Is Private Practice Healthcare a Bad Business?

Is Private Practice Healthcare a Bad Business? We hear it all the time:

• Low Margins
• Increasing Costs
• Decreasing Reimbursement
• Staffing Issues

And those are just the most common issues cited by people within the industry. But, there’s one group of people who think that Private Practice Physical Therapy isn’t a bad investment. And that group of people? Private Equity Investors & Bankers. PE firms have been increasing active in the PT market, purchasing practices and groups of practices recently. But, if it’s a bad business, why would they waste their capital? The answer is, of course, that they see the reality that most people within the industry are missing.

Private practice physical therapy has the potential to be a great business:

• Built in future demand growth (aging population, etc.)
• Competitive barriers to entry (licensure etc.)
• A group of asset holders (aka Practice Owners) who feel like they’re in a bad business and undervalue what they have; meaning they can likely acquire these assets at a bargain

I think the main reason for this dynamic is the fact that it’s hard to read the label from inside the pill bottle (not my analogy, but I loved it once I heard it). When your day-to-day is filled with dealing with medicare cuts, staff retention issues, and recruiting problems, you tend to view everything through a reactive or even emotional (fight/flight) lens.

But, as the PE firms have demonstrated, an objective look at the industry shows opportunity and potential.

If you’re a PT practice owner who feels burnt out or like you’re fighting an uphill battle, here’s one thing I’d recommend that I believe will make a big difference in your life: Set aside one full day of “Business Work”. On this day, you will work on ONLY one of the following:

• Working on the business (developing SOPs, etc. to guide routine operations)
• Business planning or vision-casting
• Thinking about the business
• Reading/Learning/Self-development in the area of business & entrepreneurship (NO CEU courses!)

I’m not saying this will “make it rain” at your business. But I’ve been doing this since 2021 and here’s what it has done for me:

• It gives me dedicated time to fix “problems” in the business that area always nagging but never get done if you’re in the clinic all day
• It gets me excited about the business & the team
• It helps get my head out of the daily grind and into the 30,000ft view
• It has greatly reduced stress

So, give it a try and see how it helps in your business. AND, if you do try it out, let me know how it works out for you.