In the past, we’ve discussed the state of PT and our aspirations to Flip the Pyramid and make conservative care the first choice for people in pain – ahead of injections, medications, and surgery.
But the current state of PT looks a lot different than it did just a few months ago due to the COVID-19 pandemic and the chaos and uncertainty it’s created in the world.
The truth is that similar events and challenges have occurred throughout history. Case in point: just 12 years ago, the financial crisis of 2008 hit and shook PT practices everywhere. At Madden PT, we were already battling encroachment from HOPTs and POPTs practices and ended up losing $98,000 in a single quarter. Back then, we were focused on physician referrals, but that crisis made us realize the need to diversify our income and create systems that would put us in a much better position during a future crisis.
Understanding these events can help us to better shift our thoughts and behaviors that will allow us to thrive now and in the future.
Exploring the Transition Curve
In the past, PT owners have typically followed a transition curve, where we start our PT practice with uninformed optimism that turns into informed pessimism when something goes wrong or business doesn’t come as easily or quickly as we’d hoped. Soon after, a crisis of meaning follows, where we explore what we really need and want from our practice. This leads to either crashing and burning or informed optimism, in which we are more aware of what it’s going to take to be successful and have new hope for the future of the practice.
But today, the transition curve looks much different. We’re now on a cycle of market emotions.
But now, just within the last week, we’re starting to see the bounceback. Patients are trickling in once again. They’re wearing masks and acting with caution, but we’re finally starting to see some hope for normalcy.
Learning How to Pivot (and Pivot Quickly!)
Just two months ago, our goals at Breakthrough looked drastically different than they do now. As a rule, our goals have always been to help private practice PT owners become successful while helping our own patients get back to normal naturally and make PT the first option they think of when they’re in pain.
We haven’t lost sight of those goals, but we immediately shifted our focus so that we could help other owners and the PT industry at large survive this crisis. We’re doing this by focusing our content and training on things to do during the pandemic, such as where to turn for financial relief and how to stay connected to your team and patients (even if you’re not treating them at the moment).
Just like we have four seasons in a year, we also have four “seasons” of the economic cycle in a given year. And it’s important to understand these seasons so that you can be in the best financial position when the market starts going up again. There will be an “end” to this pandemic, and when that end finally comes, PT owners should be prepared for the rebound.
The State of PT and the One Goal to Set Moving Forward
Bob Kowalick from Revenue Cycle Solutions shared some interesting stats with us recently on the financial state of private practice. His research found that about a third of practice owners are not in a financial position to survive this crisis. They’re in the same boat with about 43% of small business owners throughout the country that are saying they’ll likely not be able to reopen their doors when the pandemic is over.
For PT owners, avoiding this situation might mean not taking a salary for a little while. You still need a staff, a facility, and a way to pay for these things, so you might have to make the ultimate sacrifice.
Kowalick also found that almost half of owners only have a partial financial bridge. Of those, the majority are about 5% off their goal. If they need $50,000 in total to make it through, they are likely just $2,500 short of their goal. Some may be able to cut enough corners to come up with what they need, but if you can’t, your goal should be to do what you need to do to get into this next group of owners—the 19%.
Roughly one in five owners have a clear financial runway to the end of this crisis. Those 19% are at a major advantage because they’re going to be able to advertise and gain market share when the majority of their competitors cannot. They’re going to be in a better position to rebuild and hire the best staff and continue to grow their practice, both now and when the pandemic is over.
For the remaining 81% of owners, it should be the goal to become among the 19% that can weather tough storms like COVID-19 and be in a better position to continue growing.
For us to do this during the financial crisis of 2008 and the following months, we shifted our focus to three things:
- Marketing direct to the consumer to become less dependent on physician referrals
- Learning how to influence your payer mix and build a financial bridge
- Building a better culture through personnel
When the pandemic conditions started rising earlier this year, these are the same three things we focused on. That’s because physician referrals have been in a tailspin, along with declining reimbursements. And since many people aren’t hiring right now, we’re using this opportunity to attract top talent to the practice to create an optimal patient experience.
PT practice owners can put these same ideas into motion to become one of the 19% (and ideally turn that 19% into 100% by the next time crisis strikes). To start, you need to know where you are right now, then understand where you need to go.
We have tons of resources available at Breakthrough University that can help you take the necessary steps to connect your present situation to your ideal destination― learn more about Breakthrough University today.