It should not be surprising that most physical therapists have had no formal training in financial management related to their professional practice. However, knowing your cost to provide a visit is probably one of the most important pieces of information a therapist can have related to practice management, regardless of the setting where services are provided. If you are not able to ensure that your collection per visit is at least equal to your cost to provide the service, you may not be in business for long! Knowing your cost per visit (CPV) is a vital variable when determining whether or not to contract with certain health insurance companies, determining your budget, negotiating salaries and other forms of compensation with staff, and predicting the opportunity to grow your practice in the future. What is alarming is the number of therapists who do not know their cost per visit, and therefore are not able to use this information in managing their practice.
This audio conference will provide on overview of the basic financial statements necessary for healthy practice management, including the balance sheet, income statement, and statement of cash flows. Additionally, the concepts of fixed, variable, semi-fixed, and semi-variable costs will be reviewed as they relate to determining your clinic/facility cost per visit and the opportunity to predict the financial impact of contracting decisions based not only on the CPV calculation, but on the opportunity and sunk costs that are critical parts of healthy financial decision-making. A commonly accepted method for calculating your CPV will be reviewed, and an opportunity to discuss the use of this calculation in determining contracting decisions will be provided.
- Learn about the basic financial statements necessary in physical therapist practice management, including the balance sheet, income statement, and statement of cash flows
- Understand the various concepts related to calculating your cost per visit, including fixed, variable, semi-fixed, and semi-variable costs
- Learn how to calculate your cost per visit using both the “top-down” and “bottom-up” approaches
- Understand the variables necessary in determining the appropriateness of contracting with a health insurer when payment is likely to be less than your cost per visit