Chiropractic Revenue Models

Chiropractic Revenue Models

By Dr. Michael Perusich

 

In today’s Chiropractic world, there are two basic business models that live in stark contrast to each other.  

One is the pain-based model, and the other is the wellness model.

The dichotomy - Both of these are actually viable models, but require very different levels of work to make them successful

Let’s explore these two models by breaking down the economics and “sweat equity”.

As the title suggests, the pain-based model is built on treating acutely symptomatic patients.  These practices are typically more insurance-based and often heavy in personal injury and work comp cases.  As such, their average case values (the total average cost of a treatment plan) are typically much higher than the wellness model case averages.

While the revenue generated in the pain-based model practice can be quite high, this type of practice will often have  high overhead due, in large part, to the number of staff required to operate.  It is not uncommon to need eight to twelve staff members for positions such as front desk, case management, record keeping, insurance billing, pre-certifications for care, radiology, and therapy and rehab services.  

These practices are also labor-intensive for the doctor as the cases require a higher level of documentation, deeper examinations, advanced radiology and lab orders, referral notes, and interfacing with case managers.  Doctors managing this type of practice will often have an assistant to help administer many of these tasks.

Once the patient is discharged and the case is closed, they likely will not return to the clinic unless a new symptomatic injury or an occurrence of an acute aggravation of their condition.

In stark contrast, the wellness model serves as the antithesis of the pain-based practice.

This practice style is based on offering long-term maintenance and wellness services to patients.  This model typically enjoys lower overhead, fewer staff, and is dominated less by time-consuming records management due to the nature of the cases they see.

While the case average is often lower than the pain-based practice, the wellness provider will typically have a larger capacity to see patients and more freedom to practice in a niche, if they so desire.  As such, revenues are maintained by creating either a higher volume of wellness patients, or large ticket services built around one or more specific specialties.

An additional benefit of the wellness model is that it usually has a large referral base.  This helps to create long-term revenue stability, practice value, and more predictability than  a practice heavily dependent on new patient marketing.

The bottomline is this - the practice model you choose is completely up to you.  There is no right or wrong in that decision.  The important thing to remember is to manage it correctly by building the most appropriate business strategy around it.  That is how you become successful in Chiropractic practice.

Dr. Michael Perusich is a solutions-focused advisor with more than 25 years of success across the healthcare and consulting industries. His broad areas of expertise include coaching, training, content development, and motivational speaking.  Dr. Perusich is the CEO for Kats Consultants, LLC. where he and his team offer a unique platform of business knowledge and tools for today's Chiropractic entrepreneur.

Katsconsultants.com