Adapting to thrive, not just survive
A changing healthcare landscape presents new challenges for your practice. Are you willing to adjust to provide your patients with the best possible care?
The past few years haven’t been the easiest for anyone who is in or has entered the healthcare field. Although the economic crash in 2008 is becoming just a memory, there are still enduring legacies to remind you things will never quite be the same.
The pressure to survive and also achieve success is enormous in a healthcare landscape that often feels filled with landmines. Not only do patients expect a high level of care but they expect a technologically advanced experience and the assurance that their important healthcare information is safe.
Add to that the stricter legal requirements, a heightened awareness of compliance, and the cost of operating a practice in the modern age, and you may feel like you’ve lost before you’ve even begun. But despite these challenges, you’ve not only survived but you’ve thrived by adapting to a challenging healthcare arena.
Over the past year, we’ve discussed how to make your practice more dynamic by adding specialists, gaining additional training, and selling helpful products to your patients.
In our 19th Annual Salary and Expense Survey, which garnered more than 500 responses, we saw another decline in the reimbursement rates and salaries of DC-only practices.
However, what this year’s survey also shows is that DCs are changing the traditional models of practice to bring in more patients and, therefore, increase their total compensation and salary. It’s possible that DCs are learning to better manage finances, control overhead, and operate on better profit margins.
Here to stay
For the second year in a row, MarketWatch has named chiropractic the No. 1 profession with the best job security. Similar to last year, they projected that the industry is expected to grow nearly 15 percent by 2022. But note that they also mentioned “a growing trend toward specialization and advanced training in the field.”1
The results of our survey show that not only has there been a huge boost in multidisciplinary and integrated practice, but that these types of practices are thriving to the benefit of the DC with greater salaries, higher reimbursement rates, and better total compensation. The difference in total DC compensation between a solo-DC practice and an integrated practice (those with a DC and MD on staff) is more than $60,000.
Those who add specialists and other extras for their patients are seeing similar results as well as those who partner up with one or more additional DCs. Over the past few years, this is a strengthening trend, and clearly more than just a passing fad.
Meanwhile, the survey also showed that a larger paycheck comes with more experience, demonstrating that hard work does eventually pay off in the longer run. But unlike previous years there has been a trend toward working slightly fewer hours, perhaps indicating the benefits of streamlining and diversifying your practice.
Gaining an edge
While following present trends might not be for everyone, considering the changes in the industry and taking note of what patients want out of their practitioners can only benefit you.
Drastic changes may not even be necessary (or even feasible) for every practice and DC. However, you can still see results by enacting small changes and listening to what your individual practice needs to better care for your patients and achieve your personal goals.
By keeping up to date with the current market and paying attention to others in the industry, you may gain an edge over your competitors. In this challenging healthcare arena, make sure you come out on top.
Let’s get personal
With more than 515 respondents, our 2016 Salary and Expense Survey attracted a wide-range of doctors of chiropractic across the nation. We heard from DCs between the ages of 25 and 87 years old, and from those who have been in practice for less than a year to 65 years.
By averaging the responses to many of this year’s questions, we can see what the average respondent might look like:
- Male (Only 20 percent of respondents were female)
- 47 years old
- A solo practitioner (60 percent)
- Licensed in 1 state
Our average respondent:
- Owns 1 clinic
- Prefers to practice in the suburbs (52 percent)
- Employs 3 individuals (2 of whom work full time)
- Sees 136 patients each week
- Has a patient-visit average (PVA) of 24
- Attracts 8 new patients each week
- Sees patients 33 hours a week
This respondent also:
- Has average billings of $689,092 and collections of $384,627, for a reimbursement rate of 56 percent
- Sells products to patients for 7 percent of gross revenues
- Pays his CAs $29,727 and himself $81,542
- Enjoys an average total compensation of $147,334
Finally, this typical respondent spends roughly $28,000 on office leases or mortgages, $8,000 on advertising, and $3,100 on malpractice insurance.
Bills, bills, bills
Average billings and collections increased over last year’s numbers, but there was a significant fall in this year’s overall reimbursement rate.
According to our survey, average gross billings were reported at $689,000, up from $539,500 last year, while collections were reported at $384,600, up from $348,800 last year. In our 2014 survey, respondents reported average gross billings of $588,500 and collections of $391,200.
This year’s billings and collections numbers equal an average reimbursement rate of 56 percent—a 9-percent decrease from 2015 and a 6-percent decrease from 2014.
The doctor will see you now
As chiropractors assess their own earnings and expenses, familiarity with the financial realities of the broader health- care industry can provide valuable context to the numbers.
Some DCs team up with MDs to create a more comprehensive practice, and others consult regularly with general practitioners in their community. As such, this year we compared our salary survey to the data collected by Medscape.
In Medscape’s Physician Compensation Report 2015, published in April 2015, respondents indicated that the average salary for a primary care physician was $195,000. This is in sharp contrast with specialist physicians who earn $284,000, on average.
Comparatively, the average total compensation reported for DCs in this year’s survey was $147,300. This is up from 2014 and 2015’s results ($122,000 and $127,000, respectively), and also up from 2012’s survey ($128,000).
Medscape also reported that the highest median physician income came from the Northwestern and South Central regions (281,000 and 271,000, respectively) with North Dakota, Alaska, and Wyoming being the top-earning states. In addition, they found that the median earnings were higher for private practice men ($324,000) than women ($259,000) as well as employed men ($249,000) verses women ($203,000).
To compare more statistics between chiropractors and primary care doctors, visit Medscape at medscape.com.
Power in numbers
Our 2016 survey showed the same number of DCs practicing in groups or partnerships, with 27 percent this year as in 2015. Since 2013, that number has stayed between 25 and 30 percent, illustrating the move toward “power in numbers” as a more popular choice than in years past.
60 percent reported being a solo practitioner, a minor decrease from last year’s 63 percent.
Those indicating they were working as an associate also increased slightly (11 percent this year compared to 10 percent in 2015). And the number of franchisees is holding steady from last year at nearly 2 percent.
When it comes to billings and collections, solo practices saw a significant increase in both. Solo DCs reported average billings of $416,700 and collections of $258,400, compared to $404,700 and $243,600 last year.
The reimbursement rate for group practices increased as well (62 percent compared to 60 percent).
Group-practice billings, collections, and reimbursement rates fared better over solo DCs across the board. This year’s group billing was $855,000 (compared to $821,000 last year) and collections came in at $563,400. The group-practice reimbursement rate was essentially flat from last year (66 compared to 67 percent in 2015).
Average total compensation for solo DCs this year was $113,700, compared to $107,600 last year. The average total compensation for a DC practicing in a group setting increased to $145,000 this year, compared with $132,700 last year.
(Note: Total compensation for unincorporated DCs is defined as earnings after tax-deductible expenses before income tax. For DCs in a corporation, it is the sum of salary, bonuses, and retirement/profit-sharing contributions.)
Solo practices spent $2,700 on insurance (a slight increase from last year), and $6,700 on advertising, compared to $5,100 in 2015. Group practices spent more on insurance than last year ($4,000, compared to $3,200 in 2015). They also spent $13,000 on advertising, compared to $14,000 the previous year.
Group practices are spending more on office space ($41,300 compared to $34,500 last year), while solo practices are spending $21,600, compared to $18,400 last year).
A shifting landscape
In response to reader requests years ago, Chiropractic Economics expanded its “integrated clinics/DCs only” break- down to provide a more comprehensive look at the profession.
We continued that trend this year by asking respondents to indicate if they were practicing solo, in an integrated clinic, or in a multidisciplinary clinic.
An integrated clinic includes those practices with both a DC and a medical doctor on staff. A multidisciplinary clinic is defined as having a practicing DC and any other complementary or alternative medicine practitioner on staff.
This year, 67 percent reported as operating alone, up from 65 percent last year; 52 percent said they operated in a multidisciplinary clinic, up from 29 percent last year; and 26 percent responded in an integrated clinic, a huge increase from 6 percent the previous year.
Here is further breakdown of the numbers:
Billings. Integrated healthcare practices reported the highest billings ($769,800), while multidisciplinary practices reported billings of $575,700, and DC- only practices came in at $477,000.
Collections. Likewise, integrated practices saw the highest collections, ($628,900) while multidisciplinary clinics reported collections of $426,300, and DC-only practices had collections of $302,600.
Salaries and total compensation. Similar to last year, those practicing in a DC- only clinic saw a decrease in both average salary and total compensation, while multidisciplinary and integrated clinics saw a boost in these areas.
Respondents in DC-only practices saw an average salary of $77,600 (compared to last year’s $77,300), and multidisciplinary and integrated clinics fared better with average salaries of $83,600 and $94,800, respectively.
Total compensation for unincorporated DCs is defined as earnings after tax-deductible expenses, but before income taxes. For DCs in a professional corporation, it is the sum of salary, bonuses, and retirement/profit-sharing contributions made on their behalf.
With regard to total compensation, solo DCs averaged $121,900, while multidisciplinary clinics came in at $135,900. Integrated practices took a large lead with average total compensation of $184,000.
What’s in a name?
Practice label. Fewer integrated practices identified as rehab centers this year (26 percent) than last year (32 percent).
This also held for those clinics labeled as “wellness centers,” which declined among all three types of clinics. For integrated practices, this number dropped from 15 percent to 8 percent, and 21 percent of multidisciplinary clinics identified as such, compared to 36 percent in 2015.
Specialties. All three types of clinics reported “general” as their main specialty. Sports/rehab was the second-most popular emphasis for integrated clinics, and “family” for DC-only and multidisciplinary practices.
As different as X and Y
Our annual survey consistently illustrates the 80/20, male-to-female split that makes up the chiropractic industry. As expected, this year did not indicate any drastic change in gender demographics.
Even so, we’ve seen a slight decrease in female respondents over the last four surveys. This year, 20.4 percent of respondents were female as opposed to
21.8 percent in 2015, illustrating a slight decrease from last year but an increase from previous years.
The number of female respondents, however, does not represent improve- ment in the gender gap with regard to salary. Even though total compensation increased across the board, male respondents are still making about twice what their female counterparts do.
This year’s survey saw a decrease in female respondents’ annual salary ($60,500, down from $77,000 last year), as well as a huge slump in average total compensation ($73,700, down from $92,000 last year).
Male respondents saw a minor increase in salary, with respondents reporting an average of $93,700 (compared to $93,000 in 2015). But this group saw a dramatic increase in total compensation, averaging about $150,000 (up from $128,000 last year).
Other statistics:
Patient hours. The disparity in the number of hours’ male and female DCs spend in patient care widened again this year. Around 22 percent of female DCs said they spend more than 36 hours in patient care a week (up from 19 percent last year), while 45 percent of male DCs reported the same. Around 28 percent of male respondents said they spend 31 to 35 hours in patient care, compared to 20 percent of women.
Groups or partnerships. The number of men participating in a group setting stayed the same for 2015 from last year at 28 percent. The number of women participating in a group setting dropped slightly to 22 percent, down from 24 percent last year.
Marketing efforts. Much like 2015, this year’s survey indicated that women spent less money on advertising than men ($4,500 compared to $7,500). In addition, women spent less on office leases than men ($19,500 compared to $26,000), and on malpractice insurance ($2,700 compared to $3,000).
All about location
This year’s survey showed that DCs are starting to balance out financially across the nation. Previous surveys tended to show larger disparities among practices depending on where they were located. Regions with the highest billing and collections remain in the West and South, and lowest in the East and Midwest, which is in accord with previous years.
The South reported an average compensation of $135,000, followed by the West at $128,500. The remaining regions were the Midwest at $121,500, a significant increase from last year at $106,500, and the East at $106,000. Despite leading in other categories, the South had the lowest reimbursement rate at 55 percent. The West and Midwest regions reported the highest reimbursement rates at 69 percent, followed by the East at 58 percent.
Staying in suburbia
Growing your infrastructure, increasing your patient base, and having the floorspace to grow your business all make the suburbs an attractive place to set up shop. Over the years, the majority of our respondents have consistently found the suburbs to be the ideal place to locate a practice. This year was no different, with more than half of DCs reporting the suburbs as their location preference.
Although the numbers reported in this part of the survey were similar to last year’s, there was a slight increase in suburban DCs at 52 percent compared to 50 percent last year. There was also a small increase in urban practices at 30 percent compared to 29 percent in 2015, reflecting broader demographic trends in mobility. Rural DCs decreased this year to 17 percent, compared to last year’s 20 percent.
Urban chiropractors still reported the highest average salary at $96,000, with their suburban counterparts reporting an average of $88,000.
However, suburban DCs reported higher total compensation at $145,000, in comparison to $130,000 for urban chiropractors. Rural chiropractors showed another decline in salary, reporting an average of $63,500, compared to $69,000 in 2015, with a total compensation at $83,000.
Although rural practices also reported the lowest average in billings and collections ($285,000 and $223,000, respectively), they did have the highest reimbursement rate (79 percent). Suburban practices had an average billing of $593,000 and collections of $380,000, for a reimburse- ment rate of 64 percent. Urban DCs reported average billings of $606,000 and collections of $224,000—coming in with the lowest reimbursement rate of only 45 percent. Clearly, collecting on billings is a challenge for the profession. Gains in this area would significantly improve the financial picture of the average DC.
It gets better with age
With age comes wisdom—and bigger paychecks. The results of this year’s survey show that experience still reigns supreme when it comes to money in the bank.
Similar to last year’s survey, younger DCs (ages 30 and younger) reported the lowest income with an average of $65,000 coming in each year. But this number has been dropping significantly over the past few years from $70,650 last year and $97,000 in 2014 for the same age group.
Paychecks grew significantly for DCs ages 31 to 40, who reported an average total compensation of $118,100.
Historically, DCs ages 41 to 50 have earned the most money and this year was no different. This age bracket reported an average income of $137,877.
Chiropractors in the 51-to-60 and 60-plus age brackets made slightly less but held steady at $120,338 and $124,647, on average.
This year’s survey showed a slight difference in hours worked by age group from previous surveys. DCs in the
60-plus age bracket worked the most hours overall with over 47 percent reporting more than 36 hours a week in patient care. The vast majority of DCs of all ages spent 35 hours or less in patient care a week. Over 65 percent of chiropractors aged 30 or younger spent 35 hours or less in patient care.
In comparison, last year’s survey showed that more than 50 percent of DCs under 30 were working between 36 and 50 hours on average.
Promoting your people
As a DC, you are not only responsible for providing your patients with the best possible care but also for supporting your staff.
By providing them with benefits such as healthcare, paid time off, and retirement benefits, you are investing in the success of your business and the performance of your employees.
Overall, employee benefits increased this year compared to the previous survey. According to our data, 34 percent of respondents reported that they provided healthcare and some type of retirement plan to their employees, an effect of the PPACA.
The number of practices offering employees paid time off, which could include vacation or sick days, increased from 62 percent last year to 71 percent in 2016. Those offering bonuses increased from 51 percent to 56 percent. Profit sharing also increased from 6 percent in 2015 to 11 percent this year.
We asked respondents for salary information on full-time employees only—not part timers. We define “full time” as employees who work 30 hours or more per week.
Our survey showed that DCs, on average, employed two full-time and two part-time staff members.
The average salary paid to full-time employees was
- DC: $76,500,
- Associate: $59,000,
- CA: $30,000,
- MD/DO: $25,000,
- PT: $20,000, and
- LMT: $18,000.
Different from the pack
Attracting the type of patients you want might require distinguishing yourself and the type of services you provide. DCs who want to work with athletes might add sports and rehab to their practice name. Those who want to work with children may want to indicate that with a family practice designation, while wellness centers attract patients who aim to live healthier, more balanced lifestyles.
In this year’s survey we once again asked respondents if they considered their practice to be general, family, or sports/rehab in nature. There was a significant drop in the number of sports/rehab practices, with just 2 percent this year compared to 11 percent in 2015.
Family practices also dropped slightly from 17 percent last year to 13 percent in this year’s survey. The “general” classification remained the most popular choice at 66 percent, similar to last year’s 64 percent.
“Clinic” was still the most popular label, with 68 percent of respondents reporting this designation. The wellness center label dropped in popularity with 16 percent this year, compared to 23 percent in 2015. Rehab centers also dropped to a little over 1 percent, from 8 percent last year. Medical spa and franchisee rounded out the bottom, similar to previous years.
The details in retail
Our survey shows more than 98 percent of chiropractors sell at least one product in their practice. As this number has consistently remained high over the years, it’s clear that DCs across the board find success through the integration of quality care and guiding patients to the best products available.
A commitment to retailing the best industry products benefits the DC financially and also creates an important relationship between patients and the tools they need to achieve wellness.
So which products do respondents offer? Are you selling the same products as your colleagues? The top five include:
- Nutritional products/supplements. 65 percent, down from 75 percent last year.
- 58 percent, down from 63 percent the previous year;
- 54 percent, down from 63 percent last year;
- 52 percent, down from 60 percent in 2015; and
Hot/cold compresses. 51 percent, down from 68 percent last year.
Taking care of business
While your true specialty lies in your ability to provide effective chiropractic care, there has been a steady rise in other sources of income. Collections from retail, diagnostics, and consulting have all slightly increased from last year.
However, DCs still report that their major source of income remains in patient care, highlighting the dedication and commitment DCs have to their patients. Our survey showed that almost 90 percent report patient treatment as their major source of income.
We also asked what percentage of your treatment is paid for by the following: cash from patients, individual or group health insurance, Medicare, auto insurance, Medicaid, workers’ compensation, barter or trade, and other.
The majority of treatments are paid for by insurance at 39 percent, with cash close second at 38 percent.
The money-go-round
Being a DC means more than just performing adjustments and providing patient care. As the owner of a practice, you have to pay attention to expenses to keep the lights on and your operation not only running but thriving.
We’ve highlighted three major practice expenses in the profession—malpractice insurance, advertising, and an office lease or mortgage.
- Office lease or mortgage. Average costs were $28,300, an increase from $22,600 last year.
- Advertising: Average costs in this year’s survey were $8,000, representing a decrease from last year’s figure of $8,200.
- Malpractice insurance. Respondents reported an average expense of $3,100, up from last year’s cost of $2,900.
Expanding horizons
Your expertise in caring for patients through regular adjustments, together with your treating issues related to the musculoskeletal system, can undoubtedly set you up for a comfortable career. But if you face stagnation and are looking for paths to revival, year after year our survey demonstrates that joining forces with complementary specialists is a near foolproof way to expand your practice and boost your bottom line.
In 2016, a large percentage of DCs reported having other specialists working or consulting within their practice.
Those specialists included LMTs, PTs, and MD/DOs in addition to acupuncturists, fitness trainers, and nutritionists.
The specialists who become part of your healthcare team offer a more wide-ranging palette of treatment options and programs. When evaluating how this can benefit you, the numbers speak for themselves: Clinics employing specialists see more patients per week (138, compared to 136 per week in nonspecialist clinics); bill more (average of $769,000 versus $477,000); and collect more (average of $628,000 versus $302,000).
As a result, clinics employing specialists averaged a higher total compensation than those practices without specialists ($184,000 and $121,900, respectively).
Practices employing specialists also attract a higher number of new patients per week (9) compared to nonspecialist clinics (7).
Modality matters
While more than 60 percent of respondents have at least one specialist on staff, the most common specialist was an LMT (43 percent), underscoring the complementary relationship of massage and chiropractic.
Other popular specialists include:
- Acupuncturist, 14 percent;
- MD/DO, 9 percent
- PT, 8 percent;
- Nutritionist, 7 percent; and
- Fitness trainer, 4 percent.
And 7 percent of respondents indicated “other” for specialists they have in clinic.
Respondents (both clinics with specialists and clinics without) also reported that they offer a wide range of modalities, even if they do not have specialists who provide them.
These modalities include:
- Chiropractic, 98 percent
- Instrument adjusting, 62 percent
- Electrotherapy, 60 percent
- PT/rehab, 60 percent
- Nutrition, 55 percent
- Exercise programs, 53 percent
- Massage, 48 percent
- Kinesiology taping, 40 percent
- Laser therapy, 34 percent
- Decompression, 30 percent
- Acupuncture, 23 percent
- Weight-loss programs, 20 percent
- Fitness devices, 13 percent
- Medical services, 10 percent
- Homeopathy, 7 percent
- Other, 5 percent
Casey Nighbor is the associate editor of Chiropractic Economics. She can be reached at cnighbor@chiroeco.com, 904- 395-3389, or through ChiroEco.com.
Reference
1 MarketWatch. “10 professions with the best job security.” www.marketwatch.com/story/10- professions-with-the-best-job-security-2016-03. Published Jan. 29, 2016. Accessed April 2016.
