At MPI, we are routinely asked whether we would recommend that a new doctor start a practice or work as an associate. Conversely, we are routinely asked whether the established practitioner should bring in a new associate, and how that can work for both parties. This article will address those questions. First from the perspective of the new DC and then from the owner DC’s perspective.
For the new doctor, it is generally an easier transition to practice as an associate in a good, ethical office than to start up a new clinic. It can prove difficult to go from school to the responsibilities and challenges of opening a new office. There are many variables, and it can be overwhelming. The reduction in reimbursement with managed care has routinely cut into incomes and makes the owner DC less able to support associates.
A written employment contract is critically important. There is an old lawyer’s saying that if it is not written down, it does not exist. Be wary of the owner doctor who does not want to have an employment contract and does not want to put the specifics into writing. This employment contract should be reviewed by your attorney. It is particularly helpful if you have an attorney who specializes in contract work or is a healthcare attorney. We have been fortunate in having a relationship with a healthcare attorney and small business attorney. It is cost effective and convenient, because this type of attorney can review a contract in less time and, therefore, for less money compared to an attorney who is not familiar with this type of work.
Establish up front what the length of the contract will be. Open and comprehensive communication about the specifics of the associateship should take place with the initial negotiations. Two important points with the contract include whether the position is for a short term learning experience or a long term commitment, and if the owner doctor plans to have a buy in opportunity.
Pay should be another up front issue. If discussing money is avoided and danced around, that is a red flag. If the pay scale is so complicated you need an accountant to figure out how you are going to be paid, that is a red flag. If the pay sounds too good to be true, it probably is, and there could be ethical and legal issues involved.
Location, location, location. You should go where you will enjoy living. You do not need to be in a vacation resort, however, if you despise warm weather and the beach, then south Florida is not for you.
The techniques used and the practice style of each doctor is important. There are advantages to have doctors with similar practice styles, and there are advantages to having diverse practice styles. We feel in the long term, it is much easier on patients if the doctors have similar styles. For example, a Gonstead practitioner and activator practitioner can both do outstanding work; however, there will be confusion for the patient. Another example might be a Gonstead practitioner and a diversified practitioner. These two would more easily work together than the Activator and Gonstead practitioners.
Consider whether you feel your owner doctor or associate doctor has any ethical challenges. If there are any signs that the doctor is willing to sidestep ethics for money, that is a red flag. There are plenty of ethical, outstanding doctors who have wonderful clinics.
What kind of learning environment will there be? Will the owner doctor take time to help with case management? A good learning environment makes it more fun for the doctors, and it ultimately benefits the patients. Remember, it is all about the patient.
How is the owner doctor going to help the associate doctor build a practice? If the owner doctor is not willing or is not able to help the new practitioner build a practice, the doctor does not need an associate. The owner doctor may argue that the new practitioner does not know how to manage cases and will mishandle patient care. The way to shorten that learning curve is to allow the associate to handle cases and coach them in a positive way as they learn.
In regards to pay scale, one example is to set the new doctor up with a salary for the first year and help the associate build a practice, then transition the doctor into a performance based salary the next year. The associate doctor has a full year to start to build a practice or the associate needs to move on. The pay scale varies significantly from one area of the country to another, but it can work if the doctors are up front and desire a mutually beneficial relationship. If the associate doctor is willing to take a very low salary, there may be problems to watch out for. Remember, you get what you pay for.
Does the new associate bring any new information and enthusiasm to the clinic? What is the associate doctor going to bring to the table to help build their practice? I will admit my bias here, but students who are heavily involved with organizations like MPI are routinely ahead of their peers. They are willing to do extra work, spend more time developing their skills, and are typically more intrinsically motivated.
The associate doctor will most often be an employee of the clinic rather than an independent contractor. The IRS has specific criteria for independent contractor status, and it is difficult to meet that criteria as a full-time associate. There are tax advantages to bringing on an independent contractor rather than an employee, however, it may not be worth the risk. Such an arrangement would necessitate the services of an accountant and an attorney.
There are many financial advantages to have a group practice, including shared expenses, vacation coverage, and collective brainpower. There are also many pitfalls, including the fact that many chiropractors are quite independent in nature and have trouble “playing well with others.” In summary, both parties must go into the negotiation with an open mind, an open heart, and the desire to ultimately do what is best for the patients.
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written from both a clinical and business perspective to help you grow your skills and your practice!