September 2003
Doctors at risk ‑‑
Conclusion by WCA Exec. Dir. Jeff Smith and WCA CEO Dr. Tony Palermo
"I just finished doing
the math... now I know why I couldn't draw a regular salary. Thank YOU!"
"Thanks for this new
statistic. No wonder my practice wasn't fun anymore!"
"This is by far the
best exercise any coach has ever shared with me! What an eye opener. After
eighteen years in practice I can finally understand why I've been
financially strapped. Thanks so much."
"Your simple formula
has opened my eyes. I've been giving my services away at my family's
expense. I now realize that discounting my fee to attract more volume simply
doesn't work. AWESOME!"
"I'm giving my care
away! Thank you so much for this exercise. I did the math that you suggested
and I was shocked. I've never been much of a numbers person. As long as I
could pay my bills and myself from the money that came in, I thought I was
fine. Was I wrong. I've been so focused on money and making sure PM could
get afford to get care that I wasn't looking at whether I could afford to
give them care."
"I learned that I was
actually reaching into my pocket and PAYING people to come into my office
for care! I don't know how I've stayed in business. Thanks to your statistic
I'm taking control of my practice and running it like a business. Thanks so
much!"
"Thank You, Thank You,
Thank You. With one beautiful e‑mail you have dissolved 18 years of
confusion for me concerning
the determination of
fees."
‑‑‑‑‑
These are just a
sampling of the dozens of comments that Jeff and I have received from
doctors who've taken the time to discern their CPV (cost per visit). For
those of you who have not yet done so, here's a reminder of the formula.
In order to determine
your true cost to deliver one adjustment in your office do the following:
One:
Calculate all expenses for the month. That's EVERY check that you write out
of your practice for rent, mortgage, staff salaries, heat, lights,
utilities, supplies etc.
Two:
Be sure to add in your base salary (income necessary for the basics of your
survival including rent/mortgage, food, utilities, etc. for your home).
Three:
Divide that total of expenses by the number of visits you served in the
course of that same month.
Your next step...
Once you've established
your CPV, ascertain your profitability. You do this by simply determining
your GPV or Gross Per Visit. This will tell you the precise amount that you
are collecting per visit from your clients.
You perform this
calculation for the same period of time in which you determined your CPV.
The calculation is as follows:
1. Calculate total
collections (actual income) for the month. That's EVERY dollar that you
collected for the month.
2. Divide that total of
collections by the number of visits that you served in the course of that
same month.
Now you know the
exact amount that you collected on a per visit basis, as well as the
actual cost to provide that visit. The difference between your cost and
your gross is your profit per visit.
In business, the
profits are the determinant of the success of your business. Without
profits, you can't serve yourself and you can't serve others.
There are only three
ways to increase your profitability:
*** Reduce your
expenses
*** Increase your
volume
*** Increase your
collections per visit
Profitability
recommendations
By increasing your
volume you can see how your cost per visit will decrease. If you haven't yet
done so, our suggestion is that you play with the numbers to determine the
volume necessary for you to bring your cost per visit to a more manageable
number.
Based upon your current
profitability, how many visits must you serve to fund your ideal lifestyle?
Consider creating YOUR
own fees. Too often doctors determine their fees based upon irrational
thinking. Don't base your fees on insurance companies, other doctors' fees
or traditions. Determine what your fee is based upon your cost per visit
PLUS the profitability necessary to fund your ideal lifestyle.
One of the very first
mandatory exercises for new members of our Mastermind community is creation
of a life plan that accurately determines the income necessary to support
and fund their ideal lifestyle. Many doctors are thrilled to finally
determine where they are, where they're heading and the precise income
necessary to fuel that vision.
We'd like to leave you
this month with the following note that we received from a doctor who took
the time to complete his CPV exercise.
"Tony and Jeff ‑‑ I've
been holding off on this exercise out of fear. Fear of the truth. I faced
the dragon and had my head torn off. I now know that I have been extremely
busy giving the farm away. I've been a chiropractor for 20 years
and have never done
this exercise. To know is painful and enlightening. I finally know now what
I need to do in order to become profitable. Better now than never! Thanks so
much!"
Our wish for you is
that you, too, take control of your future ‑‑ starting today!
