Academy of Chiropractic
Quickie Consult 1218
Infrastructure 253 I
Preamble: Many of the issues I bring to you are very small, yet each issue is just that, an issue. If you take care of the small issues, then you will be able to build and more importantly, focus on the bigger issues...a larger practice and more family time. -Mark Studin 2006
"Nothing is working, what now?"
Dr. Studin: Could you share with me what you just said a moment ago we were approached to do?
Guest: So, I'm kind of at a crossroads. I've kind of struggled to grow my practice on my own, to the point that I want it to be at. And I recently was approached by a larger practice in town. They want me to come on board and join their practice. However, I would give up owning my own practice and being a practice owner to being basically an employee, which I said I would never do. So, on one side, the logical part of my brain says, “Oh, this is, you know, safety and security and you don't have to struggle and worry about paying expenses and bills”, and then the other part of me is like, “hell no, this is not in my DNA or my makeup to be an employee.”
Dr. Studin: Okay. And what kind of practice is it?
Guest: It's mainly chiropractic. It's father, son, a practice that's been around for a long, long time in this area and has a lot of patients, have a lot of volume, has a lot of connections with medical doctors and attorneys. So that's kind of feeling there and they're trying to integrate. They had a medical doctor on board, that had PT, they’re looking to replace those positions. So, it's kind of everything that I want to have, and I would have the opportunity to buy into the practice in three years, but I've already bought two smaller practices that I'm still paying off. So, I'm like, why would I?
Dr. Studin: you've already bought other people's junk.
Guest: Yeah. That didn't work out too well.
Dr. Studin: So basically, these people are looking for an associate because the father son, meaning the father's probably close to my age, which is in the mid-sixties, and he's looking to slow down the wants to just be the reason for the referrals.
So, the first scenario is integrating empties into a practice, was the Vogue in the mid-nineties. I mean that was like the shiny new object, the get rich quick program. Lawyers do not care to read my lips. Lawyers don't care if the MD is in your office or you refer to the MD around the corner as long as they get the MDs report, that's all lawyers care about period. Now with that being said, is that MD going to be required to be on the case? Is an ortho? Is it a neuro? Is it a physiatrist? Is it a pain management doctor? Because not every patient needs the same person. And I can tell you right now that Geico and state farm specifically Geico, and one of the reasons they created, um, a Rico cases is they pattern referrals. Is the doctor referring? Because what they say is so, and they understand the Colossus busting programs. It's called medical validation. So, for Florida it's even worse because you had BCMs emergency medical conditions to get more money. So, what they're doing is they're looking for patterns. Are you referring to the same MB all the time? That's one of the charges in the Rico case. So, if you bring this MD in this, the same one, you bang them all the time, you actually fall into that algorithm. Now, I owned four multi-discipline practices at various levels throughout the, you know, back in the 90s and up until I divested myself in 2006 or the last one. And I can tell you what it does, it doesn't get you more money. It makes it a little bit easier to work with MD, maybe not the right one.
And when you have to refer out, definitely not the right one, but it also creates a tremendous amount more overhead. And then also, yeah, creates a target on your forehead because you're going to be, they're going to be coming after you. So it's good. It was great for a year and then we suffered for nine, you know, in defending it. So, it's not going to get you anywhere you want to go, especially you don't want to just pull from, MDs from lawyers. You want to pull from other remedies, primary specialists, urgent cares, emergency rooms. These are the things we're going to work with and go for to get done.
Dr. Studin: Now. So, it's not manna from heaven. And the other thing is you're going to be an associate now and you never worked for anyone by here's the bus. There is one scenario that I wouldn't mind you working for someone and that is as a profit sharer. If they're willing to give you 60% have everything collected that your hands touch, then that's a good deal because you can't get an overhead of 40%. That's little. The average is 50%.
Guest: The way they have their business structured is, I would, you know, get a base salary and then at the end of the year, the three doctors, split what's leftover.
Dr. Studin: I don't really care what they want to do. I care what you want to do. And at the end of the year, what's left. Most practices are designed to take money along the way and have neutral profit at the end of the year for tax purposes. They control their salaries; they control their expenses. Are they, are they expensing their personal phones and personal cars that have nothing to do, um, you know, with the business? Are they expensing their landscaping in the home that has nothing to do? These are things you'll never see and are you going to get a chance to do a forensic analysis of their books? The answer is no. So, it's not going to be a great deal for you. It's just too many ifs, ands, and buts. Now with that being said, there's other things you need to do. It really the moral of the story is having an MD in an office is no integrating with multi-discipline is no longer official. There is one scenario. It is, and I don't know in your state if you're allowed to hire the MD without the MBA owning a percentage of the practice. If you could hire an MD as a pure W2, I would bring in a primary care provider and let them do primary care medicine and then let that be a referral center to you because, you know, their fifth largest time is mechanical, right? And then you're golden. Then you have an internal referral machine and you pay them 80% of what their hands touch. What do you care? You want those referrals? I don't want you to be someone else's bitch, that's what it looks.
Guest: Neither am I and my gut instinct is “No way” I just wanted to present this to you and get your thoughts on it. I knew already knew that's what's you're going to say, but I just needed to hear it for my own.
Dr. Studin: There's your expansive answer. So, listen, I'm good. I'll chat with you later.
Guest: Thank you.