If your No. 1 goal is to help your clients experience better outcomes, your second objective is to increase your practice’s profitability. After all, decreasing costs while increasing revenue allows you the budget wiggle room to make better future investments that will ultimately help you achieve your first objective. While achieving profitability can seem challenging with healthcare on the rise, many successful physical therapy practices are bringing in significant revenue. What does it take to be among these highly profitable physical therapy clinics?
Here’s how your physical therapy practice can decrease costs, increase revenue and enjoy a profitable 2017.
Identify Your Key Metrics
How do you measure success within your practice? To become more profitable, you first need to decide what key performance indicators (KPIs) you should keep an eye on every month to determine whether you’re moving in the right direction. This way, if things are starting to go off the rails, you’ll have enough time to make corrections and get your revenue train back on track.
According to Web PT, here are a few KPIs successful PT practices monitor:
Net revenue per month
Net revenue per visit
Payer revenue per patient
Revenue per square foot
Revenue per therapist
Eliminate Time Wasters
As the old adage goes, time is money. Anything that eats up staff members’ schedule or thwarts your team’s ability to complete tasks and serve clients efficiently is hurting profitability.
In some cases, these time wasters are outdated processes — like poor patient flow. In other cases, it’s a lack of training on key technology used within your PT clinics. But often, one of the biggest time wasters for physical therapy practices is old or faulty equipment.
For example, an outdated modality unit based on decade-old technology isn’t likely to produce the same results as a newer, more advanced product based on cutting-edge PT technology. Even if equipment shaves just minutes off treatment time or mere days off recovery, those outcomes add up over the year to produce real cost savings.
Look for Quick Cost Savers
When you’re focused on high-level numbers, it can be easy to forget the monthly expenses and inefficiencies that could be hurting your bottom line. You never want to cut costs in ways that will demoralize your staff or jeopardize your ability to deliver positive outcomes for clients. Luckily, you can quickly and easily reduce costs without negatively impacting your clinic’s performance.
Here are two suggestions.
Renegotiate your lease. Are you getting a fair deal on your space(s)? Take time to determine the average lease rates in your area. If you find your lease rate is higher than average for the location and space style, raise these concerns with your landlord. In some cases, you may be able to negotiate a lower monthly rate.
Use software to streamline your business. From billing and project management to communication tools, the technology your practice uses to handle day-to-day operations can make or break your productivity. Look for kinks in current systems and determine whether there is a newer or better product that could help overcome these hang-ups.
Overall, while achieving profitability in your physical therapy practice can seem difficult or even impossible, many busy private practice owners overlook potential money-saving and revenue-generating opportunities. By identifying and paying closer attention to key metrics, eliminating time wasters and implementing cost-saving techniques, you can quickly boost profitability and make 2017 your PT clinic’s best year yet.