Technology & Profitability


Advances in information technology can improve profitability for the physical therapy practice.

By Phyllis Levine, PT, DPT

If you are like me, while you may use technology, the thought of undertaking a new technological program in your business creates anxiety. I have a lot to learn about what I can expect from technology to help increase my clinic’s productivity, reduce expenses, and increase overall profitability. I have been reflecting on how I can take better advantage of technology in my private practice. In the realm of revenue cycle management, technology provides ways to gather and utilize data to guide business activity. It can be challenging to stay abreast of the offerings and keep realistic expectations for what type of data can be collected. As physical therapists, many of us have little education in business concepts and finance. Since time and money are involved in bringing new technology into one’s business, owners must be able to make an educated decision about which of the multitude of technological opportunities is the best fit for the business. This decision requires knowledge of the current business status of our practice, defined goals for the future, and an understanding of the capabilities of the programs being considered. It is also useful to know which specific technologies competitors may already use as well as how likely what we are considering will produce a more competitive edge.

The various topics of information technology related to productivity and cost are frequently found in business journals and therefore some simplified definitions presented here may provide clarity. Technology can be defined as the practical application of science to business and industry.1 Productivity is defined as the ratio of the quantity of outputs to the quantity of inputs used.2 The cost of production or services offered and rendered is therefore the valuation of the inputs.3

As profit margins become tighter, owners of private practices must place an increasing importance on the implementation of strategies critical to reducing expenses. In most cases, the costs related to communication are the ones most dramatically reduced. Communication allows the exchange of information between at least two parties. Thus information technology assists in this. In private practice, like all business enterprises, information is considered one of the most valuable commodities. Therefore, fostering good communication is mandatory for success. In the work environment, communication occurs at three levels:

  1. internally between the company and its employees,
  2. externally between the company and its suppliers, and
  3. externally between the company and its customers—or patients.

Technology, instrumental in the handling of information at all three of these levels, can be specific to our industry or may be found in an outside industry. These concerns are as pertinent to an outpatient physical therapy clinic as they are to retail or manufacturing business. The first of these areas deals with data-based software. This provides transactional data, such as tracking individual tasks and/or individual productivity and analytical data, which cross-examines individual data with the performance of the entire company. This is perhaps the most common information gathered in our rehabilitation world. Most of the commonly used electronic medical record programs and billing programs are capable of collecting this data. Looking at which reports your software can provide may reveal that you have some valuable data available to you that is currently being underutilized.

The second area where information should be collected is termed Customer Relationship Management (CRM). Any area of your business that manages the patient experience is considered CRM. Improving performance in CRM gives a high return on investment despite some difficulties in implementation. As the technology in CRM becomes more sophisticated, the human interaction is minimized. Examples of technology pertaining to CRM would be a computerized phone-answering system instead of a receptionist. Many advances have been made in this area, and the public is more likely to expect an automated response than not. However, for this to be most successful the human presence must still be obvious. The technology needs to fit the organization more than the organization fits the technology. What we use should be value added to our patient’s experience and not a substitute for excellent hands-on service.


The third area where technology simplifies information is productivity. Referring back to the definition of productivity as the ratio of the quantity of outputs to the quantity of inputs used, it is obvious that we must be able to clearly define how we account for inputs used in the process of production. In the service industry such as physical therapy, inputs are typically measured based on revenue generated by an employee divided by salary.

Productivity gains are a good proxy of cost reduction and can be a reliable tool for measuring technological progress. Minimizing production costs can be achieved through an increase of your physical capital such as more equipment, or an improved quality of the present equipment. We can also reduce cost by improvement in the quality of the labor force with adequate and ongoing training. Clearly, as technology advances, training becomes more critical. We can certainly increase productivity by using a combination of these factors.

In summary, technology is a cost-effective tool for all business aspects of our private practices. As owners, we should embrace new technology and all it offers. It is flexible yet precise. The return on investment is excellent when used appropriately and with the provision of good ongoing training for all. Gathering of data to drive decisions is imperative. However, good data does not guarantee good decisions. The ultimate responsibility lies in an informed human decision.


1. Merriam-Webster, n.d. Accessed August 2016.

2. Mueller S. October 9, 2015. Accessed August 2016.

3. Merriam-Webster, n.d. Web. Accessed August 2016.

Phyllis Levine, PT, DPT, is a PPS member and owner of Functional Therapy and Rehabilitation, PC, an outpatient practice in Homer Glen and Joliet, Illinois. She can be reached at

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