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Money, money…yeah, yeah

The payment model for PT has been failing over the previous decade that I was in practice.

The amount of reimbursement per hour from Medicare isn’t bad, it’s about $90/ hour. Let’s do a quick breakdown of how that money gets spent.

The average therapist is making about $40/hour. Add the employee taxes and we will call it $44/hr.

Still not bad, the company is left with $46/hr.

The company has to pay for liability insurance, which can cost about $0.30/hr.

Now down to $45.70/hr in profit. So far so good.

Rent is consistently going up and averages about $2000/month in my location for a small clinic. This comes out to about $12/hr

This still leaves $32.70/hr of treatment.

Wait…we still have to hire a front desk person due to Medicare regulations. That’s $15/hour plus employer taxes = 16.50/hr.

There is still $16.20/hr profit.

If the company offers health insurance and vacation time, it further reduces profits.

What happens if a patient cancels?

That $129.60 profit ($16.20 x 8 hrs) per day quicky vanishes.

We are seeing large corporations reporting 6-8% profit per year.

Some smaller clinics (without using ancillary staff) are making upwards of 20% profit per year.

Students need to understand that the company needs to make a profit in order to stay open.

This is the reason that they will get lower offers year to year. Expenses are always rising (rent, fuel, water, liability insurance) and reimbursement has historically reduced with time.

This equation really sucks for the individual when you add in $150K+ in student loan debt.

I don’t recommend anyone come into this profession unless youcan do it under $100K all in (this includes 6-7 years of school plus living expenses).

During this pandemic, I enjoy being the light that shines on good news 😂

Stay safe everyone!

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Categories: Written Blogs

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