A fundamental difficulty chiropractors have is grasping a deep understanding of what business is, and the role it plays in our society.
In Canada, chiropractors, dentists, optometrists, Tim Hortons, FedEx, WestJet, the shoemaker and everyone else have bills to pay and need to generate revenue to pay those bills and essentially live their lives. Once chiropractic students graduate, it should not come as a surprise to them that they will need to generate revenue, in addition to competent clinical outcomes, so they can pay their bills and live their lives.
Saturation
The population in Ontario has not grown as fast as the number of chiropractors has. Between 1990 and 2013, the population grew from 10 million to 14 million – an increase of 40 per cent. In the same period, the number of chiropractors in the province grew from 1,600 to 4,300 – 169 per cent increase. Chiropractic utilization rate of 12 to 15 per cent has remained unchanged from 1990 to present. Essentially, there are now more chiropractors competing for the same patient pool, which means we are seeing examples of the 80/20 rule of economics.
The 80/20 rule means 80 per cent of your outcomes come from 20 per cent of your inputs. For chiropractic, it means 80 per cent of the revenue is generated by 20 per cent of the DCs.
I have practiced in Hamilton for 13 years, and the 80/20 rule has become evident because of the oversaturation of DCs in the area. Let’s take an example of 10 chiropractors earning a combined total of $1 million. Following the 80/20 rule, you will find two of the 10 DCs are earning a combined income of $800,000, while the remaining eight earn a combined total of $200,000. This becomes more prevalent in bigger cities with larger populations, ultimately resulting in practice closures.
One vital trickle-down effect of poor performing businesses is lack of continuing education on the part of the chiropractor. Health professionals in general are changing how they earn CE credits based on the advancement of technology and financial decision-making. Webinars, podcasts and virtual courses have become more popular to doctors because they save time and money. However, chiropractic is a kinesthetic profession. To truly be effective, in person manual assessment and treatment courses are essential in our continuing education experience.
The continuing education dilemma takes on a Catch-22 flavour. Let’s take the 10 chiropractors from the 80/20 rule for example: The two chiropractors earning a total of $800,000 are too busy to take any hands-on courses, while the remaining eight DCs do not have the expendable income to spend on continuing education and so they don’t make the investment.
Demise on the rise
Since I started my practice 13 years ago, I found there has always been reluctance among DCs to demand a fair and reasonable fee for our services. In 2002, I was charging $20 per visit (plus $9.65 from OHIP). In 2015, the Ontario Chiropractic Association Guidelines recommend a fee of $39 per visit for our services and a minimum of $86 for an initial visit. Often, I have wondered if chiropractors are asking enough to ply their trade on those in need.
Take for instance Sault Ste. Marie, Ont. – a town of 75,000 people. They have 10 chiropractors along a two-kilometre stretch of Great Northern Road. Their average patient visit fee (initial included) is just above $25 and almost every chiropractor in that town charges about the same price. Undervaluing ourselves is one of the top reasons chiropractors fail in practice. When economics change, the demand for our product also changes, which makes us more likely to lower our fees to stimulate more demand. This often leads to gimmicks and off-the-wall incentives just to attract patients, which call into question our level of professionalism.
Annual chiropractic surveys found in magazines do not tell us that more DCs are leaving chiropractic and changing careers. This is happening more than at any other time in the history of our profession. Attrition is always largely under-reported because people are embarrassed to report they failed, and chiropractic schools don’t mention it because they tend to focus on the positive news to attract new students.
Within the last three years, in my surrounding area alone, five DCs have left practice to pursue other careers. Most chiropractors who leave the profession return to school to pursue other degrees, work as a technician in a hospital, sell insurance, and even become professional musicians. An additional point of interest is that the allied health disciplines of dentistry and optometry use a similar business model as chiropractic – and yet they do not have doctors leaving their profession at such an alarming rate.
The solution
Reduce the number of graduates. One suggestion is to stop graduating chiropractors for a brief period. This would help relieve the oversaturation of DCs, which would elevate the earning potential of all current practicing chiropractors. In this model, the Council on Chiropractic Education (CCE) would mandate all chiropractic colleges to participate. For one year, chiropractic schools will not accept any incoming classes. Half of the schools would do this for one year and the other half would do this the next year. This way any students desiring to enter chiropractic can access it by choosing a school that is accepting new classes. This practice is very common among teachers. In part because of the great oversaturation of teachers in Ontario, the Ministry of Education has extended teachers’ college from one to two years. An act such as this would defer the number of graduating chiropractors which would help new and struggling graduates build their own practices without having to compete with a continual influx of DCs.
Differentiate yourself. There is no such thing as a bad economy, but merely a redistribution of funds within the economy. It’s like a poker game: there are ten players and each player begins with $10,000 each, growing the economy to a net worth of $100,000. After 15 hands, there is still $100,000 in the economy, only the amount of dollars each player has may vary – some would have more than the amount they started with and many would have less.
The total amount is still all there, only this time a small percentage of people control most of it. In general, regardless of the economy, the same amount of money exists for us to reach the goals we set for ourselves. When only a small percentage of the population own the majority of the wealth (like in a depression or recession), you need to be different in order to attract those who can afford and are willing to pay for your services. Differentiation is key. You will not attract a niche population by giving patients low quality visits.
Increase utilization rate. A simple rule of business is that if you are not meeting your financial obligations or goals, you need to do at least one of two things: reduce your expenses or increase your revenue. For chiropractic, they need to reduce the number of chiropractors graduating or increase the amount of patients who see chiropractors. Doing nothing cannot be a viable option.
Over the last 25 years chiropractic associations, councils, advisory boards and chiropractic societies have brainstormed ideas to stimulate more chiropractic utilization. They have not been very successful, however. Typically, if something isn’t working you instinctively try something different – but as a profession we have continued to follow the same path.
For this, I don’t claim to have the answers. The truth is I am very fortunate to have been born when I was. Had I been born 10 or 12 years later, I would have been one of the chiropractors caught in this parade of new DCs.
I would like to hear what you have to say on this matter. I would like to write an article on this topic in the future and I need your help. If you have some ideas on how we, as a profession, can increase our utilization rate, then I would love to hear them. Kindly, send me your thoughts at exstore@usa.com.
Dr. Anthony Lombardi, DC, is consultant to athletes in the NFL, CFL and NHL, and founder of the Hamilton Back Clinic in Hamilton, Ont. He teaches his fundamental EXSTORE Assessment System and conducts practice-building workshops to health professionals. Visit exstore.ca for information.
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