Blog Post

Revenue Metrics Every PT Private Practice Owner Should Know

Financial business data isn't just for corporate bigwigs. Here are the revenue metrics every PT private practice owner should know.

Brooke Andrus
5 min read
August 13, 2014
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The phrase “revenue metrics” might conjure up images of highrise boardrooms, laser pointers, and Powerpoint slideshows with graphs galore. But these financial data points aren’t just for corporate bigwigs; every business person—including physical therapy private practice owners—should not only know what these figures are, but also pay attention to them. While there’s probably no need for you to run out and buy a laser pointer (unless you really want to—I mean, they are pretty darn cool), there are a few revenue metrics you should keep a pulse on from month to month. Here are some of the most important ones:

1. Net revenue per month

According to this Becker’s Healthcare article, many professionals in the healthcare sector make the mistake of tracking what they bill, rather than what they actually collect. But it’s important that you capture the actual dollar amount that comes back to you. That way, you can use the number as a baseline for assessing your billing practices and the overall growth of your business. If you see any significant changes in this number, you’ll want to dive further into your data to figure out what caused the shift so you can respond appropriately.


2. Net revenue per visit

As WebPT writer Erica Cohen explains in this blog post, you can calculate your clinic’s net revenue per visit by figuring out the average reimbursement dollar amount you’re collecting from each insurance carrier or patient per patient visit. Then, average them all together. On a side note, Cohen points out that it's “a good idea to get an average per insurance carrier so you have a general idea of who’s paying what. This can help if you need to renegotiate your fee schedules.” Once you know your net revenue per visit, you can subtract your net cost per visit to determine your net profit per visit—which tells you whether your clinic is in the black (i.e., making money) or in the red (i.e., operating at a loss).

3. Top payers and payer revenue per patient

This is actually a twofer: first, you should identify the payers that make up the largest percentage of your clinic’s revenue (at least your top five—preferably your top ten). Make sure you thoroughly understand their rates, claim processing details, and special policies. Then, as Geoff Elledge writes in this blog post, “take a good, hard look at your various contracts and reimbursements by insurance.” In this case, you should look at all of the insurances you contract with, not just your top payers. Specifically, figure out the average amount of reimbursement per patient visit that each carrier provides and weigh that number against your costs. If you’re not making money on a per-patient basis, then, as Elledge suggests, “it may be time to consider non-participating.”

4. Revenue per square foot

This number—which you can calculate by dividing your total annual revenue by your clinic’s square footage—tells you how efficiently you are using your clinic’s space. A low figure could mean that you have too much real estate, whereas a high figure might be a sign that it’s time to upsize. According to a study cited in this article from Advance Healthcare Network, the median annual income per square foot reported by participating physical therapy clinic owners was $203, with values ranging “from a low of $61 to a high of $550.”

5. Revenue per therapist

In measuring therapist productivity, it’s important to look beyond how many patients each therapist sees each day. For a true measure of productivity, you must consider the average amount of revenue each therapist is generating—per month, per day, or even per visit. That way, you can ensure your therapists are not only managing their time effectively, but also billing appropriately for the services they provide.

Do you track any of these revenue metrics in your clinic? How do you use them to maximize efficiency? Share your thoughts in the comment section below.

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