Percentage Split

This is Dave Kats, from Therapist Consultants and I have a tip for you.

You know, one of the most frequent questions we get in our consultancy is, “I’m thinking about hiring an associate," or, "I’m thinking about becoming an associate, what kind of split, what kind of percentage split is logical for a group practice?” No matter what I say there will be people that disagree with these percentages.

But I will tell you that it is very difficult to have a group practice and to provide a receptionist and to file insurance and do the other things you need to do for the office and make a profit if you don’t get at least 40% of the money that the therapist brings in. A normal split would be 60-40, where the therapist that does the counseling gets 60% and the office gets 40%. I will tell you that a lot of places even go 50-50.

I will also tell you that if you go 25-75 that you're not going to make any money and you will probably lose money at a group practice, especially, if you have a receptionist and if you file and accept insurance. Now, there’s one exception to this split and that is if you're a cash practice, maybe you can give a little bit better split. But remember if you are a cash practice, your dollar visit average is probably up around $120 and the 60-40 split will still give them a wonderful wage.

A rule of thumb is 60-40, I would never ever go less than 70-30 and I would really hesitate to go 70-30 and, most likely, I would stay at 50-50 as long as you are providing the new patients, you're providing the receptionist and you are filing the insurance for them.

Anyway, rule of thumb, 60-40, anywhere a little on the either side of that is okay, but beyond that you're going to have an unworkable situation as a business. Make sure that you have a workable situation because that’s the only way your practice is going to grow.

This is Dave Kats, thanks for listening.