Issue 6 - May 2003
Sixth Annual Salary and Expense Survey
How do you compare?
Our survey shows all
by Linda Segall
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How do you size up? Its a natural question; we all like to know how we measure against our colleagues and competitors. Some questions that may be on your mind are:
Are my gross billings in line with gross collections and net income, for my practice as well as for myself?
How does my salary compare to others with my years of experience?
How many hours a week do others work?
Do many chiropractors sell products to their patients?
Is multi-discipline gaining popularity as a way to practice?
Am I spending too much or too little to run my office?
You may be able to gain some insights to these questions about your income and expenses as they compare to others in your profession by reviewing our Sixth Annual Salary and Expense Survey results.
About the survey
535 readers completed a Web-based questionnaire in response to invitations to participate in the annual salary and expense survey. The invitations were extended through e-mail and on the ChiroEco.com Web site.
Results were gathered and compiled in February and March 2003.
Figures reflect either mean or median averages. The mean was calculated by dividing the sum for that question by the number of respondents who answered it. The median is the number at which half the values in a sample fell above and half fell below. It may or may not be the same as the mean.
Percentages were calculated based on the total number of respondents for each question.
Who responded to the survey?
CA/Office Manager 0.8%
Who answered our survey?
In February and March, Chiropractic Economics asked its readers to answer a short, confidential Web-based questionnaire. This year we had a record number of respondents 535, compared to 398 in 2002. As expected, most (97.2 percent) were doctors of chiropractic. Respondents were predominantly male (85.3 percent) with an average age of 42. Respondents ranged in age from 23 to 75, with 28.9 percent falling into the age range of 46-55. Although no one from Oregon, Wyoming, Nebraska or Rhode Island completed the survey, respondents came from every other state, and regional representation was fairly even and consistent with past years. Consequently, results do not have a regional influence.
If you have followed our survey for the last several years, you will find few surprises in this years results. That said, a few changes are interesting to note:
We looked at results for solo practitioner and group practice/partnership in two different ways those who define themselves as the only chiropractor in the clinic but may be involved in other disciplines (73.8 percent) and those who work alone and are not associated with other disciplines (47.3 percent).
More females (14.7 percent) answered this years questionnaire, compared to
10.5 percent last year.
Gross annual office expenses increased from $62,857 in 2002 to $73,520 in 2003. Most of the increase was attributed to other expenses that were not detailed.
The number of clinics within a five-mile radius increased this year to 23.7. This represents a steady rise: Last year the average was 20.0 and in 2001, the average number of clinics within five miles was only 15.0.
Practicing in the suburbs experienced a slight increase (54.2 percent over 53.0 percent in 2002), as did practicing in rural areas (19.3 percent, compared to 17.0 in 2002).
Group/partnership practices that are not multi-discipline declined slightly (15.5 percent in 2002) to 11.2 percent this year. At the same time, multi-discipline practices rose slightly in popularity, with 37.1 percent of respondents indicating participation, as compared to 34.5 percent in 2002.
The gross average revenue generated by associates is up $138,924 in 2003, compared to $110,774 in 2002.
Total compensation (salaries+ bonuses + retirement) for support staff and associates, as well as the primary chiropractor, was generally lower this year than in the past.
The average number of patient visits per chiropractor remains fairly stable 134.1 this year, compared to 135.0 last year.
As you read through this special report on salaries and expenses, keep in mind that although a survey can help identify trends, it is essentially a snapshot in time. We suggest you use the information as a guide, keeping in mind that results are either mean or median averages and should serve as benchmarks only. The survey results should not be used to determine salary and expense levels for your practice.
Linda Segall is editor of Chiropractic Economics.
What is a solo practice? According to our survey, 73.8 percent of respondents consider themselves as solo practitioners because they are the only chiropractor in the clinic. However, a number of these solo practitioners are actually involved in integrated that is, multi-discipline practices. Only 47.3 percent of respondents who are solo practitioners are not involved in any other discipline.
Billings and income trends
You are probably wondering, How do my billings, collections and income compare to those of other chiropractors across the country?
The median range for gross billings in 2003 is $250-$349K. By region, median gross billings increased in the West, Midwest and East to $250-$349K, each of which last year reported median gross billings of $150-$249K. The South remained the same at $250-$349K.
What about profits? (Profits are defined as gross collections minus office expenses, excluding a solo chiropractors salary.)
In 2003, median gross annual collections were
$200-$249K. Median net profits were $90-$139K.
A chiropractic gender gap?
According to the U.S. Bureau of Labor Statistics, an overall pay gap exists between the earnings of men and women, with women earning approximately 76 percent of the salaries men earn.
Our survey shows a significant gap between the gross billings (and income) of male and female chiropractors: Males this year reported median gross billings of $250-$349K, the same as last year.
Females, on the other hand, reported median gross billings of $100-$149K, down from $150-$249K in 2002.
The gap, however, may only be incidental to gender. Rather, it may have more to do with the number of practicing female chiropractors who participated in this survey (14.7 percent), as well as the number who work part-time.
Our survey shows that both male and female chiropractors work on average 30-39 hours per week. However, 16.4 percent of female respondents work 19 or fewer hours per week as compared to only 4.6 percent of males.
Also, males who responded to the survey have on average 13.1 years of experience, while females have on average
9.2 years of experience another factor that, according to our survey, influences income levels.
How many hours do you work?
According to our survey, 44.6 percent of chiropractors provide care an average of 30-39 hours per week. Only 3.7 percent work 50 hours or more per week and 6.3 percent work 19 hours or less.
Men and women both work 30-39 hours a week. However, a greater number of women (16.4 percent) than men (4.6 percent) work 19 hours a week or less.
What does experience buy?
Experience counts, at least according to our survey. Chiropractors with 18-20 years of experience have the highest median billings ($350-$499K). And chiropractors with 24-30 years of experience report net median personal income of $135-$149K. (Respondents with 12-14 years of experience also reported a median income of $135-$149K in 2003.)
What are the sources of your revenue?
Where do your revenues come from? Most likely, they come from a number of sources: 83.9 percent of respondents report revenues from cash payments; 75.7 percent, auto insurance companies; 75.1 percent, private insurance.
Chiropractors also receive revenues from other sources, including consulting, lecturing and teaching.
Associates and other members of your practice also bring in revenues through their activities. Respondents report average gross revenues of $138,924 generated by associates in 2003, up from $110,774 in 2002. Licensed massage therapists and physical therapists on staff generated an average $30,000 in gross revenues, down from $37,332 in 2002.
Chiropractors receive revenues from sources other than from patient care. One of these sources is providing ancillary products to patients.
Last year, 90 percent of respondents indicated that they sold ancillary products. That number remains stable this year, with 90.6 percent offering products.
The most popular product sold to patients? If you guessed nutritionals, you would be incorrect. Its pillows: 80.4 percent of respondents sell pillows; 77.3 percent sell nutrition products; and 69.7 percent provide orthotic supports. Of course, many chiropractors offer a number of different ancillary products to patients.
An interesting trend to note: Although more than half of Americans (61 percent) are overweight, according to economist Paul Zane Pilzer, who spoke at the Parker Seminars in Las Vegas (see Chiropractic poised for future wellness boom, Chiropractic Economics, Issue #3, 2003), the number of chiropractors offering weight management products is steadily declining: In 2001, 21 percent offered these products; in 2002, the number decreased to 18 percent. This year only 15.3 percent reported offering weight management products to patients.
Solo practitioners still prevail
No matter how you look at it, practicing solo is still the way respondents to our survey prefer to work.
The survey shows that 73.8 percent of respondents consider themselves to be solo practitioners the only chiropractor practicing in the clinic. However, only 47.3 percent are true solo practitioners that is, their clinics are not involved in any other discipline other than chiropractic. This is up somewhat from 2002, when 45 percent of solo practitioners were not involved with any other discipline, such as massage therapy, physical therapy or medicine.
At the same time, however, the popularity of multi-discipline practices grew from 34.5 percent in 2002 to 37.1 percent in 2003. Where did the growth come from? The answer is groups/partnership practices. In 2002, 15.5 percent of respondents said they were in groups/partnerships that were not multi-discipline. This year, that number declined to 11.2 percent.
Financially, what kinds of differences exist between solo (no other discipline), solo with other disciplines, groups/partnerships (not multi-discipline) and groups/ partnerships (multi-discipline)?
Groups/partnerships bring in more money (median group billings of $500-$999K compared to $150-$249K for all solo practitioners), have higher collections (median group collections of $250-$499K, compared to $140-$199K for all solo practices), and earn higher median net profits ($140-$199K, compared to $40-$89K for solo practices).
As you might anticipate, groups/partnerships also enjoy higher median net personal incomes. Multi-discipline groups/partnerships report median net personal incomes of $150K+, whereas groups/partnerships (not multi-discipline) report net median incomes of $105-$119.9K.
Interestingly, the gross median billings and collections and median net practice profits were the same for solo practitioners regardless of their involvement in other disciplines. However, solo practitioners who were not involved in other disciplines had a median net personal income of $90-$104K, compared to $75-$89K for those who were involved in other disciplines.
Whats popular in multi-discipline practices?
Our survey shows that 37.1 percent of respondents are involved in some type of multi-discipline practices, up from 34.5 percent in 2002.
Only 19.4 percent are involved in a multi-discipline practice with a medical physician or osteopath. However, this is up from 2002, when 12.0 percent said they had this type of association.
Massage therapy and chiropractic are a good fit for 86.6 percent of those who are in multi-discipline practices. This is up from 62.0 percent in 2002.
The next most popular discipline is rehabilitation (30.1 percent), up from 18 percent in 2002.
How managed care pays off
Managed care can be challenging, but it provides a substantial revenue base for chiropractors.
Our survey shows that 38.5 percent of respondents belong to an HMO, 65.6 percent to a PPO and 16.6 percent to an IPA (a type of managed care organization).
The median gross billings for respondents who belong to some type of managed care organization is $350-$499K, compared to $150-$249K of those who are not members of a managed care organization.
Net individual income is also higher: The median net income range of participating chiropractors is $150K or more (up from $75-$89K in 2002), compared to $75-$89K of those who do not participate in
The cost of doing business
What does it cost to operate a practice? We asked our respondents to identify their annual office operating expenses.
On average, respondents spend $73,521 a year to run their offices (not including salaries). This is up from $62,857 reported in 2002.
The largest single expense item that increased was the non-specific category other $15,278 this year, compared to $7,264 in 2002. The amount spent on advertising/marketing also increased, from $5,767 in 2002 to $6,198 in 2003. Other areas experienced modest increases.
As in the past, office space was the most expensive item, averaging $15,519. The 2003 amount, however, is down slightly from 2002, when office space averaged $15,967.
How much do you pay?
No one works for free. Salary and benefits are considerable expenses for any company. This year, average reported salaries were down from last year. Respondents who answered this question report paying themselves an average gross salary (which includes benefits and retirement) of $93,939, down from 2002, which was $105,013.
The average gross salaries paid to associates was $45,162, down from $54,194; and for CAs and staff, it was $43,923, down from $55,210. Only 27.5 percent of respondents offer a retirement plan.