A clear physical therapy business plan is key to achieving your practice goals in 2024.

Reach Your Practice Goals with a Clear Plan

With another year of reimbursement cuts upon us and practice costs rising, you may be wondering, “What changes do I need to make to my physical therapy business plan to allow me to serve more patients, hire the right staff, and secure a prosperous future?”

It’s possible. Read on to discover:

Why Create a Physical Therapy Business Plan?

Since 2008, the Medicare conversion factor, which helps determine how much you get paid by Medicare and guides rates for many other payers, has dropped by 14%. At the same time, inflation increased by 43%. 

It’s no wonder that countless practices are fighting just to make enough money to pay their employees. 

But with a clear practice plan, you can increase your profitability so you never again have to worry about making payroll or providing for your family’s future. 

I believe that if you can’t make a clear plan for your practice, you’re never going to be able to make it happen in real life.

The alternative is to rely on what the insurance providers or marketplace is going to tell you you’re worth. And I can promise you that’s not going to turn out well. 

Whether your profitability is stagnating or declining…or even if you’re doing well today but want to stay ahead of the trend…

You need to update your physical therapy business plan every year. 

Many owners don’t look at their finances closely. Others only look back at past financials.

Very few will look forward to the future and create a plan for profitability. As a result, they’re missing out on thousands of dollars in potential profit. 

To help, I’ve created a tool to help guide you through the process of creating a physical therapy business plan: The 2024 Profit Planner. You can download the tool and get trained on how to create your custom physical therapy business plan. 

The Profit Planner is a physical therapy business plan template. It empowers practice owners to take control of their practice finances and achieve their business goals.

What’s Possible with a Physical Therapy Business Plan

Imagine being able to:

  • Gain more market share as your competitors shrink…
  • Grow your practice while scaling back on the time you spend treating…
  • Provide quality care to more people in your community…
  • Hire more therapists and staff to meet demand…
  • Invest back into your team via better benefits and incentives…

This is what’s possible with a physical therapy business plan. My practice is proof.

For years, growth at my practice, Madden & Gilbert Physical Therapy, was stagnant. Then in 2017, we created a physical therapy business plan to hit the growth goals we wanted.

The results speak for themselves.

Madden Physical Therapy grew consistently year-after-year after creating a physical therapy business plan.

Barring a dip due to the pandemic, we achieved consistent 20% year-over-year growth, opened 6 additional locations, hired 50+ clinicians, and 5X’d practice value.

And that’s all in spite of reimbursement cuts, rising costs, and a labor shortage.

I’ve taught hundreds of practice owners how to build a physical therapy business plan to help them increase profits, grow, and improve their practice value. 

Recently, one practice owner I worked with, Verelle, told me that this process saved his clinic. 

He was struggling with a major hiring decision. Using our Profit Planner, he realized he would have lost thousands of dollars each month if he had moved forward with this particular candidate. 

There is power in having a physical therapy business plan that clearly lays out your finances and forecasts profit. 

4 Things a Successful Plan Should Do 

1. Forecast Your Profitability

To be able to hire more easily, offer your staff competitive wages, and continue providing high-quality care, you need a clear picture of your profitability today and in the future.

That involves estimating your revenue and your expenses.

Every business decision you’re considering for 2024 will impact your revenue and your costs. You need to be able to map that out clearly and see how each decision will impact your profitability.

If you can’t make it work on paper, there’s no way it will work in real life. 

There are also external market forces that could impact your revenue and costs, such as the 3.34% Medicare cut taking effect on January 1st, which could impact your revenue. 

A physical therapy business plan should map out your revenue and costs so you can get an accurate forecast of your profitability in the year ahead.

2. Increase Profits

With a physical therapy business plan in hand, you’ll be able to make strategic decisions about where you should focus your time and effort to increase profits.

It should empower you to ask yourself better business questions, such as:

“What marketing do I need to do to fill my schedules and fully utilize my treatment space?”

“How can I increase lifetime patient value?” 

“What do I need to do to improve my payer mix?”

“Can I reduce financial losses from coding issues?”

You can test different assumptions and figure out where you should focus your time and efforts. 

Your business plan will allow you to focus on the strategies that are going to have the greatest impact on your bottom line. 

3. Align Your Team Around a Shared Vision

A physical therapy business plan is not something for you to keep hidden away in a folder on your desktop. 

It should paint a clear vision for your practice. 

You’ll be able to share this will your team and refer back to it throughout the year. 

Having a vision for the future that you’re all working towards will help foster a strong team culture. 

A team that’s aligned around a shared vision for your practice is more motivated, engaged, and committed to your practice. 

4. Take Control of Your Destiny

Have you felt underpaid, overworked, and like you’re not in control? When I talk to practice owners, I can tell that many of them ultimately feel like they’re at the mercy of some exertanal force, such as insurance companies, the economy, the government, or  a broken healthcare system.

I’m not saying those things don’t have an impact. Of course, they absolutely affect private practice. But with a clear physical therapy business plan, you can take responsibility for your practice and regain control of your own destiny. 

You’ll feel more in control of your practice with a clear plan. No matter what is going on externally, you’ll have a firm grasp on what strategies you’re pursuing and how that’s going to help you achieve your goals. 

A Proven Planning Template

Unfortunately, most of the people who read this will never create their physical therapy business plan. They’ll spend the next 12 months the same way they’ve spent the previous 12 months: Watching their business expenses go up while revenue stays flat. And feeling powerless to fix the problem.

A Better Option

Our mission at Breakthrough is to empower PTs to help more people in pain solve their health challenges naturally. 

That’s why we’re sharing a 2024 Profit Planner that can be your template for your physical therapy business plan. 

You can continue to do what you’ve always done…

To get the same results…

To struggle alone while policymakers and insurance companies continue to undercut the value of PT and conservative care.

OR…

You can take the next step towards building a more profitable, sustainable, and fulfilling future in private practice by completing your Profit Plan.

The Profit Planner is a physical therapy business plan template. It empowers practice owners to take control of their practice finances and achieve their business goals.

Whether you’re a cash based practice owner selling physical therapy, chiropractic, or integrated care services, you want to help as many people as possible. But with so many options for medical care, it can be difficult to stand out and attract new clients. If you run a cash-based practice, or you’re thinking of switching to a cash-based model, marketing is even more important.

Why Every Cash Based Practice Needs a Strong Marketing Strategy

Whether you’re a cash-based practice owner selling physical therapy, chiropractic, or integrated care services, you want to help as many people as possible. But with so many options for medical care, it can be difficult to stand out and attract new clients. If you run a cash-based practice, or you’re thinking of switching to a cash-based model, marketing is even more important. 

There are a few reasons why it matters so much for cash based practices to develop a strong marketing strategy. 

First of all, cash based practices or out-of-network providers need to put a big emphasis on marketing since they can’t get patients through insurance companies. 

Cash-based practices need to work twice as hard to convince people that their practice is the right one to meet their needs. 

After all, you’re asking people to pay for your services upfront and out of pocket. But if you can reach the right people with your marketing and effectively demonstrate the benefits of your services, you can run a successful cash-based practice. 

Top Marketing Strategies for Cash Based Practices

In this section, you’ll learn successful strategies for marketing your cash based practice. There are both online and offline strategies.

The Old School Way: Marketing Your Cash Based Practice Offline

Before the Internet, marketing was done differently. Think printed signage, direct mail, newspapers, radio, etc.

It’s great to bring some of those elements back into your modern-day marketing. But as cash based practice, it doesn’t make sense to spend a lot of money on branding that doesn’t generate measurable results. Here are some ideas that will go a long way in building stronger connections with your patients.

Mail Hand-Written Notes 

Hand-written welcome notes when a new patient joins your practice can go a long way in building patient loyalty and retention. You can also send hand-written thank you notes to referral sources to build continued goodwill. 

Yes, these things can take time. But, how much is a healthy and sustainable relationship with your patients worth? 

To save time, there are print and direct mail services that can write and mail hand-written notes for you. A quick google search for ‘Send handwritten notes’ will generate several options. 

Network with Referral Sources

Building relationships with other healthcare providers can be incredibly beneficial for cash based practices. For instance, if you’re a physical therapist, you can build referral relationships with chiropractors, massage therapists, local gyms, or local employers. Attend local events, join professional organizations, and offer to give workshops for referral partners’ clientele. 

The New School Way: Marketing Your Cash Based Practice Online

Online marketing is where you will want to focus the majority of your marketing efforts. Online marketing makes it possible to measure the results of your marketing and ensure you’re generating a strong Return on Investment (ROI).

Email Your Patient List 

A past patient list is your most valuable asset. These are people who already know, like, and trust you. With a little bit of outreach from you, they are likely to return for more treatment the next time they have any pain or conditions you treat. 

To save time and get the most out of email, you’ll need a software platform that automates email. With email automation, you’ll be able to: 

  • Send an indoctrination email sequence when someone becomes a new patient
  • Send nurture email sequences to your past patient list
  • Automatically trigger email conversations when someone interacts with your website or online content

Focus on Patient Education in Your Content

Across all your marketing channels, you want to focus on patient education. Patients who understand the benefits of your type of treatment are more likely to choose your practice over others. They’re also more likely to become loyal patients when you build trust and credibility by demonstrating your authority and expertise. You can create educational resources like blogs or videos, and share them on social or via email to your patient list. 

In educational content, use lay-person language rather than medical terminology. Focus on educating your patients about the different conditions you treat. 

One mistake many owners make is to focus on branding their clinic and talking about why prospective patients should choose them. The moment you shift the focus from them and their problem is the second we see most people losing interest. Instead of highlighting what you do and how good you are, keep your patient and their problem the focus of your messaging. Make it all about them and their paint points. You can create content that educates patients about their condition and learn how your services can help them get back to normal naturally. 

An example might be a video or article on the importance of a good posture whilst working from home and best practices to optimize the work-from-home setup. The goal is to provide value and educate. Again, this is a great way to engage your patient base and to make sure your practice is top-of-mind. 

Encourage Patients to Post Online Reviews

Encourage satisfied patients to leave positive online reviews about your practice. This can help you attract new patients and establish trust with potential clients. When a patient graduates from their Plan of Care, this is a great time to email or text them asking for an online review. 

Leverage Organic and Paid Social

Social media platforms like Facebook, Instagram, and TikTok can be powerful tools for reaching new patients. Share articles, videos, and testimonials about your services and interact with your followers.

Online advertising via paid social or Google is a proven way to attract new patients. You can test different types of ads and offers. The key is to ensure that you’re generating a strong Return on Investment (ROI). So you need to be able to track results from online advertising, from leads to paying patients. Use patient-centric language and direct response copy that includes a call-to-action (e.g. register for workshop, book an appointment, watch video). The goal of your ads should be to drive people into your clinic and generate new patients. 

Optimize Your Website

A professional website can help you showcase your services and reach new patients. Make sure your website is user-friendly, easy to navigate, and optimized for search engines. Again, keep the focus on educating patients and illustrating how your services can transform their lives. 

How A Patient Demand Platform Can Help

Adding both off- and online marketing strategies to your workload may seem time-consuming, but it’s key to running a successful cash based practice. 

Leveraging a Patient Demand Platform streamlines and optimizes every marketing touchpoint with your clients — from attracting new leads, to converting leads to patients, to reactivating past patients, and measuring your results. 

With a Patient Demand Platform, you can:

  • Reactivate past patients with pre-written, automated email and SMS campaigns with just one click
  • Reach your target audience with digital advertising campaigns
  • Attract new patients with educational workshops and online ads
  • Make it easy for your staff to follow up with leads at the exact right time with pre-populated task lists
  • Track ROI so you can do more of what works, with done-for-you reporting
  • Build your team’s marketing skillset with on-demand courses, training, and networking

It’s important to work through all the pros and cons as you decide whether to manage marketing yourself, hire a marketer, or invest in a marketing partner. Even if you do all the work yourself, you’ll ultimately need software to scale your marketing efforts. 

Interested in learning more about Patient Demand Software? Request a free demo. 

Learn about the process of operating a cash practice. Discover the advantages and disadvantages of running a cash practice for your physical therapy or chiropractic clinic. Understand the steps for getting started with a cash practice model.

Why Run a Cash Practice?

It’s not a secret that physical therapists and chiropractors alike run into issues dealing with insurance payers. Insurance is a major headache for many practice owners. Therefore, many practices are considering switching to a cash practice model or offering more cash-based services in their practice.

Each year, insurance reimbursements go down. In 2022, CMS implemented a 3% cut on physical therapy services and a 15% cut on services rendered by physical therapy assistants (PTAs). In 2023, another 4.4% cut is planned.

These circumstances threaten profitability and leave many private practice owners worried about the longevity of their practice and the future of the industry. 

Switching to a cash practice model can be a great alternative for some practices.

In this article, we break down how Aaron LeBauer started one of the earliest cash practices and why he created the Cash PT Blueprint. In the second part of this article, you will learn how to create your own cash practice for physical therapy, chiropractic or integrated care.

Aaron LeBauer’s Cash Practice Story

Cash-based practices aren’t entirely new: They are already active in the chiropractic space, where insurance benefits have been cut at an earlier stage. As a reaction, many chiropractors already converted their practices to the cash-based model.

In the PT space, this hasn’t been the case until more recently. 

Two major events catapulted Aaron LeBauer on his path to change the PT industry.

First of all, Aaron recognized that patients often weren’t treated as humans anymore. Treatments are often built around what type of insurance the patient has rather than what the patient actually needs. Coming from a traditional, old-fashioned group of physicians (he grew up surrounded by them), he knew that couldn’t become the standard for him.

His goal became to treat patients like real humans and design their treatment based around their real need. He chose to take the time to ask the right questions and build a relationship to treat the patient as well as possible.

Before going to physical therapy school, Aaron worked as a massage therapist. When he became a PT, he was able to see what business practices massage therapists were doing better than physical therapists. It was astonishing how little pay physical therapists accepted given the amount of education and training they have. So when he moved into the PT space, he knew in-network practice wasn’t for him.

He set out to go a different road: He built his own cash practice, and then shared his learnings with others.

He created the Cash PT Blueprint. A course and book for PTs who want to convert to a cash-based practice or take their cash practice and scale it up. Even if you’re in network, you can learn how to add cash-pay services to your practice. 

This is how it works.

How to create your own cash practice

With insurance reimbursement going down and physical therapists requesting higher salaries, shifting to a cash-based practice can be an appealing alternative.

You don’t have to hire people to file claims and complicate your business. As a result, you can have a higher profit margin, generate more income, and keep more revenue.

Steps to setting up or switching to a cash practice

You can’t rely on insurance companies, or in the US, Medicare to find patients for you. You have to put measures in place to make sure those patients are still coming through the door. And, once they’re in: It’s all about making sure that these people are better off than when they arrived.

To successfully set up your own cash practice, there are a couple of important steps to take:

1. Identify your target market

As most patients are familiar with the traditional, insurance-based payment system, you’ll need to define which part of your market is comfortable paying for the service upfront. There may be some regions where a cash-based model makes sense, while others where it is less feasible. Today, it is more common to see cash-based practices in urban areas or regions where the average income level is above average. 

2. Price your services properly

To run a successful cash-based practice, you want to set the right price for your services. To determine this, you’ll need to take overhead costs, an ideal profit margin, and an indication of what the market will pay, into account.

3. Provide fitting payment policies

As you’re not relying on traditional insurance policies, the payment procedure has to be clear for all parties involved. Does payment occur upfront or afterward, and is it done in full or in parts? Usually, those terms are recorded in a policy and procedure guide for billing and collection. 

4. Develop a marketing strategy

Since you’re not relying on insurance companies to drive patients to their in-network providers, you’ll need to put a bigger emphasis on marketing. But this gives you more control over your practice growth and reduces the need to rely on physician referrals. In this article, we break down how you can market your cash-based practice to generate the best results.

Challenges of Running a Cash Practice

Creating a cash-based practice may be the right option for some clinicians, but it’s not without its challenges. 

Here are two of the most common challenges physical therapists and chiropractors face when they start.

1. Convincing patients that they’re getting a better deal with cash-based services

The majority of patients are used to having their insurance pay for treatment and are unfamiliar with the cash-based model. This lack of understanding often results in fear of having to pay more for treatment, than they would have done through the traditional model.

According to the Wall Street Journal, this isn’t completely true. “Patients who pay upfront in cash often get better deals than their insurance plans have negotiated for them.”

If you’re starting up a cash-based practice, convincing patients that the cash-based model is better for their wallet is a conversation you’ll have frequently.

One of the best arguments to make for the cash-based approach is that the quality of the session can be much higher than the traditional sessions because you’re not dealing with the rules and restrictions that insurance companies require.

Practitioners in the cash-based space don’t have to stress about declining reimbursements or changing their sessions to maximize their billings. Instead, they can set a price that covers their costs and makes sure they have a healthy profit. As a direct result, they can put their full attention on the patient.

2. The risks for Medicare patients and cash-based physical therapy

This only applies to US practitioners and patients.

Medicare, a government national health insurance program, has some conflicting elements with the cash-based practice. In fact, it’s not possible to accept cash payment from a Medicare patient for physical therapy services, that’s only possible for non-covered services. Legally, physical therapists cannot opt-out of Medicare, which leaves cash-based services for Medicare patients forbidden territory. The American Physical Therapy Association (APTA) supports legislation that would change this, allowing Medicare beneficiaries to select the health professional of their choice through private contracting. 

The Advantages of Switching to a Cash Practice

Despite the challenges, the advantages of switching to a cash-based practice may be worthwhile to some. At the very least, it is worth considering how you can add more cash-pay services to your practice. 

1. Get to Know Your Patients

This model enables more flexibility around how you structure your time with patients and can deliver higher profit margins for your practice.  

To start and grow a successful cash-based practice the right interaction and attention are required: Slow down the conversation, ask the right questions, and get to know the patient first. 

2. Customized Plans of Care

The second element of running a cash-based practice is that you’re able to create customized programs for patients. This speaks to most practitioners who turn to this model as it allows them to focus on a journey of health and wellness, not just a quick fix. Plus, you don’t have to deal with the pressure of keeping up with the administrative costs of submitting insurance claims.

The transparency and clarity are unrivaled as both parties know that the charges are coming out of the patient’s pocket. No more “We’ll send to insurance and see what they pay” when the treatment ends.

3. Inclusivity

The cash-based model is inclusive.

As payment is by cash, patients aren’t rejected because of the limitations of their insurance. The cash-based model is designed for self-pay patients who are free from outside interference. This allows them to address their circumstances and needs of themselves, not what their insurances deem allowed or necessary.

After all, the cash-based model places the control back into the hands of the practitioners and patients.

4. Attract More Loyal Patients

The fourth advantage of a cash-based practice is that it attracts more committed patients.

In general, it’s safe to assume that patients who pay out of their own pocket are far more dedicated to their treatment plan. This is because they have paid their hard-earned money for it and thus, are more invested in a steady way to recovery.

5. More Time with Patients

Finally, it’s a big advantage that sessions don’t have a maximum duration and there’s no need to worry about insurance approvals.

This makes a thorough assessment of strengths, weaknesses, and imbalances possible. Which gives you a full picture of the potential issues of the patient. As a result, you’re able to work on the right areas and ensure the patient is pain-free again. 

After all, that’s your biggest goal. Right?

Summary

Both PTs and patients benefit from a cash-pay model for physical therapy and chiropractic services.

Many owners are incorporating more cash-based services because of the level of freedom and flexibility the traditional systems don’t allow. This way, they stop having restrictions with third-party payers, which prevents them from helping their patients in the best way possible.

It’s important to work through all the pros and cons of your decision of starting and growing your own cash-based practice. This will help you to understand if it’s the right option for your business goals and your patient population.