Published 7/1/2011
Michael Q. Freehill, MD; William Evans, MBA

Adding physical therapy to your practice

Physical therapy (PT) and occupational therapy (OT) are crucial to successful outcomes for patients with musculoskeletal problems, and many excellent reasons exist to develop in-house PT/OT. However, the success of physician-owned physical therapy services (POPTS) is not a foregone conclusion. There is an array of operational, financial and political pitfalls.

Operational considerations
The impact on existing facilities and staffing is one of the first issues to evaluate when considering adding PT and/or OT lines of service. If sufficient unused (or at least nonrevenue-generating) space currently exists, developing a new PT/OT clinic may be fairly simple. However, if additional space or significant renovation is needed, costs can quickly escalate. Federal regulations, such as Stark, generally encourage PT/OT to be housed in the same building as where the physician owners hold clinic, so space limitations can present significant obstacles unless new space is pursued.

Likewise, an evaluation of staffing and company culture is needed. For example, the increased throughput requirements for the front desk may dictate that additional staffing (or even an entire front desk remodel) is necessary to add PT/OT in existing clinic locations. Further, it is uncommon to simply employ one PT without some additional support, such as a PT assistant, aide, or perhaps a certified athletic trainer (ATC). As a result, clinics should be prepared for additional staffing requirements. In the case of physical therapy, a 2:1 ratio of PTs to PT assistants is not unreasonable, although every practice must determine its own needs based on volume of referrals.

Benefits of adding PT
While there are many potential pitfalls to adding PT/OT lines of service to an orthopaedic practice, there are also numerous benefits. Naturally, one of the primary benefits is financial. Profit in excess of $100,000 per therapist per year is not unreasonable, and in many areas of the country the potential upside is even greater. Current MGMA data (2010 Report; 2009 Data) indicate mean collections are $235,000 for PT and $199,000 for OT, with an average profit of nearly $160,000. Although potential diminishing returns limit how many therapists a clinic may hire, these additional revenues cannot be ignored in an era of declining physician reimbursement. Next to ambulatory surgical centers, therapy is often the most profitable ancillary tool orthopaedic surgeons wield.

Moreover, in-house therapy yields greater control over the quality of therapy and improved continuity of care. With the physicians employing the therapists directly, there is a greatly likelihood of patients receiving the treatments the doctor expects. Being able to walk a patient down the hall and introduce him or her directly to the therapist who will be providing treatment is a great way to extend the patient relationship the physician has already established. Furthermore, patients are increasingly demanding convenience, and a “one-stop-shop” model for all treatments is becoming the expected norm.

Therapists can also be used as an additional marketing tool through community outreach and education. Injury prevention training or rehabilitation education can generate goodwill among the community in general and the practice’s existing patient pool in particular.

Excerpted from Enhancing your practice’s revenues: Pearls and pitfalls, a primer for orthopaedic surgeons developed by the AAOS Practice Management Committee. Download a free copy of the entire primer at www.aaos.org/pracman