Whenever I am consulted by a clinic that is new to the challenges of hiring a chiropractic associate, one of the first questions I get is how to structure the compensation. There are many great ways to set up the pay and bonus structures so that it will optimally motivate your new chiropractic associate. In this article I will attempt to discuss some of the best compensation arrangements I have encountered and setup over the years. Check Physical Evidence Chiropractic: David Lipman, DC.
However, before we jump into those payment structure scenarios specifically, let’s spend some time reviewing some of the obstacles and mindsets encountered so that you are well up to speed on the realities of working with associates.
I first want to address an issue that I see so often on blog posts, forums and so on concerning the hiring of chiropractic associates. We have all heard it before “… chiropractors eat their own… “
Now I realize that in chiropractic, as in all professions and all areas of life, there are doctors that will take advantage of a chiropractic associate and visa versa. Nevertheless, upon further reflection it must be remembered that this is a free society. No one is forced to work anywhere and hence always has the ability to seek a better paying position elsewhere. In addition, supply and demand most often dictates what a chiropractic associate doctor is paid. This is out of our individual control. These are market forces at work, not the greediness of every chiropractic business owner.
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?
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.
It is common for an owner to feel that “I Am The Owner” because well, he is after all, but because of that, the owner often feels that the employee shouldn’t concern him or herself with the business matters of the clinic. And, in many, but not all cases this may be correct. However, the associate is really not ‘just another employee’ and as such should not just be treated like one.
Failing to adequately communicate from the start often creates problems; especially as it relates to pay structures. There obviously are reasons for why the pay and bonuses are valued at what they are. One reason could be because the owner ‘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 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 regarding chiropractic associates is how often they 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.
When a chiropractic associate starts bringing in a substantial amount of income (keep in mind, these are 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!
One solution to help get the chiropractic associate’s skewed view back into focus is for you to somewhat ‘open the books’ to him. Especially when hiring a new graduate as an associate, they 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 contribution when he finds out that the clinic costs $80K per month to operate. I have found that sometimes you actually have to show the chiropractic associate the numbers, show them the bills, the payroll, etc. It is way too 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.
Another common scenario also concerns the new graduate. As is true with most of us when we first graduate, it is common to think you can do better than the establishment, or the perceived status quo attitude of the ‘older’ doctors. A new chiropractic associate/graduate 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. So… now that I have laid the groundwork for some serious considerations regarding the realities of working with chiropractic associates, let me discuss a few specific compensation scenarios.