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Home > Newsletters > July 2008 > Acupuncture Business Models and Styles

Acupuncture Business Models and Styles

By Lawrence Howard, L.Ac., MS.Ac.

Toward the final semesters of school acupuncture students take the “practice management” class where they are introduced to creating an office. They learn about topics such as leases, tax forms, and how to write a business plan - with the intention of getting a business loan. These are the components of what one may call the basic “free-standing” business office model. It may be the most common business model among practitioners but it is not the only one.

Each business model has its strengths and weaknesses, and it is for the oriental medical practitioner to decide which is most appealing to them and their potential patient base. Practice style is as important as the business model for it will affect income as well as reflect some of the practitioner’s goals. Treatment style sets the practitioner with or apart from other practitioners in the area. It may reflect the professional interests of the practitioner and determine the type of patients that are attracted to the office. Keeping these in mind, a new practitioner can get a better sense of what to expect and veteran practitioner something to think about when they evaluate their practice.

Business Models

Free-standing office - The practitioner finds and rents office space, “puts out a shingle,” and hopes for the best. The office could be a store-front, medical building, or a home’s basement or even living-room. Advertising, coupons, free evaluations/treatments, and word of mouth are a few methods patients are obtained; the practitioner essentially run a grass-roots campaign to attract patients. They may have staff but probably not at the beginning. The practitioner is independent but alone.

Shared-space - Practitioners of the same specialty share an office space. Practitioners may share the rent or one practitioner may rent (sublet) from the other. In the latter case, expenses as utilities and staff are often included in the rent. The primary owning practitioner may have the option to rent a treatment room by the day or even the hour. The dynamic between/among practitioners may be cooperative or more competitive. This is essentially a free-standing office but with less expense.

Cross-referral - The practitioner refers patients to nearby practitioners of another specialty. These practitioners might include medical doctors, dentists, accountants, soccer coaches, or just about anyone else. There is the stated or implied intention to refer patients to one another. This system works best if there is a mutual exchange of patients and there is more than one source. It is recommended that the practitioner is familiar with the specialty they are referring the patient and that the referral is legitimate.

One may call this “networking” with other practitioners. This is cooperative relationship because each person increases their indirect potential patient/client base…word of mouth.

Multi-disciplinary - The patient sees several practitioners in the same office space. Modalities may be administered consecutively or simultaneously as long as they do not compromise the effectiveness of each other. These practitioners may include chiropractors and physical therapists. There are many management variations to this model but they are clinically similar.

Housecalls - This allows the practitioner to escape the humdrum office routine entirely. The benefits include little overhead, limited travel - if one can limit their “range” to a neighborhood, the ability to charge less due to lower expense or more due to it being a housecall. There is the additional benefit of flexible hours, guarantee to see patients unless prior cancellation; there are no “no shows.” There is the disadvantage of little control over the treatment setting (ex. small dogs, cats wanting attention). Bringing a treatment table or chair is advised.

Coverage - Substituting for other practitioners. The practitioner covers for fellow practitioners who are vacationing or are ill. This income is especially unstable, however, a large base of practitioners may be able to compensate.

Purchasing an office (free-standing probably) - Practitioners moving to another location or retiring want to sell their successful practice. They choose to sell their practice instead of dissolving the practice or referring patients to other practitioners. The prospective owner may buy the practice “lock, stock and barrel.” The purchaser should be well “transitioned” to the office in order to retain the patient base. They probably should avoid making dramatic changes immediately - following the adage “if it ain’t broke don’t fix it.” Patients in an established office are accustomed to a routine and don’t always adapt to change easily.

A new owner should use their preferred treatment style or techniques on new patients. They should pay close attention to the rate of retention or referrals compared to the established patients. This will help the practitioner adapt to their style to what works best.

Practice style

In addition to having a place to practice there is the issue of how the treatment is conducted and the immediate surroundings to consider.

Spa style - This is where the patient is not just treated but pampered. This can be found particularly in offices that specialize in “facial rejuvenation.” There are simple amenities as perfumed facial pillows, soft lighting or “dimmer” lights, soft new age bamboo music, or nature music and glasses of water (not paper cups). Attention is given to the smallest detail - office ambiance, letterhead, signage, body language, and speech. The practitioner is the patient’s humble servant… and practitioner too.

Standard - This style is called standard because it is learned as an intern in school and serves as a good reference point. A complete history is taken and the patient is treated in their entirety – about an hour is spent on each patient. The treatment strategy is probably ultimately multi-branched/rooted. The main complaint is taken into consideration, but also as part of the larger “clinical picture.” Successful treatment and patient attention are the highest priority.

Medical clinic style - This is where the practitioner focuses treatment on the main complaint. Patterns are identified and standard protocols are used which the practitioner may modify. This is often a fast-paced office where there is less interaction. This office may streamline time by limiting point selection to readily accessible “Microsystems” as the ear and hand. Successful treatment, speed, and patient volume are the highest priorities in this style.

Any office may focus on a particular ailment. They include pain management, stop smoking, weight loss, stress reduction, drug/alcohol detoxification. Specializing has the benefit of focusing on a particular population and building a reputation on this specialty but the challenge is choosing a specialty that will attract a sufficient number of patients. Additionally, limiting to one specialty can become boring after a few years.

Treatment style

It’s fair to consider that a practitioner’s opinion and understanding of Oriental Medicine may affect their treatment tendencies. For example, a practitioner who believes qi is just a theory may focus on needling trigger points, whereas a practitioner at the opposite end of the spectrum may integrate “emitted qi gong” techniques into their acupuncture treatment.

“Traditional” or “Old school” - These practitioners strive to practice Oriental Medicine in its purest energetic form. They may use raw herbs, qi gong, and possibly cross-over into other similar energetic systems.

“Modern” or “New School” - These practitioners embrace the latest technology. They may use spray-on moxa, point locators, lasers, electrical stimulation, herbal injection, meridian diagnosing machines etc.

“Medical” - Discarding the energetic foundations in favor of needling nerves, trigger points and other physical structures.

A practitioner should know their general tendencies because it will affect how they interact with their patients. It’s easy to see which kind of practitioner an avid yoga instructor, computer technician, and orthopedist would prefer and refer their friends. A practitioner who is aware of their patient tendencies can adapt their interactions to their patient or market to a patient type.

Putting it Together

The great challenge for each practitioner is to match business model, practice style, and treatment style to patient expectations and the neighborhood demographic in order to earn a good income. Although this is ultimately a personal matter, there are two simple concepts to keep in mind when making these decisions - time and space. The patient is paying for your time and you have office space - both of which are limited. It is also good to keep in mind that one of the most severe pains a patient can experience is that of opening their wallet to pay.

Here are two simplistic scenarios generating the same income:
1. Spa style/Standard- 5 patients treated at a rate of 1-2 patients per hour (two tables) at $100 resulting in about a 5-hour work day.
2. Clinic style- 25 patients treated at a rate of 5 patients per hour (five tables) $20 per patient resulting in a 5-hour work day.

It is easy to see how time and space greatly affect all other factors considered. A patient accustomed to a “clinical” style treatment will likely feel a spa style treatment is too long and preventing them from doing other things. A patient expecting a “traditional” practitioner but is getting treated in a “standard” style would feel neglected and slighted in a “clinical” style office with a “medical” type practitioner.

For any new office there are some unsaid, uncelebrated landmarks that are noteworthy. The landmarks are: earning enough to pay for lunch, paying for gas to the office, paying the office rent, paying the home mortgage/rent, putting away for retirement.

We are fortunate to be in a business with so much flexibility. We are able to adapt to our location yet attract those we seek. Our future is in our hands and we can change it anytime.

Lawrence Howard, LAc, MSAc is a New York State licensed acupuncturist and has worked or covered in over twenty offices in the five boroughs of NYC and two counties of Long Island as an employee, independent contractor or owner since 1998.

This Month's Articles

July 2008
Volume 6, Number 7

Self-Help for Low Energy

External Wind and the Common Cold Explained

Acupuncture Business Models and Styles

Recent Research

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