Is bigger always better?
A PRACTICE BROKER EVALUATES PRACTICE value and sells practices on a commission as a third party. The effort expended is equal, whether it is a large practice or small. Since the commission is more profitable with a larger practice, it would seem “reasonable” that brokers would prefer to spend their energies on larger practices.
Smaller practices may be referred to as “part-time practices” and may be more useful as satellite clinics. Established or older practitioners may be told to walk away; it isn’t worth enough to put in the effort. Thirty-five or 40 years of practice, one’s life work, has been spent caring for a community, which has fed and housed the doctor’s family as well as sent them through school. The practice has been a neighborhood asset. To “walk away” would now mean “patient abandonment” if not done properly.
“Straight” chiropractors tend to have smaller practices from the point of billing. The belief that the key to healing is more influenced by the well-delivered adjustment overrides the multiple therapies, supplements and high-frequency office visits that increase the bottom line.
In-house physical therapy is beneficial to patient care in terms of spinal rehab and is essential to the home exercise program, but the patient must be held accountable. Many chiropractors choose to not deal with workers comp or personal injury cases and are more dedicated to the aspect of family care as well as the basics we see like back pain, headaches or radiculopathies.
Many also choose to be in-network with insurance companies because patients choose to use the insurance programs they pay for through their employment. This means shortfalls like having to write off examination fees, and as with United Healthcare, $60-per-diem restrictions. Yes, being a cash practice seems like a more comfortable start — but that route may not always be reality.
With the burden of hefty student loans and the expenses of daily living, like rent or mortgage, insurance, malpractice insurance, raising a family and car payment, a new graduate may look for an associateship to get more experience as well as establish an income.
Associateship may lock the new doctor into a contract he/she may not be comfortable with. That relationship may also provide lessons in how things should not be done. Getting out of the contract may entail hefty legal fees, setting the new doctor further back financially. As an alternative, when purchasing an existing “smaller” older practice there are important things to consider:
- Is the technique you are choosing compatible with the technique used in the established practice that the patient base is accustomed to? Retention is an important factor in this purchase. The new doctor is entering an established practice with patients waiting; there is no need for extensive advertising to draw patients like there would be starting from scratch. Patients tend to stay with doctors they are comfortable with and trust the established doctor will find a replacement who is similar.
- Is there room for growth? Does the established doctor know the procedures to handle enrollment? What kind of practice does the new doctor want? A small practice purchase will afford the new doctor an income with little start-up cost compared to building a practice from scratch.
When purchasing an established practice, there are options of having a turnkey purchase, where the old doctor hands over the keys, says “best of luck” and walks away, versus the established doctor staying on for 12 to 18 months to mentor the business aspect as well as ease established patients into the next set of caring hands. This may also give the new doctor opportunities to establish a relationship within the community, like with Rotary and other organizations. The bank may prefer the doctor stick around to ensure the loan is a good venture on their part.
Equipment may be older, but should be well-maintained. The established doctor should have good character and reputation within the community as well as having a living compliance program in place.
Smaller practices are not “part-time” or insignificant to the community. Statistically, there are more smaller practices than big corporate practices – “the McDonald’s of Chiropractic.” These big corporations take on the medical models. Smaller practices have been the backbone of chiropractic.
COVID has changed many things. Some doctors retired earlier than they had anticipated, either due to illness or death, or the realization they had spent half their lives caring for other people and would like to enjoy the time they have left in other pursuits.
After retirement, a wise old doctor, Alex Cox, said that he had regretted not getting to know his patients better. He embodied the belief to “Look well to the spine for the source of dis-ease.” He was an integral part of the huge Gonstead practice and system. Not only did he practice seven days a week; he and his fellow practitioners tried to squeeze more than 24 hours into a day.
Life can be a delicate balancing act. My children told people I was always at work. I tried to catch every game, get them to practice, participate in community/social/sports and volunteer opportunities. In the end of practice, what really matters is that my loved ones are well, I have done my best for family and patients and friends, and I am thankful for all I have.
Remember, chiropractic is a science and an art. We learned the science basics in school. In practice, we hone our art. Chiropractic has a bright future still ahead of us. As health care practitioners we will be faced with many opportunities as well as challenges.
Consider investing in a smaller practice that has been in practice for a length of time — the practice is stable and usually reasonably priced, and the price may be negotiable. The selling doctor wants the best for his/her patients as well as to provide a new generation with success. Check with your chiropractic college business development office for practices for sale. There is a bright future ahead.
DIANE M. BARTON, DC, MCS-P, CIC, is with Medical Compliance Specialists Ltd. in Homewood, Ill., and can be reached at 708-922-3911 or drdianebarton.com.