New Research: Chiropractic Students Not Trained for Business Success

Foundation for Vertebral Subluxation
New Research: Chiropractic Students Not Trained for Business Success

Chiropractors Have Highest Health Provider Student Loan Default Rate

According to a survey of chiropractic students at Palmer Chiropractic College in Davenport, new DC's may not be prepared to balance the demands of being a health practitioner, business owner, financial planner, and office manager simultaneously.

The study, published in 2014 and conducted by Julie Lorence, DC, Dana J. Lawrence, DC, Stacie A. Salsbury, PhD, RN, and Christine M. Goertz, DC, PhD and published in the Journal of the Canadian Chiropractic Association reinforces previous reports by graduates of North American Chiropractic programs that they are unprepared for practice and business success.

According to the authors their analysis agrees with other recent surveys of the business training of practicing chiropractors which noted significant gaps in their existing knowledge and perceived need for additional education on topics such as accounting, finance, human resources, managerial decision making and other key components of successful practice management. Similarly, state the authors, a survey of DC students at two chiropractic colleges revealed self-perceived knowledge deficits in personal finance, practice management, and long-term investment strategies.

According to the new survey:

  • Most new DC graduates carry with their diplomas significant student loan debt.
  • More than 60% of DCs are self-employed, which may require additional commercial loans on top of student loan debt to begin practice.
  • New DCs may be underprepared to balance the demands of being a health practitioner, business owner, financial planner, and office manager simultaneously.
  • While no reliable statistics on business failure rates exist for new chiropractic practices, 56% of all new small businesses fail within 4 years.
  • While DC employment is expected to grow 28% through 2020 consumer demand for chiropractic services has shifted making the success of new chiropractic businesses more uncertain than in the past.
  • The number of people seeking chiropractic care may have reached its pinnacle in the 1990s as evidenced by a 2.5% decrease in the chiropractic utilization rate.
  • The average income for DCs has changed accordingly. Chiropractic practice surveys instituted in the 1960s by the American Chiropractic Association (ACA) suggest average incomes of DCs doubled from 1980 to 1989, with net incomes rising from $43,000 to $101,000, but then fell to $86,500 by 1997.
  • In 2010, the Chiropractic Economics annual salary surveys reported the average salary of DC respondents at slightly over $87,000.
  • The Bureau of Labor Statistics reported a median annual wage for DCs at just over $67,000 in 2010.

The authors noted:

"Chiropractic students enter the profession within a context of a competitive healthcare market, possibly saturated consumer demand for chiropractic services, and tightened salary prospects."

The authors stress that chiropractic students: "will require strong business acumen to assure financially successful clinical practices."

Results of the survey showed:

  • 88% of these chiropractic students had between $100,000 to over 175,000 in student loan debt.
  • A majority (77%) of respondents did not plan to start a practice within 1 year of graduation
  • A majority (65%) correctly identified the median range of income for a chiropractor (between $67,000 and $85,000) reported in the literature. 
  • But only 21% identified this salary range as their personal definition of financial success. Most participants defined personal financial success as an income of $90,000 or higher.
  • When asked how many years it would take to achieve this salary level, 49% believed it would take them less than 5 years to reach this salary level, while 84% believed it would take 8 years or less.
  • When asked how they feel after a large financial decision, 74% reported being somewhat optimistic or very optimistic.

Few respondents engaged in medium-range financial habits such as spending less than 20% of take home pay on consumer debt, having money to cover unplanned expenses such as a car repair, or saving a 3-month emergency fund. Long-range financial habits, such as owning diversified investments and retirement accounts, saving for financial goals such as a house or children’s educations, or having a current will were uncommon. Few respondents reported a written budget or short-term financial goals, calculated their net worth, or knew their tax bracket.

According to the authors:

"Our results suggest DC students enrolled at one chiropractic college have unrealistic future salary expectations, high levels of actual and planned loan acquisition, an underestimation of their own risk tolerance, low levels of basic financial knowledge, and poor current money management skills."

The authors refer to a study of non-practicing chiropractors where 70% disagreed with the statement: “salary surveys are realistically aligned with the real world of chiropractic practice”. Chiropractic students who believe they will earn more than the average DC may be heading to a similar disappointment in regards to future income according to the researchers.

Regarding student loans the authors state:

"Chiropractic students may underestimate the financial risk associated with student loans. While 86% of respondents scored as low-to-average risk takers, 74% reported they would owe more than $125,000 in student loans. The median student load debt for professional degree students is $80,000. While the reported student loan debt ($136,000) for medical or osteopathic degree students is similar to the DC students in our study, employment prospects of the respective professions differ. Medical or osteopathic college graduates enter residency programs with defined salary and benefit compensation packages. Post-residency median salaries for medical professionals greatly exceed salaries averaged by DCs. Many DC graduates are not likely to achieve their financial goals given their high level of student load debt paired with low post-graduation financial prospects. Chiropractic students may rationalize student loan debt into a different risk category than other financial liabilities due to the lower interest rates, although this should not be the case. Chiropractors have the highest rate of student loan default of any health profession among borrowers from the federal Health Education Assistance Loan program."

In regards to knowledge of basic financial concepts the authors noted:

"Respondents’ average score on this quiz was 77%, or a grade of 'C'. These scores suggest these DC students do not demonstrate mastery of basic financial concepts. Respondents reported good short-term personal financial behavior, but a high percentage of respondents did not engage in mid- and long-range financial behaviors critical to small business success, such as using a written budget, saving money for small financial emergencies and long-term financial goals, and understanding taxes."

The authors recommend:

"Chiropractic colleges may consider assessing students’ financial literacy and behaviors early in the chiropractic curriculum to raise students’ awareness of their own limited knowledge and practical skills. In addition, colleges might teach foundational financial literacy concepts prior to introducing business management concepts to their students."

The authors conclude their paper by stating: "Chiropractic students may require a broader foundation of basic financial knowledge and the development of personal financial skills to support the practice of chiropractic as a financially viable option."

READ MORE: Chiropractic Colleges Not Preparing Graduates for Business Aspects of Practice 


Foundation for Vertebral Subluxation