Saving Patients Money

The other day John Schmeider of Community Acupuncture of St. Louis emailed Lisa and I to ask a few questions around a press release he and his partner, Bryan Wagner, were about to issue. Let me post the press release below and then we'll get into the meat of this blog post:

 St. Louis Gets the Point:Community Acupuncture Doubles Size of Clinic to Meet RisingDemand

 

ST LOUIS, MO:Community Acupuncture of St Louis today announced the expansion of its clinic and its open house celebration on September 25 & 26, 2010.This expansion doubles the clinical square footage of the facility, increasing the clinic’s capacity to serving 15 clients at one time.

“This expansion will enhance each client’s experience of all the benefits acupuncture has to offer, creating a more spacious and serene environment” explains John Schmieder, Co-Owner ofCommunity Acupuncture of St Louis.

Community Acupuncture is the largest clinic providing treatment by qualified, state licensed acupuncturists in the city of St Louis.Each practitioner has a Master’s of Arts in Acupuncture & Oriental Medicine, and has passed national board exams after at least 2,500 hours of training.

Clients come to Community Acupuncture for pain relief of many conditions, and also for reduced stress,better sleep, and a greater sense of well being.The clinic offers a “no questions asked” sliding scale, inwhich clients choose their own treatment cost between $20 and $35 persession.

Community Acupuncture has been serving the city of St Louis for five years.Milestones in the first five years of operations include:  An average growth rate of 50% per yearin number of client treatments, a cumulative total of over 1,700 new clients treated over five years, and total clients’ savings of over $115,000 through use of the clinic’s sliding scale for fees. 

“Community Acupuncture makes holistic healthcare affordable, so that clients can prevent the need for major healthcare interventions later,” said Bryan Wagner, co-owner of Community Acupuncture.

Community Acupuncture of St Louis will hold open houses on both September 25 & 26, 2010, to celebrate this expansion.The events will be held from 11am to 2pm at the clinic, 2006 South 39th Street,St Louis, MO63110.Refreshments and complimentary acupuncture trial treatments will be provided.Contact 314-772-4325 or visit www.acustl.comfor more information.


The part in boldface got my attention the most as I had never thought of how much in dollars and cents WCA might be saving its patients. So I asked John how did he come up with that figure and as it turned out he was thinking of something different than what I was. He compared what the average payment to his clinic versus the top of the sliding scale and multiplied by the number of patients. So I decided to do the same for WCA Cully just for the past 12 months, August 09-July 10. Here's what I got:

Total number of patients for the year at Cully: 22,393

Total Cully income from acupuncture and herbs only for the year: $395,818

(We sell Noodles, T-shirts, a GREAT Pulse diagnosis DVD (and I mean Great!) and other stuff too which I am not including here.)

Average payment per patient at Cully during this year: $17.68 

That's the base. Now the St. Louie guys compared their average price to the top of their sliding scale, $35, so if I do the same for WCA, where the bottom of the sliding scale is $15, the total savings for the patients is:

 $387,937 

 (A quick aside. I am not comparing WCA with the St Louie guys here. They have one of the best damn clinics in the country and if you are anywhere near the Midwest you should go there and learn something about how to run a clinic.)

Now let's go further. I first thought that the St. Louie guys were comparing their prices with their local Boutiquers. They weren't but I will. The average Boutique Acupuncture price in Portland is $75 these days.  If those Boutiquers saw the same 22,393 patients that WCA Cully sees, they would rake in $1,679,475. Wow! Just look at those riches that Boutiquers must be getting!  Heh. Back to those riches in a sec, but first, by coming to WCA those patients saved:

$1,283,657

Double wow!

By now you of course realize there's a problem with my figures in comparing WCA to random Boutiquers. Actually there's a couple of problems but the main one is that most WCA patients would never step inside a Boutique and pay Boutique Acupuncture prices if WCA was wiped clean from the face of the earth. Which makes it hard to compare. So how many of our patients would pay through the nose if they had to? I asked Lisa to think of this and separately I did too and we came up with pretty similar results, though to be clear we don't actually know.  But we do ask our new patients if they have ever had acupuncture before seeing us and Lisa and I figure that about 3 in 10 had. But-and here's the catch-probably just 1-2 in 10 of those who had had acupuncture before had it on anything like a regular or even sporadic basis. The rest were one and done. Maybe they had been to a Boutiquer or maybe they had it at a health fair for free; whatever,  those folks had had it done once and usually a few years before seeing us, just enough to know they weren't scared, not enough to get anything resembling results. 

So doing the math, take the 30% of all new patients who have had acupuncture and multiply that by the 10-20% of those who had acupuncture more than once and you get about 5% of our patients who in the past had been poked by a Boutiquer on a regular or sporadic basis. 

5% of our patient load in the last year is 1120 patients.

Skipping the math (sorry Mr. Kunaniac (9th grade Algebra teacher)-I am NOT showing all my work!) that puts their savings in seeing us at $64,198.40 

Pop quiz time! If you, reader, are looking at these numbers and thinking that if you either raise your rates or just price yourself higher than what CAN clinics do,  you could make a cool million, then run, don't walk, to I don't know, your nearest NFL football training camp and volunteer to be a tackling dummy because You. Ain't. Gonna. See. That. Money. If. You. Raise. Your. Rates.  

Are we clear?

Good.

This story was posted on August 17 2010 by Skip.

Comments

  • August 18 2010 at 2:30 AM
    NancyS writes:

    Excellent.

    I love it when someone (not usually me) goes wild crunching numbers!  

    Thanks, Skip.

    Nancy S.

      0 likes
  • August 18 2010 at 12:52 PM
    ReneeK writes:

    Talking about money

    Skip,

    Thank you for disclosing the money numbers that make up the WCA business. There are so many ways to put up boundaries between people in the same profession, and NOT disclosing numbers holds weight in ways that keep the discussion of class politics hidden. 

    So thanks. Renee

      0 likes
  • August 23 2010 at 1:37 PM
    Guest writes:

    Actually, I know a couple of

    Actually, I know a couple of LAc’s who grossed more than 2 mil last year from their clinics. So it CAN be done (pun intended). That said, how many of the 70% of LAc’s currently making less than $20k a year are going to do what it takes to run a business model that actually does rake it in? Just like when replicating the franchise prototype of WCA, running a McDonalds like a McDonalds will make you a bunch of dough. Trying to run a BA clinic without a franchise protoype that is proven effective will not work. But there is one out there for those with a thick stomach lining and very, very calm shen. So don’t say you won’t make any $ by raising rates- you should say, you won’t make $ by starting a half-assed business.  Judging by the numbers in your recent survey I’d say that also applies to CA’ers. It’s US folks. WE’RE the problem- whichever business model you choose. And the other side of that coin- WE’RE the solution too!

      0 likes
  • August 23 2010 at 10:16 PM
    Skip writes:

    You know you are right!

    You can make money charging high prices! You can:

     

    - Become an ambulance chaser.  I know of a couple of those in my town (Portland). There’s only room for a handful per city but that’s one route.

    - You can become well known in your town from pregnancy/women’s health. Like ambulance chasing, you have to get the right connections so it helps to be established. 

    - You can try some other specialty; again the connections have to be worked and that takes time.

    - You can be one of the original Punks in your city. Punks who started in the 70’s and 80’s got the rep as THE acupuncturist to see because they were one of the few Punks in town and thus the upper middle class and upper class bracket, which is so overcrowded now, was pretty wide open then.

    - Then there are the relatively few recent grads who manage by their interest in entrepreneurship to break into that lucrative bracket. As Lisa’s blog post right above mine shows through the NCCAOM stats, that’s now a tough thing to do and easily most who try this fail. But there are some who do make it every year.  Really you can put the specialists in this group too as most fail in doing that too. 

     

    In thinking this a little more, it’s not that Punks need a Business model that works because at that point people are looking for a gimmick to save them.  What is needed in their education is more of a deeper understanding of who they are as healers, how they fit into the acupuncture profession, and through those two things a clear idea of what is realistic for themselves in plotting out their post-graduate life.  That’s too much to talk about here but I’ll get to it in another post.

     

      0 likes
  • August 24 2010 at 11:42 AM
    emily writes:

    Don’t forget the guru mentality.

    Most of the successful BA acupuncturists I know have patients that *worship* them (which probably also has to do with them being established for a long time).  Not that I want that burden, but I wonder how they do it?

      0 likes
  • August 24 2010 at 1:57 PM
    David Lesseps writes:

    soft eyes

    soft gaze, bemused detatchment, esoteric quips…

    David
    The Hammer from SF

      0 likes

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