How much did your vacation cost you?
The true cost of taking a vacation
By Todd Crabtree, DC, JD, MBA

How do you handle vacations? Do you bring in a relief doctor, or do you close down and give everyone time off? Is one way of handling vacations better than the other?

Consider the situation with Dr. J, a solo chiropractor.

Like anyone else, Dr. J needs to get away periodically for a week of rest and rejuvenation. Finding the right relief chiropractor is often a challenge, but in the past, a local retired chiropractor filled in for him.

This arrangement worked well for several years. Unfortunately, the retired chiropractor gave up his license and is no longer available. Faced with the burden of finding and training a new relief chiropractor, Dr. J decided he could save some money by closing his clinic for a week. He left a recording on his answering machine announcing that the clinic would be closed.

But, was that the best decision? Dr. J calculated the cost to keep the clinic open during his vacation to be $2,100 (Cost of relief DC, $1,500; cost of CA, $600). What he didn’t calculate — but should have, in order to have made the best decision — was the total cost of shutting the clinic down during his week of R&R, including the cost of a downturn in business — which he observed, following the vacation.

CALCULATE THE TRUE COST

To determine the true cost of closing the clinic for one week, Dr. J must run a number of calculations:

1. Establish average weekly patient visits before the vacation. Review the number of visits for a 12-week period before the vacation.

In Dr. J’s case, the average number of patient visits per week was 92.

2. Calculate the average income per patient visit. Divide the total collections for the year by the total number of patient visits.

In that year, Dr. J collected $221,142 and had 3,880 patient visits, for an average income of $57 per patient visit.

3. Determine when patient visits equal or surpass pre-vacation visits. Then calculate the difference in average patient visits before and after the vacation.

Dr. J observed a reduction in patient visits following his vacation office closure. When he did the calculations, he saw that it took 15 weeks following his vacation for the number of patient visits per week to come up to the pre-vacation 12-week average of 92.

The average number of patient visits for the 15-week period was 72, for an average loss of 20 patient visits per week.

4. Calculate lost income. To calculate gross lost income for the vacation plus the downturn following the vacation, multiply the average number of lost patient visits (20) by the number of weeks (15) it took to regain the previous patient visit average. This gives you the total number of lost visits (300).

Then, multiply the total number of lost visits by the average revenue per patient ($57). In Dr. J’s case, the total gross lost income comes to $17,100.

If the clinic had been kept open, the net loss would have come to $15,000 ($17,100 - $2,100 cost of relief DC and CA = $15,000. Keep in mind that although the relief DC earned income, during the week off, patient visits declined afterward — hence, the calculation.)

Shutting the clinic down for a one week vacation results in a whopping 6.78 percent decline in yearly gross income ($15,000 / $221,142).

Obviously, it is impossible to eliminate other factors influencing the total number of weekly patient visits: marketing efforts, market changes, service delivery, etc. However, the noticeable decline following closing the clinic down is undeniable.

Chiropractic Economics 9th Annual Salary and Expense Survey report indicates that the average number of new patients per week is 5.7 and the average number of times they treat is 28.9 times.

Lost new patients alone accounts for a significant portion of the lost visits when an average clinic is shut down for a week — 5.7 new patients x 28.9 visits = 165 visits. Moreover, new patients referred in by those lost new patients will not materialize and current patients wanting treatment or patients attempting to re-activate care would account for additional lost patient visits.

WHAT DOES THE PUBLIC THINK?

What impression does it give a community if a chiropractic clinic is closed when all other businesses remain open when the proprietor goes on vacation? This question applies not only to closing a clinic for a week-long vacation, but anytime someone calls or visits the clinic during normal business hours and finds no one there.

Questions that may nag patients are: “Did the clinic die? Is this some fly-by-night outfit? Do they care that I need them now? Should I return later or go to a competitor?”

Granted, having the clinic open for business during normal business hours does take some effort, especially for solo practices, which comprise 69.7 percent of all chiropractic clinics. However, there are many clinics where being the “elusive” chiropractor is a primary barrier to growth.

BEST BET

What is the best way to handle a vacation? This is what I recommend:

• Keep the clinic open;

• Find and train a relief doctor. Look for someone who is committed to using the same adjustments, treatments, and procedures you use; and

• Schedule as if you were there. Instruct the CA to schedule new patients and regular patients as if you were still there. In fact, make it clear that you want no changes to any process.

Remember, quality healthcare is giving the patient exactly what they expect every time. While they won’t be getting you, they will be getting everything you do.

Next time you need that vacation, do it smart. Your patients will appreciate it and with a little effort you can avoid stunting your clinic’s growth.

Todd Crabtree, DC, JD, MBA, is the CEO of Clinic Doctor, Inc., a provider of online billing services, marketing, and business management consulting. He can be reached at 866-999-5859, Todd.Crabtree@ClinicDr.com or at www.ClinicDr.com