By: Jennifer Heiligman, PT, MPT
The decision to open your own rehab therapy practice is not one that should be taken lightly and it is not the right decision for everyone. Opening your own practice does allow you to make your own decisions, grow as a clinician and it may allow for you to earn a higher income than if you work for someone else. However, it does not come without its challenges and risks. To be a successful practice owner you need to do your research, get a plan in place, build your knowledge in areas such as business that you did not learn about in school and be ready to put in the work.
To help those of you who have dreamed of opening your own clinic and are brave enough to actually do it, we have compiled some key considerations to start you on the path to success.
Research the Market
In most cases, it would be ideal to open your business in your community or in close proximity to where you live. However, before deciding specifically where to establish your clinic, you will want to do some research to make sure there is a need for a rehab therapy clinic in that location. Take a look at your potential patient population. This may help you decide if you will have enough patients to support your business. In addition, it may determine what type of therapy you will be offering. Generalized rehab therapy or is there a need for a specialized niche practice? Are you in an area where there are lots of young families? You may want to consider incorporating pediatrics or sports specific rehab for all those scholastic athletes and weekend warriors. Maybe you have a good number of retirement communities in the area. This may drive your therapy more toward a geriatric population including vestibular rehab and recovery from joint replacement surgery. You may be located in a diverse area where you will want to incorporate many different options including multiple therapy disciplines. The key is to do your research and know your audience in order to provide needed services.
You will also want to take a look at your competition. How many other rehab therapy practices are in the area, how big are they, what services do they offer and how long have they been in business? These factors should play a role in determining the location of your practice and what type of therapy you will be offering. Take advantage of any gaps in coverage or services that are identified.
Establish a Business Plan
Your business plan is essentially going to be your road map to starting your business and how you will run your business. This plan will explain each aspect of your business in detail and will be necessary in order to secure financing. The business plan will include such things as your mission statement, company description and organization and business goals. If a business plan is a new concept to you, you may want to hire a professional to assist you in writing up the plan. There are also many online resources available.
Financing Your Practice
If you are independently wealthy, you may not have to worry about where you will get the money to start up a business. However, for the majority of us, securing funding is a crucial step in making the dream of owning your own business a reality. Most people in this situation will take a loan from a bank. With this option you will need to be patient. A bank requires the completion of a lot of paperwork and may require you to revise your business plan in order to qualify for the loan. Other options to secure financing include using a private investor or asking family members or friends to invest.
You will need a significant chunk of upfront money. This will be necessary to pay rent, purchase office supplies and equipment, obtain clinical equipment either by purchasing or leasing what you need, possibly remodeling your clinic space and paying utilities. Insurance payments can take up to 3 months which means it may take awhile to start to get a consistent income. Your financing plans will need to account for significant early expenses, but no significant increase in income for quite some time.
Cash Based? Insurance Based? Hybrid?
As you were establishing your business plan you most likely thought about how you would be conducting your billing. Would you only accept cash? Would you accept insurance payments? Or would you have a hybrid model where you accept both cash and insurance? Contracting with insurance companies may be a bit easier since you will only be responsible for collecting copays and deductibles. It may also make it easier to attract new patients. However, insurance companies have continued to cut reimbursement leading to a decrease in the total revenue that can be generated from a private practice accepting only insurance based patients. This is definitely something to consider as you are determining your payment model.
Find a Location
There are many items to consider when deciding on your practice’s physical location. How much you can afford to pay will determine how much you can spend for rent. This should be laid out in your budget. Other items to consider include how much space do you need? This will be relevant to what type of therapy you will be offering. For example, sports rehab will require more space than say vestibular rehab. If you will be providing pelvic health therapy, then private rooms in addition to an open gym will be a requirement. A space that is highly visible to the public may help increase your name recognition, in turn increasing patient volume. As you are a provider of healthcare services, ease of accessibility is also an important consideration.
Complete the Necessary Paperwork
This is the step in the process where it may be beneficial to hire a professional to assist. The paperwork and what is needed can get a bit complicated. Some of the necessary items include finalizing the name of your business, getting an EIN from the IRS, making sure your therapist license is up to date, filing articles of incorporation with the state, and purchasing your liability insurance. If you decide to hire someone to help with this process because you are feeling overwhelmed it is best to hire a company that has experience with establishing private medical practices.
If you are planning on being a sole practitioner, then you may be able to skip this step. But, you may still want to hire a front office manager. While you are busy treating patients they can be answering phones and taking care of other administrative responsibilities including handling insurance related tasks so you can focus on patient care. Be sure your office manager is friendly and competent. After all, they will be the first person your patients come into contact with when they come to your practice.
If you are planning on hiring additional therapists now is the time to start reaching out to colleagues or classmates. You may already have specific therapists in mind that you would like to have come work for you. Through your market research you may have identified a specialty area of therapy that could benefit the community and your practice. Start the search early for a therapist with that expertise.
Develop a Marketing Plan
Once you have decided upon a business name and you’ve created your logo, have business cards and marketing materials created. A strategic marketing plan is key to the success of a new practice. You will want to diversify your methods. Meeting with local physicians to cultivate referral sources is a must. In addition, participate in community events such as health fairs and festivals. This will allow you to start to get name recognition in the area. Sponsor local sports teams or events since this usually involves having your business name on uniforms or displayed on a banner. Any method to get your name and what services you offer out into the community is a good marketing idea.
Build a Website and Social Media Presence
This step generally goes along with your marketing plan. These days most people will go straight to the internet to search for information on a business. Creating a website is of utmost importance. Initially a simple website that provides the basics of who you are, where you are located, what services you provide and how to get in touch with you is all you need. As your business grows, you can add information such as patient testimonials and blog articles. Be sure the website is mobile friendly since most people have their phones on them at all times. In addition, make sure it is branded to your logo including color scheme and that it functions and loads quickly. You could potentially build the website yourself. However, this is another time when you may want to hire a professional. If you have an only so-so website, potential patients may get the feeling your practice is also only so-so.
Another consideration is your social media presence. In 2019 it was indicated that consumers are spending up to 3 hours on social media platforms per day Some platforms to consider in order to build your social media presence include Facebook, Instagram, Twitter and LinkedIn. Posting on a regular basis helps your business be seen. In addition, you will want to have patients post positive reviews as soon as possible. The most popular sites for reviews are Google and Yelp. Positive patient reviews will give confidence to those people searching for a rehab therapy clinic that you offer quality service and may encourage them to choose your practice over your competition.
Find the Right Software
Another consideration will be which EMR software is most appropriate for your new practice. You will want to do your research since the software is going to assist you with your day to day processes of running your business. At a minimum the software should include scheduling, documentation and practice management reporting capabilities. In addition, to help decrease manual tasks a patient portal and automatic appointment reminders are extremely helpful. An EMR that has built in compliance alerts and reminders can significantly decrease delayed payments and claim denials due to such things as treating outside of authorization windows or not obtaining a certified plan of care. As with any new system, a learning curve is to be expected. However, to minimize that impact, check with the software provider regarding training and ongoing support. A good quality EMR system will provide both. Make sure the system can grow with you as your company grows. Consider your future needs, not just your startup needs when reviewing EMRs. The last thing you will want to do is have to change your EMR after only a short period of time simply because it does not offer the features your now busy and successful practice requires.
Opening your own rehab therapy practice can seem quite daunting. We’ve provided a general outline of some of the key considerations in that process. As you can see, there are many things to consider. However, there are many resources available to assist in the process of opening your own therapy practice. There are many therapists who are willing to serve as peer advisors. The Private Practice Section (PPS) of the American Physical Therapy Association (APTA) offers many useful start up tools. With the right mindset and knowledge your dream of becoming a rehab therapy practice owner can become a reality.
If you are interested in learning more about how OptimisPT can be your practice partner for your start up clinic or existing clinic, schedule a demo.