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What happens when your healthcare practice keeps growing, but your profits disappear?
Orit Hickman built Pain Science Physical Therapy into a million-dollar practice. One year, the business generated more than $1 million in revenue with roughly 12% profitability. The following year, revenue increased—but profit dropped to just 2%.
Something had to change.
In this episode of the Financial Beast Podcast, Orit explains how declining insurance reimbursements, rising salaries, increasing administrative costs and the growing burden of dealing with insurance companies pushed her physical therapy practice toward an unsustainable business model.
Her solution was dramatic: drop roughly 65% of the practice’s insurance contracts and begin transitioning toward a fee-for-service model.
Today, the practice is seeing fewer patients while making more money.
In this conversation, you’ll discover:
- How a growing practice can become LESS profitable
- Why insurance reimbursement stopped supporting Ari’s model of care
- How administrative costs quietly consumed practice margins
- Why she dropped 65% of her insurance contracts at once
- The emotional difficulty of dropping Medicare
- How she transitioned back from 45-minute to one-hour appointments
- Why cash pay allowed her to rethink compensation for her providers
- How she’s transitioning toward a fully fee-for-service practice/li>
- Why practice owners need to put financial stability first
- How Ari transitioned her identity from clinician to business owner
- Why seeing fewer patients can sometimes produce a stronger business
- How telehealth could allow Pain Science Physical Therapy to expand nationally
If you’re a physical therapist, veterinarian, optometrist, dentist, chiropractor or other healthcare practice owner dealing with shrinking reimbursements and rising expenses, Ari’s experience offers an important lesson:
More revenue doesn’t necessarily mean you’re building a healthier business.
🎙️ Subscribe to the Financial Beast Podcast for financial strategies, practice growth insights, exit planning and wealth-building strategies specifically designed for healthcare practice owners.
CHAPTERS:
0:00 When Practice Revenue Goes Up but Profit Goes Down
1:39 Escaping the Insurance Reimbursement Trap
03:19 Why Orit Hickman Started Her Physical Therapy Practice
05:25 Growing From Clinician to Practice Owner
08:17 COVID, Rebranding & Declining Reimbursements
10:36 The Identity Shift From Practitioner to Owner
12:41 Why Practice Owners Must Prioritize Profitability
17:13 Getting Out of Patient Care Without Losing Quality
20:35 The Problem With Insurance-Based Physical Therapy
23:06 $1M+ Revenue but Profit Falls From 12% to 2%
27:21 Making the Decision to Leave Insurance
30:43 Dropping 65% of Insurance Contracts
32:58 Transitioning to a Cash-Pay Physical Therapy Practice
34:11 Seeing Fewer Patients and Making More Money
36:04 The Plan to Become Fully Fee-for-Service
40:07 Money Lessons From Building a Healthcare Practice
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