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Reposted: NCCAOM and the Terrible, Horrible, No Good, Very Bad Numbers

last Thursday, the NCCAOM finally released their 2008 Job Task Analysis Report, which includes data on AOM practitioners' gender, race, income, student loans, hours worked per week and numbers of patient visits. You can read it here: http://www.nccaom.org/exams/pdfdocs/jta/NCCAOM2008JTA.pdf

I think the NCCAOM report is going to require a couple of posts, actually. There's just a lot here. Let's start with the income data, hours worked, and patients per week, and then I want to tell you a story about an experience I had last week.

This survey was sent to 18,000 active NCCAOM diplomates. 732 of them completed it. As we keep saying, nobody has an accurate count of how many licensed acupuncturists there are in the US, but I'm going to go with Keith's estimate of about 28,000. As one of my friends pointed out, there would probably have been some very interesting data if the NCCAOM had surveyed inactive or lapsed diplomates about their practices, or lack thereof, as well.  It seems reasonable to assume, though,  that the 10,000 acupuncturists who didn't get the survey are less likely to be practicing; and that active diplomates who took the time to complete the survey are more likely to be acupuncturists who are still invested in their profession, who are serious about it and who are trying to make it work for them. We'll never know about the 17,000 plus who didn't do the survey, most of whom never even opened the email from the NCCAOM. (Doesn't that seem a little odd, all by itself?) So, if anything, before we look at this data, just based on who sent it in, we should assume that it is somewhat skewed towards the positive -- towards acupuncturists who are positively disposed towards their profession and its accrediting bodies. This survey probably doesn't represent the embittered, the resigned, the ones who have given up altogether and don't even want to talk about it. It looks like 1.6% of the respondents said they are not currently practicing, and the survey included questions about why, but the answers don't show up in the report.

OK. Let's start with income. The report states that 70.1% of respondents have annual gross income "from their AOM activities" of less than $60K per year. That's an awfully big range; it would include the negative numbers, everyone who is losing money on their practice, on up to the person who is grossing $59,999.99. But wait! Looking back at the actual survey, it appears that the  question referred to smaller increments of income, starting with "less than $20,000", see there at the bottom of the page? So it would make sense, wouldn't it, that the categories that people responded to were probably "less than $20,000", "$20,000 to $40,000", "$40,000 to $60,000",  "$60,000 to $80,000" . Right? But the report presents the income data not in increments of $20K, but in increments of $60K: 70% report incomes under $60K,  21% report incomes from $60K to 120K, and 9% report incomes over $121K. That tells us much less.  For all we know, 70% of diplomates have gross annual incomes under $20K, 21% have gross annual incomes precisely between $61K and $62K, and 9% all have incomes "from their AOM activities" of  $125,493.52. (4.1% of the respondents are AOM educators or administrators, and 0.7% have an active MD license; perhaps we've just accounted for about half of that upper 9%. What do you think are the odds that the other half own herb companies or are on the CEU circuit?) But truly, we don't know. Reporting the income data in increments of $60K, when that isn't how the question was asked, tells us only that we aren't getting the whole story. Add me to the list of people who would very much like to see the raw data.

But let's keep going with the data we've got. 91% of the respondents are self-employed. 30% are both self-employed and working for someone else, "as an employee or a contractor". OK, there is a world of difference between an employee and a contractor, but these categories are not separated in the NCCAOM report. Contractors pay 15.3% of what they gross in self-employment taxes; they are also responsible for their own insurance, their own supplies, and generally pay a portion of the overhead wherever they work. Employees get a check, as well as, usually, a tax refund about this time of year -- unlike contractors and other self-employed people who are usually scrambling to pay the IRS.  In other words, you can safely assume, for anyone who is self-employed, that what they net for themselves is at best 50% of what their gross income is. So there are two important take-home messages here from the report:

There are virtually no jobs for acupuncturists.

Because almost everyone is self-employed, and there is a huge difference between the net income and gross income of a self-employed acupuncturist, 70% of acupuncturists are probably taking home less than $30,000 a year from their practices.

(Hey, I just noticed something. 9% of respondents gross more than $121K per year. 9% of respondents are also not self-employed, meaning, they have jobs! I wonder if that's a coincidence.)

These might sound like unduly gloomy conclusions, but wait -- we haven't gotten to the data about hours worked and numbers of patients seen.

60% of respondents work less than 30 hours a week. That includes 19% who work less than 10 hours a week in their practices; 20% who work between 11 and 20 hours; and 20% who work between 21 and 30 hours a week. 47% say they prefer to work part time, while 53% would prefer to work full time. The report states, "this practice characteristic warrants further study to better understand and interpret these findings." How about this interpretation: given that they owe an average of $56K in student loans, with some owing more than $100K, most acupuncturists would prefer to have a job rather than a hobby -- but they don't, because they can't attract enough patients. And as for the 47% who say they "prefer" to work part time, is that because they are simply too terrified and overwhelmed to want to do it more? 35% of respondents say they felt poorly prepared to do marketing and PR -- in other words -- they have no idea how to communicate with anyone about what they do.

Looking at the reported numbers of patient visits, I'm thinking back to my previous post about terrible, horrible, no good, very bad numbers in acupuncture, and it's making a lot of sense. 91% of respondents see 10 or fewer new patients a week; and 33% see 10 or fewer returning patients per week as well. Which suggests that, for 33% of acupuncturists, 20 patients per week is a record achievement. Another 47% see between 11 and 30 returning patients a week, which combined with that low new patient figure, suggests that for 47% of acupuncturists, 40 patient visits per week is doing really well. I think most acupuncturists who are working would agree that 40 patient visits a week is really just the bottom end of a sustainable practice, just the beginning of creating a stable patient base and decent word of mouth. 80% of acupuncturists are probably not hitting that minimum target of 40 visits a week. This is why 99% of the US population is not getting acupuncture: 80% of acupuncturists aren't really working. Yes, I realize that is the most negative possible interpretation of those numbers -- but the only thing that can refute it is more specific data, which we don't have. What if the weekly patient visits were reported in increments of 5 instead of 10?  The head of an herb company once told me that he thought most US acupuncturists were seeing about 12 patients a week (this was before the recession). You can arrive at that figure with the NCCAOM report, also: 33% already definitely see less than 10 new patients and 10 returning patients, what if 47% see 11 returning patients and 1 new patient per week? There you go: 12 patients a week, a hobby and not a job. And let's not forget, these numbers are coming from active diplomates who took the time to answer the survey: a positive skew.

When I mention to patients that the acupuncture profession is in a bad way, they often look at me with surprise. "But," they say, " that's hard to believe! It seems like acupuncture is becoming so much more mainstream, so much more accepted. How can that be?" This is where my story comes in.

One of the things that acupuncture doesn't really treat is basal cell carcinoma, caused by years of being a lifeguard before people knew what sun damage was. So last Tuesday, I drove Skip to two different medical offices: a dermatologist out in the suburbs where he got Moh's micrographic surgery, and then to a plastic surgeon downtown where they repaired the results of the surgery. The plastic surgeon's office was in the most expensive real estate in Portland: a high rise on the waterfront that also happens to be the shiny new "Health and Healing Center" affiliated with a prominent teaching hospital. When you walk into the lobby, this is what you see: an espresso cafe, comfortable chairs and sofas, huge windows looking out onto the water, a bank of elevators with a directory of all the doctors, and a flight of marble stairs. Next to the flight of stairs is a sign with an arrow pointing up. The sign says: spa, wellness, acupuncture. I took the elevator up with Skip to his surgeon but made a mental note. While I was waiting for him, I took the elevator back down, and walked up the stairs, because I can never resist an opportunity to do research on the economics of acupuncture.

At the top of the stairs, on the right is a huge gym. Straight ahead is a reception area with two very polite receptionists. I told them I was interested in learning about their acupuncture services. One of them handed me a menu titled "life wellness services". At the top is the name of the spa and wellness center, which is clearly not affiliated in any way with the prominent teaching hospital, although if you didn't pay attention to logos, you might not realize that. Underneath the logo, the menu goes like this: customized massage, acupuncture, facial, personal training, pilates training, yoga training, nutrition coaching, resting metabolic rate assessment, and waxing -- eight different varieties of waxing. An acupuncture treatment costs $100 for a first visit, and $80 for a follow-up. They won't bill your insurance, but they will give you a receipt. (Just like WCA!) I asked about the availability of the acupuncturists, and I discovered that there are two acupuncturists. Each of them works at the spa for two days a week, from 11-7 or from 12-6. A new patient visit takes 90 minutes, while a follow up takes an hour. They see one person at a time. Sometimes they are completely booked, but other times they have same-day availability. Thank you very much, I said, and went down to the lobby to do the math.

The health and healing center of course has free wi-fi, so I googled the acupuncturists. Both young women, relatively recent graduates, both have other practices outside of the spa. OK, so they almost certainly are contractors rather than employees, because no savvy spa owner would want to take on payroll taxes if there was any way of avoiding it. Let's sketch out a week for one of them, in which she is 80% booked: with a maximum of 16 possible appointments, let's say she sees thirteen. Four of them new, nine returning. That's $1120. Unless there is some extraordinarily charitable arrangement at work here, the spa's cut will be at least 50% of that; she's getting not only high-end rent, but also reception service. That leaves her $560. Take out self-employment tax of $85.68 at 15.3% and you get  $474.32. Take out another 15% for regular taxes -- and of course she'll have to withhold all of these taxes herself -- and we're down to $388.64. Let's see, insurance would come to about $15 a week, two and a half boxes of Seirins at $25, then there's laundry, and parking...and so, if this acupuncturist is lucky, she'll take home less than $350 a week. The odds are good that anywhere else she practices, she will make less, because she won't have the same level of visibility, or a human being to answer the phone and book appointments. She can make just enough money to tread water, to answer an NCCAOM survey and feel good about it, to not quit -- at least not for a few years. Her yearly gross income from acupuncture at the spa, if she works 50 weeks at that same rate, would be $56,000 -- and yet her true net, after taxes, would be closer to $19,000.

Thousands of people walk through the lobby of the shiny new health and healing center every week, and thousands of them see the sign for acupuncture. And yet, out of all those thousands, 32 of them at most are actually getting acupuncture each week in that facility.  No one would know that by looking, though; in fact, it's likely that everyone thinks that the prominent teaching hospital is endorsing acupuncture, has accepted it as an equal medical treatment -- when in fact, acupuncture is lucky to get billed above bikini waxing. And the only people who are making any real money from acupuncture are the owners of the spa -- who are surely not acupuncturists themselves. Hardly anyone getting acupuncture, acupuncturists not really making a living, people who are not acupuncturists taking what profits there are -- it's a microcosm of the rest of the profession.

You can't separate this microcosm, of course, from the larger reality: if you look at income statistics for the US population, more than 80% of people can't afford acupuncture at conventional rates. That's why acupuncturists aren't seeing enough patients to work full time; "this practice characteristic (that) warrants further study to better understand"? It doesn't warrant further study. All it warrants is doing the damn math. The conventional business model isn't working for the majority of acupuncturists. The acupuncture profession is a house of cards, propped up by the handful of people who are making money from it.  Acupuncture education, and the conventional acupuncture business model, ought to come with a warning label, the way cigarettes do: NOT SUSTAINABLE. May take years of your life and leave you with nothing, except huge student loans. This NCCAOM report should be that warning label. The danger, of course, is that no one will read it. We need to make sure that they do. That everyone does. Pass it on.

This story was posted on March 1 2012 by Lisafer.

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