Why Your Physical Therapy Practice Needs the “Pay for Performance” Model

(Updated March, 2024)

As a private practice owner, you may have heard about the Pay-for-performance model. MEG Business has been a proponent for this approach to personnel management because we see firsthand how it impacts business results. 

MEG Academy hosts the most comprehensive information and direction on the Pay-for-performance model. Members can learn more in the Systems of Operation Program.

But for now, let’s break down what makes the Pay-for-performance model special within a physical therapy clinic. Essentially, it provides financial incentives to employees that encourage meeting specific benchmarks. In this model, targets are established and then the staff will work to meet those targets and be rewarded accordingly when they reach them. This also goes the other way – not meeting specific metrics can result in a lower salary. It’s a high-risk and high-reward model.

The Components of the Pay For Performance Model for PTs

Based on our experience, three components factor into how the process works. It should also be noted that this type of system is not designed to generate sweeping changes to overall employee performance and day-to-day duties, but rather to empower staff to take more control over their own success and provide an incentive to earn more.

1. Clinical Efficiency

Clinical efficiency is rewarded in a Pay-for-performance model and can be measured differently. Clinical efficiency is the amount of output relative to the amount of time spent. So, if a therapist can help a certain number of clients daily, that can reflect clinical efficiency.

This can be measured in a few ways, but the most common is through patient visits or a system of value points. MEG Academy, for example, has specific calculations to create a level playing field between PTs and PTAs, OTs and COTAs, and SLPs and SLPAs.

2. Production

Production is another critical metric of Pay-for-performance model for physical therapy practices. Production is also gauged by the amount of output relative to the amount of input, usually measured by time.

Setting production standards for your clinical team allows you as an owner to ensure your team is exchanging in abundance with every patient that chooses your practice for their physical therapy care. 

3. Quality 

Perhaps one of the most important components of the Pay-for-performance model is quality. Quality of care can have several observable metrics and is one of the more complex considerations for a Pay-for-performance model. At MEG, we recommend using the Net Promoter Score (NPS) as a key performance indicator. Brian Gallagher takes this concept further in his PPS Impact Magazine article, “Is NPS Legitimate?”

Clinics can measure quality of care via standard metrics that include percent of kept appointments, physical therapy outcome measures, success stories and patient surveys.

Getting Win/Win/Win Results

When measured correctly, this is a win for the patient, the staff and the business. If the clinician is maximally efficient, they are treating more patients and delivering an abundance of care during each visit without sacrificing quality. 

You can learn more about Pay-for-performance in our blog Exploring the Pay for Performance Compensation Model for Your PT Clinic

Transitioning Staff to a Pay for Performance Model

It’s obviously essential to ensure the staff understand the expectations and benefit of this model at your physical therapy office. This is best handled by sitting down with each of them and explaining how the process works, in addition to using MEG’s spreadsheet models to illustrate how performance translates directly to payment.

The management team will also need to ensure all documentation has been submitted and the process of documenting performance is standardized across the office.

Get Results-Driven Personnel Management Training

MEG Academy can easily help your physical therapy practice adjust to the Pay-for-performance model, and we have the in-depth resources, training and tools needed to enhance many other areas of your personnel management within MEG Academy

In the end, your top producers will bring in more business and be compensated on top of their existing salary. The best part is that the more they earn, the more your business will grow!

Contact MEG to increase your clinicians’ productivity, grow your patient population and build the practice of your dreams.

New call-to-action

Recent Blogs

Go to Top