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A Question to Small Private PT Clinics
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A Question to Small Private PT Clinics - February 17, 2005 1:48:00 AM
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hlavacek
Posts: 29
Joined: November 10, 2004
From: Georgia
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What are your opinions as to the best ways to set up a small clininc on a shoe string budget. Can you sub out all of your billing and receiving?
What other things can you outsource?
What have you found to be the biggest barriers to starting your business?
Thanks in advance!
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Re: A Question to Small Private PT Clinics - February 17, 2005 2:35:00 AM
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SJBird55
Posts: 2438
Joined: May 10, 2004
From: Michigan
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I am currently going through the process.
"Starting & Managing Your Own Physical Therapy Practice" by Samuel Esterson was an easy read.
The business series home study course that you can get through the APTA (marketing, legal issues and defining your business) have a lot of material in them. [URL=http://www.ptmanager.com]www.ptmanager.com[/URL] also has various spreadsheets available for you to use.
In June, in Boston, there will be a series of courses offered specifically for those starting out (if I remember correctly).
What is your definition of "shoe string" budget? It depends on your target population. It depends on what equipment you want available and the quality of the equipment you want to use. It depends on your practice style. It depends on your lease. It depends on how large of a staff you will have. It depends on how you want your office process to occur.
I'm choosing to not do my billing. I'll have a contract with another company to provide me that service.
The biggest barrier for me is my lack of business knowledge. If it weren't for my husband, I'd be having an even tougher time. He's negotiated contracts for me. He'll be setting up my books and he knows accountants. He knows MI business law. And he knows lawyers. He knows all that boring business stuff that he tells me I need to know.
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Re: A Question to Small Private PT Clinics - February 17, 2005 3:11:00 AM
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hlavacek
Posts: 29
Joined: November 10, 2004
From: Georgia
Status: offline
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Thanks SJBird55,
I am wanting to start a small one PT clinic, general ortho and sports. To start up I will not need a bunch of equipment or a fancy space. I plan on working some home health at the same time to help out. I am with you though, am clueless when it comes to the business side of things. Which is why I would like to sub out as much of that as possible.
What is the general process for getting on insurance plans. Is it a matter of just filling out the paper work, or do you have to negotiate individually with each plan?
I am in a small town that has been taken over by POPTS. At the same time, I have realized that the only way I will be happy is to be my own boss. So my idea is to start out real simple and see how things go. My main question is how easy is it to start out simple?
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Re: A Question to Small Private PT Clinics - February 17, 2005 3:12:00 AM
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Diane
Posts: 1507
Joined: March 9, 2001
From: Vancouver, B.C., Canada
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SJ, your husband is no doubt a good resource, but I think it's important for people to realize that business stuff is just.. stuff. The level of complexity isn't very great, it's not hard to understand. You just find your way and deal with one bit at a time and you are fine. The world is set up for business, so much so that anyone (literally!) can manouver into having a business.. don't be daunted by the thought.
The other thing is that you don't have to do it all, lean on others!.. accountant, bookkeeper, biller, banker... believe it or not they like to do their work as much as we like to do ours. Your PT association likely has resources and ideas you could adopt/modify, but keep it as simple as possible so you can control as much of it as you can.
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Re: A Question to Small Private PT Clinics - February 17, 2005 6:42:00 AM
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SJBird55
Posts: 2438
Joined: May 10, 2004
From: Michigan
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Thanks, Diane. I am doing as you say - surrounding myself with a team. It may cost a little more to do it that way, but it does decrease my stress so I can have time to do fun things (like ride my horse). And, yes, Diane, I'm joining the private practice section when I'm at the combined sections meeting next week. What I'm guessing and I hope I'm right is that the stress and overwhelming feelings I currently have will be substantially reduced when the clinic is actually opened.
hlavacek, my husband actually told me that before he'd help me out that I had to sit down and write a business plan. I did a SWOT thingy and came up with a vision, a mission and a motto. I designed flow sheets for the various processes that will occur on the operational side of what occurs ( [URL=http://www.aafp.org]www.aafp.org[/URL] had some helpful stuff even though it was for physicians)
My father in-law who has been president and vice-president of companies (like my husband) gave me the thumbs up and said I did a good job with the business aspect of the clinic.
hlavacek, I don't know enough about the insurance company stuff yet. I'm planning on keeping it simple - Medicare and BCBS. Some thick forms to fill out for Medicare... once you fill them out and are open, you can treat Medicare patients, but you can't bill out for their services until Medicare gives you a number. Supposedly that may take up to 8 weeks. Then, for BCBS, I can't fill out their forms until I have the Medicare number. And then after those forms are completed, it might be 8 weeks until BCBS responds. So, you have to keep in mind that initially there won't be money coming into the company.
If you really wanted to do outpatient physical therapy in the home and bill it out under Medicare B... honestly, you should probably contact Peter Kovacek. He's here in MI and he would probably spend a nice chunk of time speaking to you about that kind of endeavor. He'd be a great resource too. Check out [URL=http://www.ptmanager.com]www.ptmanager.com[/URL]
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Re: A Question to Small Private PT Clinics - February 21, 2005 9:24:00 PM
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goodlooks58
Posts: 425
Joined: October 21, 2002
From: CA
Status: offline
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Being in business for 20 years has taught me to be vigilant on new patient flow into your practise. When we get busy we tend to feel comfortable and take our referral sources (MDs) for granted. An MD is a very fickle animal and he/she will drop you anytime for no rhyme or reason and you can lose 20%-30% of your business in one day. I have learnt so much from my past billing problems that now I have my own small billing service on the side. So the lesson to learn is not to put all your eggs in one basket and have a goal of having atleast 80-100 referral sources. So that if you get 1 patient
from anyone of them, your business will be intact.
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Re: A Question to Small Private PT Clinics - February 22, 2005 3:52:00 AM
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hmgross
Posts: 292
Joined: February 28, 2003
From: Minnesota
Status: offline
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As far as insurance, I did contract with Medicare, BCBS, Medica (which is also Aetna, UnitedHealth)and UCare, because I knew that was the majority of what was in my area. If you get good "word of mouth" people will be willing to see you "out of network" which usually means they will have to pay a bit more out of pocket. I had some previous experience billing for a dentist years ago and prefer to do my own coding and billing but that can be too daunting if you have never done it before. I actually find it fun, because it is gratifying to post payments and make deposits! I guess my advice would be, find a good accountant, an attorney (not needed often)and join the PPS and ask people who have been in the business a while. Everyone's situation is a little different, no two practices will be alike, but I am doing quite well so far! I agree with goodlooks about not putting all your eggs in one basket--always good advice.
_____________________________
Holly Gross PT
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Re: A Question to Small Private PT Clinics - February 22, 2005 6:44:00 AM
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coloradojulie
Posts: 413
Joined: November 10, 2002
From: colorado usa
Status: offline
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I have been in private practice for almost 10 years, and have definitely learned as I went. Pros and Cons to this. The more advanced preparation you have the better, to address the growth issues. I now have an office manager, a billing manager, and four PTs (including myself).
I have tried billing both ways...outsourcing and in house. I have to say I prefer in house. I did the billing for a while and took some classes. It is actually pretty easy...there are few codes to use in PT unlike other areas in medicine. I can keep tabs on it, audit it, adjust it, and it is on hand for immediate patient questions. We use an electronic clearinghouse and it speeds up payment and reduces costs. We do our own statement generating etc. I use Medisoft accounting and have used it my entire practice. I found when I did my own billing, I increased my collections by $50,000 per year. That's not chump change. Also it costs me less to have someone in house vs. a percentage.
Getting contracted with insurers is a process. Identify the important companies in your area. Call local hospital billing departments and see if someone will share with you what companies they see the most. Then contact the companies, online or via phone and get in touch with the provider relations department. Often the process is started with you writing a letter of intent and they will follow that by sending you an application. Familiarize yourself with the relatvie value system so you can determine what they are paying. Often they will send you a sample reimbursement list for specific codes. Don't necessarily take the first offer. Try and negotiate. It will do others in your area if you accept too low a contract, resulting in all of them possibly having lowered reimbursement. Use medicare as a middle ground standard and go from there. Remember there are very strict laws about price fixing...so you can't compare contracts with your neighbours. Figure out your costs and determine what type of profit you need in order to succeed. These per visit numbers can help you determine what amount you must get.
Also more and more companies are contracting through large groups such as theraphysics. I have personally boycotted these organizations due to the substantial fees they charge. Rather I contact the company directly and see if I can contract under a small practice or rural and remote ruling. So far I have avoided these types of companies.
Develop your financial policies carefully making sure you are upholding the law as well as any insurance contracts you might have. That APTA course mentioned above is a good start.
Be prepared for lean times and slow growth. Competing with POPTs will be a challenge. Gaining referrals requires quality care and patience. People need to hear your name or your business name three times before they even begin to register or remember it. Communication with docs consistently through marketing, progress reports etc. is very important in keeping the lines of communication open. I have found time and performance the best marketing tools we have.
Set a professional business impression. Meaning in you keeness to grow and get new patients, don't bend the rules or compromise your financial policy. This can leave an impression in the patient's mind that you are not professional. You will gain more respect by being structured from a business and financial standpoint.
Know your competition. Oprah (if I may quote her here) said that the time it takes you to look behind you at your competition, slows you down a step. Be aware, not obsessive. Control what you can control...your environment etc. Being paranoid is one measure of success according to people like Trump and Gates. I translate this into meaning avoiding complacency and knowing that you have a certain market size in your area and that you want to get your piece of that market and protect it. Always evolving and improving and responding to the needs of your clients, the docs, your area etc. are good things to do.
Set yourself apart somehow by offering unique services or better quality. People need a reason to change patterns. Once a patient has "my therapist" you have to increase the value you offer enough to make them turn in your direction.
Good luck to you. It is very rewarding and also a lot of work. Setting goals can help in the short term and long term. Be prepared to really put your heart and soul into this venture.
_____________________________
PRC
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Re: A Question to Small Private PT Clinics - February 22, 2005 8:03:00 AM
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apolipo
Posts: 115
Joined: December 22, 2004
From: Grand Rapids, MI
Status: offline
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hlavcek,
One of the best pieces of advice I received from a PT with a great mind for buisness was get your referral sources established before you invest any significant amount of capital. He told me to have at least 20-30 Drs. agree to refer to you before you even look into location/billing/staff/equipment/etc. If you don't have referral sources, your dead in the water.
mike t
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Re: A Question to Small Private PT Clinics - February 22, 2005 5:28:00 PM
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coloradojulie
Posts: 413
Joined: November 10, 2002
From: colorado usa
Status: offline
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Getting referral sources lined up is important...but just a couple of thoughts...many docs may say they will refer to you, but you may find they don't. Also we work with consistently about 5 docs and have intermittent referrals from about 17. Getting strong relations with one or two docs is a good start. That is how our practice started.
I have to say though I have seen many successes and failures for independent private practice.
_____________________________
PRC
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Re: A Question to Small Private PT Clinics - February 23, 2005 4:28:00 AM
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hmgross
Posts: 292
Joined: February 28, 2003
From: Minnesota
Status: offline
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I am always cautiously optimistic in my practice. I cover a large, rural geographic location, I have had about 20 different referral sources, but most of my referrals come from 5 physicians, three in my town, one 20 miles away and one 60 miles away. I have only been at this since last September and word gets out, particularly when the patient sees their doc and says "I saw Holly before and I want to keep going to her"--The physicians are busy and can't always remember PT names or where they practice, so if the patient speaks up, it helps. I think I am also at an advantage, because I grew up in this area and I am also visible in the community and am a member of the school board.
_____________________________
Holly Gross PT
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Re: A Question to Small Private PT Clinics - April 19, 2005 2:20:00 PM
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tnt
Posts: 22
Joined: April 18, 2005
From: Wisconsin
Status: offline
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I too am in the early stages of starting my own practice, and am finding the comments on these pages very helpful. I am an "information gatherer" by nature, and have already ordered several publications. The one thing that has eluded me is finding a list of available seminars regarding starting your own clinic. I remember several of these things coming in the mail during all my years as a corporate practitioner, but of course when I want them, I can't find them! Does anyone have any suggestions?
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Re: A Question to Small Private PT Clinics - April 19, 2005 11:47:00 PM
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Randy Dixon
Posts: 744
Joined: August 6, 2004
Status: offline
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My experience with seminars and consultants in this area is that they get you into more trouble than they get you out of most of the time. They usually have a large business mindset and want you to implement things that are the reason you left working for someone else in the first place.
I suggest reading books like Guerilla Marketing and small business books. Except for dealing with insurance it is all a lot easier than you would expect. When we started our business I thought there would be a lot more to it as far as what needed to be done.
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Re: A Question to Small Private PT Clinics - April 19, 2005 11:52:00 PM
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Randy Dixon
Posts: 744
Joined: August 6, 2004
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I'll tell you about our first day in business. We began contracting Home health while we established a clinic. So we set our opening date on Monday, we had a technician and a marketer that we had brought in with us and we said we needed to start at 8 A.M. sharp. So we all got there and looked at each other, we didn't have any patients, we didn't have any patients the whole day. The marketer went out, but we stayed in looking at each other and trying to figure out how many times we could organize the paperwork. It was embarassing.
The next day we got a patient. I doubt he'll ever realize why he got such friendly service.
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Re: A Question to Small Private PT Clinics - April 20, 2005 8:17:00 AM
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matotoms
Posts: 57
Joined: February 16, 2005
From: nbn
Status: offline
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im curious about HH contracting. What kind of rate do you charge. Is there a written contract or is it pretty much like an independent contractor arrangement?
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Re: A Question to Small Private PT Clinics - April 20, 2005 10:26:00 PM
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goodlooks58
Posts: 425
Joined: October 21, 2002
From: CA
Status: offline
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Any thoughts on Practise Builders and Measurable Solutions etc type of consulting businesses? I have been inundated with solicitation mail from them.
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Re: A Question to Small Private PT Clinics - May 3, 2005 7:06:00 PM
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webrehab
Posts: 24
Joined: January 31, 2002
From: San Diego
Status: offline
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Great to see the group here talking about physical therapy private practice and start up.
I have been in it for 10 years and it has been a struggle, rewarding, tiring, and exciting.
Here are my thoughts:
1. Read the E-Myth and set up your practice with the author's thoughts in mind.
2. Realize that a business owner is not a clinician only but a business owner as well. Time must be spent on the business side of things - financials, HR, marketing, etc.
3. Diversify - a hard lesson I learned when we lost 38% of our business to a POPTS. We treated those doctors, their family, etc. Try to get a bunch of referrals from a variety of doctors. If one goes away, they have only a small impact on your business.
4. Differentiate yourself yes but don't harp on the "I do one-on-one care" or "our quality of care sets us apart". Everyone says that. Find niche markets that you are passionate about.
5. Educate your staff(Internal Marketing). Teach them how to reply to questions that your patients and prospective patients have. Come up with a script for them. You will only have contact with a small percentage of potential clients. Your staff will be in contact with as many or more.
6. Be diligent about the numbers. Know how much it costs to treat a patient, where your patients are coming from, your avg. days in AR, etc. and have a plan to improve these things.
7. Develop a retention marketing plan. Stay in touch with every patient that comes through your door. Don't depend on a physician to initiate the referral process. Educate your patients on what you have to offer.
8. When you go to your doctors, build a relationship with the front office and then ask for permission to meet the doctor. Don't meet the doctor the first time and do all the talking about what you have to offer. They have heard it before. Ask them how you can help and then offer some solutions. Talk evidence-based as well. This has always worked for me.
9. It is a game of numbers - if you meet enough docs, you will get the referrals.
10. Look for other contracts - HMO, Work Comp, etc. Talk to a non-competitor and find out what they are doing.
Email me any time if I can help you out.
Dave Straight, MPT, OCS
[URL=http://www.e-rehab.com]E-rehab.com[/URL]
_____________________________
David Straight, MPT, OCS
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Re: A Question to Small Private PT Clinics - July 6, 2005 7:22:00 PM
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FL_PT
Posts: 28
Joined: February 15, 2003
From: Sarasota, FL
Status: offline
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I can't agree with this last post more. E-Myth is an outstanding resource for developing your private practice. The idea is to work “ON” your business instead of “IN” it. Many of us start out in the same position. We realize that we can treat fewer patients and provider better service if we work for ourselves, but we don’t realize that we know little to nothing about running a business until we do it.
I left a local hospital because I love physical therapy and started to burn out. When I opened my clinic four years ago I new I was a good therapist and patients liked me, but I had no idea what I was in for. Now, I work twice as many hours as I did working for the hospital, but I love every minute of it. Every patient I treat leaves feeling better than when they came in and I know that there is a light at the end of the tunnel. I am creating something that will last long after I retire and that is true satisfaction for me.
I have purchased the services of both Practice Builders and Measurable Solutions within the past year. I can say that Practice Builders presents good information, but be careful. I spent $1000 for one of their seminars and was ready to sign a $50,000 commitment to purchase their services before I came to my senses. I still spent $25,000 by the end of their sale, but I felt it was time to improve the image of my company and increase market awareness. Their services were ok, but I could have hired a local graphic designer to create what they created for about 30% of the cost.
As for Measurable Solutions, I would say buyer be ware. They also offered a “New Patient Course” that cost around $2,000, but their intention is to sell you their executive training seminar for around $34,000. I purchased this after 1-year of thinking about it and have been satisfied with it, but let me tell you a little about it.
First, they are a group attached to the church of Scientology, and everything you learn is mixed with their teaching. I felt like the entire time I was there they were trying to convert me to their religion.
The information they provide you is good, but it is nothing you can’t find in business books and other non-religious consulting companies. The founder, Shawn Kirk, was a PT and is a charismatic speaker, but don’t be fooled, his primary purpose is to raise money and members for Scientology. I say this from experience and research. There are other consulting groups for dentists, doctors, and other professionals that teach the same material with the same purpose.
I have used the information learned at Measurable Solutions in my practice, and it is useful information, but it would be irresponsible to endorse a company so blatantly devoted to the church of Scientology without warning others of this fact.
If anyone is interested I would love to share what I have learned, minus the $34,000 price tag and I wish all therapists moving into private practice the best of luck.
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