The Business of Physical Therapy: A Guide for PT Practices
Starting a physical therapy practice of your own requires a
significant shift. You are no longer just a healthcare practitioner. You are
also a business owner. This provides more freedom – you get to be your own boss
– and presents exciting new possibilities.
It also brings new obligations. You are responsible for the
well-being of your workers and your patients. You are also responsible for your
overall business success. It’s up to you to hustle for patients, drive growth,
and boost revenue.
A PT business offers fantastic opportunities. The field is
expected to grow at a rate of 18% from 2019 to 2029. You can expect
sufficient demand – thanks in part to an aging Baby Boomer generation in need
of PT services.
That said, you will have to work extra hard if you want your
business to stand out from the crowd in an increasingly competitive marketplace.
Read on for general tips on how to establish a thriving
physical therapy practice.
A Guide to Setting Up a Successful Physical Therapy Practice
When setting up your own PT practice, you have to be like a
medical professional and a business
The below points cover some of the essential issues worth
Choose a Business Model
You can choose to do it alone and open a solo physical
Alternatively, you can opt for a partnership. This allows
you to share the business startup costs and risks. Also, pooling your money
with another person can make it easier to own your business fully, minimizing
the need for a third-party lender.
If you do opt for a partnership, look for someone whose
skills and expertise balance your own. For example, maybe you focused your
education on PT for people recovering from auto accidents – while your partner
is focused on sports injuries. This combination allows you to corner a larger
If neither the “solopreneur” route nor a partnership sounds
right for you, you can opt for a group practice. You can also consider
multidisciplinary care teams, subscription-based or concierge services, or even
partnerships with area gyms.
Define a Specialty
Defining a specialty can help you stand out from
other PT practices. It might seem counterintuitive. After all, if you’re just a
general physical therapist, you’ll have more of a market share, right? In fact,
patients often seek specialists in distinct fields, like surgical recovery.
Additionally, identifying a specific field will allow you to
better liaise with fellow healthcare professionals and establish the network of
contacts you need to succeed.
Suppose the orthopedic surgeons in your area hospital know
that you are the go-to specialist in helping patients recover from hip and knee
replacements, for example. In that case, you can count on plenty of business
coming your way via direct referrals.
Figure Out a Financial Model
The healthcare marketplace offers patients diverse payment
options. It’s up to you to determine what sector you want to cater to.
Your physical therapy practice may enter into contracts with
major insurance companies and work with patients based on specific, previously
agreed reimbursement rates. The bulk of the financial burden, in this case,
falls on the insurer (although there is usually still a co-pay for the
Alternatively, you may go “out of network” and establish a
cash-based practice. This doesn’t mean that you only accept cash payments, of
course. It just means that you receive payment directly from patients.
This spares you the added administrative burden of dealing
with insurers or Medicare/Medicaid reimbursements. However, it also potentially
narrows your patient pool. Not all patients are willing or able to pay out of
pocket and then wait for potential reimbursement.
Determine Your Funding Needs and Set Up Your Space
Once you’ve got the above points taken care of, you can start writing a business plan. Determine what you
need in terms of physical space, workforce, and tools and equipment. This will
help you figure out how much money you need to get your physical therapy
practice off the ground.
You have a few ways to get funding. First, you may have a
nest egg you’ve been building for precisely this purpose. If you’re going into
business with a partner, you may have enough between the two of you to get
started. Alternatively, you can also take out a loan from a private lender.
Protect Your Business with Sufficient Insurance Coverage
You’ve invested time, energy, and money into setting up your
PT practice. Now, you want to protect that investment. The appropriate
insurance can help.
Here are a few types of insurance to research as a PT
liability: Professional liability coverage can help protect you from malpractice claims – or sexual
misconduct or abuse claims (e.g., from employees or patients). It can also help
safeguard your business in case of damage to other people’s property on your
practice’s premises, data security breaches, or violent workplace incidents.
● Business Owner’s
Policy (BOP): A BOP covers issues that may
arise that aren’t explicitly related to your services as a physical therapist.
It might include commercial general liability insurance, privacy liability
protection, or employee theft.
Compensation: This type of insurance helps
to protect you if an employee is hurt while performing job-related duties.
Depending on the state you live in, and the number of people you employ,
workers’ compensation may be mandatory for your PT practice.
This is just a sampling of some of the insurances you may
need. An expert focusing on the healthcare industry can help you determine your
needs based on factors like the size of your business and the services
Get Protection for Your Physical Therapy Practice Today
Healthcare Providers Service Organization (HPSO) offers insurance for physical therapists, including the
types listed above.
Our expert team will assess the risks your physical therapy
business faces based on its unique attributes. We will then tailor
recommendations to help you get the coverage you need to keep your business
We believe that every physical therapist business is unique
and want every policy we write to reflect that fact.
Contact us for a quote.