Maximizing the Value of our Physical Therapy Practices
According to the latest data from The OrthoForum, and our own independent research, CAO is the largest Orthopaedic group in the country, unmatched in our number of physicians and clinical expertise. For any organization, let alone one as young as CAO, this is an incredible accomplishment that we should all be very proud of. However, while we are finally taking important steps to act as a unified group across all of our locations to create a consistent and elite patient experience, we remain too splintered in how we go to market within our 38 physical therapy (PT) clinics. Rather than acting like the Orthopaedic powerhouse that we are, we operate PT like small mom and pop shops, limiting our ability to seize upon many of the great opportunities that are right there for the taking.
Fortunately, thanks to the input of many of our physicians and administrators, we have recognized the potential to add great value to our existing PT facilities. We have already taken the steps to assess their current state, examine areas in need of improvement and develop an actionable plan. As many of you know, led by our PT task force, which includes diverse leadership from physicians, physical therapists, administrators and PT managers, we embarked on an extensive audit process of each one of our PT locations. CAO engaged Medkita, a PT assessment and improvement company, to move forward with a complete evaluation of each individual center keeping the following high-level goals top of mind:
- Grow CAO’s physical therapy business
- Position CAO to compete effectively for value-based bundled payment contracts
- Enhance the CAO brand through greater consistency of care
The resulting “Performance Improvement Assessment” summary report developed short, intermediate, and long-term areas to help maximize our existing PT operations and better position this critical revenue stream for strong growth. While the findings contained many positives, and we are taking good care of our patients, the report identified several key areas where implementing changes as a unified group would benefit all parties. Below, please find a short summary of the findings:
Short-term
- Documentation, coding & compliance training
- Standardize PT-specific EMR
- Implement common therapy-specific patient satisfaction survey
- Validate therapy-specific profit and loss numbers
Intermediate-term
- Examine economic models for reorganization of therapy clinics
- Decision to move forward or not with a reorganization of PT
- Implement reorganization of PT including evaluation of engaging operational consultant/s vs. hiring internal talent to manage the process
- Implement standardization and best practices
Long-term
- Strategic expansion of PT services, including free standing centers in underserved areas.
In all these efforts, the objective has always been to grow revenue with a view of the big picture. Our goal is to create more jobs within our PT facilities, drive improved and more standardized patient care and begin branding The Centers PT as the highest-quality and low-cost care provider in each community we serve.
After presenting the report to the Board of Managers, and with the understanding that any decision involving PT is very sensitive, we hosted an “all-members” PT Summit at the Bolger Center on Saturday, October 1, to discuss the possible consolidation in great detail. It was a highly successful event, which provided the chance for all participants to voice their opinions on the future of our PT practices, and the conversation has continued to build momentum following the meeting. Next steps will be to further address any outstanding questions, collectively approve the final financial assessment, and put the initiative to a vote by the Board of Managers.
PT consolidation into a single powerful entity represents a significant next step in the maturation of our organization, driving efficiencies throughout our operations, improving the standard of care and better positioning our facilities to be a step ahead of the competition. Equally important, as we move forward with implementing bundled payments, it will put The Centers in the advantageous position of being able to negotiate with payers as the clear high-quality, low-cost PT provider. It also allows us to identify and expand into under-served areas where we currently do not – but should – have a presence, and we will be able to better control costs and ensure referrals remain within the CAO family.
Once we come to a consensus on the best model for enhancing our PT revenue stream, we can then start building its public-facing brand to present a unified front to our communities. With all of us working together with a singular focus, we will raise awareness for our patient-focused brand in ways that currently aren’t possible as smaller PT facilities battling for market share against larger players. Similar to the great headway we have made with brand conversion across each care center, these efforts will run in parallel to further build loyalty among our patients
If we, as a company, seize upon this vision to maximize and grow our PT centers, the potential for increased revenue is amazing, and, most importantly, we will be able to provide better care for our patients while controlling the entire episode. That’s a formidable value proposition and it represents a bright future for The Centers.