Array ( [id] => 27679 ) Colleges Can Make $3 Million by Paying Interns and Giving Clinicians A Bonus
Acupuncture Today – September, 2000, Vol. 01, Issue 09

Colleges Can Make $3 Million by Paying Interns and Giving Clinicians A Bonus

By Kevin McNamee

Yes, it's possible for an intern to make over $38,000 for treatment rendered in the internship that may be used for starting a practice. It's also possible for clinicians to earn a bonus of $76,000 above the current salary.

A college clinic can generate over $3 million for the college, which can be used to expand academic and clinical offerings, increase faculty salaries, fund research, help purchase and construct more buildings, and become less tuition-dependent. How can this happen? Follow the numbers and see.*

There are three phases of development (and three key players) to this program. The key players are the students/interns; the clinicians; and finally, the college. Each group must be on board to accomplish these goals, and each must understand business and teaching in a clinical environment.

The Intern

The three phases of development for the intern are the preclinical phase, observation phase and internship phase.

Preclinical Phase

During the preclinical phase, the intern's goal is to learn how a business is run. It is important that this be done prior to beginning in the clinic. This goal can be accomplished in an office management class in which the student learns low- and no-cost marketing methods similar to those used by successful doctors. It does not take thousands of dollars to build a financially thriving practice. Students need to understand and develop a marketing plan and deliver a consistent marketing message to be able to practice these time-tested methods.

Low- and no-cost marketing is based on regular networking in the community and educating people of the healing skills the intern has to offer. It requires becoming involved in community events and building a human bond with others before the business bond is created. Interns need to learn the communication skills to tell people of the wonderful health opportunities offered and to interest them in coming to the clinic for an appointment. During this phase, the student's marketing instruments are developed, such as their biography; description of services; business cards; a press packet with press releases; articles for publication; personalized brochures; etc. These can all be used in the internship and later in practice. The office management class creates a marketing expert who not only understands how to tactfully educate the public of the healing benefits of Oriental medicine, but how to make appointments. The course must be completed before entering the next phase: the clinic observation.

Clinic Observation

The clinic observation method currently used in most colleges is to have new interns follow a senior intern around for a four-to-six week period. The senior intern may have only six or eight months more experience than the intern and may have never started, operated or run a thriving practice, yet the colleges continue using this blind-leading-the-blind system. A more successful model is to identify key community doctors who are willing to have observing interns follow them during the day.

For example, the college may have 500 alumni in the area surrounding the clinic. One hundred might meet the college criteria to be a key community doctor. Such criteria might consist of a minimum patient volume; certain types of conditions treated; ethical practice patterns; good clinical skills; and of course, a willingness to be observed by students. Interns could then be rotated through multiple offices, allowing them to learn from a variety of doctors and patient conditions.

The observation phase could take six weeks, with students visiting three doctors a week for four-hour time slots. This means a total of 18 community doctors would be observed in a 72-hour period, as well as over 150 different patients in various stages of care. This would give the observing intern a wealth of information: seeing how a successful practice is run; patient flow; communicating with patients; how an examination is done in the practice setting; clinical pearls; and interesting cases. This becomes a tremendous database for observing interns to bring back to the clinic.


When the observation phase is completed, the internship begins. During this phase, the intern is encouraged to implement the marketing plan that he or she learned and practiced in the office management class. After completing the observation phase, the intern now knows that many of these same marketing skills were used by community doctors to develop a successful practice. By this stage, the intern will be making money for him or herself instead of the college by the number of patients seen in the clinic.

Can the intern make $38,000 by graduation? To take a line from the movie Jerry Maguire, "Show me the money!"

This is how it works. First, the college needs to be protected so it does not go bankrupt on this program. To ensure this, the college's cost per intern (CPI) needs to be computed. Once the intern generates income for the clinic equal to the CPI, the intern and college are in the incentive plan. For example, it might cost $400,000 for the college to operate the clinic each year. This includes space rent; staff/clinician salaries; medical/office supplies; insurance; marketing; etc. If the clinic has 100 interns per year working there, the cost per intern is $4,000. This becomes the target for the intern to reach before a profit-share begins.

When the intern reaches this figure, the college will split profits with the intern at, for example, 50% of the income generated through the intern's exams, treatments, herb sales, etc. For example, if the intern puts in 40 hours per week at the clinic for 50 weeks a year, treats one patient every hour, and the fee for each treatment is $40, the intern will have produced $80,000 (one treatment/hour x $40 per treatment x 40 hours/week x 50 weeks/year = $80,000). Subtract the $4,000 cost per intern (CPI) to protect the college, and the intern will have generated $76,000. At a 50% split to the intern, this translates into a $38,000 check upon graduation.

This calculation assumes that the treatment fee is $40 per visit, and that the college clinic charges separately for the initial history and exam. Unfortunately, many colleges feel that low fees attract patients. They are wrong. Low fees keep people away from the clinic because they wonder, how good can a treatment be if it only costs $20?

What attracts patients to the clinic are services and benefits of care. In this case, the interns are selling themselves and Oriental medicine. The interns know that there is a financial reward for the care given, thus they will be sure the patient benefits from the treatment and therefore recognizes the visit was worth $40. In fact, based on good benefits and services, the patient will refer others to the clinic. What a concept! Now the college has 100 marketing experts functioning at the college clinic as if it were their own practice. Based on the incentive plan, the intern's reward for their hard work and diligence will be financial.

Interns will be eager to see a new walk-in patient instead of reading a good book or playing cards. They will be in the clinic early Saturday morning to see emergency patients instead of going to the beach. It could also encourage interns to market the benefits of Oriental medicine even when they are not at the clinic. These choices are commonly encountered in practice, and the wise intern's behavior begins to reflect that of a successful doctor. Not only does the intern get a head start on their own business, the college clinic reaps the rewards of having a more confident, motivated staff.

The Clinician

The second factor to success is the college clinic's clinicians who oversee the interns. They should be very bright, personable and clinically astute, and they should understand how to market and operate a successful practice. They should also be able to handle many tasks and interact with a variety of personalities. These people must also benefit from the incentive plan, otherwise there is no reward for their participation.

Of the money the intern generates for the clinic, let's say the clinician would receive 10% over the $4,000 threshold. At $76,000 x 10% x 10 interns per clinician, this would equal a $76,000 bonus each year. If the clinician has a base salary of $30,000 per year, this translates into a $106,000 annual income with salary and incentives. This income is competitive to those made in private practice, which could attract quality clinicians to the college. Now the college will have excellent talent begging for the opportunity to be a clinician.

This incentive program will also force unproductive clinicians to either increase their revenues or move on, because interns will not want to be assigned to them, and the patient volume will speak for itself. If a clinician does not achieve the benefits desired by the patient and thus does not get more referrals, patient volume and dollar totals will be down.

This program encourages and rewards excellence. The remaining 40% of the income generated by the intern is for the college to do with as it sees fit. At $76,000 per intern per year x 40% x 100 interns per year, this would equal $3,040,000.

What can the college do with $3 million? One option is to invest in an endowment fund to support its programs. If $1,000,000 were invested each year for 10 years, with the contribution increased for inflation 4% each year and at a reasonable rate of return of 12%, the college would have $23,425,897 by decade's end. This $23,425,897 would generate $2,811,107 in interest annually.

With the remaining $2 million, the college might establish specialty clinics to attract specific conditions, thus allowing for specialty residency programs. The money may fund research at the college using the clinic and specialty clinics; pay the faculty a wage that attracts and keeps talent at the college; or improve and build facilities, expand programs, etc. The options are endless.

The incentive plan described above gives interns, clinicians and the college a chance to produce quality doctors of Oriental medicine who have excellent training and a financial opportunity to open a practice. The college can keep and attract quality clinicians and faculty for the growth and maintenance of the program while becoming less tuition-dependent.

Each college will need to address internal issues such as accounting; bookkeeping; training of clinicians and faculty; modifying current marketing courses; addressing legal issues; and so forth. This program can become a success if the college, clinicians and students are inspired by such incentives.

* A videotape of this plan has been sent to the president, dean and student body president of every Oriental medical college in the United States. If you wish to obtain a copy, please check with your local college or contact me at the number below for a free copy while supplies last. There is a duplication and shipping fee for the video. The video may be copied in its entirety and redistributed at no cost. It must not be altered or resold by anyone other than the author.

Click here for more information about Kevin McNamee.


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