Assess Your Practice
Once a practice starts asking “what are the magic PT numbers” we know that it is time to assess how best to manage the practice for vision accomplishment. The answer to both questions is really that “it depends on the details of your practice.” Consider your financial dashboard and pay close attention to your utilization rates. Make sure your dashboard is being filled in with accurate numbers and data. Review your facility and fixed overhead costs.
One practice owner shared that with his initial 1500 square foot office and three clinicians his profit margins were fairly high because his overhead was low. But then, he moved into a fitness center with a pool and gym facility that had so much overhead, and so many fixed monthly costs and debt payments that profit margins shrunk dramatically. He found that he had to increase efficiencies on every front to make a reasonable monthly profit.
During your practice review, determine which products and services are making you money and which ones are not. Determine whether you can have someone spend less time in his/her physical therapist role or whether you need to hire a part- or full-time person to help your PT manager/owner find time to manage the business.
Sometimes a step back to review and reflect is what is needed to achieve our practice goals; to reorganize our approaches and to determine what the magic PT number is for your office. Taking an objective step back from day to day operations will also help you to ask the right questions about your practice. What are we doing well? What’s not working so well? What are our daily and weekly numbers? Are we reaching our goals financially and for service delivery? What do we need to be doing differently right now? What do we need to strive to be doing in order to achieve our goals? Where can each team member’s talents best be put to use?
Without answers to these questions, we will miscalculate the number of therapists needed to operate an efficient and financially sound practice. When you remove yourself from doing clinical work day in and day out, you can experience a more objective view of what’s really in place and working well, and what’s not. For instance, you can assess:
- Can we manage staff hours and patient visits more effectively?
- Are we maximizing our product and package sales?
- What is our real overhead? Facility, utilities, amenities and so on!
- Will we benefit from the addition of clinician and/or support staff?
One of the challenges of taking a step back and having an owner-therapist cut back on service-provision hours is that the practice may lose needed income. This means that our utilization rates and staffing levels need to be optimal enough that a step-back in hours by the clinician/owner is workable for the entire practice. At the same time, inefficiencies may be discovered that can be corrected and that can make the practice more money working less clinical hours.
I started with myself and two therapists. Sometimes we get caught up looking for a “right answer” when what we need to do is focus on what is right for our vision accomplishment and our practice’s future. You have to do what’s right for you based on your vision. Consider your practice vision, your current financials, and your dashboard numbers in detail as well as in combination to determine what your magic number of PTs really is.
Many practice owners have shared that having three to five therapists creates the “magic” needed for the practice to operate at its best service and profitability levels. As mentioned before, it depends on the details of your practice. One practice owner shared that her magic number is four to five therapists, here is what she had to say:
“For me, my magic number is four to five therapists because this number provides enough redundancy, overlap, and coverage on the schedule to allow me to become a part-time clinician rather than the full-time bread-winner of the practice. It really is a matter of laying the cards out on the table and seeing what you are working with, seeing how you can reshuffle and set a path for growth of your practice. Each practice needs to have enough clinicians to take some of the volume off of the main clinician so that the practice can be managed for success. If things are not growing the way you want, implement a 90 Day Sprint or sign up to work with Jamey so that you can achieve your vision and goals.”
Another of The Automated Practice owners shared:
“Once I hit about five FTE clinicians, that’s when I felt like I could take a step back and begin to manage the practice more effectively. Also, I’ve found that it takes about half of a support FTE (Full Time Employee) per PT. Which means as you add PT’s, you are also adding support staff. As the staff team grew, the pressure was on me as the owner to take a step back and to really manage the practice. I found that I simply could not be a full-time clinician and a full-time manager of the practice. I had to make a choice to treat patients and hire a practice manager, or to step back from my clinician hours and to manage the practice. I chose to step back and manage the practice I was working so hard to grow. This decision has helped me build a valuable and sustainable practice.”
I have found that every time an owner takes a step back from the business to assess what is working well and what is not, the business grows. I’m not talking about immediate, next-day growth, but the kind of growth that happens over several quarters and is sustainable, making the practice an ongoing success. Take the time now to begin deciding what you need to do in order to start stepping away and begin the process, soon your magic number will appear.
If you’d like to have a conversation, please fill out the Owner’s Profile.