed at that same pace for the rest of the day? Are you a chronic procrastinator? If so, starting and owning a practice is not for you.
7. Are you a passive person?
All successful new DC’s are highly competitive, goal-driven individuals. They are determined fighters. They know most HMOS and managed care plans will not welcome them and they are willing to fight for the remaining non-HMO/managed care patients. If you are passive in nature, become an associate—let your employer do the fighting for you.
8. Will your spouse be supportive?
Does he or she understand the stress you will be under while arranging construction loans, building-out your office, negotiating equipment leases, talking to bankers, etc.? Is he or she going to be supportive of you when you practice 40 hours a week in your office, plus spend another 20 hours as a member of the Jaycees, the Chamber of Commerce, the Lions, The Rotary, etc.? If not, you should become an associate, not the owner of a practice.
How to Evaluate Your Answers
The reason I wrote this article was not to deflate your hopes and dreams of having your own practice, but to motivate you to seriously evaluate whether or not you are ready to be an entrepreneur (start a new practice). If you answered yes to any of the questions posed in this article … don’t go against the odds, become an associate. In time, you may develop the self-confidence and financial resources it takes to make it in your own practice or you may find yourself content and fulfilled as a career associate.
There are two other compelling reasons why you may choose to be an associate. If you feel unsure about finding and reducing subluxations, or if you want to gain some specialized knowledge, becoming an associate is appropriate. However, only associate with a highly successful doctor who will teach and mentor you. How to find this type of doctor and how to avoid being trapped in “An Associateship From Hell” are topics of the next two articles in this series.
More information on becoming an associate is available online at www.practicestarters.com.
Dr. Peter G. Fernandez is the world’s authority on starting a practice. He has 30 years’ experience in starting new practices, has written four books and numerous articles on the subject, and has consulted in the opening of over 3,000 new practices. Contact Dr. Fernandez at 10733 57th Avenue North, Seminole, Florida, 33772; 1-800-882-4476;
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or visit www.drfernandez.com.
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