August 2003

Doctors at risk

by Jeff Smith, WCA Exec. Dir. and Dr. Tony Palermo, WCA CEO

Part 2 in a series...

Based on our recommendations in last month's column, you've taken the time to calculate your all‑important CPV (cost per visit). Having done so, you now know precisely where you stand relative to the profitability of your practice. This month, Jeff Smith and I will outline specific strategies to assist you in the quest for increased profitability in practice.

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Before we get into those strategies, please accept our most sincere congratulations for having the guts to put pencil to paper and calculate your financial position.

Many of you were pleasantly surprised at your current level of profitability. Others of you realized that your profits were a bit too thin for your liking and this awareness is an inspiration for you. A significant number of you were shocked to learn that your practice is "upside‑down," which means that you're actually losing money on a per visit basis. It's costing you more to deliver your adjustment than you are collecting per visit.

Regardless of your position on the spectrum of profitability, strategies for immediate increases are relevant to all practitioners. Here are our "Super 7 Strategies" to increase profits -- IMMEDIATELY!

1. Raise your fees.

I can hear the collective gasp of shock and horror from some of you. Realize this all‑important concept of business: You cannot lose money on each visit and make it up in volume!

Once you know your CPV, you want to add the level of profitability necessary to adequately fund your lifestyle. Let's face it, you've worked hard and long to earn your chiropractic degree. You paid the price on many levels. In order to maintain integrity and self‑respect it is essential that you establish a fee that serves YOU.

If you haven't raised your fee in 12 months or more, please do so immediately. It's very simple, you have a note at the front desk that says, "As of August 1, 2003 our fee for a visit to our office is $X. Thank you."

I would venture to guess that every vendor, service, salary or fee in your office expenses column has gone up in the past year. And while you're at it, please be sure to raise your fees significantly. Don't raise them one to two dollars per visit. Raise them at least $5 per visit.

2. Off the "dead wood."

Have a conversation with any practice member(s) who may be paying you less than your cost per visit. Is it a comfortable conversation? Well, to me any time that I can stop the hemorrhage of cash out of a doctor's office I feel VERY comfortable!

You simply say, "Mrs. Jones, I cannot afford to continue serving you at this fee. Starting with your next visit ‑ your fee will be $X." You can explain to members that you afforded them the benefit of a discount for your services, however, the fee no longer serves you and your practice.

Yes, some people will leave. This will immediately add to your profits because you are no longer paying the person to come into your office for care! Some people will step up and pay the fee. That's great too. Either way, you're increasing your profits and decreasing your stress.

3. Evaluate your staff expenses.

Consider cutting a staff member from the team or possibly reducing their hours to part‑time. We have met far too many chiropractors who are bending over backwards to pay their staff and yet they are forgoing their own paycheck on a regular basis.

4. Count the beans.

Schedule an appointment with your accountant and get to the bottom of your bottom line! Don't put this off. The price you pay emotionally, financially, physically and spiritually is escalating every day. You know this already so let these words serve as your motivation to take action immediately.

5. Keep it simple!

Clean up your financial options for practice members. I recently heard from a doctor who had seven different fees in the office! There was a fee for one adult. There was a different fee if two adults were under care. There was another fee for the first child, the second child and the third child under care. And there was no fee if any of the children were 0‑4 years old. There was another fee for 4‑12-year olds and another fee for 12‑18 year olds!

Simplify your fees and make sure that the "family fees" support YOUR family. I'm not a fan of discounts for numbers of family members under care.

6. Ask for your fees.

This seems so simple but when coaching doctors having financial difficulty, I will ask them to present a "typical case" to me. I ask them to present the care plan and the financial plan.

Usually within 90 seconds I can tell why they're struggling financially. They typically stammer and stutter through the fee presentation. If you're struggling to say it I can only imagine how much you are struggling to actually receive your fee!

You don't ask, you don't get. Or, another way to look at it is you have received precisely what you've asked for. So if you don't have what you want, start asking!

IF you can't/won't/don't present fees with self‑confidence than do yourself a favor and hire someone who will present your fees for you. That's a very wise investment in your success.

7. "Show me the money!"

Finally, I suggest you perform an internal audit to discover the whereabouts of your money. If you have receivables of 60, 90 or more days then go after your money. If you have to turn them over to a collection agency or attorney, then do so.

In Part Three of our series we're going to let you hear from doctors who have taken our advice and followed the plan that Jeff and I have offered you this month. We would love to hear your results as well. E-mail me your results at drtony@drtonypalermo.com and we'll be happy to share them with our readers!

(WCA Executive Director Jeff Smith is an acknowledged authority on "outside the box" success strategies for chiropractors. As a non‑chiropractor who's been a patient of chiropractic since he was 17, his unconventional ideas have revolutionized the lives of an exclusive group of D.C.s in "The 2X+1 Chiropractic Mastermind," his private by‑invitation‑only community of the world's top doctors. Smith is the author of dozens of books and courses, including "The Stress‑Free Chiropractic Success System." To discover more about The 2X+1 Mastermind and how doctors are using the 2X+1 Principles to create their Ideal Lifestyle and Ideal Practice, go to www.chiropress.com.

Dr. Tony Palermo serves as the CEO of the World Chiropractic Alliance. His Bethlehem, Pa. "Dream Practice" is 100% Cash, 100% By Referral/Members Only catering to health conscious individuals and their families. He joins Jeff Smith as co‑leader of the prestigious 2X+1 Chiropractic Mastermind. In addition, Dr. Palermo offers success‑oriented chiropractors coaching for pennies per day! Visit www.DCStayingPower.com to learn more and be sure to take the FREE Practice Quiz.)