Competition in the aquatic arena.
By Keith Ori, PT
Across the nation, physical therapy clinics are focused on two things: serving their client base and improving their bottom lines. Sometimes, it seems quite challenging to accomplish both goals, especially when it becomes evident that a potential customer base is not coming to a facility because it does not have the best amenities. In those cases, clinic owners can simply continue along the same marketing path and hope they stay in the black, or they can attempt to garner a larger piece of the client pie by adding equipment and services to attract clients.
One tool that many physical therapy practices are using to attract additional clients to their doors, rather than the doors of their competition, is aquatic therapy. Aquatic therapy has long been considered a niche of physical therapy; however, it is becoming a solid performer in its own right. Still, offering onsite aquatic therapies in a technologically advanced warm-water therapy pool can seem daunting, especially from a financial perspective. The key is to ensure that the investment in any type of water therapy equipment, including pools, will provide a sustainable and reliable return on investment.
For practices that are just starting on the journey toward offering aquatics as a modality for clients, especially those clients who cannot fully engage in land-based therapies, the key is to start slowly and do your homework. Pragmatism is a physical therapy clinic owner’s greatest ally; it can help lead the way through the following suggestions aimed at those just dipping their proverbial toes into the aquatic therapy waters.
#1 – Start Working with Clients in a
This can be a local YMCA pool or private pool. While it is probably not going to have the warmest waters or equipment, like an underwater treadmill and resistance jets, it will give physical therapists and clients a taste of what is available. Additionally, it provides a good starting point to see how interested people are in having aquatic therapy in addition to land-based physical therapy.
If and when a consistent number of aquatic therapy clients develops, and the annoyance of having to rely on another organization’s pool schedule becomes too great, it is an indication that it may be time to investigate buying a therapy pool for your clinic.
#2 – Investigate Therapy Pool Options
There are numerous therapy pools on the market, and you want to ensure that you will get the best product for your needs. Look less at the overall price tag and more at the features the therapy pools include and decide whether they match your clinic’s needs. For instance, some larger models allow aquatic therapists to work with more than one client simultaneously, or provide aquatics classes. Features that allow for different water depths can be very important. When the pool’s features match your clinic’s specific needs it can lead to a faster return on investment potential. During this period of examination and exploration, visit other clinics around your region—or even the country—with therapy pools and ask about their real-life experiences with the specific models.
#3 – Investigate Relocation Versus Current Site Expansion
A therapy pool takes up a good deal of space. For those who have room to expand through construction, it sometimes makes sense to simply add the pool to their current location. Just as often, though, physical therapy clinics that want to expand to aquatic therapy seek out new real estate. Make sure there is enough space to allow your clients to transition into land-based exercise programs as evidence of progress in their program.
Any properties that are being considered should be easy to find, central to the target population, and offer convenient parking. Commercial landlords should feel comfortable with the inclusion of a warm-water therapy pool on their property. In general, lease terms should be around seven years; this assures the clinic owner that the space will remain available, but he or she is not locked into decades of working in the same spot should conditions change.
#4 – Do the Numbers
If you are at the point of seriously considering adding a therapy pool (and amenities like locker rooms, maintenance of the pool, etc.), you need to be able to come up with data to support the decision. The data most important to consider includes:
- State reimbursement rates for aquatics codes. (States vary in what they pay for aquatic therapy and similar health care codes.)
- Cost of new aquatic therapy equipment and construction.
- Number of patients needed to reach the break even point.
- Understand your potential patient clientele. What kind of patients are you likely to see—from total joints to chronic pain—and what are their specific needs?
- Number of additional physical therapists (if any) needed to offer aquatic therapy. How to staff this facility is a critical decision.
- Amount of marketing dollars allocable toward aquatics.
- Amount of money set aside for annual employee training.
By carefully assessing current and projected future finances, it is possible to determine the break even point, or how many clients per week are needed to keep the aquatics program viable, and, eventually, profitable.
#5 – Take the Plunge and Start Construction… and Advertising
Do not wait for the pool room to be finished, start advertising your new services when ground is broken. Potential referral sources, such as physicians, surgeons, and perhaps even other physical therapy clinics, should become aware of the opportunity that is opening up for their patients.
As construction continues, it will become easier for others to begin to catch the excitement of what is happening. During this period, consider calling former clients to let them know about the upcoming positive changes. Word of mouth referrals are golden in the physical therapy world!
#6 – Open the (Pool) Doors and Keep Track of the Figures
This is a part of the business plan that too many physical therapy clinic owners fail to complete. They are so thrilled to have an up-and-running therapy pool with underwater treadmill, underwater jets, underwater camera, and variable depth floor that they forget to regularly assess their revenue. It is a costly mistake, because the figures will start to tell a story.
Instead of waiting, start tracking and evaluating immediately. Make sure all projected expenses (e.g., salaries, rent, utilities, upkeep, and annual maintenance agreement) have been included in the numbers. The story will start to unfold thanks to the numbers.
A Case Study: Our Clinic’s Entry into Aquatic Therapy in Rural Montana
Make no mistake—this article has not been written from theory. Our clinic went through the process, too. It went as smoothly as could be imagined, but took a couple of years to complete.
Being a rural Montana physical therapy clinic that dove into aquatics in the late 2000s, we determined that we needed five visits per day, and two to three units per visit in order to break even. Lo and behold, we hit the mark within the first few weeks of being open.
Since 2009, our visits have been steady and have more than paid for all elements of our aquatic therapy investment. Our average number of annual visits hovers around 2,200, which covers expenses. With that being said, the changes in health care took a slight nip in our profit margins in 2013 and 2014; however, everyone appeared to be hit in those years. Additionally, the charge per visit has varied, but we have been able to compensate.
I am pleased to say that our five-year return on investment summary proves we made a healthy decision. Our return on investment is a healthy 38 percent, and we are actively looking for ways to bring it up even more. Perhaps the most rewarding element of all is that we are able to keep growing and serving more of our population. We have a steady group of clients that return to our clinic for physical therapy due to their success with the aquatic program. By being careful up front, our team was able to make wise choices with the information they had, and they are proud to show individuals around our 2,800-square-foot clinic.
Keith Ori, PT, is the managing partner and chief executive officer of Orthopedic Rehab, Inc. He can be reached at email@example.com.
Break down effective marketing strategies for straightforward approaches to success
By Mike Eisenhart, PT
Growing up I hated puzzles. Well, maybe hate is a strong word, but I never really got into them the way my family did. I can remember many family vacations where someone would buy a zillion-piece puzzle “for a rainy day,” lay it out on the table and slowly and steadily reconstruct the image on the box. This happened piece by piece, morphing from something that started like a pile of rubble into an amazingly detailed image.
In truth, I do not think I have any deep-rooted puzzle “issues” per se—in reality, I love the feeling of figuring something out after having struggled with it, exactly what puzzles provide. The problem for me is that I get sucked all the way in, into the abyss until the puzzle is done: part rabbit hole, part obsession.
When I started thinking about how I might write an article on marketing, it was a bit like looking at the pile of puzzle pieces. Marketing has a zillion pieces and, for most of us, it can be a pile of rubble in one of various stages of sorting. We can see the beautiful image on the box (our vision), and we know if we had unlimited resources (time, money, or energy) to dedicate, we could likely sort them all out, but in the back of our mind we know it also has the makings of a rabbit-hole and we risk getting sucked in. In many cases, we walk softly, tiptoeing around the pile to deal with something more urgent or less messy, trying to not entirely lose sight of the beautiful image waiting to be constructed.
How Physical Therapy Central successfully partnered with Confluent Health.
By Bridgit Finley, PT, DPT, FAAOMPT
“Start with the end in mind.”
These words, by Steven Covey,1 helped me successfully navigate the partnering of Physical Therapy Central with Confluent Health this past January. Confluent Health is a newly formed private-equity firm resulting from the roll up of several successful entities under the direction of Larry Benz. PT Development, Texas Physical Therapy Specialists (TexPTS), Fit for Work, Evidence In Motion, BreakThrough Physical Therapy, and now Physical Therapy Central all came together under one common holding company, Confluent Health. Now months later, I still view this as a success. But not all such mergers are successful. Why this one?
In just 10 years, Physical Therapy Central (PTC) expanded from one location to seventeen—from a small business to a significant enterprise. In 2014, I transitioned from treating patients to full-time Chief Executive Officer (CEO) in order to devote my full attention to this thriving business. We also began to centralize systems—payroll, accounting, and human resources—to enhance our ability to effectively manage the increasing size of the company. Unknowingly and unintentionally, we were positioning ourselves to be an attractive acquisition. While PTC was successful on its own, partnering with Confluent Health provided the opportunity to achieve two goals: (1) to enable us to have an impact on health care delivery as a nationally recognized player, and (2) to solve my need for a succession plan and an exit strategy—all without sacrificing our culture. Successful partnering does not happen by chance. You must start with your goals—the end—for merging and test each step against those goals.
Three approaches for getting your practice discovered.
By Mark Wilson
You have got the background, the staff, and the experience to treat patients better than anyone in your area. Your office is looking good, your equipment is state of the art, your new electronic medical record (EMR) is top notch, and it is even a sunny day outside.
Guess what? None of it matters if no one can find you. The problem is that in today’s world, getting “found” is getting more complicated. We all remember when a few solid referrals and a few bucks spent on local newspapers and the yellow pages were all we needed to prime the pump.
Today it is a different game. But with a little commonsense, some consistent efforts, and a new philosophy, you will be generating traffic in no time.
Here are the three basic approaches to getting found:
- Home Base: Your website. Some tips on making it better and more relevant for prospective patients.
- Search Science: Your new favorite hobby. Easier than you think.
- Content Marketing: Blogs, newsjacking, and more. The secret sauce for getting found organically.
1. Home Base
First, let us take a look at your website. It really is your home base—the fulfillment vehicle for everything else that you do. It is where you should be sending everyone, and it is worth all the time, effort, and money you can put into it.
Do Not Make Me Think. Make sure your site design makes the content easy to read and easy to navigate. A key idea here is to make sure that you do not frustrate anyone, ever, when they are looking for information. Put the basics in a spot that is easy to find: your services, location, hours, and insurance coverage.
Mobile Friendly. Depending on whose stats you read, up to 80 percent of your traffic could be coming through a smartphone or tablet. So design for it. Any decent web designer and many do-it-yourself web-building sites automatically work this way. It is called “responsive design” because the text, images, and navigation will scale and reconfigure automatically based on the screen size of the viewer.
Messaging Matters. Determine your differentiator(s) and talk about it. Loudly. Do you specialize in spine, hips, or knees? Do you get folks back to work faster? Perform better at their favorite sport? Then say so. And be clear about it. Remember, it is okay to talk about yourself and your philosophy—it is why they come.
Look Around. And learn something. Start with a simple Google search on physical therapy in your town and see what you come up with. Find out what the competition is saying and how they are positioning their practice. Now take a look at your own messaging again and make sure you are saying something unique. Something those competitors cannot say. Got it? Great. Now be sure to look and sound different too.
Location, Location. Help me find your office, once I have found your website. Put your location in headlines (this helps with search results). Tell us where to park. What is the nearest public transportation? Add in drive times—whatever makes sense in your area. Make sure your address is on every page—along with the phone number.
Simplify Your Services. You do many different things but your prospective patient only cares about one. Make your categories clear and easy to understand—for the layman—while still providing enough detail to demonstrate your specialties. As Einstein once said: “Make everything as simple as possible. But not simpler.”
Build for the Future. It is generally worth it to spend a little money to pay a local web developer to assist you with the design and build of the site. You are the one who will still have to provide the content: words, pictures, videos, etc. And honestly, that is the hard part. So make sure you use WordPress or a similar simple content management system so you can update, tweak, and improve the content on your own.
2. Search Science
Search engine marketing refers to the science of promoting your business by making it more prominent in search engine results. And the science of “search” is critical to making your site more visible and coming up sooner in a potential patient’s Google search.
Your challenge is to keep making your ranking better. And it is something of a constant challenge at that. Studies show that the top listing on Google receives about 33 percent of the traffic for any search term, and the second place result receives about 18 percent of clicks. To make it even tougher, the first page of results gets 91.5 percent of the total clicks. So if you’re on page 2, 3, or 4?1 You need to do some work.
How do you get there?
First and foremost, Google loves real authentic content: content that is relevant to your topics and well tagged. Make sure you reference your location and your services multiple times within your copy. And strive for as many links to your site as possible.
Google and the rest of the Internet are powered by HTML links. Good rankings and success in all search engines results pages depend on getting links from other sites to your site. The more the better (without resorting to junk link schemes that try to fool Google—and usually fail).
The best way to do this is to create content that others are hungry for: news, tips, how-to videos, maps, blogs, relevant and well-tagged images. What can you put out there and then promote (see Content Marketing below) that is worthy of attention?
AdWords is Google’s paid advertising program that allows you to place targeted ads on the Google search results pages. If you have ever used Google to search for something, you have seen these ads before. You will often see one or two AdWords ads at the top of the search results page—or along the right side of the page.
Investing in Google Adwords campaigns is a simple way to get started with search engine marketing. It will quickly increase your understanding of how Google works—and will increase the chances of your practice appearing higher up in search engine (www.google.com/adwords/get-started).
Keywords (search terms) are the most important part of a Google AdWords campaign. So when you plan yours, think about how the patient is likely to search for you—without knowing your name. Then be specific about specialty and location.
Once you have created your list of keywords (and phrases), you will then tell Google how much you are willing to pay to have your ad appear when someone types it in. Do not worry, you will also establish a maximum monthly budget for spending. The account gets burned down every time someone clicks and when your budget is used up, the campaign ends and your ads no longer appear.
3. Content Marketing
You probably have friends in marketing who have been telling you for years to get out there and be part of the conversation. You have something to say. Now say it. And the creation of this original “content” has become a very powerful marketing tool and a new science of its own.
And when you do it successfully, you will not only engage the patients you care about, but you will go a long way in boosting those organic search results we were just talking about.
So what is content marketing and why should you care? According to the Content Marketing Institute:
Content marketing’s purpose is to attract and retain customers by consistently creating and curating relevant and valuable content with the intention of changing or enhancing consumer behavior. It is an ongoing process that is best integrated into your overall marketing strategy, and it focuses on owning media, not renting it.2
Let’s get started:
A Simple Plan. Start by putting together a calendar of content you want to create for this month. Now set aside a little time to strategize, brainstorm, create, and publish.
Try Newsjacking. Sounds like a futuristic sci-fi survival flick, right? Much simpler: It is the simple act of actively paying attention to what people (blogs) and the news media are talking about, then piggybacking with your own point of view. The idea of creating content around trending topics, or newsjacking, means you are out there supplying content to people who are already actively looking for it. Good sources for trending topics? Twitter, Facebook, Instagram, and, of course, Google.
Ask Something. Everyone loves to give you his or her opinion. So let them. It is a great strategy for generating content and engagement. Try a survey. Do it right on your home page and send out an email to let your audience know it is there. Or do it with your own private list using a service like Survey Monkey (www.surveymonkey.com) then put your newfound knowledge to use with your next round of relevant content creation. The opinions and ideas you get will be fresh and might surprise you with the insights you uncover.
Rhymes with Log. If you haven’t started one, now is the time to start a blog. You dispense information and opinions all day long. A blog is simply the commitment to do it in writing once a week/once every two weeks whatever you (and your staff) can handle. Again, you may want to email your list to tease out the blog content (that lives on your site) and boost your search results.
Tips Like These. People (and the internet) love lists. If you are short on time, there is nothing wrong with writing a paragraph that summarizes a topic, tosses in your own point of view, and gets followed by your own list of key sentences and hyperlinks on your given topic. This is an excellent exercise to delegate to your staff members. It is a research topic that they can accomplish in an hour.
How-to Videos. Do what you do best—and show others how it works. With a decent video camera, some basic lighting, and a “patient” who has signed a model release, you have got everything you need to produce some valuable videos. Promote it as a series. As a learning experience. As a follow-up reminder sequence to encourage compliance. It is a matter of planning and follow-through. And once you have the assets (edited videos) you have got something you can use on your site or provide as part of a guest physical therapist series on someone else’s.
Getting discovered requires that you adopt a new philosophy: Content is king. And this is my kingdom!
In order to rule this new land, you will be adding credentials to your list that are focused on creating value for your current and future patients and making sure that you have made yourself easy to find, valuable to listen to, and worth the discovery process every patient goes through.
And once you decide to work these efforts into the ongoing flow of your practice it will get easier, more effective, and success will find you!
Mark Wilson is the executive creative director of Cramer, a digital marketing and advertising company in Boston, Massachusetts. He also is a firm believer in the benefits of working with a good physical therapist. He can be reached at firstname.lastname@example.org.
How the patient churn rate can erode your business’s bottom line.
By Scott Hebert, PT, DPT
If you have been watching your bank account recently, you may have noticed a lot more recurring transactions happening. I know I have. To put an eternity’s worth of new music on my iPhone, I fork over $9.99 a month for Spotify. For unlimited TV shows and movies, it is another $7.99 for Netflix. My gym membership, razor blades, and even certain groceries are all goods and services I purchase through a subscription. There is a good reason why this model is becoming more common: It is a business model that has proven to be an incredibly successful way to make money—that is, if you understand how to optimize it. Just like any other business, it comes with its own set of risks. Without the security of a long-term contract, subscription companies must keep customers happy and engaged or risk losing millions. The second they cannot, customers drop off—sometimes never to be seen again. This customer drop off is what has come to be known as “churn” and is measured with a simple metric known as the churn rate.
So what about your physical therapy business? When a patient walks in your door, are you selling them a series of one-time services? Or are you selling them a subscription path to recovery? While perhaps not as immediately obvious, your physical therapy practice already generates revenue via a subscription model, there is just a good chance that you are not framing it this way to yourself or to your staff. Nearly every patient who walks in your door will require multiple visits to reach their recovery goals; every new evaluation signs up for a physical therapy subscription. In a fee-for-service world, there are no long-term contracts; you only get paid if the patient shows up. Every time a patient comes back to your office they renew their physical therapy subscription, and it is up to you to make sure they keep coming back. If you fail to engage a patient in the process or are unable to sell them on their plan of care, not only will your patient’s outcomes suffer, but also your business’s bottom line will suffer.
Running a subscription business requires laser focus on key metrics such as the churn rate, which is simply how you measure the percentage of customers who leave a supplier over a specific time period. In physical therapy, patient churn is a bit trickier to calculate than in other business sectors but still just as important. This is because metrics like average visits per case and cancel/no show percentage, while easier to measure, can often misrepresent the true business problems. By thinking about your physical therapy business as you would a subscription business, you can borrow the best practices from a host of other industries to maximize both your patient’s outcomes and your business’ profitability.
Understanding the Subscription Model in Physical Therapy
In a subscription model, and in your physical therapy business, the basic unit economics are simple. Just take the product of the following three variables to estimate top line revenue.
- Total Number of Subscribers (in your case, patients)
- Average Length of Subscription (how many visits do they come for?)
- Subscription Price (How much you make per visit)
While optimizing a subscription business requires monitoring a number of key metrics,1 churn rate is a critical place to start.
The Hidden Impact of Churn Rate On Your Bottom Line
In looking for a good benchmark for patient churn rate, we examined over 30,000 outpatient physical therapy episodes of care. The results were startling: Over 20 percent of all patients treated came in for 3 visits or less.2 While a certain percentage of patients experience quick recovery, I think we can all agree that one in five patients requiring less than three visits is unlikely. It is therefore safe to draw the conclusion that a large subset of patients are not seeing the value of physical therapy for one reason or another and are failing to complete their course of care all the way through. This fact is a textbook example of bad customer churn.
So Why Not Just Measure Average Visits per Case?
The quick answer: You should measure visits per case, but it will lie to you. While almost every practice owner that I talk to can rattle off an average visits per case number for their clinic, I find that very few are accurately measuring patient churn and the impact of patient dropouts on their practice. As it turns out, it is really easy to hide bad churn behind a good average visits per case number.
In the sample of 30,000 discussed before, even though 20 percent of all patients came for three visits or less, the average visits per case was still 10. Ten visits per case is typically just fine; in fact, it is a number for which most physical practices strive. The problem is, this number can clearly be misleading. To start, take a look at Graph A.
While the large majority of patients are coming in for 10 visits or less, there will always be outliers. These outliers have the ability to substantially alter your average visits per case number, as it has done with our sample. If you zoom in further on that same graph, the actual impact of bad patient churn is clear.
Your average visits per case figure can be drastically swayed by outliers, and because of this, average visits per case alone may not be the best metric to measure. As health care continues to evolve, and new forms of payment become more and more common, these outliers will become much less frequent. Being proactive about monitoring churn now will allow you to be ahead of coming reform, and help you focus on providing the highest quality care.
Defining Churn Rate in Physical Therapy
Churn rate in physical therapy is simply the difference between expected visits and actual visits divided by expected visits. If the patient exceeds the expected visits, just calculate that churn rate as 0 percent (no need for negative churn here). The beauty of the churn rate calculation is that it takes into account the variability of care length. By taking the average churn rate for each patient, you start to get a much more accurate assessment of your clinic’s ability to keep patients engaged in their course of care, identify weak areas with regard to age and diagnosis, and target providers who are more engaging than others.
Measuring churn rate itself is not all that complicated, but it does take a plan. While actual visits are usually easy to pull from your practice management system, expected visits can be a bit more difficult to come by. Here are some of the strategies we have seen practices use to estimate expected visits.
Option 1: Take a Subjective Approach
After completing an evaluation, every therapist estimates how many visits a patient will need to reach their recovery goals. This number is being relayed to insurance companies, doctors, and other therapists—why not use it for your churn rate assessment? This is often a great estimation of expected visits per patient. The problem with this approach, however, is that it can be quite subjective and may vary by therapist experience level and skill. Still, it will get you started on your path to analyzing patient churn.
Option 2: Bucketing
If you feel like you have a good handle on the expected visits per case needed for a given patient type at your practice, it can sometimes work to bucket your patients by diagnosis, age, or a number of other factors. Specifically, if you feel that patients at your practice require only four visits for a meniscal repair, bucket all patients with a meniscal repair to use four visits per case as their expected visits. While this is sometimes hard to administer, Microsoft Excel can be your friend.
Option 3: Outcomes Tools
If you are using a standardized outcomes registry, you will often have access to an expected visits per case estimate. This is an excellent number to use and makes expected visits per case simple to track. It is also a bit less subjective as it takes into account your practice’s history, the patient’s diagnosis, and leverages a larger dataset to get a more accurate prediction when used correctly.
Once you have a handle on expected visits and actual visits, you are ready to start calculating. Be sure to calculate it on a patient-by-patient basis to get the most accurate numbers.
Always Strive for Good Churn
So what happens if your patient comes less than the expected number of visits but meets their recovery goals? Is this still bad? The answer is a resounding No! In fact, you should strive for this with every patient you treat. Exceeding expectations is an excellent way to develop customer evangelists.
How do you measure good churn from bad? Simply make a note if the patient’s goals were met or not. If his or her physical therapy goals were met and his or her actual visits were less than their expected visits, do not sweat it. Simply mark that patient down as 0 percent in your churn rate calculation. This will give you the most accurate picture of bad churn, which is what you are trying to correct anyway.
While there are other key metrics like patient lifetime value (LTV), customer acquisition cost (CAC), and viral coefficient to keep in mind, churn rate is perhaps the most important metric with which to start. By understanding churn, you will be well on your way to running your practice like a more efficient subscription business.
1. Hebert, S. Physical therapy and the subscription economy. Strive Labs blog Web site. http://blog.strivelabs.com/2015/04/10/pt-and-the-subscription-economy. Updated April 10th 2015. Accessed May 5th 2015.
2. Hebert, S. 5 steps to improve patient outcomes & increase revenue in PT part 1: churn rate overview. Strive Labs Blog Web site. http://blog.strivelabs.com/2015/04/16/churn-rate-pt-and-the-subscription-economy. Updated April 16th, 2008.
Scott Hebert, PT, DPT, is a PPS member and chief executive officer of Strive Labs, Inc., a patient relationship management platform for physical therapists. He can be reached at email@example.com.