We briefly talked about totaling up expenses in order to calculate your net cost per visit in a previous post, but today, let’s take a deeper dive into the expenses side of things. Admittedly, it’s not the most exciting topic, but it’s necessary nonetheless, so here we go. Below are four metrics to help you get a handle on the costs of doing business (adapted from this article):

1. Wages divided by net revenue.

Rehab therapy is a very labor-intensive industry, so most of your expenses will probably be related to staff, specifically to their salaries and wages. This metric will help you figure out how to adjust staffing as you experience revenue changes. Now while some changes in this metric might be temporary (perhaps a busy PT takes some time off), significant and long-lasting changes might signify the need for some staffing adjustments.

Of course you know how much you spend on each staff member’s salary, but when was the last time you calculated the true cost of your employees? Things like insurance benefits, paid time off, continuing education tuition, and team-building activities (such as birthday celebrations, catered lunches, and team barbecues) are all wonderful incentives, but depending on the size of your practice, they can certainly add up. Knowing how much you’re spending on the little stuff can help you make better informed decisions on the big stuff—like when to bring on another team member.

2. Total clinical hours per patient visit.

This is another metric to help you staff correctly. To calculate it, take the total paid hours of your therapists, aides, assistants, and students over a one-month or three-month period and divide it by the number of patient visits during that same stretch of time. Once you’ve accounted for several periods, you can track trends and even go so far as dividing this out by type of patient case (e.g., knee, shoulder, or hip). This could help direct your marketing efforts to target patients suffering from certain types of conditions. Perhaps this even could help you identify your specialty or niche.

3. Supply costs per patient.

This is just a good metric to track so you know how much you’re spending on things like hot and cold packs, gloves, bandages, and foam rollers per patient (or patient visit). This can help you make buying decisions, formulate your budget, and even negotiate to reach lower bulk buying costs. You also can break this number down by therapist to identify best practices and areas of opportunity.

Also, don’t forget to consider the cost of maintaining paper charts. At $8 a year per record, documenting on paper can be quite the additional supply cost, especially if you’ve got a lot of patients.

4. Maintenance and repair expenses.

While it can be hard to get a handle on average cost of maintenance and repair expenses because they vary so much month-to-month and year-to-year, having a ballpark understanding of this metric can help you set aside the appropriate funds necessary to ensure a leaky roof or faulty treadmill won’t completely derail your cash flow.


What other metrics do you consider when evaluating the costs of doing business? Tell us in the comments section below.

The State of Rehab Therapy in 2019 - Regular BannerThe State of Rehab Therapy in 2019 - Small Banner
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