Planning for the Short and Long-Term Future
Key items to help you one, five, and 10 years down the line
By Heidi Rose Bender, MBA
As famed baseballer Yogi Berra once said “Without a plan, even the most brilliant business can get lost. You need to have goals, create milestones, and have a strategy in place to set yourself up for success.” Planning creates a framework that is crucial to the success of your practice. Once you determine where you want your practice to be in one year, five years, and ten years, it becomes so much easier to make short-term and long-term decisions that support the foundation of your plan.
So, in the physical therapy space, what should you consider when developing your short-term and long-term plans?
1 YEAR PLANNING
- If your plan is to bring in $75,000 of revenue per month, what statistical goals can you set to ensure you are on track to meet your plan? How many visits do you need to see per week, per month? How many referrals? What should your rate of collection be?
Critical metrics to review may include but are not limited to:
- Referrals — weekly, monthly, yearly.
- Revenue — monthly, per clinician, per visit.
- Profit — per visit, per month, per year.
Patient Satisfaction and Net Promoter Score (NPS) — Set an overall target and monitor on an ongoing basis.
- “Bain & Company (the creators of NPS) note that a good NPS score is 0 and above. Above 50 is excellent, and above 80 is world class.”1
- (See Impact’s article on NPS at bit.ly/49qROAG)
Billing & Revenue Cycle Management — Select key metrics to monitor the efficiency of your collection.
- Days in Receivable Outstanding
- Patient payment collection rate
- Upfront collection rate
- Gross collection rate
- Arrival Rate/Cancellation Percentage — weekly, monthly, yearly.
- Once you develop the statistical metrics that align with your goals, develop strategies to help you achieve them, monitor your progress on an ongoing basis, and adjust accordingly.
Now that your statistical goals are locked in, develop a budget that uses your statistical goals as guideposts.
- New cases
- Actual revenue
- Labor expenses
- Clinical labor cost
- Administrative labor cost
- Payroll administration fees
- Health benefits
- Contract labor costs
- Variable expenses
- Advertising and promotion
- Education and travel
- Clinical supplies
- Office supplies
- Fixed expenses
- Bank charges
- Rent and utilities
- Professional liability, business liability, and workers compensation insurances
- Loan payments
- Repairs and maintenance
- Professional services including but not limited to legal and accounting
- Computer services including software
- Communication services
- Compare projected budget to actual budget on a monthly and quarterly basis.
- Make adjustments as needed.
Now that you have determined your goals and developed the statistics and budgets you are going to use to measure your progress, it is time to create a marketing plan outlining how you are going to position your practice to get there.
- Company Culture — Marketing starts with the first greeting and continues every moment throughout the course of care. Decide who you are as a company, and make sure that carries through from the front office to the clinical staff.
- Program Development — What are your current areas of specialization? What are the opportunities for future specialization? Is there a TMJ program in your area? What about LSVT BIG?
- Website Development — Is your website a static entity or an evolving location where patients and potential patients return to find valuable information? Have you considered a weekly blog post to your website?
- Search engine optimization/keyword research
- Social Media
- Word-of-mouth marketing — A happy patient is your best marketer. Do you have and promote a patient referral program?
- What sets your practice apart?
- Physician marketing
- Patient marketing
- Community marketing
Why is compliance planning a critical part of any practice? A compliance plan makes sure all employees in your organization know the best course of action in any set of circumstances.
- Each year, review your compliance plan and ensure it is up to date with current regulations.
- Make sure you provide monthly and/or annual compliance training planned for all employees and new hires.
5 YEAR PLANNING
If you plan to expand, what are your options?
Open a new location.
- What is the competition in the immediate area?
- Will you be able to enroll the new location in all necessary insurance plans?
- What are your staffing options?
- What are the demographics of the patient population?
- Are you offering any new services to the area?
Purchase an existing physical therapy practice.
- Is the current practice profitable? Make sure you complete a thorough due diligence analysis.
- Will you maintain the current staffing?
- Will you run the practice under your own tax identification number?
- How will you incorporate the practice you are purchasing into your own company culture?
Move or expand your current location.
- What are the pros and cons of moving?
- Open a new location.
- What are your capital equipment needs?
- Do you need to invest in EMR and/or other technology?
ANTICPATING THE FUTURE
What is the practice of physical therapy expected to look like in the next 5 years?
- How are regulations changing?
- How are insurance companies changing their payor policies?
10 YEAR PLANNING
A long-term succession plan will ensure the continuity of your organization now and in the future.
- First, identify your key employees.
- Next, identify each key employee’s anticipated timeline of employment with your organization.
- Then, identify those employees you feel have the qualities necessary to move into a key position.
- Develop a training plan which may include continuing education, cross training, job shadowing, incremental addition of job responsibilities. The end goal of the training program should be to develop a key employee who is ready to assume the responsibilities of a key employee who is exiting your organization.
- A succession plan should be developed with a long-term view. However, it should be re-evaluated on an ongoing basis.
After all of your plans, goals, and objectives have been carefully laid out, the next step and perhaps the most important one is oversight. Responsibility, accountability, and oversight are key to staying on track and making your plans a reality. You can have the greatest plans in the world, but without oversight and accountability, those plans will rarely result in success.
1Goodey B. “NPS Healthcare Guide: 25 Healthcare NPS Benchmarks & Industry Guide.” Customer Gauge. https://customergauge.com/benchmarks/blog/nps-healthcare-net-promoter-score-benchmarks
Heidi Bender, MBA, graduated from Gannon University with a Master of Business Administration degree. She currently serves as VP of Operations for MRS Physical Therapy and can be reached at firstname.lastname@example.org.