Welcome to the Planning for Practice Success Newsletter

Practice Startup Success

Information Advice Encouragement

January 28, 2008                                                                                ISSN 1934-3248

"Flying may not be all plain sailing, but the fun of it is worth the price." Amelia Earhart

 In this issue:

Your Tax Rebate

Just a thought:  If you pay U.S. taxes, you will probably receive a tax rebate sometime soon.  My suggestion:  If you are getting ready to start a practice, don’t spend it. Save it; you may need it for the bank.  Most banks want cash, and it would be good to have some to give them.  You can spend it later as part of your opening, if you want.

 Stark Law Question

Someone recently asked me two questions that I will answer in this newsletter:  The first question was about the Stark Law and what it is and how it relates to chiropractic. 

The law (actually three separate provisions) was enacted to prevent physicians from profiting by sending patients to other medical providers.  It is sometimes called “physician self-referral,” because of the practice of doctors referring to medical facilities in which they have a financial interest.  Again, the problem is conflict of interest. The argument is that these doctors are referring unnecessarily, thus increasing health care costs. 

How does this law affect chiropractors?  If you refer a patient to some other provider in whom you have a “financial interest,” you could be in violation of this law.  It is difficult to determine whether an independent contractor status in which the contractor pays you for services is actually in violation.  The law is complicated.  As an ICA “Strategies” paper states, “Doctors of chiropractic have gone to jail for Stark Law violations.  Here is the web site, if you want to read more about the Stark Law as it relates to chiropractic:  http://www.dc2be.com/ICA_Strategies/strategies12-13-2002.htm

Evaluating Locations

The second question relates to evaluating possible practice locations.  The person asked, “how to determine which of my alternative locations would present the best opportunity for practice success, all factors considered.” 

Many “experts” assert that you should carefully analyze a number of factors to help you decide on a practice location.  

One of the most important factors is competition.  Some lenders and others will want you to justify why “there are not too many chiropractors” in your area.  You might want to get out a map and mark the chiropractors within the area you are considering, taking into account what I call your “circle of practice” (i.e., the area from which you can reasonably draw patients).  What is “too many”?  Some will say that an average of 5000 people for every chiropractor is reasonable. 

One company (www.locusmap.com ) will do a detailed demographic analysis using the “Ten Essential Demographic Factors.”  You can see these factors on their website.  I am not recommending them; I have no idea how much they charge for these services.  I’m just saying that this is a good list of factors.

Having said all that, though, I have to tell you that the most important factor is … personal preference.  One doctor who spoke to my class said it best, “If mama ain’t happy, nobody’s happy.”  In other words, if you and your family are not where you want to be, the demographic factors are not going to carry much weight.  I know a DC who did this kind of detailed analysis for my class.  She took two locations and analyzed them carefully.  Her conclusion was that Location A was “best” demographically, but that she really wanted to live in Location B.  I heard from her later and she said she was very happy.  For another example, read my newest “Startup Stories” article in StudentDC, about a DC who went to Colorado because that was the lifestyle he wanted. 

Don’t get so hung up on demographics and “too many chiropractors” that you forget the personal factor in finding a practice location.

 Ask Dr. Jean Murray a question (email jean@dcpracticesuccess.com )
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