3 Key Metrics Every Physical Therapy Clinic Owner Must Track
In the beginning, I was a physical therapist who owned a practice. I was the aide, marketer, reception, and janitor. The only reason I tracked any numbers was to show growth from month to month. My business was my salary, and what I made from the business went to pay my bills and put food in my kids’ mouths. My tracking was simple…visits, evaluations, cancels every month. I wasn’t focused on key metrics—I was just surviving.
As I started to hire more employees, I was still a physical therapist working in my business. I was working more than any other therapist, treating more patients, and when I broke down the hourly rate I was being paid, it was half of what my other therapists were making. Something wasn’t right. My tracking was still simple…visits, evaluations, cancels on a weekly basis. I wasn’t looking at the key metrics that actually move the needle.
As I started to see shifts in healthcare, I knew I needed to “keep up with the pack.” I was still a physical therapist but now was starting to work on the business and less in the business.
I cut my treating schedule down from 45+ hours a week to 30 hours a week and I also started looking more at the objective measures of the business.
I started tracking many more aspects of the practice, from referrals to other employees. What did this do? It gave me more stability and allowed me to better control people—but I still was not truly a business owner. I hadn’t fully embraced tracking the key metrics of the business.
Over the past few years, I’ve made the transition from physical therapist working in the business to a business owner working on, and building, the business. For a business to be successful, there is one key KPI metric that must be measured: profit.
When you look at your business, there needs to be one key metric that defines success. That key metric is profit. And in any business, especially in physical therapy, there are key metrics that drive that profit. Without profit, your business will not grow and ultimately will wither and die.
In the physical therapy business, there are three key metrics every private practice must watch and control if they have any desire to grow their business.
Metric 1: Referrals
Yes, you read that right: referrals.
In the early days of my practice, I was only tracking evaluations. Only measuring this number made me assume every evaluation actually became a referral, but I had no idea. As a business owner, you should already be measuring the number of evaluations you see in a week or month because this is the lifeblood of your business. This is the “new client” we work so hard to acquire.
When you only measure evaluations, you miss the true new client number. Research shows that only 4 out of 10 physician referrals actually contact a physical therapist. Surprisingly, not all of those show up for their first evaluation.
Once you track referrals as one of your key metrics, you can compare weekly and monthly the number of referrals against the number of actual evaluations.
What is the value of a new patient to your business? For every referral that doesn’t become an evaluation, you can count the lost revenue and a lost future referral source.
Metric 2: Cancellation Rate
Most every practice owner does measure this key metric, but do they make any effort to change it?
The business owner works so hard to drive new referrals into the business, and they work hard to ensure those referrals become new patients. So why aren’t they just as focused on keeping those visits in the door?
When a patient cancels or no-shows, three people are affected:
The patient who missed care
The patient who couldn’t get in because that slot was taken
The therapist who is now sitting idle
During warm, sunny months, the national average for cancellations is 7–8%.
That increases in snowy conditions. What is the loss to your business for a single cancellation? What is the compounded loss of two patients missing treatment, and paying a staff member who is not productive?
This is one of those key metrics you must track and act on. Lost appointments are lost revenue forever.
Metric 3: Revenue Per Visit
All practice owners know how much they collect in a week or month. But do they truly know how much money they make per visit?
Too many owners think only in terms of gross collections, not net revenue.
This is where key metrics like net revenue per visit come in. Net revenue is what remains after expenses, it’s your actual profit. It's your paycheck.
To find this, track six months of net revenue, divide each month’s total by the number of visits that month, and take the average. This gives you your true net revenue per visit. A decent number is 10% profit over cost. A great number is 30% +.
This key metric helps you determine whether to stay in-network, go out-of-network, or raise your cash rates. It also guides critical decisions about pricing, therapist productivity, and staffing.
Revenue per therapist is another often-overlooked number. While many owners obsess over daily productivity, they miss this bigger-picture key metric: is each therapist making money or costing you?
Conclusion
As a business owner, you need to look at more than just evaluations, visits, and cancel rates. These are just a few examples of key metrics that truly drive success in your clinic. These key metrics should be tracked monthly and reviewed with your management team. That’s how you stop guessing and start growing.
Want to track all the metrics that actually matter—without the guesswork?
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