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Why Are My Chiropractic Visits Up but Profit Down?
Four common reasons a chiropractic practice sees more visits and earns less.
More visits should mean more chiropractic profit, but four common causes can push profit down while the schedule fills.
When a chiropractic practice sees more visits and profit falls, the cause is usually one of four things. Package discounts may be lowering revenue per visit. The visit mix may have moved toward insurance visits that collect less. Associate or space costs may have grown ahead of volume. Care plans may also be booked as income when sold, so profit follows sales instead of visits.
Each cause has a different fix, so the first job is to find the one that applies. More marketing will not help if each added visit earns less than it costs.
The four usual causes
- Package discounts lowered revenue per visitA care package sells many visits at a lower price per visit. When more patients buy packages, visits rise faster than revenue. Revenue per visit after package discounts shows what each visit is really worth.
- More visits are insurance visits that collect lessInsurance visits collect only part of what is billed. Cash-pay visits avoid that gap. So a shift toward insurance can add visits without adding much collected revenue. Track revenue per visit by channel to see it.
- Costs grew ahead of volumeAn associate, a larger space or more front desk staff adds fixed cost right away. Volume builds more slowly. Until it catches up, cost per visit rises. Fixed overhead divided by visits delivered shows whether the schedule can carry the new cost.
- Care plans are booked as income when soldWhen plans are booked as income on sale, a strong selling month looks like a strong profit month. The months that follow carry the visits but none of the revenue. Profit then falls in the months you are busiest. Booking plans as visits are delivered matches revenue to the work.
How do I tell which cause it is?
A standard P&L cannot separate these four causes. On that statement, visits are up, costs are up and profit is down. Nothing on it shows whether the problem is pricing, channel mix, fixed cost or timing.
Four reports can separate them. You need revenue per visit after package discounts, collections by channel, cost per visit, and a balance sheet that carries unused care plan visits as deferred revenue. Our chiropractic practice accounting books care packages as visits are delivered and keeps cash-pay and insurance revenue apart.
Frequently asked
Why are my chiropractic visits up but profit down?
It is usually one of four causes. Package discounts may be lowering revenue per visit, more visits may be insurance visits that collect less, costs may have grown ahead of volume, or care plans may be booked as income when sold. Revenue per visit by channel and cost per visit will show which one applies.
Do care packages make a chiropractic practice more profitable?
Not on their own. A package brings cash in early, but the visits still have to be delivered. Profit depends on what each visit earns after the discount and what it costs to deliver.