How to Boost Physical Therapy Clinic Revenue and Increase Margins
Physical therapy clinic owners nationwide are feeling the financial pressure of declining reimbursements and historic inflation. As you plan for 2023, you’re likely focused on how to grow physical therapy clinic revenue and cut costs. This article will share 7 ways to increase physical therapy clinic revenue in 2023. Incorporate these strategies into your 2023 practice plan to make more money in your physical therapy clinic.
Recently, on the Grow Your Practice Podcast, we talked with owners about 2023 financial planning. The key takeaways are included in this article. If you’d like to watch the full episode, press ‘play’ on the video below.
Wondering How to Increase Physical Therapy Clinic Revenue? Start by Designing Your Annual Physical Therapy Practice Plan
Like any business, the key to a thriving private practice requires a well-thought-out plan with measurable and achievable goals and an all-in mentality from every team member regardless of their role.
For physical therapy clinics, your Practice Plan should include:
- Your biggest long-term and annual goals
- Vital practice metrics (e.g. new patients, visits, revenue, attendance rate) this year and projection for the year ahead
- Financial assessment from this year (revenue and costs) and plan for next year
- Marketing assessment from this year (what worked and what didn’t) and plan for next year, including key metrics to track
- Personnel assessment from this year and plan for next year
A private practice growth plan ensures predictable performance and consistent growth not only next year but over the long term.
Should You Increase Revenue or Cut Costs?
The threats of declining reimbursements, a competitive hiring market, and rising costs for space, personnel and equipment are reducing physical therapists’ already slim margins to dangerous levels. There are two main ways to combat these challenges:
- Increase top-line revenue
- Reduce costs
Most of your competition will approach this problem by seeking to lower costs. But you actually have less control over costs than over revenue, and cutting costs usuallys lowers revenue, particularly when it comes to marketing. There is much more upside and growth opportunity available to those practice owners who focus on increasing top-line revenue rather than decreasing costs. Therefore, the suggestions we make in this article focus on increasing top-line revenue.
7 Ways to Increase Physical Therapy Clinic Revenue
In this section, we’ll explore 7 ways to increase physical therapy clinic revenue without a significant increase in costs.
1. Decide on Your BHAG (Big Hairy Audacious Goal)
Before you develop your practice growth plan for the year, look ahead and think about what you envision over the next 5, 10, 15 years, and beyond. If you had a magic wand and could make anything possible for your practice, would would it be?
This is how you can determine your Big Hairy Audacious Goal (BHAG), an idea popularized by the book “Built to Last,” by Jim Collins and Jerry I. Porras.
Your BHAG is something that is long-term and achievable but at the same time, makes you feel a bit uneasy that you’re even considering it in the first place.
It should be inspirational, motivational, and something that is frequently shared with your team.
Here are some examples a BHAG for a physical therapy clinic:
- Become the number one physical therapy provider in your region
- Help 20% more people in your community YOY
- Open a new clinic every 3 years
- Become the most popular physical therapy clinic to work at in your area
Note that your BHAG should not be a revenue goal. It’s important to have revenue goals, but your BHAG should be something motivational, inspational and compelling that makes your entire team proud to work at your clinic.
Your annual goals should be designed to support your your BHAG.
For example, if you have a BHAG that has to do with increasing your volume of patient visits, you’ll need to develop your annual goals to ensure that you have a plan in place for driving more visits, have enough space to accommodate more visits, and enough clinicians to serve additional patients. Depending on your situation, you may decide to open additional locations or hire more staff.
2. Break Down Goals By Quarter, Month, and Week
One of the biggest mistakes private practice owners often make is developing an annual plan and then shelving it for the year. Without a concerted effort however, you simply won’t be able to grow your practice.
Therefore, you must be specific and set goals for each quarter, month, and week. This strategy allows you to understand what’s working and what needs to change so ultimately, you can meet your annual goals.
3. Add Cash-Pay Services
Think about ways that you can provide more value to your patients and generate more revenue by adding additional services to physical therapy. Many physical therapy practices are supporting their revenue by adding cash-based services such as therapeutic lasers, massage therapy, or dry needling. Some practice owners are even adding gym or fitness facilities on to their practice and charging for membership or fitness classes such as pilates or yoga.
4. Be Transparent With Your Staff
Keeping the lines of communication open, and sharing metrics, high-level finances, goals, and achievements with your staff gives them ownership, builds morale, and helps to retain and attract staff. .
For starters, your staff should have full transparency into your expenses, marketing budget, reserve, and profit. With this data, they’re able to get an accurate and complete financial picture of the business. Staff will want to know that the practice is stable. When finances are tight, it gives them a better understanding of why their salary is what it is.
As long as your staff is behind the mission of your practice, your BHAG, and the culture of your practice, they are more likely to stay on for a lower salary than what they could potentially get elsehwere.
During weekly meetings, start with wins and recognize staff members who have gone above and beyond to help your patients or solve a problem.
Then, each staff member should share their accomplishments for the week, such as the number of visits and attendance rate, as well as what they’ll work on the following week.
This not only builds accountability, but it helps staff recognize that they’re working as a team to achieve a financially stable environment, grow the practice, and ultimately, help more people and leave a bigger impact on the community.
5. Create Monthly Recurring Revenue
Earlier this year, we spoke with Jeff Langmaid on the Grow Your Practice Podcast about how to grow practice revenue. One of his main suggestions for diversifying your income is to create recurring revenue that meets your minimum viable monthly expenses each month. “If you can have recurring revenue that meets your expenses, working in your practice becomes a lot more fun and way less stressful,” Jeff said.
He offered 3 models for creating monthly recurring revenue:
Provide ongoing services
This can look like a monthly movement assessment, a monthly check-in, or any type of maintenance care that makes sense for you. After your patients complete their plan of care, have them check in with you once a month. A majority of time this is warranted and is not overtreating. A monthly check-in is a great way to increase patient visits and create monthly recurring revenue.
Open an e-commerce store
Sell items that supplement your services. Supplements are a great example of what you can sell in an online store. We know that between 50 to 70% of people going to conservative care providers take supplements each and every day, whether its a multivitamin, Vitamin D, Omegas, etc. Other options could include exercise props, therapeutic heating/cooling devices, ergonomic products for sleep or work as examples. The key to creating auto-recurring revenue is to have an online store that drop-ships direct to your patient. This way, you don’t need to have the inventory and utilize space in your clinic.
Offer online coaching or digital courses
This could look like anything from telehealth all the way up to lifestyle coaching. For many providers this may feel like very new territory, but there’s an avenue there to create monthly revenue by providing value on an ongoing basis. This can be leveraged at scale online. You can create courses that can be sold online without requiring significant amounts of your time on an ongoing basis.
6. Explore Remote Therapeutic Monitoring
Most updates in the 2023 Medicare ruling further squeeze revenue for PTs.
But there is one area that actually presents an opportunity to GROW revenue: Remote Therapeutic Monitoring (RTM).
Remote Therapeutic Monitoring is a way to contact, communicate, and monitor patients remotely outside of the clinic setting. RTM solutions may leverage certain medical devices, apps, or online tools to monitor and communicate with patients. RTM is often used for follow-up conducted remotely via phone call or two-way audio-visual communication.
Many therapists are recognizing the opportunity to augment their services with Remote Therapeutic Monitoring to increase reimbursements.
7. Build Patient Demand to Create Consistent Patient Visits Year-Round
Private practice owners are often unsure about how to get started with marketing and which tools and platformsthey should invest in.
The best (and most affordable) place to start is with your patient list and email marketing.
Email can help make your practice more valuable, and increase reactivations and build patient demand for your services.
Once your email marketing is in place, you’ll want to think about online advertising. However, it’s important to recognize that not all channels are created equal and what works for one practice may not work for another.
Talk with your patients first and find out what types of media they’re consuming to figure out which channels would be the most effective.
Breakthrough offers a complete, all-in-one patient demand platform that provides a simple, repeatable way to consistently grow your practice by attracting leads, converting leads into patients, and measuring success.
Our team of marketing experts has years of experience working with hundreds of private physical therapy practices and delivering guaranteed revenue growth.