I got a few questions after the recent series on Leaving Your Practice. One of the best was:

“How much should I pay the person who looks after my practice?”

Great question. There are several ways you can consider compensating the person who fills your shoes while you’re on sabbatical, vacation, maternity leave, or any other type of time off. For consistency, I’ll use the term “practitioner” to describe the health care professional who owns the practice, and “locum” to describe the person filling in, even thought they’re both likely practitioners.

Fee Split
You’ll find this is the most common type of arrangement, mainly because it keeps the risk down for the practitioner. A percentage fee split is arranged in advance. All the billings generated by the locum during the practitioner’s time away are split according to the agreed ratio.

You’ll find all manner of different ratios, but somewhere in the 40/60 to 60/40 range is relatively commonplace. Fifty-fifty is also common – it’s an easy, fair-sounding number to gravitate toward. However, based on some of the factors mentioned below, more extreme fee splits are quite possible.

Salary/Flat Rate
Got a busy, consistently booked practice? Does it generate excellent revenue? You might consider hiring someone on a straight weekly or monthly salary. The predictability for both parties is nice, but it requires you to have a reasonably busy shop. The downside is that your locum isn’t motivated to drive patient visits and revenue.

Sliding Scale
A sliding scale changes the amount your locum earns based on the number of patients they see and/or the amount of revenue they generate. You might offer a certain fee split up to x visits, for example, then a little more for everything above that. This provides some good incentive for your replacement to try to keep the numbers up.

Exchange
Taking turns covering each other’s practice is a cheap and easy solution for short vacations or emergencies. Each practitioner gets x weeks, and you agree to see each other’s patients for free during that time.

You can do this even with your competition, particularly if you find someone with a practice of similar volume. Because it’s an exchange, both parties are motivated to be respectful of each other’s patients.

Combination
You can combine any of these into a plan of your own design. The only limitations are really the rules of your regulatory body, if you have one. Make sure you check with yours.

In the end, though, you’ll still have to come up with the actual numbers of the offer. So how do you choose the actual amount or the fee split? Here are a few factors to consider when deciding your magic numbers:

1. Ask around. Locums are common in many CAM professions – chiropractic, for example – and there may be established ranges.

2. Practice volume. If your locum will be run off their feet the whole time, you can likely get them to take a smaller percentage. A smart locum will require a larger piece of the pie if the practice is not busy – it’s the only way for them to make it worthwhile. If they know they’ll be booked solid the whole time, they can accept a smaller slice.

3. Other income. Does your practice have other income? A dispensary? Related product sales? Will you be sharing that income with the locum? If so, how much is it likely to be? Remember, you don’t have to share that income – it’s up to you.

4. Risk and responsibility. Does your locum have to manage other professionals? Are they signing off on the work of other CAM pros? For example, a naturopath might have a nurse administer various treatments in her office. The locum would need to sign off on the nurse’s work in her absence, thus adding additional license risk to their job.

5. Skill and experience. Does your locum have special qualifications and years of experience, or are they fresh out of school? Can they manage other staff while you’re away, or do they need to be managed themselves? Are they an acupuncturist who can manage multiple patients concurrently, or are they a one-at-at-time practitioner? Both the fee and the fit will both depend on these details.

6. Bonuses and Incentives. Will you be providing incentives for the person covering your practice to reach certain revenue volumes or patient visits? This can greatly sway a base fee split ratio or flat rate compensation.

Overall, make sure you estimate a realistic revenue flow in your absence, and try to target “profit” as your goal, as opposed to “lose as little as possible”. It never hurts to aim high!

Related Posts
How to Take Time off From Your Practice Part 1
How to Take Time off From Your Practice Part 2