Non-for-profit (501c3s) are famous for not making it. Most if not all have really good intentions of changing the world and could have truly changed the world, but they don’t master the finances. Over time, there’s no money to get the message out there, they can’t afford to operate the business at a level necessary to make it a success, key people move on to jobs that pay the bills, and they end up forced to go under.
Often to a fault, I really don’t care about the money-side of taking care of patients. I just want to get and keep people well. I believe anyone that chooses to be a doctor of any kind leans this direction as well and as a result, most doctors practically by intention lack a strong enough business and financial acumen.
To really and dramatically impact someone’s health; it requires long-term care. This is true of any area of healthcare, particularly chiropractic. 3 adjustments, a week of dieting, or 1 workout rarely impact someone’s health forever. Some of the most important and recent research in chiropractic is predicated on patients under wellness care; receiving adjustments over an extended period of time.
I’m currently getting my PhD in Business Administration. Most of the business courses and conferences I have been to outside of chiropractic spend considerable time discussing the value of retention over the value of a new customer. For example, the cost of acquisition (COA) is $0 for a retained customer rather than what can be $100s of dollars in cost and man-hours for a new customer. Therefore, the focus is the lifetime value of the patient along with achieving important objectives long-term rather than being misled by the attraction on the money short-term.
The Customer Lifetime Value (CLV) is a critical “business” number. This includes not only the initial payment, but other monies earned through referrals, products they purchase, re-signing into new plans, and opportunities they create like lecturing at their work. Where paying for one plan could be a couple of thousand dollars, the CLV could be $30-40,000. All while providing integrity and the absolute best health outcomes for the patient.
1000’s of the offices I’ve worked with had been doing 20-30+ new patients starting each month for a decade or more when I started with them. This process requires the greatest investment in time and money. They have converted between 2000-3000+ new patients in 10 years. Yet, for many, they are re-signing 8-15/month into wellness plans or even far less. In other words, out of 2-3000 initial, signed-up new patients, only 100-150 are still in the practice 10 years later. If you do the math, that its between 94-98% attrition. Or, what is known in the business world as corporate suicide.
A COMMON MENTAL MISTAKE.
For years at conferences, I would hear, “I had 100% re-signs last month.” I would think to myself, “There are red flags being thrown all over the field. If you had 100% re-signs, your visit per week volume would be 3-5000/week and you’re at 200/week. “
Eventually, I learned that they were only considering the people that made it to the re-sign. It is actually pretty typical that 75-100% of the people who make to the re-sign will re-sign. They made it through the gauntlet of items that cause people to drop off and chiropractic is awesome; so why drop off now? The problem is getting them to the point and day of re-sign. While your re-sign success rate is 100% at re-sign, the actual resign rate from the people who started care is a 2-6%. A far cry from our ultimate goals as wellness leaders.
People have trouble sticking to anything for a long period of time. Most patients report being very pleased with their chiropractic care and that rather than “quit” they just naturally fell off the routine. It’s our job to coach, manage, hold accountable, and to provide a system that encourages people and keeps them on-track.
AREAS TO ADDRESS TO IMPROVE RE-SIGN AND CLV
- Call list management
- Strong case-management. A case manager is there to assure a patient’s care is progress as expected and to act something like a patient-advocate.
- Patient clarity on short-term and long term
- A clear list of goals the clinic has with each patient addressed patient by patient in all meetings and huddles.
- Effective retention processes
- Prompt response to missed visits, non-optimal patient engagement, and cases progressing below expectations
- Urgency and diligence in managing cases that have gone off-track.
- On-going educational events (We can’t educate people once or twice and expect sustainable understanding of the value)
- Specific points where other opportunities to improve the patient’s health and make the community a healthier place to live are discussed
It seems absurd that at some point someone just decides that they’re healthy enough and it’s time to get back to drinking tap water, eating at McDonalds, no more working out, and I’m going to put my amalgam fillings back in. It’s certainly no less irrational to stop getting chiropractic. Our love for the patient and our systems make the difference.
Have fun saving the world
Dr. Ben
