Physical therapy continues to be a booming industry — it has an annual growth at 5.7% as of this year, and it’s the strongest rebounding sector of healthcare since 2020.
The PT industry is estimated to be worth $46 billion, and it has remained stable even through difficult economic times, garnering interest from aspiring entrepreneurs and investors. And, there has been a growing demand for physical therapy franchises, too.
As the industry becomes more competitive, hopeful physical therapists are turning to franchising as a long-standing, proven avenue for business growth.
Franchising offers many benefits to entrepreneurs over “going it alone.” This can include mentorship from experienced business owners, location analysis and assistance with lease negotiation, a proven brand name, proven marketing strategies, refined and tested systems and operational processes, financial clarity and planning, and many other benefits that help speed the transition from start-up to seasoned business.
Franchising can help solve many problems and difficulties associated with owning and operating your own business — but, most franchise models fail to solve the two major problems affecting the entire physical therapy industry…
Declining insurance reimbursements, and physical therapy burnout.
Every year, it seems like yet another insurance provider lowers their reimbursements, causing an uproar amongst PT business owners as their profit margins get slashed.
Those drops in reimbursement force PT owners to make difficult decisions. Should they increase PT case loads to increase patient volume? But what will that do to the client experience?
And if the client load increases, it only further drives physical therapy burnout. Not only does this make employee retention difficult, but it also causes PT business owners to feel like there’s “no way out” of the cycle.
So! What if there was a model where you didn’t EVER have to fight with insurance companies? A model that found success in low volume and concierge service, where physical therapists wanted to work without sacrificing growth potential?
A 100% cash-pay physical therapy franchise model removes the stronghold insurance companies have on the PT industry. It gives balance and purpose back to the therapists, and it provides all the benefits of franchising. Sounds too good to be true, right?
Here are 5 reasons you should strongly consider investing in a cash-pay physical therapy franchise…
1. Don’t Need to Rely on Insurance
Nobody likes unexpected surprises — especially when they can have a massive impact on your bottom line!
This is exactly what the physical therapy industry has tolerated for years. As reimbursements have steadily decreased year-on-year, physical therapists have accepted LESS money for the same (if not higher quality) work.
Can you think of any other place where that would be allowed??
Insurance companies have dictated one of the most important factors to business success: price point. How can you set a budget when you don’t know how much somebody else will determine your price per session to be?
To add insult to injury, they also have a higher demand for proving medical necessity with endless paperwork. This only further increases the need for higher volume to make up the difference.
And of course, the higher volume puts strain on treating therapists, who realize that working for a “mill” isn’t what they received their doctorate for. Burnout and PT attrition is plaguing the industry and stalling growth for many companies.
The difficulty — and why PT business owners have been “stuck” accepting the dictatorial laws of the insurance fiefdoms — is the reliance on doctors and “the system” to provide them new clients.
In a cash-pay franchise model, you’ll never have to deal with insurance companies and declining value for your service again.
The franchise brand will be able to set a fair price per session for market value that aligns with concierge speciality service. You won’t need to buy bagels and pander at doctor’s offices for referrals because you’ll have training and access to a predictable client generation system through direct consumer marketing.
With proper pricing models and differentiated market dominating services, you can operate a low-volume, high-value clinic that puts the emphasis back on the client. AND, this will provide an ideal schedule and system for talented, aspiring physical therapists.
A cash-pay physical therapy franchise can solve the biggest problem facing clinics around the country.
2. Low-Volume Concierge Service
A cash-pay PT franchise also provides the framework to provide world-class customer service.
The cash-pay model reduces the complexity of PT business ownership, allowing every staff member within the business to focus on creating “wow” experiences. Those “wow” experiences further drive referrals and repeat business, feeding overall clinic growth.
In a low-volume system, therapists have enough bandwidth to invest in their clients versus just “getting through” the treatment. Low-volume practices also require less documentation, saving time for PTs to have lives outside of their treatment hours. When employees love where they work, that energy will be passed on to clients.
3. Less Administrative Staff
Cash-pay physical therapy practices have less overall administrative staff, since there is no insurance billing.
The amount of time needed for billing is enormous — in addition to handling billing, your employees also have to follow up on claims and approvals, track down accounts receivable, gather co-pays, and double-check that the insurance company hasn’t made an error. Not to mention the ridiculous amount of time spent on the phone…
You likely need 3 or more people to handle these processes (if not more).
In a cash-pay model, you can remove an entire wing of business ownership, saving your time in recruitment, hiring, training, and payroll (and headaches!). Plus, there is much less “human error” where your hard-earned money can be lost in the shuffle.
4. Predictable Lead Generation (Not Relying on Doctor Referrals)
In every physical therapy business, the number of new clients sitting for evaluations is a key metric. More new clients means more business.
The problem is that insurance-based practices get a majority of their clients from doctors’ referrals. This “standard” of practice is so entrenched, that owners forget that there’s a more predictable way to generate leads without pandering for referrals…
Direct to consumer marketing through website leads, Google Ads, social media, in-person events, newspaper articles, and community sponsors puts the business owner in control of key variables in a predictable marketing strategy.
Direct to consumer marketing allows the business to control the brand identity, brand message, and target audience (amongst other factors). When referrals only come from doctors, your client’s first impression is whatever that doctor tells them that you specialize in.
It’s likely that YOU want to control the message of your business — and a cash-pay business model allows you full control over your marketing and brand message. Plus, you can budget more accurately with more predictable leads!
5. The Industry is Moving to Cash-Pay
Talk to any insurance-based PT business owner, and you’ll hear them gripe about insurance reimbursements and the “need to find more cash-pay clients.” The industry understands that the declining reimbursement rates aren’t sustainable, and growing the percentage of cash-pay services and clients is key to survival.
If insurance companies price mandates are such a hindrance to success, why not just get rid of it all together? Instead of using cash-pay as a stop-gap, why not make it THE strategy??
In a cash-pay franchise system, you’ll have access to a treasure trove of knowledge from a franchisor who’s operated a 100% cash-pay business for years. Having specific training on the systems and processes in marketing, sales, and finance for the cash-pay model will save you time and help you avoid costly mistakes.
If the industry is moving towards the need for cash-pay services, why not go all-in and open a cash-pay franchise?
You’ll be able to ditch the insurance company, operate at low volumes while providing “wow” experiences, attract and keep top physical therapists and staff, avoid being bloated with billing and insurance administrative staff, and be able to rely on a predictable marketing system for new clients.
You’ll be on the forefront of the future of physical therapy.