QC Kinetix Franchise: When Orthobiologics becomes McDonalds
In this blog:
- Dr. Centeno reviews a new business plan called a QC Kinetix franchise
- Advertising materials and information are reviewed
- Conclusions on the viability of this franchise opportunity are discussed
Are patients a commodity to be bought and sold or is what we do as doctors “sacred”? In my opinion, a new business plan in orthobiologics called a QC Kinetix franchise is turning patients into hamburgers and turning healthcare clinics into McDonald’s. Let’s explore this phenomenon this morning.
Medicine is “Sacred”
First, let’s take a step back from a QC Kinetix franchise and contemplate what we do as doctors. If you look at the various professions each is in some ways similar but also very different. For example, they all require specific training, certification of competency, and a code of ethics. However, of these, medicine is the one that deals with life and death. Because of that, medicine is often considered sacred. Take the Hippocratic Oath or the Oath of Maimonides, both associated with our profession. You find statements like these:
“first do no harm”
“Now if I carry out this oath, and break it not, may I gain for ever reputation among all men for my life and for my art; but if I break it and forswear myself, may the opposite befall me.”
“May I never see in the patient anything but a fellow creature in pain.”
“Oh, God, Thou has appointed me to watch over the life and death of Thy creatures; here am I ready for my vocation and now I turn unto my calling.”
Note the words “oath” and “calling”. No other profession is associated with words that dance on the edge of religion.
It’s because of this that good doctors realize that what they do is different than those in business. While good doctors may understand business and spreadsheets, they also know that there are lines they can’t cross because of their oath. For example, substituting lesser trained providers in situations that require more training to optimally help patients produces great spreadsheets and mints money, but is a disservice to patients. Now that we have that orientation, let’s look at a QC Kinetix franchise.
Meet the QC Kinetix Franchise -Medicine as a McDonald’s
So what’s the opposite of sacred? In my opinion, that’s turning medicine into a franchise opportunity. In business, the modern franchise is a vehicle by which a service can be replicated and exploited for reliable income. IMHO that’s what a new clinic chain is doing in orthobiologics calling itself a QC Kinetix franchise. Let’s dive in.
What is QC Kinetix?
QC Kinetix is a clinic chain I’ve blogged on before. This company offers simple orthobiologic injection care and was founded by a physician’s assistant (i.e. not a doctor). In this QC Kinetix franchise business model, you get labor as cheaply as feasible and train that labor in specific tasks to keep overhead low. You then replicate that model of simple care delivery and spin it out all over the country. However, IMHO, what’s different than a fast-food chain like McDonald’s is that you don’t offer cheap prices for your orthobiologic hamburgers, you charge top dollar by hiring sophisticated salespeople to upsell.
A QC Kinetix Franchise Opportunity Listing Online
While you think I may be hitting too hard on the QC Kinetix franchise opportunity, let’s use the company’s own words from an online ad (above) and notes taken by an interested franchisee to define how this business model works:
“Absentee Ownership Models Available
Imagine Owning your own Regenerative Non-Surgical Medical Clinic without prior medical experience.
Business is so good these clinics can make money being open just one day per week on Saturday’s or any other day of the week.
Keep your day job…….”
So here, we find out that in a QC Kinetix franchise, anyone can open a clinic, even a guy who normally runs a McDonald’s or Pizza Hut franchise. Note the focus on the business opportunity.
“90 Clinics currently Open and 300 Clinics in Development.
Low investment, you are “All in” for $255,000 – $300,000
Here again, the focus is on this being a financial investment.
“We will show you how to hire a part-time Medical Director to oversee the Medical Staff.
You are the CEO of the Clinic
We are a concierge medicine that offers tailored treatment plans for things like arthritis or injury.”
So all you need is a “part-time” medical director. Why part-time? Again, like McDonald’s, in a QC Kinetix franchise, to keep profits high we have to keep overhead low. There’s another reason you only need an actual doctor “part-time”:
“Please note: You will not be involved in creating or administrating any medical procedures, you hire, and we train your two-member medical team.”
Who is on this two-member medical team? First is a physician “medical director”. From what I have observed, this position is mostly a figurehead who gets paid a few thousand dollars a month for the use of a medical license. Second is the mid-level (i.e. not a doctor) who is the cheap labor in this McDonald’s model who will deliver most of the care.
Limited Competition Regenerative Medicine is a relatively new concept and is mostly practiced by physicians.”
This is an interesting statement. IMHO “mostly practiced by physicians” again means that the QC Kinetix franchise model is to substitute lower-cost non-physician labor in place of a more expensive, better-trained, and more educated physician specialists.
Notes from a Franchisee who Attended a Seminar
A colleague attended a QC Kinetix franchise meeting for prospective buyers and took these notes (I’m showing the most interesting bits here):
- “Care credit and green sky financing
- $8500/ visit – multi joint injection. 50+% use financing – $125/month
- 4000-10000+ treatment paths.
- Center is open 1 day week. 80% less labor, high volume day, busy day”
So 50% of the patients are using financing to pay for the treatment. That’s because the average cost is $8,500 a visit. That’s about double the average cost for our patients. Why so high for QC Kinetix when the care is often delivered by lesser trained non-physician providers and the company publishes no research nor outcome data? My last investigation answers that question. A QC Kinetix patient relayed that instead of getting turned over to a scheduler like you would in a medical clinic who schedules exactly what the doctor orders, the mid-level provider fills out a sheet with the treatment direction, and then you’re turned over to an aggressive professional salesperson who tries to “upsell” you and get you to “buy today”.
- Biggest expense. 60k per month in Philly.
- Have to use their marketing management companies to control content. Lawyer reviews content
- Channels – local radio; classic, rock, sports; country; corp website; youtube; linkedin;
- 85% radio, 5% television (emmitt smith our face), 10% digital”
We have heard that a QC Kinetix franchisee is required to spend tens of thousands of dollars a month on marketing, so this is not surprising that the marketing outlay in Philly is 60K a month. Like McDonald’s, you’re bombarding a market with radio advertising.
When Orthobiologics Becomes McDonald’s
What’s interesting here is that I have heard a literal uproar from many physician specialists who offer interventional orthobiologics. They all see these QC Kinetix franchises come into their market, start bombarding the airwaves with ads, and then their own research shows that this is a sales operation employing low-cost labor to deliver simple medical care that’s often way more expensive than the more sophisticated work they offer.
If the outfit was offering cheaper care, there would be perhaps a community benefit by allowing patients to access these therapies for a lower cost to offset the lower value of being treated by a non-physician provider. However, IMHO, the trend here is the opposite-lower quality for more money.Join us for a free Regenexx webinar.
What Can Physician Specialists Do?
There are two schools of thought here. One is that this franchise like Stem Cell Institute of America (SCIA) before it, will burn bright for a few years and then flame out. The other is that physicians need to be involved in protecting patients from groups like this one. Let’s dig in.
On the flame out theory, that has weight. Remember I blogged on a similar outfit called SCIA that was buying up newspaper and digital ads carpet-bombing whole markets with marketing. That outfit also seemed to be expanding at a rapid rate. However, it died as quickly as it burned bright. Why?
SCIA was very similar to QC Kinetix. It also used cheap mid-level labor and offered many of the same treatments. It even had an advantage QC Kinetix doesn’t enjoy, these turn-key regen med practices were bolted onto existing successful chiropractic clinics that already had a significant patient base. What seems to have destroyed the company is the marketing spending was not sustainable and the results were not justified by the cost.
On paper, huge marketing spends look good. However, in the end, this added expense has to be offset by high consumer prices for your treatments. For example, many college-educated consumers figure out that they’re getting less sophisticated care for top dollar and go elsewhere. In addition, by overselling and underdelivering, SCIA dealt with a myriad of consumer complaints when the expensive magic that was promised was never delivered. This caused the FTC to take down the company.
On the “protecting patients” side, there is merit there as well. Less educated patients often don’t know the difference between a legitimate medical practice that is a part of the local medical community and a franchise focused on profit. Hence, there is a legitimate reason for local physicians to alert the medical board, attorney general, and others that this is happening. That often begins with dissatisfied patients. It’s one thing for a physician to offer a medical procedure that is the best fit for the patient that fails to help, but quite another to be offered a medical care package that is sold by an aggressive professional salesperson to optimize profit. In addition, when financing the procedure is used in 50% of the patients, some dissatisfied patients are left paying for procedures for years that were ineffective. This has a way of coming back to bite you.
The upshot? After diving deep into QC Kinetix, I can’t say that I’m surprised. When I sat down this morning to write this blog entry, I asked myself should medicine stay sacred or should it be turned into McDonald’s? My only answer comes from the thousands of pain patients I’ve talked to through the decades. They desperately want help and want the best-qualified person they can get to advise them on what to do based on their medical needs and not the limit on their Visa card. Hence, my personal opinion is that QC Kinetix will eventually go the way of SCIA. However, only time will tell.