Three Common Barriers to PT Clinic Success

By Joseph M. Sapp*

Physical therapy practices frequently encounter significant obstacles to success.

Serious problems with serious consequences: reduced profitability, poor morale, frequent turnover, and more. Over the years, our team has discovered three common barriers that keep clinic managers and owners from achieving their potential: revenue shortfalls, staffing, and compliance and billing.

Below, we’ll examine the reasons why these problems persist at so many clinics, and provide steps that managers should consider to identify long-term solutions.

Lagging Revenue: Falling Short of Your Full Potential

So, what’s your bottom line? It’s a huge question. Many practices underperform key benchmarks for income, year-over-year growth, and other important financial metrics. We have witnessed this phenomenon in practices large and small across the U.S., and there are many forces driving this problem. Among the most prominent:

“We’re doing OK.” Often, physical therapy clinics may not even know that their financial performance is lagging behind national averages … or that it’s far below its potential.
Neglecting the “little” things. By neglecting to establish detailed protocols about “smaller” things, like visits per patient, a clinic can wind up creating conditions that add up to a major loss of income over time. Likewise, a physical therapy practice that doesn’t maintain a laser-like focus on patient outcomes can lose future referrals; and that means future lost revenue.
Not treating your practice like a business. Physical therapy clinics rightly emphasize the provision of care and treatment. But sometimes that focus can pull management away from solving the thorny problems that can hamstring a business: unrealized revenue from a low collections rate, delayed payments that choke off cash flow, and more.

Three things you can do:

Measure, measure, measure. A problem well-defined is a problem half-solved. Identify the key metrics that drive growth—and commit to analyzing them on an ongoing basis.
Embrace change. Knowledge without action won’t move the needle. Commit to the idea that you must make improvements based on deficiencies you measure—and quantify your improvements.
Focus on the patient experience. At their core, profitable clinics typically develop an approach and an atmosphere that engages patients. This approach ensures they complete their full treatment plan and optimize patient outcomes … keys to enhancing current and future revenue.

Staffing: A Constant Struggle

If you have difficulty finding and keeping therapists, you’re not alone. Many of the physical therapy clinics we encounter cite staffing and human resources problems as their number one challenge. Here are a few key reasons why:

Competition and market forces. The best physical therapists are capable of securing multiple job offers in locations of their choosing. Practices that don’t stand out, or don’t offer clearly defined reasons why candidates should choose them, may struggle to draw interest.
Failing to look beyond the initial hire. The best therapists—that is, those who can help you build long-term success—are interested in fair compensation, but also in professional growth. If your practice doesn’t have a defined program that offers real opportunities for expanding their skills and long-term growth, you risk losing the best talent … or never attracting them in the first place.
Lack of resources. Do you have a dedicated, full-time recruitment program? Established, ongoing relationships with schools and associations? Suitable sign-on and retention bonus structures? Without these tools at your disposal, it’s an uphill climb for any practice.

Three things you can do:

Attract the right talent. Successful recruiting requires a carefully crafted incentive plan, including sign-on and retention bonuses. But a smart practice will also entice candidates by explaining how the actual work experience will benefit a candidate: a unique clinical environment or a commitment to emerging therapy techniques, for example.
Stop the brain drain. Retaining your best therapists takes more than financial compensation. It requires developing a team atmosphere that values input and fosters morale. Another key: providing professional development opportunities and ongoing education for driven therapists.
Systematic, continuous recruiting. Unfortunately, the job of seeking skilled therapists is never “done.” Successful clinics have a defined, ongoing program for identifying and attracting talent. Physical therapy clinics that struggle, or that simply don’t have access to in-house expertise or resources, may want to consider weighing the advantages of working with an experienced recruiting partner.

Compliance: Managing a Complex and Ever-Changing System

What if you had a huge unexpected expense—maybe a six-figure expense—every single year? Well, in effect, this actually happens to many practices that don’t have a firm grip on compliance and billing. Clinics can—and do—lose irreplaceable revenue on regular basis. Some of the key issues:

It’s all so complicated. The complexities of coding and documentation can bog down any staff, leading to morale problems and payment delays. Continuous changes to regulations add an additional layer of difficulty … and frustration.
A major drag on revenue. A clinic staff might be unknowingly under-coding or improperly coding visits, leading to payments that are delayed or much lower than they could be. Some billing issues that start as tricky problems wind up becoming permanent losses.
Regulatory oversight. An RAC visit can result in a regulatory drawback that deals an unforeseen—and possibly devastating—blow to your bottom line.

Three things you can do:

Automate and update. Are there tools you can use to streamline your workflow? Revisit your software of choice and review the technology available to support the compliance and billing processes.
Commit to your team. Clinics that choose to tackle compliance with an in-house staff should guard against staff churn by reviewing compensation, providing ongoing training, and focusing on creating a team- and morale-building atmosphere.
Be realistic. If compliance and billing headaches become overwhelming, consider a cost/benefit analysis of outsourcing that aspect of your operations.

How much success a particular physical therapy clinic will achieve depends on a number of variables. But by focusing first on the biggest barriers to improved financial performance, your PT practice can take the first steps toward meeting its true potential.

Joseph M. Sapp, PT, a licensed therapist and founder of his own successful physical therapy practice, launched Innovative Therapy Concepts in 2006. ITC’s practice management model, designed to reward therapists and improve financial performance, currently benefits 45 plus points of service.

*The author has a vested interest in this subject.