For PT practice owners, finding ways to increase topline revenue can be challenging. While there are a number of strategies for growing your practice, your success ultimately hinges on accomplishing at least one of the following:
- Getting paid more for the services you provide.
- Getting more patients in the door.
- Keeping patients from dropping out early.
For many practices—especially newer and smaller clinics—it’s easy to get stuck on the first one and forget about the second two. After all, payment issues often are a major driver of stress and aggravation among practice owners. At times, you may feel like you’re are in a David-and-Goliath-type situation: negotiating payer contracts with minimal leverage, dealing with frivolous claim denials, or filing mountains of paperwork to make sure your patients are able to get the care they need.
And when those payment-related challenges take up such a big portion of your daily responsibilities, it’s no wonder you’re prone to losing sight of other areas of the business that are 100% in your control—ones that don’t require fighting epic battles with massive corporations just to increase your bottom line. Though maximizing payment is a critical step to optimizing your practice’s financial health, it’s important to remember that it’s not the only step. So, next time you’re feeling frustrated about managing payment issues, take a step back and see if you could employ one of these strategies instead.
1. Decrease Patient Churn
Patient churn is one of the biggest problems facing PT businesses, but unfortunately it often goes unnoticed. But, what is patient churn anyway? Put simply, it’s the percentage of patients who fail to complete their course of care. Generally speaking, about 70% of all patients fail to complete their course of care, and about 20% drop out within the first three visits. Over the course of a year, this can cost the average PT practice upwards of $150,000.
Measuring Patient Churn
There are a number of ways to measure patient churn, but here’s the simplest equation:
(Expected Visit Count – Actual Visit Count) / Expected Visit Count x 100
Because churn rate looks beyond average visits per patient, it can help identify—on a patient-by-patient basis—where lapses in care expectations occurred. Such lapses can be incredibly costly, as patients who drop out of therapy often are already taking up spots in your schedule. Plus, they’ve incurred significant administrative costs for the purposes of authorizations and claim collection. Additionally, these patients can be major liabilities for your practice, as they are more likely to provide negative feedback about their therapy experience to friends or family members. Simply put, patient churn is too big of a problem to ignore, and it can have a profound impact on your clinic’s bottom line.
Stopping Patients from Churning
To decrease patient churn, you must first gain a total understanding the patient experience. Fortunately, there is a very simple method for measuring patient experience in PT.
As WebPT president and co-founder Heidi Jannenga explains here, the Net Promoter® Score (NPS®) is an awesome way for therapists to get immediate insights into the patient experience. Rather than simply measuring patient satisfaction—which tends to have a ceiling effect in PT—the NPS® provides a reliable tool for tracking patient loyalty. Loyalty is a much stricter bar than satisfaction alone—and therefore, a more sensitive indicator for measuring potential patient dropouts. Even better, the NPS® is a simple one-question survey that asks the patient to respond to following using a scale of zero to 10:
How likely are you to recommend [Practice Name] to a family member, friend, or colleague?
Anyone who answers this question with a number below seven is deemed a detractor. Promptly following up with patients who fall into the detractor category can be an incredibly successful method for addressing patient issues and ensuring that they are retained in care. This strategy is especially effective when initiated early in care (i.e., within the first three visits). That way, you can get an early pulse on which patients are most likely to drop out and why.
2. Increase Patient Lifetime Value
Ultimately, every patient you treat has a certain financial value. In general terms, a patient’s financial value is the dollar amount of reimbursement you received during his or her course of care. We refer to this as patient lifetime value (LTV). With this definition in mind, it’s clear that decreasing patient churn can have a major impact on patient lifetime value (which is part of the reason why improving churn can have such a drastic impact on your business). However, this definition of patient lifetime value is much too simplistic, because patients are worth so much more to your practice than the amount of payment you receive during their course of care. In fact, when managed effectively, your patients can become your most valuable referral source.
High-growth companies like Facebook, Twitter, and Netflix typically achieve rapid growth through word-of-mouth, person-to-person sharing. This network effect is sometimes referred to as “viral growth.” While it’s unlikely that your PT clinic will “go viral,” your patients can become an incredibly valuable marketing channel to drive new business.
For example, let’s say every month, one out of every four patients refers a friend to your practice. Or, put another way, you know that every new patient brings you 0.125 additional new patients a month. This means that in just six months, the referral volume at your practice will be twice as large as it is right now.
With this in mind, assessing patient lifetime value becomes more complex, as you must consider not only the course of care value for each patient, but also the referral value. It also brings to light a simple way to boost your clinic’s bottom line: focusing on the generators of patient lifetime value.
Pumping up Patient Lifetime Value
Just like with patient churn, increasing patient lifetime value ultimately comes down to understanding the patient experience. With churn in check—and detractors at a minimum—you can turn to the NPS® to help you increase LTV. Patients who score above an eight are deemed promoters; these are the patients who are most likely to refer a friend or family member to your clinic. And the best way to get them to do that is simple: ask! While automated patient relationship management (PRM) tools make this task really easy, any clinic can start measuring NPS® and asking patients for referrals—all it takes is a little planning.
Perhaps the biggest bang-for-your-buck promoter request is asking patients to leave online reviews. More and more, online reviews shape your clinic’s reputation, and asking your promoters to review you online does two things:
- It increases the likelihood that the individual will actually do it, and
- It increases the likelihood you will get a good review.
Sending patients to review sites embedded within search engines (like Google Reviews) can also boost your clinic’s search engine optimization (SEO), thus making it easier for potential patients to find you in the future and increasing the number of referrals each patient ultimately generates.
3. Increase Patient Reactivation
Patients can be great marketing assets for your practice, but they also serve another valuable purpose: they can always become patients again. One thing we know about managing musculoskeletal disease is that its incidence is extremely common. Every year, half of all adults in the United States will develop a condition that can likely be treated by a PT—but only about 9% actually end up seeing a therapist. This means that as PTs, it’s our responsibility to check in with discharged patients and make sure everything is going well.
When a patient comes back in, we call this reactivation. Just like new patient referrals, patient reactivation is a valuable method for keeping the schedule booked. For the average practice, a 1% boost in patient reactivation can lead to a nearly 10% boost in topline revenue, making it another effective way to grow your practice—and it’s completely under your control.
Turbo-Charging Patient Reactivation in Your Practice
The best way to manage patient reactivation is by automating patient outreach. Again, PRM tools are useful for reengaging with past patients without subjecting your staff to a lot of time-intensive work, but simply compiling a mailing list is a good start. Some practices reach out to patients every year on their birthdays and provide links to sign up for free wellness screens or phone checkups. These types of programs can be incredibly successful when it comes to driving patient reactivation. You may choose to run such campaigns on a one-time basis or keep them going continuously based on patients’ dates of discharge. While there are a number of online tools that make automating patient mailers easy, it’s important to ensure you’re working with a vendor that complies with all security and privacy rules and is willing to sign a business associate agreement (BAA).
As you can see, there are a number of strategies you can leverage to boost your clinic’s bottom line, and not all of them involve waging war with the insurance world. Plus, when you’re running a business, just feeling like you’re in full control of any given situation does wonders for morale—and that in and of itself can have a profound impact on the health of your business. You can do it; I believe in you! Keep grinding.
Have questions? Leave ’em in the comment section below, and I’ll do my best to answer them.
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