PT Project contributor Ben Gold is a PT in New York but hails from Australia. I’ve asked him to fill us in on the Health Care System of Australia, and more specifically, the business model of most private practice “Physiotherapy” clinics there.
Physiotherapy in Australia
“Australia has Nationalised healthcare. That means free healthcare for the public. Free care if you get into a car accident and end up in emergency and need orthopaedic surgery. Free elective surgery for an ACL tear for example, but you may be waiting a while to get such surgery that is not urgent.
We also have the option of private health care for anyone that can afford it. I just received a quick quote from a top Australian Insurer as a single person. I chose the top tiered plan that gives me the best possible care (eg, medical / dental / laser, joint replacement, etc…) It came to a total of $245 per month. A basic plan for a single person (32 years old) with a 250-dollar deductible is about 120 dollars a month.
The difference between the private practice physiotherapy in Australia and the USA is enormous. In Australia, 90% of private practice business is cash-based. The other 10% is Medicare, Veterans, TAC (our government-subsidised car accident insurer). Payment from this 10% is received quite promptly. Payment from the cash-based system is immediate. When I say immediate, I mean it.
Mr Jones has a 30-min physiotherapy session. The cost of the session is 70 dollars. At the end of the session, Mr Jones hands his insurance card for payment, which is then swiped like an eft pos card at a terminal linked directly to the physiotherapist’s bank account. The terminal says the insurance will pay 50 dollars, and the co-pay is 20 dollars. 70 dollars gets paid to the physiotherapist in an instant. The insurance payment is determined by which level of coverage Mr Jones chooses when he signs up with the insurer. There is no confusion about this, as Mr Jones already knows his plan will pay 75% of physiotherapy sessions, and he will get 40 sessions per year. This is just an example of course…
Notes do not need to be submitted to insurance companies for perusal, as we are regarded as professionals, and insurance companies do not run the healthcare system in Australia. We never get denials “based on medical necessity,” payment is never received in 90 days, and payment is not denied if we forget to put a strength grade for a muscle group, as we don’t submit our notes.
The icing on the cake is that physiotherapists can get reimbursed for Pilates in their practice, and exercise performed with an exercise physiologist too. Patients will often get a rebate for these services too.
Let’s do the math….
You are the practice owner and you have 2 full-time physios on a 45/55% split. 45% goes to the PT, 55% goes to you as the practice owner.
Let’s say follow-up visits are 60 dollars to be very conservative. Initial consultations are usually more, but let’s forget that for argument’s sake.
Let’s say the 3 physiotherapists are 75% booked all the time.
3 PTs x 30 hours per week ( 75% of a 40 hour week is 30 hours)
= 90 hours per week.
Let’s say visits are 30 mins each.
90/0.5 = 180 visits per week.
As the practice owner: 60 visits x 60 dollars = $3600
120 visits x 60 dollars = $7200 x 0.55 (55%) = $3960
$3600 + $3960 = $7560 per week,
$7560 x (45 weeks to be very conservative)
= $340,200 per year (CASH).”
The Australian model works well for PT practices
Wow! That was a fantastic and inspiring summary. Thanks Ben! Depending on the overhead and taxes of our hypothetical practice owner, that’s a pretty solid income. If I didn’t already have a successful cash-based clinic here in Austin, this would make me want to move to Australia (and I could because I have citizenship there too). More than anything, it makes me consider hiring another PT sooner than I had planned. Any great Manual Physical Therapists out there looking for a job?