Of our entire 13 Things You Will Need to Change series, this post will perhaps represent the toughest challenge for many to chiropractors accept and overcome, which is why I have saved it for last. Before I spit it out, let me preface it with three quick thoughts:
a) The old revenue model, purely based on volume, is crumbling. Payers are paying less and less for adjustments and limiting care while expenses continue to increase.
b) Unfortunately, over the last decade or so, utilization has not increased; in fact, the latest stats indicated that the public use of chiropractic has either flatlined or decreased slightly.
c) Simple economics dictate that if the price of your service is decreasing, the frequency of which it is consumed is decreasing and the cost to deliver that service is increasing, you have an impending disaster in the works.
Thus, here is the single biggest change that chiropractors must make:
Chiropractic businesses must focus more on strategy and less on tactics.
Problem is, most chiropractors go about this backward. Too many of our businesses are driven by opportunity seeking tactics. We hear about the latest rage in chiropractic (decompression, laser, nasal irrigation – whatever) and we hop right on the bandwagon and hope to ride the profit wave.
There are two fundamental flaws with the tactical approach:
1) This causes our practice to be driven by our sales, not our strategy. So when the inevitable happens and things don’t quite work as we hoped, we are off to the next opportunity and we drag our practice (and our staff) 180 degrees in a different direction in its pursuit. Even if our tactics do work temporarily, we don’t know how to manage sustained growth because there is no real strategy at the core. We end up just slapping on one tactical patch after another until our practice is a rag-tag mess of a business whose revenues ride like a roller-coaster.
2) To survive, a tactical-driven business must stay ahead of the curve. Success is possible for tactical businesses, but you must be an early adopter. If you happen to be one of the first chiropractors to introduce a new technique, try a new marketing scheme or have some sort of new gadget and can figure out how to promote it, things will be good. Unfortunately, this is bad news if the game you are playing is constantly changing or the future is uncertain (as in healthcare) because it decreases the odds that anyone can actually stay ahead of the curve. And since obviously not everything new works so well, the tactical DC will inevitably drop some good ideas in favor of some newer, but less effective ones. Even worse, this cycle must continue. The practice must constantly strive to find the newest angle because it lacks a fundamental strategy and therefore, has no cohesive approach to anything and instead gambles its success on whatever novel idea the “wave” of opportunity brings. Perhaps worst of all, the tactical DC is generally not a good colleague to have next door. He is hyper-competitive by nature because his business rests on tactics and tactics generally lose their effectiveness over time or with over-utilization (because then they are no longer a shiny new object).
Why Strategy is Needed for 2013 & Beyond
So, we must re-engineer our businesses towards strategy to succeed in 2013 and beyond. (If you haven’t watch the above video already, see how we are approaching that concept in our consulting business with our new Chiropractic Profit Launch Blueprint training).
Our revenue model must change. Put another way — the “old school” style chiropractic ain’t going to work much longer. This will be true (and already is in some aspects) in every sense of our business. Marketing will change, reimbursement will change, our care will change. With healthcare in flux, we may not be able to predict the change, but we know it will happen.
To adapt to that change therefore, we don’t need more tactics that will try to keep impossibly ahead of an ever changing curve, but better strategy.
Our strategy will need to address fundamental business problems mentioned above – i.e. declining reimbursements, decreasing utilization, increased overhead, etc. And then, our strategic response to those challenges should include tactics that address those obstacle and not the other way around.
Here’s why strategy must come first:
Let’s say we find a new internet marketing tool (a tactic) designed to attract new patients and we put it to use. Now, truth be told, we don’t quite know if new patients are the answer to our problem, but since our tactic is so new and attractive, we put it to use anyway.
The tactic apparently works well and NP’s come in the door. But we notice there are a few things wrong with these New Patients. The possible errors could be many:
- You attract a bunch of bargain hunting cash patients and you are trying to increase your high end decompression cases. They go away eventually because they found the “wrong” chiropractor.
- You attract many Spanish speaking patients but neither you nor your staff speak Spanish and can meet their wants. They go away eventually because they found the “wrong” chiropractor.
- You attract many new patients and are unable to handle the growth. Your older patients who have been around a while begin to leave; the newer ones stay but they are less profitable, more work and don’t heed your recommendations as well as the older patients who left.
So, where did your new tactic get you? In all three cases, absolutely nowhere; possibly, you are even worse off than you started. This is why strategy must come first. Without a strategic plan, you don’t have the ability to recognize what is a good opportunity and what you should pass up. Instead, you constantly run around putting out one fire after another in hopes that someday you will get ahead (but you get a sinking feeling that day will never come).
What Strategy Will Serve YOU Best?
Honestly, I don’t know what will work best – for you.
For some chiropractors, your strategic plan may include the need to enhance what you are doing currently to take your practice to the “next level.” This may include tactics such as adding significant additional revenue streams (By significant, I mean ones that can generate add least 5 digits. Quite frankly, most offices don’t sell enough topical pain relieving gels, back supports and the like to call this income significant) to help their clinics grow; some will need these streams to survive.
For others, you need to re-evaluate what you are offering currently and re-engineer your business. Your actions may include take a focused, systematic approach to making sure that you are being paid for the good that you do. For some, that may be as simple as actually billing for the services that are rendered instead of giving them away free. Others may need to discover that you have reimbursable services that you are currently performing, but not being paid for.
Finally, some of you may discover that your practice is so completely lacking any strategy of any sort, that you may just need (or want) to blow things up and start again. You will need to re-invent yourself and your practice in order to survive. Then you will be better positioned for future growth and profits.
One Size Doesn’t Fit All, But The Good News is…
As you can see, with the strategic approach one size definitely doesn’t fit all as those in the tactical camp proclaim. Inherently, most of you can see through the shallowness of such claims anyway. How can this one marketing trick truly be THE answer to all your new patient dilemmas? How can this technique solve all your profit problems and mine and every other chiropractors?
The good news is that although the strategic approach is definitely not “one size fits all,” you only need one size – yours! In other words, the approach that works best will be a combination of your style, your experience, your goals and your systems formed into a cohesive strategy that allows you to uniquely bring your service to the marketplace.
Once you’ve mastered this strategic approach, your drastically reduce competition, you inherently create excitement and demand around your passions and you inevitably feel that you are doing what you were put on this planet to do!