Is Your Practice Style Putting You at Risk?
FEATURE
Ray Foxworth
The title of this article may first bring thoughts of malpractice risks or compliance issues. Actually, I’m going to talk about risks in a more personal way—lifestyle risk, particularly if your practice style is a solo practice. What are some of the risks of a solo practice? Here are a just a few:
• Missing your kids’ events at school because you have to ran the practice and can’t afford to take off because of the loss of revenue.
• Missing vacation time with your family because, as a solo doctor, you not only have the expense of the vacation, the loss of income, and the continuation of overhead, but also the challenge of building the practice back up when you return. Your buddy’s $2,500 to $5,000 vacation can easily cost you $10,000 to $20,000 when you add up all of the costs.
• Being one illness away from financial devastation. If you can’t work, you don’t produce revenue, and your expenses continue to mount. That can certainly be a recipe for disaster.
• Nearing retirement and knowing there is no transition plan in place.
• Working longer because you “have to” rather than because you want to.
• Realizing that your practice is truly not a business that can be sold easily because there is no true practice equity value. It’s very likely that when you’re gone, so is the practice.
These are all sobering thoughts. As a second-generation chiropractor, with both parents being DCs now in their 80s, and now being 30 years into practice myself, I can tell you I’ve lived, to some extent, or seen every one of the previously mentioned scenarios. They are not pleasant. Those are some of the reasons I think our historic practice style of a “solo practice” is one of the greatest risk factors we face in this profession. It’s also why I feel strongly that we need to rethink the typical career path most DCs take, not just for the sake of the individual doctors, but also for the long-term benefit and survival of the profession.
Why should we consider changing our model?
Consider these facts:
• Reimbursements from third-party payers tend to trend downward over time and expenses clearly trend upward. That is not sustainable for the long haul.
• The solo-practice model is clearly a more expensive model to operate compared to sharing the costs for fixed and variable expenses, such as buildings and equipment, chiropractic assistants, and billing and other support staff.
• According to the Journal of the Canadian Chiropractic Association 2014 Mar; 58(1): 58-65, over 74% of chiropractic students will incur more than $125,000 in student loan debt. We also have one of the highest default rates of any profession. “Students in doctor of chiropractic (DC) programs face many financial barriers to establishing successful clinical practices after graduation. Most new DC graduates carry with their diplomas significant student loan debt. More than 60% of DCs aie self-employed, which may require additional commercial loans on top of student loan debt to begin practice. New DCs may be underprepared to balance the demands of being a health practitioner, business owner, financial planner, and office manager simultaneously.”
• “Let’s not forget the time-consuming efforts to transition to electronic health records, meaningful use, PQRS, and becoming a compliance officer.”
• “While no reliable statistics on business failure rates exist for new chiropractic practices, 56% of all new small businesses fail within four years.”
• “While the reported student loan debt ($136,000) for medical or osteopathic degree students is similar to the DC students in our study, employment prospects of the respective professions differ. Medical or osteopathic college graduates enter residency programs with defined salary and benefit compensation packages. Post-residency median salaries for medical professionals greatly exceed salaries averaged by DCs. Many DC graduates ai e not likely to achieve their financial goals given their high level of student load debt paired with low post-graduation financial prospects.”
Simply put, the chiropractic profession does not have the infrastructure in place to bring new doctors into a stable work environment, such as group practices, and we have no formal exit strategies for doctors who have spent their lives building their solo practices. Combine this with the negative lifestyle effects of a solo practice and it becomes easy to see there are significant “risks” associated with the solo-practice model.
While solo practices may have been the preferable model years ago, a combination of economics, regulatory issues, and the desire for better lifestyle choices ai e converging to create an environment that we have never seen. With the move in health care to “medical homes” and accountable care organizations, it is clear that the one-man or one-woman show may, and perhaps should, become a thing of the past.
So what aie we waiting for? Why have we resisted this model? Why are over 60% of our recent graduates still going into solo practice? A better question is: Has there ever been a better time to consider joining forces, collaborating with colleagues, sharing expenses, and creating the infrastructure that provides practicing doctors with a more stable and predictable future and our graduates the promise of a truly rewarding career that is financially rewarding as well as rewarding in every aspect of life?
What are the benefits? Let’s just take all of the negatives that I previously outlined and reverse them. How would you like to:
• Be able to attend your kids’ events at school without a negative impact on your practice.
Patients will forget that you were out, but your kids will never forget that you weren’t there.
• Take vacations with your family or spouse and really enjoy the downtime, knowing your patients are being taken care of, your income remains stable, and you return to see your patients rather than to rebuild your practice. You could actually enjoy some time off rather than stress about it.
• Know that if you had a health issue, your colleagues have your back. You can focus on getting better and let your partners/associates step in for you and maintain your practice. Talk about peace of mind for you and your spouse! And if
Our ability to adapt is what will determine whether we survive or thrive, as individuals and as a profession. 99
your colleague has an issue, then you have his or her back.
• Know that you truly have a retirement plan and exit strategy because you’ve partnered with other chiropractors and have groomed new docs coming out of school to be successful. In addition, you know that you have financially stable and capable buyers for your practice or your interest in the practice.
I know, and continue to meet, far too many smart, talented, and dedicated chiropractors who are at a crossroads in their lives with few options because of the solo-practice model. Many of us, prior to experiencing a successful multi-doctor practice, have felt the “ball and chain” existence of flying solo. Perhaps it’s because we weren’t doing it the right way and should have had better guidance, but I don’t think that is the case.
I think once we stop competing with each other for patients and realize that there aren’t too few patients but too few people who know how chiropractic can change their lives, then the better off we’ll be and the more likely we’ll be willing to work together. If we were to pool our resources, share expenses, and put proper business plans in place for new practitioners, as well as exit strategies for retiring practitioners, we may find our practices would be more successful, satisfying, and profitable.
Beginning with our college days, it seems we are taught to be islands. We have very little interaction, if any, with other professionals. We do our own “everything” in practice, from consults, exams, X-rays, lab, treatment, therapy, and rehab to the documentation, billing, coding, and collections. For many, not all, our training prepared us for a solo practice, not an integrated or group practice, and the marketplace and healthcare environment are demanding change. Our ability to adapt is what will determine whether we survive or thrive, as individuals and as a profession.
Can a solo practice be rewarding? Sure it can. Having practiced and lived in both models, though, I can tell you with 100% certainty that I, and many of my colleagues who have chosen the multi-doctor practice, would never go back to a solo practice. The key is making sure you have the right doctors with the right mindsets, similar values, and a willingness to work together to do what is in the best interest of the patients first, followed by the best interests of the practice, then the staff, and then the doctors.
Why is this approach important and why does this model work so well? Because, to paraphrase Zig Ziglar, “If you help enough other people get what they want, you’ll get what you want.” Professional success, personal success, and enjoying life along the way aren’t too much to ask for, and it is more easily attainable when you aren’t trying to do it all alone.
Sure, group practices have their challenges, but the ones I’ve seen struggle the most are those driven by self-interest. The most successful group practices are those driven by service and a focus on putting others first. If that is your mindset, you should consider minimizing your risk and consider a multi-doctor or associate-style practice. After trying to do this on my own in the past and having it not work out so well, I can tell you that the first step is to “seek wise counsel.” There are some great consultants in the profession who can help you along the way. At a minimum, find a friend or colleague who has had long-term success in this style of practice and allow him or her to mentor you. I think you’ll be glad you did.
Dr. Foxworth is a certified Medical Compliance Specialist and President of ChiroHealthUSA. You can contact Dr. Foxworth at 1-888-719-9990, [email protected] or visit the ChiroHealthUSA website at www.chirohealthusa.com
