Author Archives: NDBusinessSolutions

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3 Common Mistakes that Violate your Standards of Practice

3 Common Mistakes that Violate your Standards of Practice.

As naturopathic medicine gains more widespread recognition amongst the pubic as a reputable profession, more and more private businesses are looking to employ naturopaths in various capacities. It is important to note that many of these companies may not be familiar with the regulation surrounding naturopathic medicine or simply don’t care because it is the naturopath, not the company that is held responsible if rules are broken. These companies usually offer some type of health related service (a specific supplement or diet, lab tests, weight loss, etc.) and are looking to add a naturopath to their team.

In this blog I want to cover some of the common misconceptions that I have heard from NDs regarding working for private businesses.

The company would not offer me a position/contract that would break the rules.

It is SOLELY the responsibility of the registered naturopath to comply with the standards of practice; conflict of interest rules; and all other regulations regarding the practice of naturopathic medicine. If these rules are broken it is the naturopath – not the business – that is held responsible and the consequences often include a substantial monetary fine and suspension of your licence. Additionally, you will likely be forced to look for a new position and may have difficulty finding one because of the recent finding against you.

Another naturopath works there and told me it is fine.

Once again, it is your responsibility to make sure the position you are offered complies with the regulations of the BDDT-N/CONO (College of Naturopaths of Ontario). Additionally, some of these positions are also listed by naturopaths in job postings and classifieds specifically for naturopaths. These naturopaths that already work for the company may be violating the regulations unknowingly. In the past year, the BDDT-N has taken disciplinary action against naturopaths found to be in violation of the standards of practice.

My professional opinion is that the product or service the company is offering legitimately helps people, therefore no conflict exists.

There are many factors that determine whether a conflict of interest exists, and even the appearance of a conflict could be problematic and result in a disciplinary action:

Any reasonable appearance of conflict of interest, even if a conflict does not actually exist, needs to be addressed (BDDT-N Guidelines on Conflict of Interest, p. 5)

Other factors include compensation, billing arrangements, and independence of practice. While it is possible to structure many of these relationships in ways that comply with the relevant regulations, it is very easy to make a legal or contractual mistake that can result in running afoul of the rules.

 Scrutiny to Increase

Currently, reviews and disciplinary action is only conducted when a complaint is made by a patient. We expect the level of scrutiny to increase substantially as the CONO assumes the role previously filled by the BDDT-N. Additionally, it is likely the CONO may take disciplinary matters more seriously as naturopathy struggles to gain full acceptance from government, the public, and western medicince.  From the latest CONO bulletin (Jan 9th 2015):

Each year, the College will randomly select up to 20% of members who hold a General Certificate of Registration to participate in a Peer and Practice Assessment… The assessment will take approximately 3-4 hours, and includes a review of your practice, selected patient charts, and a discussion about the Standards of Practice, policies and guidelines of the College.

Many of the investigations conducted by the BDDT-N have found practitioners that had been unknowingly violating the standards of practice for many years. Under CONO quality assurance regime, these infractions are much more likely to be detected. Are you 100% sure that your practice or position is in compliance with the Standards and Guidelines for NDs? Do you work for or have an affiliation with another business? Have you been offered a position or affiliation agreement? Contact us for a complimentary assessment.

If there is an issue that requires professional service, our fee may be covered by the business rather than the naturopath.

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Determining the fair value of naturopathy patient files

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Determining the market value of naturopath patient files

Recently, ND Business Solutions has assisted some naturopaths that were either buying or selling patient files (either on their own or as part of a practice). In the industry right now, some common rules of thumb are often used to determine the value of these files. The most common metric I’ve heard from naturopaths is that patient files are worth a certain dollar amount per file, or per file that has been active within a certain time frame. The CAND suggests between $125 to $200 per file active in the last 3 months and about half this for files active within the past year. While this method has the advantage of simplicity, it has some pretty serious (and potentially expensive) drawbacks.

If you take a moment and think about the billings you generate from your list of patients you will quickly realize that some patients provide a greater amount of revenue for your practice than others. Additionally, you also have probably realized from experience that someone who came in for an initial consult a few months ago and hasn’t returned isn’t as likely to continue being a patient as someone who has been in for a visit every couple weeks. Here’s a graph from a random sample of patient files showing the revenue breakdown distributed across the patient base. The area shaded in represents total revenue.

Fair Value of Patient Files

As we can see from the graph the top 20% of these patients generate roughly the same amount of revenue as the other 80%, making their files much more valuable for any potential buyer.

It’s possible to make the argument that this distribution is accounted for in the dollars per patient file rule that is commonly used, and this is true to an extent. An average billing per patient will occur across the profession and if the revenue distribution across a set of patient files is similar to the average, the rule of thumb can provide a fair value.

How do I know if my patient files will be accurately valued by a rule of thumb?

Currently there is no data available revenue distribution or average patient billings for the industry, although it is a project we are working on (help us here!). Since there is no way to accurately determine if the dollars per patient file works for a given situation, it is impossible to have any certainty that the valuation it produces is a fair value.

There are other issues with this method as well:

Different naturopathic practices will have higher or lower billings per patient for many reason (urban vs rural fee gaps, specialization in certain modalities, differences in the experience and reputation of naturopaths, etc.)

When a naturopath sells their patient files, they may decide to keep their best clients who are generally the most loyal and willing to travel to the naturopaths new location or even have consults over skype.

How else can I determine the value of a naturopath’s patient files?

ND Business Solutions values patient files using the adjusted discounted future cash flow method.  The goal of this method is to predict the future cash flow the purchaser will generate from the files purchased, adjusted for an appropriate return on investment that reflects the level risk of the purchase (this is referred to as a discount rate).

This method places more emphasis on revenue and income that a set of patient files will generate, rather than the sheer number of files.

ND Business Solutions has also created a metric called the Retention Score that predicts how many patient files will actually turn into patients.  This method differentiates between top patients that book visits frequently and other less than stellar patients.

naturopath patient retention score

By assigning different values to patients based on their predicted retention, we are able to solve many of the issues discussed with the single amount per file rule discussed above.  Looking at the above graph, the top 20% of the patients would rank much higher as they are more loyal to the clinic and likely have been in for a more recent visit.

ND Business Solutions can professionally appraise your patient files, or patient files that you are looking to purchase.  Please contact us to see how we can assist you.

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