Physical Therapy Practice Profitability | Real Cost of EMR

Calculate physical therapy practice profitability by discovering the real cost of documentation and EMR.

“The real problem is that even with a 20-minute SOAP note, I need a tremendous amount of time just for documentation. Peter wearily continued, “If I had 4,000 visits a year, I could make $312,000 a year. But even with the best documentation system I would need an hour to document 3 visits. That’s 1,333 hours a year just for documentation!”

“Wait a minute, Peter,” Alicia said, raising her voice. “those 1,333 hours ARE the evenings and weekends you miss with your family. When you see patients, your average revenue is $156 per hour. But when you document their visits you make zero, nada, zilch! Peter I think our mistake is that you only focus on increasing the number of patients you see. I understand you must invest time for documentation compliance. But we should find a way to reduce that unproductive time which pays you nothing.

“I do understand your rational Alicia, but the best documentation system only gets us down to 20 minutes per note. That’s still a problem. It places us in a dilemma to either spend 1,333 hours documenting or see fewer patients and lose revenue. What should we do?”

“Peter, let’s first figure out the REAL cost of your current documentation system. Alicia continued, “Let’s see if the computerized documentation system is better. Then we can think about our next step. Does it sound like a plan?” Peter relented and agreed with Alicia.

“So, if your average revenue for patient care only is $156 per hour, then that’s the best you can do. Every other activity dilutes the revenue. Now lets estimate the COST of other activities in terms of the best value you could be getting by seeing the patients. Does that make sense Peter?”

“First, let’s see how long it takes you to write an average note with your current system. An hour? So you see Peter, you are spending that time writing a note instead of seeing a patient for $158 per hour. How many notes do you write per year? 2,000? OK, then your current manual documentation system costs you $316,000 every year. Do you care to know how much that is in 10 years? Right! Three million, one hundred and sixty thousand dollars . . . That’s a very expensive compliance requirement, would you agree Peter?”

“Next, let’s estimate the documentation cost of your 20 minute notes. One 20 minute note will cost you a third of your best performance revenue, or $52. If you multiply $52 by your total annual visits, which is 2,000, that’s $104,000 in annual documentation costs. Care to extrapolate that into a decade? That would be over One Million and forty thousand dollars. That’s better than three million but still VERY expensive.”

“So, what can we do? Where can we find a documentation system that costs less?” Peter sounded discouraged as he felt his rosy plans being crushed by the cold hard facts of Alicia’s reasoning.

“Well Peter,” said Alicia, relieved that she was able to get Peter to finally think about the business side of his practice, “We must find a documentation system that does not take more than 3 to 5 minutes for a single note. Just imagine, if we had a system that took 5 minutes per note, you could do 12 notes an hour. In other words, your per note cots would be “only” $13 per note. Therefore, documentation of your entire year would cost you $26,000, or $260,000 over a decade.” chimed Alicia. “Now that’s a cost we can live with!” exclaimed Peter.

“And in terms of hours,” added Alicia, unable to hold her excitement, “you would only need 167 hours to spend on visit documentation for entire year. That’s just a tad over 3 hours extra a week! Imagine being able to work almost regular hours and still see 2,000 patients a week.”

“So, Peter,” concluded Alicia, “until we find such a system, you have to choose between your family and your practice.”

What do you think? Is Alicia right in her calculations?

Do you know of a PT-specific documentation system that could make Alicia’s and Peter’s dreams come true?

Physical Therapy Software | Documentation System

physical therapy documentation

How to Measure the Impact of Your Physical Therapy  Documentation System on Your Bottom Line

By Amy Griffin, PT, Yuval Lirov, PhD, and Dave Macolino

Peter felt great this morning. He was happy to jump on his exercise bike, stretch his lower back and hamstrings, get a quick shower, and head straight to his physical therapy office. He knew his patient care schedule was full with at least fifteen or sixteen patients. Treating patients was the kind of work he loved so much.

His physical therapy practice was steadily gaining traction since opening one year ago. He was making a name for himself with several referring doctors as well as a solid community service reputation. Peter began thinking . . . . since he was seeing two patients per hour, charging an average $78 for a one hour visit, and working the standard 2,000 hours a year, that he was going to make about $312,000 a year.

Smiling to himself, Peter thought that perhaps in a year or two, he could hire a couple of assistants, increase the throughput to maybe 4 per hour and double his revenues to $624,000 a year. Peter envisioned a solid $6 million over the next decade. He could not wait to share his calculations with his young wife. They had been dreaming of building a house in a nice new development and a new SUV for her to bus their 7-year old and her friends to their daily soccer training sessions.

“Peter, will you skip dinner tonight again?” asked his wife Alicia. Peter had worked every evening in the past 2 months as well as all of the weekends. He had also missed all of their daughter’s soccer matches and he even forgot their wedding anniversary. Alicia was now wondering if the idea of Peter opening his own physical therapy practice was a good one. Was working for somebody else making $65,000 a year so bad? At least life was normal then.

“Maybe we should sit down tonight and talk.” Alicia said to Peter. “I really need to understand why you spend every evening and every weekend in the office.”

Peter started to feel a light headache and stressed with pressure from his wife. “You know honey, patient visit documentation is a compliance requirement. Both malpractice insurance and payers require it. Without visit documentation, we risk failing post-payment audits and incurring severe penalties including license suspension, fines and imprisonment. Is that the kind of risk you want me to take for us to have dinner together each night?”

“Peter, what about computerized documentation? What do you think about purchasing a physical therapy practice management software system that generates SOAP notes for you? I actually called around and discovered several physical therapy documentation systems that allow you to complete a note within 20 minutes.”

“All you have to do,” continued Alicia, “is to document patient complaints and comments in the Subjective section, document your findings in the Objective section, type your Assessment, and prepare your recommended treatment in the Plan section.”

“Alicia . . . ” Peter was getting tired of explaining the same thing again and again, “I know all there is to know about SOAP notes. My problem is that I need to type each and every note. How can I type an entire note in 20 minutes?”

Physical Therapy Software | Customizing SOAP Notes

Build your Dream Practice by Customizing your Physical Therapy SOAP Notes

Imperfect documentation of patient visits at your physical therapy practice can lower your revenue by taking time away from other income-producing activities. Even worse, a slow documentation system accumulates backlogs of undocumented visits, increasing your risk of failing a post-payment audit.

By using digital xDocs for your physical therapy SOAP notes, you will have more time to treat your patients and as a result increase your profit.  In fact, some customers using xDocs have doubled their clinic’s billing performance in three short months.

Practice A started using xDocs in May. In just three months their billing more than doubled:

It’s all about commitment though, if you don’t make a complete transition to xDocs your results will suffer. By using xDocs inconsistently, you will produce a smaller margin of billing improvement as shown below.

Practice D was using xDocs for less than 12% of the visits and achieved no meaningful improvement in billing performance:

We know change can be hard to adjust to and scary, especially when you trade familiarity and convenience for a more complicated technological process. However, this transition to digital documentation with xDocs will make patient documentation simpler. Our xDocs offer auto-populating forms that fill in patient demographics for you and they can be completely customized to look and work like your old paper forms. xDocs are easy to use from day one.

The best part is that xDocs make EMR follow your workflow. This means you are more likely to follow the SOAP note while you are still with your patient and submit it with the click of a button once the appointment has ended. In doing so, you don’t have to stay behind to catch up on unfinished paperwork after work is done.

Fast submission of SOAP notes directly impacts the billing process. The sooner you get them done, the sooner you get paid. By submitting them early, you get to spend more time treating and receiving more patients, increasing your practice’s profitability. Not to mention that going digital will earn you a meaningful use stimulus from the US Government to encourage EMR/EHR transitions while making it easier to stay on top of any changes made by payers.

Ultimately, the potential uses of xDocs at your physical therapy practice are almost limitless and include required PIP documentation, physical therapy intake forms, visit documentation, care plan tracking or any other special purpose from within bestPT’s cloud-based Vericle platform.