By Michael Dorausch, D.C.
I’m 23 from Pennsylvania and I’m starting a pre-chiropractic track at IUP here this coming spring. I know I’m jumping the gun on this but I cant help but think what would be more productive, to find a job with a firm? Or start my own business? I definitely want to start my own business one day but it just feels like a bad idea to start directly out of school because for one I don’t come from a rich family so I have to borrow every penny for schooling, having said that I would have to take out even more loans.
Maybe it’s just the area I live in but it seems that every chiropractic practice is independently owned, I’ve only been to one of the offices and I know only one chiropractor that is employed there and he is the owner. I’m looking forward to dedicated the next 7 years of my life to schooling and really expanding my mind in the field of science. The reason I chose chiropractic could be contributed to the fact that I’ve been in multiple car accidents over the years. The work doesn’t seem stressful and I always got great satisfaction after an adjustment and I’ve seen what he charged my insurance company. He did say though “What I bill them and what they pay me are two completely different things” I got that they obviously pay less then what he bills but I was curious how much? or how that works? I also understand that you have to buy insurance? Such as malpractice insurance or what not.. As you can tell I’m pretty new to all this stuff and I apologize if your already cover this on your website. Information you have or any kind of advice you could tell me would be very much appreciated.. Thank you
These are great questions and they do come up regularly. Each individual seems to have their own concerns regarding schooling, two of the most popular being borrowing money for school and potential chiropractor salaries.
Sometimes my advice is going to sound like “do as I say and not as I do” but we learn from our mistakes, and we teach others in hopes that they don’t repeat the mistakes we have made in the past. I took out student loans but I strongly suggest chiropractic students attempt to borrow as little as possible to avoid debt in the years after chiropractic school graduation.
I know it’s easier said than done, but if you make the efforts now to restrict spending, the rewards will be there in the future. There’s too many things you can spend money on (besides chiropractic school tuition) with student loan funding. Everything from having roommates, to not buying a new car, borrowing schoolbooks versus buying new ones, and keepng weekend partying to a minimum. Those things add up. Looking back, one expense I could have easily avoided while attending chiropractic school, was buying meals. I would have eaten healthier had I prepared my own meals daily and would have saved a significant amount of money had I not gone out to eat with classmates so frequently.
If you can do it without more loans I say go for it. If you have to take out student loans and increase your overall debt, make sure you have a rocksolid plan and stick to working that plan. I’ve seen more chiropractic graduates fail in business in the first three years than any other time in practice (but that’s the case for nearly anyone starting a business). The first few years are the toughest but everybody’s got to get their hands dirty sometime. Chiropractic practice is not meant for everyone, and neither is ownership of an independent business. You’re far more into the world of business ownership (small-business ownership) versus chiropractic practice when it comes to running your office. If the discipline and skills for running a business are not there, it’s going to be a struggle, and you may find your business imploding even several years into practice.
The discussion of insurance is an entirely different story. Every chiropractic office operates differently but it’s true that insurance companies often don’t pay the same amounts that are billed (that goes for all providers of healthcare, not just chiropractors). Sometimes insurance companies pay at 100%, but many times there are a myriad of other factors that determine reimbursement. Situations like high deductibles (which many patients are seemingly not aware of), co-pays, limits on care, medical necessity, and a number of other factors.
A common unfortunate situation which is a no-win for many chiropractic practices is the individual that thinks they have great insurance. They pay a monthly insurance premium (often deducted from their paycheck) and their insurance company tells them they can receive “chiropractic services”. In reality that doesn’t mean squat, as they often overlook the things I mentioned like deductibles, co-pays, and limits on reimbursement. Then there are patients who assume their insurance card is like a credit card, having no copayment and having no out-of-pocket payment due whatsoever. When in practice, you’ll have the joy of meeting these individuals for yourself.
It’s one of the main reasons so many chiropractic offices decline taking insurance (and are still successful). As a side note, I spoke to an OB/GYN yesterday who told me that if her office stopped taking insurance, and could receive the same reimbursement for services, she could see half the amount of patients and still have the same income. Something she is strongly considering for her medical practice in 2011 or 2012.
Personally, my advice would be to not build a chiropractic practice based on the potential of insurance income, as insurance reimbursement for chiropractic care can change significantly between now and the time you graduate, plus it also varies from state to state. There are the large corporate insurance plans to consider, some cities have hundreds or even thousands of employees that may have chiropractic coverage on their insurance (think big tech companies like Microsoft or Hewlett-Packard), but those plans could end at any time, or massive layoffs could occur. You may practice in an area that has these types of reimbursement for chiropractic care (like movie studios in Los Angeles) by building your business model around one or two companies could be risky, especially since insurance reimbursement can change from year to year.
I looked around for related topics that have already been covered on this site, things that may be of interest to prospective chiropractic students include: paying off your chiropractic student loans, things you may consider when choosing a chiropractic school, An Interest in the Study of Chiropractic Work, Chiropractic 101: An Aspiring Chiropractor, and Questions About Practicing Chiropractic.
Based on your initial questions here are things to consider: work for a chiropractic office while in school so you can get the business knowledge not being taught in chiropractic college.
Try and borrow as little as possible. There is no other way to do this than figure out your own way. Trust me, you don’t want a monthly payment of a couple thousand dollars to pay off student loans (sometimes for 30 years) when you’re going to have rent payments, insurance payments, staff payroll, business insurance, your house and or rent payment, and loads of other expenses.
Personally, I don’t think that malpractice insurance and general liability insurance for chiropractic small businesses is expensive. The same medical doctor I spoke to yesterday about her practice, shared that she was paying over $50,000 annually for malpractice insurance. That’s more than 10 times what the average chiropractor will pay per year.
Re: insurance coverages, it’s going to vary state by state and city by city, but nearly all landlords are going to require a general liability policy and I feel it’s a good idea for you also to carry chiropractic malpractice insurance. Who you choose for coverage is up to you, there are several insurance providers offering affordable coverage for doctors of chiropractic, both general liability and practice related.
Your reasons for choosing chiropractic are great in my opinion and if you focus on providing people with the same satisfaction from adjustments that you now receive, you will be on your way to being successful in practice. Depending on when you ask me, having your business smarts and your motivation in order are going to be most important, some days one is more important than the other.
Keep working on these two while you’re in school and when you’re out of school and continue to plan your work and work your plan for as long as it takes. All the best in your success!
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