One of the first questions I’m asked by a doctor considering adding an associate DC is “how much should I pay my associate so it is a fair amount and to make sure he/she is motivated?”
And… as luck would have it – the answer is not just a cut and dry dollar amount.
In chiropractic, just like other professions, supply and demand most often dictates what an employee is paid. This is out of our individual control. These are market forces at work, not the greediness of every business owner or prospective employee.
So what does the chiropractic job market dictate and demand?
Well that of course changes over time and depends on the area of the country or world you are in.
Having said that, my goal with this article is for you to make the pay structure and amount you extend to an employee fair and equitable for you both.
Which brings us right back to the question, “what does the ‘fair’ job market demand?”
If the average chiropractic associate’s base salary in a certain area is 4 thousand a month should I pay 6 thousand because I am a good guy? Not if I am a good business man I wouldn’t.
Now, of course this does not take into account a myriad of mitigating circumstances. What is this particular doctor’s experience? Does he bring a patient base with him? Has he in some way demonstrated or do you have some assurance that the candidate can build up and manage a large patient base on his own – verses just wanting to show up and treat whoever is placed on his schedule?
These are of course factors to consider when figuring out the amount to pay your associate.
A common scenario that I have seen arise occurs when a chiropractic associate has been working for a clinic for a good period of time, usually a few years, and they know the numbers that they bring in and the collections that result from their efforts, yet they do not feel their pay has grown relative to those numbers.
In fact, in most situations where I see a disgruntled chiropractic associate this is usually the case. The underlying cause of this is often poor communication on the part of the owner (or fear of honestly communicating) and a lack of understanding on the part of the associate.
Failing to adequately communicate from the start often creates problems; especially as it relates to pay structures. There obviously are reasons – in addition to job market demand as discussed above – for how and why the associates pay is what it is.
And for each owner the philosophy behind ‘why’ is very different. Some owners recognize that they ‘carried’ the chiropractic associate for quite a number of months or years while the associate built a practice. And when the success of the chiropractic associate finally comes to fruition the owner may now feel he is entitled to reap the rewards of taking on those risks and extending those early efforts. In reality, that is a valid standpoint on the side of the owner; however, the chiropractic associate needs to realize that from the beginning of employment.
Another observation I’ve made is how often associates will come up with a number in their head that they think the owner should make off them. I will often hear an associate say something like “… I can understand the clinic making about $5K per month, but I’m bringing in $20K, it’s not fair…” The issue here is not the deal, the issue again is communication.
Nonetheless, when a chiropractic associate starts bringing in a substantial amount of income (I’m talking from patients he has fostered over time, not those that were handed over to him when he first started at the clinic), in many instances he becomes more like a partner; regardless of ‘ownership.’ And, when the associate is really good, and he is making the clinic a good deal of profit, then perhaps a partnership of some sort should be considered at that time. After all, you don’t want to lose someone who makes you money – this is where greed or ego can ruin a good thing.
OPEN THE BOOKS
One solution to help get the chiropractic associate’s skewed view back into focus is for you to somewhat ‘open the books’ to him. Associates and especially those fresh out of school, will often have no concept of what it takes and what it costs to run a busy practice. That chiropractic associate may think very differently about his $20K monthly contribution when he finds out that the clinic costs $80K per month to operate.
It is very common for them to overlook all that it takes to run a practice and incorrectly assume that the money they are bringing in just goes right into your pocket.
By exposing a general idea of the operations costs, you can also offset the common associate perception that they can do better than the establishment, or the perceived status quo attitude of the ‘older doctors.’ An associate with this mindset will see that $20K per month and think, “I could open my own practice for $3-5K per month overhead and start pocketing $15K per month!” A good owner will recognize this green attitude and over time educate the chiropractic associate on the realities, the risks and often the hardships of owning a business.
Pay is Pay but a Bonus is something entirely different. I am a big fan of the monthly bonus.
Many docs gravitate directly to doing a bonus based on collections. While if done right it is a good option, for most owners I caution them on this approach since collections can often be very cyclical and not representative of the work done on the part of the doctor – especially in his eyes.
A simple system that I use is based solely on the patient visits (PV).
For Example, if you are hiring the associate to actually see existing and new patients in the clinic, you might figure out the average monthly patient visits (PV) over the last 6 (to 12) months prior to hiring the new associate. Now you can set that PV number plus 10% as the ‘base.’
Should the chiropractic associate do a much better than average then he should be compensated appropriately. So, if the clinic averages out to see 600 PV over the last 6 months, then the associate doctor’s base would be 660. Anything above that will yield the doctor $_____ per PV.
That dollar figure of course depends upon how much revenue your clinic generates per PV. I would not have a problem paying a good chiropractic associate about 20% of that number; so if you brought in an average of $100/PV then the doctor would receive a bonus of $20/PV for every patient visit over 660.
Having a bonus structure based on patient visits not only sets a motivating goal but is also very easy for everyone to track. I am perfectly fine with that because he is making money by that fact that he is making me money verses say a fluke higher than normal collections month that he inappropriately reaps the benefit of.
In summary, while adding an associate to your practice can provide huge financial benefits to your practice and help you serve even more of your community, there is still the personality of the associate to proactively manage and maintain in good condition. Use the above strategies and a lot of common sense to ensure your associate is excited about and committed to your practice – the other option is to go ahead and start searching for the next great addition to your clinic.
If you would like more training in how to Hire, Pay and Manage an associate DC for maximum motivation and retention… we have an awesome program that is reasonably priced and time-tested by us (in our own clinics) and our consulting clients. You can learn more at the link below: