Debt—it can be a scary thing. Whether you have unpaid bills, student loans or credit card debt, owing money can cause problems for any chiropractic practice. To find out the best ways for chiropractors to avoid and manage debt, Today’s Chiropractic LifeStyle sat down with Tom Necela, D.C., founder of the consulting firm The Strategic Chiropractor. 

Aside from being a practicing chiropractor, Necela is a speaker and writer on subjects that deal with chiropractic management and business. “We teach chiropractors how to work smarter by mastering the ‘business’ side of Chiropractic through principles of proper billing, coding, documentation, collections and sound business management strategies,” Necela says.

When it comes to debt among chiropractors, Necela says there is typically one common theme: education. “Most chiropractors find themselves in debt upon graduation from chiropractic college,” he says. “The intensity of the chiropractic curriculum demands a full-time schedule, with little room to pay as you go by supporting yourself with outside employment. So, unless a student’s family completely supports and pays for [his or her] education, most chiropractic students incur high levels of debt.”

However, while the intensity of a chiropractic education may make debt a reality for many students, the self-indulgent nature of some chiropractic students is to blame for debt issues. When debt is used to maintain high-level lifestyles during school, chiropractic students are led down a dangerous path toward long-term debt.

Is Debt Bad Or Good?

According to Necela, while being in debt is typically thought of as a negative or bad situation, this isn’t always the case. In his website article “Bad Debt Is Killing Good Chiropractors,” Necela touches on what bad debt really means. He says that bad debt refers to “uncollected accounts receivable. In other words, services you have already performed, but for which payments have not yet materialized.”

In contrast, Necela says that there a few instances when debt can be good for chiropractors. “Borrowing to fulfill an already existing demand may be considered a wise use of debt, especially if the return on your investment will be rapid,” he says. “Debt to learn a new skill or to solve an existing problem may also be acceptable. For example, a certification that would allow a chiropractor to expand business or increase the specialization of his practice may be a smart move. Similarly, if a chiropractor is having collections troubles and had to hire a consultant and spend a few thousand dollars to solve a six-figure problem in the office, this would also provide an excellent return on investment.”

How to Avoid Debt

Ultimately, debt is often unavoidable. So to help chiropractors manage and eliminate current debt, as well as avoid future debt, Necela outlines a few suggestions for chiropractors. Ideas include using online payment tools so patients can easily pay balances, developing and following an official payment policy and having a bonus system for employees who collect patient payments in the office.

Necela also explains that there are two ways to get rid of debt: the hard way and the smart way. “[The hard way] is through good, old-fashioned hard work and discipline by committing yourself to consistently paying down debts,” he says. “The smart way requires intelligence to avoid the careless acquisition of new debts. Debt will disappear the quickest through the application of these ways.”

When it comes to recent chiropractic graduates, student loans and pressures from a new practice can be daunting. To help new chiropractors avoid future debt, Necela suggests that borrowing money should be done “on demand,” not “in anticipation.” “Too many new chiropractors borrow because they feel they need a certain piece of equipment or to try a new marketing venture to bring in patients,” he says. “This borrowing is ‘in anticipation’ and generally creates a great deal of stress and risk because you are going in to debt in hopes that your future plans work out. 

“On the other hand, if you need to expand your office or purchase another adjusting table to accommodate the demand, this is much smarter. Since the demand is already there, you are taking less risk that you will purchase something only for it to sit and gather dust.”

What About the Future?

With the recent economic crunch and the possibility of another recession, managing debt is a struggle for many Americans, including chiropractors. Even through the dismal economic climate, Necela says Chiropractic remains a successful profession. “Chiropractic still affords an excellent opportunity to make a great living, particularly in comparison to many other health professions,” he says. “Chiropractic practices are neither completely dependent on the insurance system to create a profitable practice, nor are they forced to do so only through a cash practice. However, the extremes of both ends—heavily insurance-based or a cash-only practice—are getting more challenging due to changes in the marketplace.”

While chiropractors have seen some relative stability, the chiropractic profession has changed greatly over the years due to the economy, which has resulted in chiropractors adapting new business principals to ride the seemingly turbulent economic wave. “Chiropractic has moved from a primarily cash- and non-insurance-based profession, to being embraced, perhaps even lavishly, by third-party payers and has now settled down somewhere in between,” says Necela. “Older chiropractors are now finding that what worked a decade or two ago in terms of reimbursement strategies is no longer effective. Today’s chiropractors must be updated in the areas of proper billing, coding, documentation, collections and even business strategies to succeed.”