You became an occupational therapist to make a difference in the lives of your patients. But if you’re also a private practice owner, then you also need to make a dime—or two. Your clinic’s revenue stream depends largely on patient volume and per-visit earnings. Unless you run a cash-based practice, changing how much you earn per patient visit can be difficult—especially with the challenges that come with payer negotiations and Medicare's wonky regulations. Thus, to positively affect clinic revenue, you’ll want to increase patient volume. But how many patients can one OT really treat—without sacrificing quality of care or personal sanity? In this post, I’ll explain how to calculate your ideal patient load, based on an article from pediatric practice administrator Brandon Betancourt.
1. Pinpoint your patient cost.
How much is your practice spending? Add up annual expenditures to obtain a total dollar amount; that’s your practice cost. Expenditures include:
- Operating costs, like:
- Equipment and therapy products
- Employee salaries and benefits
Example time! At your private practice, let’s say last year’s operating costs were $300,000 and salary costs were $200,000, which means the total practice cost for 2014 was $500,000.
2. Determine the average payment per patient.
Identify how many patient visits (or encounters) you had in 2014, and divide that number by your 2014 net receivables. To keep the example train rolling: Your practice netted $600,000 in total receivables with 6,000 encounters. This means your average payment per visit was $100.
3. Figure out the number of days per year that you worked.
I’m going to keep this example simple: You’re an OT that enjoys the weekend, so your practice is open Monday through Friday. However, your business was closed for seven holidays, and you took two weeks’ vacation. (This is important; you want to always figure in vacation days and holidays.) This means you worked 243 days.
4. Calculate your breakeven point.
And now, we calculate:
- Practice costs ÷ average payment per visit = total number of patients to see for the year. Example: $500,000 ÷ $100 = 5,000 patients
- Total number of patients to see for the year ÷ days worked = Number of patients to treat each day to offset cost. Example: 5,000 ÷ 243 = 20.57 patients (You can’t treat only half a patient, so round up)
Eureka! Your ideal patient load! Easy, huh? However, if you’re thinking this sounds too simple, you may be right. This exercise can give you a good idea of your ideal patient load, but it’s a very basic calculation method. That’s why I recommend enlisting an accountant to validate your findings. Accountants can, well, account for other factors that this equation may not.
Craving more revenue-centric how-tos? I recommend these posts:
- Revenue Metrics Every PT Private Practice Owner Should Know
- Key Metrics for Marketing and Sales for Physical Therapy Practices
- Developing a Marketing Budget for Your Practice
About the Author
Charlotte Bohnett is the Content Manager for WebPT, the ultimate electronic medical record solution for PTs, OTs, and SLPs. She has nearly a decade of experience in marketing and sales with specialized knowledge in healthcare compliance, technology, business best practices, communication, social media, and marketing. She graduated summa cum laude from Bowling Green State University with a Bachelor of Fine Arts in Creative Writing and earned her Master of Science in Technical and Professional Communication from Lawrence Technological University in Southfield, Michigan.
In 2012, Charlotte escaped the winter doldrums of the Midwest and returned to her hometown of Phoenix, Arizona, to join the WebPT team, headquartered in the blossoming downtown tech scene. Since then, the lean startup has grown into the leading web-based EMR for rehab therapists, ranking on Inc. 500’s list of the nation’s fastest-growing companies two years running and receiving a significant investment from Silicon Valley-based venture capitalists, Battery Ventures.