Introduction
This page offers an introduction for those who may be thinking about working in or establishing a private practice. It outlines a number of areas that you should bear in mind before entering this field. It looks at different models of private practice, as well as some financial, equipment and marketing matters. It is important to note that other avenues of information should also be sought. In essence the project gives a brief review of the situations you are likely to encounter as a physiotherapist setting up a private practice. In this instance we make specific reference to the UK based NHS (National Health Service) system. We use the NHS as an example. Some of the information included may also be pertinent to those who are not based in the UK.
Advantages of Private Practice
Patient Perspective
- A more personalised experience of treatment.
- Reduced waiting times
- Possibility of longer treatment sessions
- A wider variety of treatment options
- Increased patient autonomy
Physiotherapists Perspective
(Advantages compiled by Physio123.com and Physiopulse, websites which help new private practices get up and running and advertise their new business)
Excitement and personal challenge
The start up period will involve discovering new talents and creativity.
By writing your own business plan, renting space and equipment and executing your marketing strategy, you add a personal touch to your practice.
Independence and Autonomy
Being your own boss -deciding when you want to work, how you work,and the clients you choose to work with.
Direct Link Between Effort and Reward
Your compensation will be a result of the work you put in i.e. the harder you work to gain referrals, the more income you will earn.
The extra knowledge and skills required to specialise in an area which other practices cannot or choose not to, will again be rewarded with extra business and income.
Flexible Work Schedule
Once your practice is established you can choose to work outside the traditional ‘8.30-1630’ hospital hours-improving your work-life balance
Holidays can be taken at times that suit you, and compulsory working days e.g. during the Christmas period will be free to be days off.
Earning What You Deserve
You decide your own fee structure and therefore what you get paid-the earning potential is unlimited.
You have the authority to budget any improvements ie. marketing, equipment etc.
You are not subjected to workplace politics or hospital heirarchy
Disadvantages of Private Practice
Patient Perspective
- Increased expense for patient
- Less access to other medical professions
- Physiotherapist may be profit driven
Physiotherapists Perspective
- Physiotherapists working in a private practice may feel slightly isolated as they may have been accustomed to working with other physiotherapists in a hospital environment.
- Reduced CPD opportunities. Less regular in-services
- During the initial period you will have to work long hours to establish the business.
- The long hours at the beginning can have an impact on relationships with family and friends.
- There is no guaranteed income, you receive payment only for the work you have done.
- You have to pay your overheads even when not working.
- You have to finance your own pension and sick pay scheme.
- As well as physiotherapy skills, you must have business and administrative skills.
NHS vs Private Practice
There are some key differences that are useful to outline between working privately and in the NHS system. In the private context you may be employed in a particular practise working for somebody or you may have decided to take on the risk of running your own practise. Again the differences here will vary. Some private practise establishments have expanded in size and number and also offer some benefits akin to the NHS system. Below gives a brief outline of what to usually expect when working within each of the groups.
Hours of Work
Rostered hours apply for NHS employees. Usually a prearranged agreement for a particular duration of time.Most physiotherapists in the NHS will also have some degree of emergency duty where they are on call over non sociable hours or at weekends. Private practise employees hours of work vary dependent on their workload. Very busy practises may work in excess of the NHS norm.
Income
In the NHS your income is usually known and guaranteed. Band 5 Physiotherapist can expect to earn between £21,176 -£27,625. Band 6 physiotherapy pay ranges from £25,528 – £34,189, Band 7 from £30,460 – £40,157. Finally Band 8 clinical specialists earn from £38,851-£ 55,945. All these scales are based on the NHS agenda for change pay rates. Accurate as of 1st April 2011[1].
In private practise pay can be variable and uncertain depending on how many clients you see or what type of contract you sign with your employer. In certain successful private practises you may expect to earn in excess of that which you would receive in the NHS. The average pay usually increases with the more experience you receive. National range varies from £17,315- £ 53,107[2].
Self employed in private practise carries the same uncertain and variable risk of pay. But again the potential for earnings in excess of the NHS is a possibility
Tax Deduction
NHS workers pay their national insurance contribution and income tax through the PAYE scheme. Tax is deducted from their pay as they earn. In private practise to those who are under contract or who are employed by somebody tend to have this same facility. Those who have their own practise then are responsible for submition of their own evidenced tax and national insurance contributions.
Pension
The NHS provides a pension scheme for all employees. Sick Leave
The NHS provides paid sick leave. Private practise agreements will vary in relation to receiving pay for time missed due to illness. Those who are self employed will obviously not be paid for work in which they are not present. They also carry the burden of requiring to make arrangements for existing patients
NHS employees receive holiday pay in accordance with government directives. Private practise employees are not necessarily entitled to the same holiday pay but most will have some form of holiday pay built into the contractual agreement. Self employed physiotherapists will not receive holiday pay and may also required to arrange and pay for a locum to come and cover their existing patients
NHS uniforms are provided or upon renewal an allowance is paid. Any equipment needed for the assessment or treatment of patients is usually provided and serviced depending on the departments budgets. It is not the responsibility of the physiotherapist to provide these. Private practises may or may not be provided with uniforms by the employer.Within private practises it is usually the responsibility of the owner to provide the equipment so again depending on contracts and the physiotherapists role in the private practise the provision will vary. In the case of a self employed physiotherapist, their uniform needs to be provided at their own expense as does any equipment they deem necessary
In the NHS you are guaranteed to have contact with physiotherapy colleagues as well as those working in the wider multidisciplinary team. In private practise this dynamic can vary depending on the practise specialty and how many people work there.
CPD in the NHS is encouraged and may be provided for and funded again depending on budgetary allocation of funds. With the private practise arena there is often some form of CPD provided for and funded through the contract with the employer. Again it is encouraged so as to promote the skills and knowledge base of the private practise physiotherapists which will in turn promote their reputation. There are varying options available when setting up a private practice. The type of practice a physiotherapist sets up should include consideration for the financial risks, additional personal responsibilities and the large amount of administrative work involved. Below is an outline of each type of private practice with the advantages and disadvantages included:
A Chartered physiotherapist may privately treat a self-referring patient, or a referral from another health professional. The physiotherapist must hold HPC registration with CSP membership, in this way personal professional activities are covered by the CSP Professional Liability Insurance (PLI) scheme. This is subject to the terms of the policy, including appropriate hygiene standards. The CSP recommends seeking advice from an insurance advisor to establish whether additional insurance is required, including public liability cover.
A CSP associate member can work as a self-employed private practitioner. The clients undertaken must be referred by a registered physiotherapist. This requires that there is also some formal arrangement between both parties involved. In private practice this will need to be determined by the written “contract-for-services” (a summary of the relationship and arrangements). This will form the legal basis for the service provided. Another option is entering into business in an existing private practice. It is essential to seek legal and financial advice when making this decision. Also a formal partnership or directorship agreement will need to be established.
The option of purchasing an existing practice may also arise. This private practice is already up and running and has its own equipment and clientele. Businesses are often advertised in CSP’s “Frontline” publication, Physio First’s “In Touch” Journal, as well as in local papers. As a private physiotherapist it is important to have a the essential skills assessment and diagnosis and when to refer patients. You will need to keep updated with continuing professional development (CPD) and consider how time will be allocated to CPD.
If you undertake a position where you are self-employed esure a “contract for services” outlining the proposes arrangement. If undertaking a postion as an employee you should recieve an a “contract of employment” In either position, members should be absolutlely clear about the contents of the contract (the relationship between you and the practice owner/employer and set out the expectations for both parties).
If you are a CSP member employeed in private practice you will have a range of employment rights and obligations. Society’s Employment Relations and Union Services (ERUS) staff should be contacted if any problems within the workplace arise. If self-employed, you are working under your own account and are not covered by the same employment rights that apply to employees. As such, there are only limited areas in which ERUS is able to assist which include: access to some aspects of ERUS legal services, support with responding to a complaint made against them to the HPC, and initial assistance in determining their employment status if this is unclear. However, self-employed CSP members who are also members of Physio First will be able to access further advice.
When setting up a private practice it is essential to consider the type of ownership structure. A practice can be owned by a sole proprietor, by a partnership of two or more, or by Directors of a Limited Company. Each scenario has different tax and legal implications, and these should be given due consideration. When seeking to start a private physiotherapy business it is important to seek advice, develop a thorough business plan and evaluate the risk. In addition to establishing whether starting a business is viable, a business plan should address the following issues:
When making the decision to set up a private practice the individual will be required to come up with a varying amount of capital in order to cover start up costs
Sources of this capital will include
Firstly, you need to identify the area in which to establish the practice. Close proximity to general practitioners, gymnasiums and heath/leisure centres can help you build local networks that could benefit your practice. It may help to rent space within a health centre or gymnasium, not only to decrease overheads, but to establish referral networks. The location that you choose may have an important imapct on the type of clinic you have. Whether it is in the premium or economy class will have an impact on rent, which will ultimately influence the prices charged for physiotherapy services. Therefore think very carefully about the area, as most leases are from 1 to 3 years.
How much space do you need? Things to consider when viewing a premises
Can you afford the rent/mortgage? It does not matter that the property is perfect, if it costs too much, your fixed costs will increase and this could undermine the financial viability of the business.
Disabled Access The disability Discrimination act 1995 makes it unlawful for service providers to discriminate against disabled people and requires service providers to make “reasonable adjustments” in relation to the physical features of their premises to overcome physical barriers to access.
Equipment will vary depending on the manufacturers, suppliers and types of equipment you require.
Leasing of equipment is an additional option. Advertisements for second-hand equipment appear often appear in physiotherapy or related magazines. Appointment and treatment cards, headed notepaper, brochures and patients’ accounts stationery will be needed and should appear professionally.
When considering equipment you need to ask a number of questions:
In a partnership, two or more people share the risks, costs and responsibilities of being in business. This is a simple, flexible and cost effective method to run a private practice. Conversely, partners do not have any protection if the business is not a success. Each partner is self-employed and the profits are shared accordingly. A partnership has no legal existence separate from the partners themselves. A sole trader runs their business as an individual. Responsibility of all aspects of the business falls back on the owner, including paying personal tax on the profits of the business. A sole trader is personally liable for any debts that the business acquires and is therefore a risky option for businesses with a lot of investment. The advantages are independence and any profits made go to you. Some disadvantages include a lack of support, unlimited liability, and personal responsibility for any business debts. A limited company exists in its own right and remains a separate entity from its owners. Shareholders can be individuals or other companies. The shareholders are not responsible for the company’s debts unless they have given guarantees. This is a distinct advantage of this management structure. The only money that can be lost is the money invested in the company. This will be influenced by factors such as whether the general practitioner is responsible for purchasing physiotherapy services for the community they are located in. As of October 2011, this is the case within England, however it is not similar in Wales, Scotland or Northern Ireland. The physiotherapist may have to apply to the General Practitioner to become a provider of physiotherapy to their patients. There may also be the opportunity to receive referrals from private G.Ps. This remains the most important source of patients for independent practitioners. Word of mouth is often the main advertisement for private physiotherapists. Given the increased caseloads and costs present within the NHS a new initiative where the NHS is looking into shifting their services towards private referrals has arose. These referals will allow for the growth of the private sector while additionally relieving stress from the general NHS system.
The “Any Willing Provider” initiative based in England is am example of this type of outsourcing of NHS services .AWP is a way of commissioning NHS services that enables patients to choose any provider that meets the necessary quality standards and price. At the time of writing the details of how these will be assessed are not yet known. The price will be in the form of a national tariff or be set by commissioners locally. Providers can be drawn from the NHS itself, the voluntary sector, the private sector (including independent hospitals), or from a GP practice. Once they have satisfied the agreed assurance tests providers will be put on a local list and patients will be able to choose who to go to from this list once it has been agreed with their GP that their condition warrants it.
Private Practitioners can either: Require patients to pay the costs themselves initially and then advise them to follow up with their insurance companies to claim the expenses back, or; Have patients complete insurance claim forms and then be reimbursed for the physio services provided by the insurance companies.
The majority of insurance companies use the GP or specialist as the gatekeeper for access to a physiotherapist, although some are now accepting claims for patients who self refer independently. Insurance companies may limit the number of sessions reimbursed per course of treatment. These are companies which handle the management of claims for insurers. For example, if an individual has been involved in a road traffic collision (RTC), their insurance company may well pass their details to a commercial intermediary company who may then: Some of these companies offer inducements which should be avoided. Many will strictly limit the number of sessions and insist that you use pathways/protocols. Some may try to negotiate on cost. Physio First has a great deal of information about many of these companies and should be contacted if you have any concerns. (www.physiofirst.org.uk) In a useful study by Potter et althe characteristics of a ‘good’ physiotherapist were outlined.[3] They interviewed 26 people and could elicit what skills were deemed as the most important from the patients perspective. Communication was seen to be the most important skill. Much of the patients experiences were centred around either good or bad communication. The authors concluded that additional training in communication skills may be beneficial.
Other skills seen to be important were:
The original definition of the scope of physiotherapy was set out in the 1920 Royal Charter, which states that all activity must relate to one of the four pillars of practice: massage, exercise, electrotherapy and kindred treatments.
More recently the changing in patient and service needs has brought about the need for more up to date guidelines. The Health Professions Council “Physiotherapy Standards of Efficiency” (2008) defines scope of practice as “the area or areas of your profession in which you have the knowledge, skills and experience to practise lawfully, safely and effectively, in a way that meets our standards and does not pose any danger to the public or to yourself” (Points to consider
Does your intervention fit into the overall scope of UK physiotherapy:
Does you intervention fit into your individual scope of practice:
Limiting their professional activity to those areas in which they have established and maintained their competence.
More detailed information relating to up to date changes in physiotherapy scope of practice can be found by clicking on the following link ‘extended scope‘. Income
A business plan should also provide an indication of fees and the likely number and frequency of treatments.
Things to consider with respect to fees are: – what payment form will you accept
“Cash sales” means all income from your main business activity which is received at the conclusion of a course of treatment, whether this is a single appointment or spread over several visits. Your cash sales income will be from patients paying your fees out of their own pocket and from patients covered by health insurance who will pay you and then claim the cost from the insurance company after the treatment has been completed. If such a patient needs a course of treatment (more than one appointment), you may decide to charge them after each treatment rather than at the end of the course to improve your cash flow. Income from patients that are covered by health insurance but who will pass you the claim forms at the end of the treatment for you to claim from the insurance company will be “cash from debtors”.
Similarly with any NHS patients you have, you will be reimbursed by the Primary Care Trust or Health Board and this will also be cash from debtors.
Any retail sales of physiotherapy equipment that you make needs to be included in cash sales. You should be able to set up a merchant account facility with any high street bank and they will provide the equipment.
To prepare your cash flow, you need to estimate how much income you will receive over the next twelve months. To do this you will need to work out how many patients you are likely to treat, how much you will charge them and when you will receive the money. Treatment Fees
As of 16/11/11 as taken from 5 private practises in the Edinburgh area patients can expect to pay between £40 -£65 for an initial physiotherapy assesment. Regular treatments sessions then range from £30-£45
Wages of practice staff, employees may include: A solicitor provides advice and expertise in matters such as drawing up a partnership agreement or forming a company. Solicitors may be very helpful in the initial setting up and running of your business, for example, advising on contracts, dealing with property matters, and handling complaints. Practice accounts will need to be maintained, and these must comply with all HM Revenue and Customs obligations. The nature and extent of insurance required by any private practitioner will depend upon a number of factors and individual circumstances. Members of the Chartered Society of Physiotherapists (CSP) are covered for professional liability. The CSP has produced information papers on Scope of Physiotherapy Practice in the UK, and separately on Insurance and Physiotherapy Practice. Both documents provide the essential information needed in this area. A website for your practice is a good method of informing potential patients about products and services that your practice offers. It can be a means of communication and a method of marketing your practice. This website must comply with all Advertising Standards Authority (ASA) regulations. Shepard, 1994 conducted a study on the public perception of physiotherapy and outlined how these findings could be used to market a physiotherapy private practice. Here are his main findings:
Physiotherapists are best known for treating musculosketal injuries. Care provided by physios to women and children is poorly understood. Client-centred care is sought. Mead & Bower (2000) outlined 5 key demensions to patient centred care:
1. The biopsychosocial perspective, involving the practioner gaining a better understanding of social and psychological issues as well as the biomedical aspects of the injury.
2. The ‘patient as a person’, the personal meaning of the injury and their beliefs, expectations, feelings and fears.
3. Sharing power and responsibility, encouraging patient involvment.
4. A positive interpersonal relationship between the patient and practioner is seen as essential.
5. The ‘practitioner as a person’, highlighting the importance of the practioner’s self awreness of emotions and behaviour. Personal reccomendation and doctors refferals were the preferred method of choosing a physiotherapist. Reasons for attending a physio were also investigated. 25% attended for sporting injuries, 23% for work injuries, 16% cited other injuries and 11% were unaware of the cause of their condition. Clients expected the physio to explain the treatment, give exercises to do at home and provide education classes – for example, back pain classes. Respondents believed that physiotherapists were more expensive than general medical practitioners, requested their clients to return too often and should provide an outline of the number of treatments likely to be required. Doctors are crucial for referral and communication about physiotherapy. A private practice physiotherapist should insure they have clear lines of communication with local doctors. Physiotherapy must meet the patients expectations of treatment. These expectations are often individual and require much atention from the physio. Building a good reputation is critical as word of mouth appears to be the best method of marketing.
It is mandatory for all physiotherapists, that are actively practicing, to register as a member of the Health and Care Professions Council (HCPC). This is due to the fact that the terms “Physiotherapist” and “Physical Therapist” are protected titles in the UK and so practitioners who want to use the titles must be HCPC registered. As members of the HCPC private physiotherapists must adhere to the following: As an added incentive for Private Physiotherapists registered with the HCPC, physios are granted VAT exemptions if their turnover is greater than statutory figures. HCPC registration may, in some local authorities, allow for private practice premises to be exempt from licensing. Also, private medical insurance providers require physiotherapists, that their policy-holders are referred to, to be HCPC registered at the time the treatment is being undertaken. With modern technology there are countless methods for marketing a private practice. The most commonly employed are usually the media based advertising methods that include television, magazine, and internet advertising. Branching off of these mass media based methods includes bench, bus, taxi or billboard advertising. Additionally, a practice website is vital in this digital age, if only to provide a basic level of information about your practice as well as the contact information for the practice and its members. Lastly the final method we will focus on is networking and referrals.
These methods, utilized separately or together make up the basic marketing methods that are most commonly employed. Each of these techniques will be discussed in further detail in the following sections. When considering a physiotherapy private practice within the UK the Media Based Marketing
Nowadays television and the internet and the most certain ways of reaching a mass audience and thus increasing your odds that marketing methods will be effective in attracting new clientele. Additionally these methods allow for a more interactive approach to enticing potential clients. The unfortunate draw back to such advertising methods are the costs involved. There is the potential not just for the cost of placing the add but the cost of making it. Hence the reason why only larger more well funded firms tend to utilize these methods. Provided there is available funding in the start up costs for your practice, most television and internet companies have a marketing branch that you can contact to enquire about advertising with them. As additional solace in internet marketing, the Print Based Marketing
Secondary to media based marketing is print marketing such as magazines, newspapers, billboards, as well as bus and taxi advertisments. These methods are considered equally as effective as media marketing at potentially reaching any future clients. Additionally they tend to be significantly less costly. However the draw back is the nature of our evolving society. Print media sales are declining and becoming secondary to media marketing. This of course is due to the increase in the amount of information available on the internet and the increasing trends of younger generations relying more on media for their information. The requirement of new practices is to be able to reach as wide an audience, for that practice, as possible and given that the majority of western civilizations are not seeking out information through print media, this method may better serve a purpose as a additional marketing methods secondary to the more effective methods.
More often then not, a clients first interaction with a private practice is via the practice website. Therefore this may not be a method that you use to reach potential clients but rather a method to further inform them of your practice in an effort to promote and provide reassurances that your practice is what the viewer needs. When organizing a website for a private practice, again the Networking and Referrals
Perhaps the most widely used and most valuable marketing method is the utilization of networking and referrals. Private practice owners tend to agree that this methods generates the majority of clientele. Presumably this occurs due to the weight a recommendation carries with it. This method involves swaying local relative practices, such as GP’s, to promote your practice when the need arises. Additionally most local councils and community governments will promote and host events for local practitioners to meet. These events allow for a mingling of local health practitioners to swap information to facilitate referrals amongst friendly practices. Additionally it is common practice for representatives from your practice to contact local facilities such as school and athletic clubs to negotiate the promotion of your practice by the various other individuals. Finally in relation to networking and referrals, a referral form a current client to a potential client generally carries the most weight and has been more relied upon by practitioners.
Granted media and print based advertising will reach more people and a practice webpage will provide people with more information. Regardless of this networking and referrals are more reliable and effective at recruiting clients. The care quality commission (CQC) is an independent regulatory body for the United Kingdom government established in 2009 to regulate and inspect health and social care services in England. The CQC took over the roles of the Commission for Social Care Inspection, the Healthcare Commission and the Mental Health Commission, which were all abolished on 31st March 2009 (DOH 2007). This new Commission regulates health and adult social care services, whether they’re provided by the NHS, local authorities, private companies or voluntary organisations, monitoring the operation of the Mental Health Act and ensuring that regulation and inspection activity across health and adult social care is coordinated and managed. The type of organsiations and activities that are required to be regulated were defined within Resources
Sheppard L. 1994. Public perception of physiotherapy: Implications for marketing. Australian Journal of Physiotherapy 40(4) pp.265-271.
Mead N. and Bower P. 2000.Patient-centredness: A conceptual framework and review of empirical literature. Social Science and Medicine 51(7) pp.1087-1110.
Department of health. “Care Quality Commission” (Press release). Department of Health. 2007-11-16.
The Health and Social Care Act 2008 (Regulated Activities) Regulations 2010. SI 2010 No. 781. Holidays
Uniform And Equipment Provision
Colleagues
Continual Professional Development
Types of Private Practice
Treating Privately
Support Worker
Becoming a Partner in an Existing Practice
Purchasing an Existing Practice
Private Practice: Points of Consideration
Experience
Employment
Setting up a New Practice
Business Planning
Start Up Capital
Premises
Before you search for your premises, write a list of exactly what you require, remember, as space increases costs increase, so consider the followig very carefully:
Equipment and Stationary
Partnership
Sole Trader
Limited Company
Types of Patients Seen in Private Practice
G.P. Referral
Self Referral
NHS Referral/Privatisation of NHS services
Health Insurance Companies
Commercial Intermediary Companies
• Arrange for referral to a physiotherapist; and
• Pass the details to a legal representative.Skills Required for Private Practice
Scope of Practice
Finance and Running Costs of a Private Practice.
Income and Fees
– how will you set the fee level for each treatment
– who will pay you (the patient, the health insurance company or the NHS)
– will you offer discounts
Expenditure
Running Costs
Professional Fees
It would be advisable to get an estimate of the likely cost of the services you will require.
Accountancy firms offer a wide range of business services, including book-keeping, drawing up the annual accounts which are essential for Inland Revenue purposes, preparing tax and VAT returns, handling the operation of PAYE and providing advice on tax and business.
HPC registered physiotherapists are exempt from registration for payment of VAT when providing physiotherapy treatment even if their turnover is above the statutory limit. However, this also means that the practitioner may not recover VAT on items of expenditure.
As with legal costs, ask your chosen accountant to estimate the likely cost of the accountancy services you require.
Working in private practice, you may need some or all of the following types of insurance:
professional liability (CSP membership covers this)
Marketing
Public Expectations of Private Physiotherapy
Implications for Marketing
Professional Expectations of Private Physiotherapy
Modes of Marketing
Your Practice Website
Care Quality Commission (CQC)
URL: References
