Cash Physical Therapy | for Therapeutic Wealth

“How much money do you make?” the lovely lady in the passenger seat of the borrowed old blue Nissan pickup truck questioned. I’d met this lovely specimen of humanity the a day before and logic, wisdom, and reason had fled my cranium just seconds after that.

Unwilling to let the girl with the golden brown hair get away I admitted, “I probably make 2-3 times what a therapist earns here”. Clearly that was “the hormones talking” but it indeed was the truth.

Back in 1996 as a home health physical therapist, I was easily earning over $100,000/year. As I’d crossed our northern border to meet this lovely lady, this was even more true because the U.S. dollar at that time had more earning power than their dollar.

In those days before 27 page home-health “OASIS” forms it was quite easy to see 8-10 patients per day and collect the equivalent of a contracted $59/visit for each one of them. My fuel costs were $100/month. Finances were easy for any PT willing to do home health.

Four months later on Valentines Day in the rainy mist (as you may recall from a previous post) that pretty young lady said that she would marry me. Of course I wanted her family to meet mine before the “big day” so down her parents flew from the mist of Victoria, BC to the sun of AZ to meet my family. Wanting to have an appropriate nest ready before our wedding day I had already started house shopping. When my beloved’s dad saw the 2 BR + Den newer rancher with a pool and hot tub I was preparing to buy, he was incredulous.

Off to the side he told my dad, “I don’t think they should be buying such a house as newlyweds”! “But he’ll be paying cash for it”, my dad explained. “Then they should have it”, my prospective father in law agreed. An easy $132,000 check written to Mrs. Johnson and toward the middle of June 1997 I carried my bride over the threshold of our lovely new home that was all ours. We owed nobody.

In eleven years what has happened to the wealth building ability of PT’s? I have seen sub-contracted PT’s who get $65/visit. Their fuel costs are at least $300/month and their paperwork load has gone up dramatically. The cars they drive cost twice as much to replace. With the additional paperwork most PT’s are considered full time at 25 visits/week. Fewer visits are possible so their earning potential is no greater and in most cases considerably less. That same house I bought my bride has since sold for $300,000.

What is driving the trend in physical therapy? Third party payers.

With the number of medicare recipients growing and the number of people paying into medicare shrinking, change in the downward direction isn’t debatable. It’s inevitable. No amount of legislation will change the fact.

The laws of economics are simple. Our PT claims to Medicare must become smaller or fewer as the amount of money available to pay the bills becomes smaller. We have lobbied successfully and not had our part B rates cut and this year have even received a 1/2% rate “increase”. In the last few years have you noticed your cost of living decreasing? Though it doesn’t look like it on the books our effective spending power for unit of time billed has decreased.

In other third party supported clinics it is difficult to find a payer better than Medicare. Kerry Halcomb, PT who owns two out patient clinics in Phoenix, AZ says, “Medicare is the best payer”. The infamous United Health Care has a plan that is less than the cost of providing the services.

What then is the answer? Increasing the quality (cash paid at the time of service) of our services.

Even if a PT isn’t interested in having a cash practice, his or her patients will progressively be paying more out of pocket for their health care. Rising copays are a thing of the present and the future.

Why not make your facility sensitive to the needs of your client now before the next raise in copays? Next time I’ll give three ways you can increase your perceived value as a PT or PT practice for less than $1/visit. If you’d like to get some of that info for free now. You can register at Home Study Courses for Physical Therapists.

All the best,

Lance
Cash Practice Secrets