Wednesday, June 11, 2008

Competition and the Cash Practice

The word “competition” can elicit many different emotional responses. For some it represents a challenge to be overcome and for others it may represent an excuse as to why they are not succeeding in business. Competition can be seen in the form of obtaining new patient referrals, having the most respected practice in the area and especially in the recruitment and hiring of experienced physical therapists.

Physical Therapy Products recently published their 2008 Hot Job List in their most recent issue and the report on Physical Therapy was very interesting. According to the industry research firm IBISWorld, Inc. which is one of the nation's most respected independent publishers of business intelligence research reports “those seeking a stable career, in a potentially lucrative industry, should think about physical therapy, a career path which incorporates the fields of physical, occupational, and speech therapy. Mr. Van Horn said Physical Therapy will drive job growth for years to come as aging Baby Boomers, as well as high school, college, and professional athletes often require extended periods of therapy to recover from painful injuries. The Bureau of Labor Statistics claims jobs in these professions are set to increase at a much faster rate than the average for other occupations, advised Mr. Van Horn. He added, "IBISWorld predicts that significant growth in demand for these occupations estimated to be about 4.9 percent could well result in labor shortages over the next five years, which may negatively impact the sector's revenue growth by driving up wage costs." However, according to our clients across the US and Canada there is already a shortage of physical therapists and wages are already being driven up.

So how does all this relate to a cash based physical therapy practice. Well, first off a good cash practice model has very little overhead so the business immediately has more profit potential. Second, you do not need an army of experienced physical therapists at an average of $70,000 a year to run a cash practice. A correctly setup and managed cash practice needs very few physical therapists and a drastically reduced number of administrative staff.

Since in a cash practice you can offer a physical therapist the chance to deliver care on their own terms without the treatment arbitraries forced by an uneducated insurance industry you can offer something that the competition can’t – freedom.

A cash based physical therapy practice offers a business model that puts the owner ahead of the competition as it provides a higher profit potential and better work environment for the therapist who simply wants to treat patients and help them with the treatments they know will get results.

The future of private practice physical therapy is a correctly setup and managed cash practice and that is why we are devoting a significant portion of our time in helping our clients set up their own cash practice.