Starting and building a practice depends on making a series of investments. Business executives weigh the risks and benefits and move forward based on their analyses.
It’s the same with chiropractic. You open a practice, you weigh the benefits, you calculate the potential profits and you consider the overhead, which includes employee salaries, fees and other business expenses.
If your practice is just you and maybe one receptionist, your overhead is low and so is your income potential. Your future is also limited.
If you hire more staff members, move into a new building or add more services, your overhead costs rise. Your income potential increases as well.
You decide to medically integrate your office, and you naturally brace for a rise in overhead costs, which includes increases for salaries of medical doctors or other health-care practitioners.
You can obviously expect your overhead to rise significantly in a medically integrated office, but so will your revenue potential. While estimates vary widely on the exact costs of your overhead, you can expect your revenue to jump substantially. It’s a balancing act. But is it worth the investment?
Where’s the Money?
According to a 2015 Chiropractic Economics survey, medically integrated practices generated average annual billings of $753,800. Practices that included alternative medicine practitioners reported average billings of $532,000. Chiropractic only practices made on average $471,000.
The numbers of reported collections also reported similar trends. Integrated practices generated $641,900, multidisciplinary practices reported $403,400 and chiropractic only practices produced $281,800.
Other estimates put the potential revenue benefits even higher. According to Global Medical Staffing, employing a medical physician can generate $1.4 million in annual revenue for your practice. That’s subtracting recruitment fees and the doctor’s annual salary.
While you don’t have to hire a medical doctor to integrate your office, a doctor on staff allows you to expand your patient base substantially. Only around 14 percent of the American public will seek chiropractic treatment, but nearly 100 percent will see a medical doctor at some point. Your patient base just grew by around 86 percent. If 20,000 people live within a few miles of your practice, you’ve gained access to about 17,000 new patients.
The overhead in a medically integrated practice tends to range between 40 and 60 percent depending on how active of a role you play in your practice, how efficient your systems are, what services you provide and how insurance reimburses in your state. The largest investment in having a medically integrated practice will likely be an MD or a Nurse Practitioner. One method of medically integrating more cost-effectively is by hiring a supervising MD which usually costs between $1000 and $2000 a month. The cost for a Nurse Practitioner ranges from $80,000-$110,000 a year depending on the area of the country.
Switching to a medically integrated office with health-care practitioners on staff may require you to shift your role from chiropractor to executive. You may want to hire an associate chiropractor. Serving in the executive role will allow you to focus more on the business development side of your practice.
You may decide to continue treating patients and hire an office manager or practice executive. But in your role as chief executive, you set the schedule and you determine how you portion your time and efforts. You may decide to devote your entire day to practice management and strategy development.
An integrated model enables you to decide how your practice grows, giving you greater room for maneuvering your practice through marketplace complexities. You develop your level of participation and oversight.
Medically integrating a chiropractic practice isn’t for everyone. It’s an investment in your practice, for your future and places you in a higher tax bracket.
Who Does It?
According to the Chiropractic Economics survey, more than 65 percent of chiropractors provide only chiropractic services at their practices. Nearly 30 percent said they had chiropractors and practitioners of alternative medicine at their practices. Only six percent were medically integrated with both chiropractors and medical doctors on staff.
“This is going to be probably the biggest transition you do to your practice ever. You’re basically taking a small shop to a big shop and the faster someone can step into that executive role, the quicker they’ll move. The faster they can educate (their staff) about what they need and what they want, the faster they’ll move.”
-Dr. Mike Carberry