The secret to scaling practice is utilizing metrics to measure a variety of key parameters
Doctors of chiropractic treat more than 27 million Americans annually. Demand isn’t letting up, as an estimated 50 million Americans suffer from chronic pain. Over the past five years the chiropractic industry in the U.S. has grown by 1.2%, and in the same time frame the number of businesses has grown by less than 1%, offering an opportunity for scaling practice for chiropractic businesses to fill a slow growth gap.
Chiropractors are among the leaders in health care showing success in solving chronic conditions. Opportunities for the profession appear plentiful, as well as for chiropractic entrepreneurs already in practice who want to grow their business. For example, one franchisor of chiropractic practices that has been extremely successful in recent years is The Joint Corp. In the first quarter preliminary highlights of 2019 versus 2018, The Joint showed an increase in gross sales of 32% to $48.9 million.
One of the secrets to a chiropractic scaling practice is employing metrics to measure a variety of key parameters, including efficiency, effectiveness and more. However, there’s an art to using metrics in order to make them matter. Understanding how to measure each metric is extremely important if you want your growth strategy to be effective and efficient.
Some key metrics to measure on a regular basis include:
1. Patient retention and discharge. Measuring how long a client stays on with you and how often the client receives services is essential, along with frequency, duration and discharge information. Is your practice discharging patients, or are your patients discharging themselves?
You can use this metric by tracking the number of sessions or timeline, depending on the structure of your business model. One of the leading shifts in chiropractic private practices today is the adoption of a membership model. If you offer a monthly membership, the metric you establish will be based on revenue over duration as a client. Otherwise, you can base the metric on a patient’s average number of visits.
2. Cancellations. This metric will allow you to measure cancellations occurring less than 24 hours before an appointment. It’s not unusual for chiropractic private practices to have cancellations of 25%, which means lost revenue. Include vacancy rates in your metrics.
Knowing the percent of cancellations in your practice can help you decide if you need to create a cancellation policy that enforces charges on those who don’t show up to their appointments. It can help ensure that clients make their appointments. Another option is to charge a fee only if they don’t reschedule. Consider setting up text reminders 48 hours in advance of an appointment to decrease cancellations.
3. Quality assurance. Patient satisfaction impacts your retention rate metric, as well as the reason for discharge. To capture this, send out a survey after every visit. Giving patients an incentive to complete it, such as submitting their name to monthly drawings for a free chiropractic adjustment, can help encourage them to return surveys. Create the survey using a number scale that will let you statistically rank levels of satisfaction for quality of the chiropractic services, scheduling, environment, and other aspects of your practice.
4. Marketing analytics. Marketing is a key ingredient to growth. Measure your marketing expenses compared to the number of patients received through that marketing. In addition, understanding where referrals come from and the cost of acquiring new patients is essential. Referral metrics is an analytic that allows you to evaluate where your referrals are coming from.
Are you getting referrals from physicians, networking groups, business associations, Google searches or other places? The more you’re able to break down your marketing referral metrics, the easier it is to create a successful marketing budget measured on ROI, which directly relates to your customer acquisition cost metric.
5. Profit & Loss (cash basis). Although many chiropractic private practices are now introducing memberships and cash-based programs, there are still many private practices that accept insurance. It’s essential to measure how much money is going in versus money going out on a regular basis. Private practices must receive 60% of revenue within 30 days from the date of service.
Breakdown of a cash analysis can be different than a profit and loss (P&L) statement if you’re running your P&L on an accrual basis. Your ability to track cash basis metrics will have a direct impact on maintaining a steady and consistent cash flow. Failing to analyze this important aspect could prove detrimental to scaling practice in your community.
When you’re adequately informed, you’re more likely to scale to a profitable practice with a healthy flow of patients who return as satisfied customers.
BRANDON SEIGEL is an internationally-known business coach and president of Wellness Works Management Partners. He currently manages multiple private practices and consults with entrepreneurs and private practices throughout the world. A recognized leader in today’s private practice environment, he is a frequent keynote speaker and trainer for organizations, associations and universities. His new book, The Private Practice Survival Guide: A Journey to Unlock Your Freedom to Success (Rebel Press, Feb. 5, 2019) covers the essential how-to questions of opening a successful private practice. Learn more at wellnessworksmp.com or brandonseigel.com.