Why it is time to incorporate technology
Gen Y DCs connect to high tech
By Steven Kraus, DC

What does it take to sell your practice in today’s chiropractic market? Every chiropractor wants the answer to that question.

Traditionally, buyers consider cash flow, improvements made to the property (such as new paint and new carpet), and expenses (both fixed and variable).

But selling a practice to the upcoming generation of chiropractors is going to require more than opening your books. It will require you to take a new perspective.

The generation of chiropractors now graduating from chiropractic college is in Generation Y (Gen Y). If you plan to sell your practice to this generation, accept that the world has changed. This new generation of chiropractors has grown up, lives in, and expects to be surrounded by a digital world.

Gen Y chiropractors (those born after 1980) cannot remember a time without Internet, cell phones, text messaging, downloading files, and maintaining virtual libraries.

Imagine how these techno-savvy chiropractors will react to paper records, travel cards, and offices with no Internet access!

Although cash flow is still important, you must consider how prepared your practice is to sell to Gen Y chiropractors and what you need to do to more effectively market your practice to this audience.

Here are several factors that will influence how a Gen Y buyer will evaluate your practice.

Factor 1: Cash is still king. The most important factor of practice value hasn’t changed; cash flow is important.

If a buyer were to choose between two practices with identical operating hours and annual gross collections, the logical choice would be the practice with lower annual gross expenses. That practice would have a better cash flow.

Cash flow is also the basis for assessing repayment ability by a lending institution when the buyer is seeking funds to purchase the practice.

Cash flow is universal and hasn’t changed. Technology within the practice, however, assists in driving cash flow.

Factor 2: Gen Y wants digital capabilities. Digital is what this generation knows.

Right now, the first cohort of Gen Y is about to get out of chiropractic college. These are the ones who have been online since they were 11 years old and became computer savvy before their parents.

Some of them haven’t used a landline phone since the year 2000. In a short time, the rest of Gen Y will go through student clinics with digital x-rays and digital documentation, and take for granted their school’s wireless Internet.

At this time, Life Chiropractic College West has already moved to digital recordkeeping, and Palmer and Northwestern are not far behind. The digital switchover has begun.

Cash is still king, but the more high-tech a practice is perceived to be, the more value to the up-and-coming chiropractor. A 2005 Wall Street Journal survey found that 74 percent of all patients in America want their doctors to be technologically advanced.

This is a cultural reality that Gen Y understands. As a group, they have relied on technology in everyday communication and problem solving more than any other generation before them.

Factor 3: Technology has molded the Gen Y buyer’s perspective. As a result of this comfort with technological innovation, Gen Y has assumptions about the way the world works that change how they see your balance sheet.

What you see as having value may, in fact, represent a liability to their productivity and the realities they will face as a clinician.

Here are three examples of this possibility:

• Paper is an expense, not a security. Clinic storage has always been a problem for the solo practitioner. The situation has been made more complicated by HIPAA laws, which have increased the demands on the security features of storage spaces and filing cabinets.

Gen Y has been raised trusting digital storage and is quite comfortable with having the data of their lives carried in the hard drive of a laptop, USB drive, or iPod.

Where paper has grounded previous generations and provided a sense of security for many doctors, Gen Y knows maintaining paper records means perpetual expenses for x-ray jackets, file folders, file storage, and the cost of shipping any clinic record.

They know data backed up and stored on more than one server is virtually indestructible. Paper, however, is vulnerable to fire, natural disasters, and the more common phenomenon of getting misplaced. It also requires more staff and therefore, more expense to manage.

• Travel cards are incomplete. If you are a veteran in practice, no doubt you have pride in your robust catalog of patient files, stuffed with travel cards and stories about your chiropractic successes.

To many selling practitioners, this represents the most valuable part of their practice. To Gen Y, however, travel cards are quickly becoming relics of a kinder, simpler day in chiropractic documentation. Those patient files that are still active will be absorbed in an electronic health record (EHR) that the Gen Y doctor will need to have to get paid under the coming documentation requirements.

Due to high default rates on student loans, Gen Y chiropractors are going to have to fight to get the loans they need to purchase a practice. Travel cards that haven’t been digitized into some sort of EHR will represent a liability because they will limit the new doctor’s ability to get paid by third-party payers.

The documentation these cards contain will be incomplete and leave them vulnerable by not explicitly justifying their involvement with the patient.

• Anything less than digital is inefficient. Gen Y is the Google generation. Their whole concept of information architecture and the speed at which data should be accessible has been formed by electronic catalogs, databases, journals, and search engines.

A patient-record system not searchable through multiple parameters is ultimately inconvenient for Gen Y doctors. It disrupts their efficiency and creates extra work by asking them to straddle the digital and paper world and repeat data input.

This is true, whether the task is billing, scheduling, or managing the patient’s plan of care. This incon-venience will be very apparent to Gen Y chiropractors, who, by the time they are licensed DCs, will already be comfortable working from a digital note to create an EHR.

PREPARING FOR GEN Y

As baby boomers retire and Gen Y begins purchasing established practices, technologically prepared chiropractors will be able to increase their practice value in the minds of Gen Y.

Wouldn’t you prefer to step into a practice that’s already a clinic of the future? Buyers of chiropractic clinics will expect the same. Those clinics not prepared for the future will have their value decreased. The knowledgeable veteran who has prepared his or her practice ahead of the curve will have created a value-driven asset to the Gen Y doctor, and should be rewarded accordingly.

Steven Kraus, DC, is the current chairperson of the Iowa Board of Chiropractic Examiners and founder of Future Health, Inc. — a chiropractic software company. He can be reached by phone at 800-348-7657 or by e-mail at sjk@futurehealthsoftware.com.