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Driving Clinic Revenue – A Case Study of 2 Dramatically Different, Proven Strategies

 

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Running and managing a therapy clinic is a tough slog today.  Especially when it comes to delivering excellent clinical results and growing your clinic’s revenue. Both are important. Revenue keeps the lights on and the doors open. Helping patients with excellent care drives more revenue and referrals. There are many factors that impact balancing these two imperatives. But for the most successful clinics, it all starts with a well thought out competitive strategy for differentiation and filling a specific market need.

One of the first and most important decisions a Manager or Director of Rehabilitation faces is – how you choose to position your clinic in your local market. There is no right or wrong method, but lately we are seeing that the traditional model of passively waiting for referrals is not always going to be the most successful. Especially with reduced insurance reimbursement, rising patient insurance deductibles, and rising copays. Maybe your clinic has not yet solidified a strategy. And that’s OK, but perhaps it’s time to take stock of your business outcomes, critically assess the changing marketplace, and solidify your plan for future growth.

So, how, exactly, can you look past the traditional clinic model and explore new approaches? Take a step back, review your books to determine your best clients, and your steadiest sources of revenue. And apply the industry experience you have amassed over the years. Look for a unique, strategic way to position your clinic to be top-of-mind in that space. Should you focus solely on general rehab, orthopedic referrals? Hand therapy? Or are those paths yielding limited results? Is relying on health insurance reimbursement the only method you have considered? There are many ways to skin a cat, and progressive clinics are trying new approaches to become more successful. Let’s examine how two rehabilitation clinics took diametrically opposed, but equally valid approaches, and pursued them ambitiously to become very successful both in clinical and business outcomes.

 

1. More Revenue with Workers Compensation and Work Conditioning

Rich Douglas, Center Manager at NovaCare Rehabilitation in Northfield, NJ has taken a deliberate, focused approach to cultivate Workers Compensation clients. This client base is very lucrative, because Workers Comp clients statistically come back for more rehab sessions than the average patient burdened by insurance co-pays. By upgrading his clinic with new technology, in his case he chose the BTE Primus, he gave himself a competitive advantage over other area clinics, and has enabled his clinicians to consistently provide accurate task simulation and objective performance data to clearly show each patient’s progress. Workers Comp referrers love this, and send him steady business, choosing his clinic over competitors due to his unique offering. “We have to keep costs low, get results and keep the referral source happy, but we also have to keep the patient happy,” says Rich. “Using Primus for effort measurement allows us to do both. We can objectively show when a patient is not putting in a consistent effort. It gives us objective data to support our subjective findings.” Rich continues, “We get calls from doctors and case workers to find out if their patients are giving consistent effort in therapy. Since the referral sources see how these tests can help them, they request them from us.”

Due to his location being so close to Atlantic City, an area dense with large employers, Rich has also been able to reach out and partner with companies to measure the data points specific to their employees’ job demands. And then replicate those tasks on his clinic’s Primus, offering extensive work conditioning and teaching proper body mechanics. Rich explains, “At NovaCare, we design occupation-based personalized plans of care for firefighters, police officers, truck drivers, electricians and more.” Measuring each patient’s deficiencies and rehabbing them to function, with documented progress.

 

2. The Cash Pay ModelTaking Insurance Out of the Equation

Marla Tappy, a Physical Therapist based in in Sterling, CO, was all too familiar with the frustrations that arise from insurance billing from her years working in traditional physical therapy clinics. Frustrations and unwelcome surprises both for the clinic and for the patient were the norm. So, when she decided to open her own clinic, she designed it with a cash pay business model. In this way, the cost and time associated with billing insurance were completely eliminated, passing the savings on to her clients. Marla also made the strategic decision to broaden the scope of her new PT/Sports Medicine clinic to include transitional rehabilitative fitness programs and a medically-supervised fitness club. And so, Momentum Sports Medicine and Wellness was born.

Marla believed the cash-pay model would be best for her business and for her patients. “Clients generally don’t have a good understanding of exactly what their insurance is going to cover.” Tappy said.  “Then they are shocked and disappointed when they see a bill from therapy due to unmet deductibles, high co-pays, or the percentage of the bill they are obligated to pay, based on their policy.”  Patients get blindsided by these bills long after they have attended the therapy sessions, after insurance has paid what is allowed.”

“I call it the Home Depot mentality; fix it yourself,” Marla says. “I had to convince the community to not rely on insurance and instead take charge of their own well-being. Once they realized that I would charge the same or less as their copays, and it wouldn’t go against their deductible, it was easy, and my results are huge.”

In Tappy’s model, patients, clients, and members choose from a cash-pay menu and they know exactly what their bill will be at the end of the treatment.  Unlike the insurance model, patrons of Momentum are also not bound to preset visit limits, and referrals from a physician are appreciated but not required.  Monthly memberships, punch cards, and payment plans for long term post-surgical rehab cases are also available.

But, beyond the cash-pay model, in order to succeed, Marla knew that she needed to offer something more to patients than what other clinics had. She researched her options and turned to innovative technology to put her clinic over the top. Momentum Sports Medicine and Wellness developed diverse offerings for a wide range of clients from athletes and fitness enthusiasts to the injured and elderly. So, says Marla, “We need to serve everyone. We can’t have a niche. That’s why we invested in a BTE Eccentron, the unique eccentric-only lower extremity strength trainer, which works for all these different populations, and is the centerpiece of equipment in the gym.”

With the combination of Marla’s innovative business model and differentiating equipment, business is thriving. And the clinical outcomes are significant. Marla shares, “I received a call last week from an orthopedic surgeon who just completed a three-week post-operative visit on a 44-year-old patient of mine following bilateral total knee replacements. He said, ‘My patient has full range of motion and a normal gait pattern. What are you doing out there?’ I told him ‘It’s Eccentron.’ The versatility of the machine allows for a quick, yet subtle, transition from passive range of motion activities to progressive eccentric strengthening,” Marla explains.

 

The Bottom Line

There are many ways to position and differentiate your clinic. We have explored two. So, what’s the takeaway from this glimpse into two very different, unique approaches to growing a therapy business?

In his Workers Comp and work conditioning focused model, Rich Douglass is able to create custom templates for employers that are personalized and job specific. Leveraging his technological edge, Rich explains, “None of the other physical rehabilitation centers around have Primus, so I use it to market my center,” says Rich. He often prints out reports and takes them personally to doctors and risk case managers. “The objective data clearly shows patient progress and evidence for our recommendations. It’s a terrific marketing tool that helps us get more referrals.” This is key to his business, and the interactivity of the exercise he offers keeps patients coming back.

On the other hand, Marla Tappy’s clients at Momentum are not bound by insurance restrictions, visit limits, or even referrals from a physician. Though area physicians are impressed with her results and do refer patients to her. But many of her patients fill her clinic via word of mouth, purely focused on the benefits and objective progress results they get from Marla’s advanced Eccentron technology. That is the driving factor behind their repeat visits and her overall clinical success. Though non-traditional, by removing the confusion and red tape of health insurance and offering superior treatment, Marla has found a way to make therapy more accessible for her community, and drive demand for her services.

Today, both clinics are very successful, having taken very different paths. Because their Directors critically assessed their market and crafted a unique strategy to fill a specific need, driving demand for their services. Ask yourself – what is my clinic doing to differentiate ourselves, and to actively pursue a specific type of target client or referral source? Finding the best answer to that question and acting on it is the key to growth for today’s clinic.