Guides
Best markets for a physical therapy business
Best markets for a physical therapy business: why no city is named, and a six-factor scoring method that ranks markets for your practice from checkable sources.
What to take away
- No market is named here. A ranking of cities for a physical therapy practice would depend on a payer environment, a labor supply and a referrer map that change by state, by year and by the practice doing the asking.
- Six factors decide a market for a clinic, and each has a public source or a checkable local fact. Score them the same way for every candidate.
- The most telling factor is the one no dataset carries: the wait time at the practices already there.
- Score the market you are already in first. Most practices should grow where their referrers are before they look at a map.
Why no market is named
A market that is excellent for an in-network clinic with three therapists can be wrong for a solo cash-based practice in the same building. The state's rules on referral and supervision, each payer's allowed amounts and policies, the density of referrers, the supply of therapists to hire, and the cost of space differ from one place to the next, and they differ for each practice model. A named list would be a list for one model on one day. The method below produces your own list, for your model, from sources you can check.
The six factors
| Factor | What to measure | Where it comes from | How it fails you |
|---|---|---|---|
| 1. Referrer density and willingness | The number of physicians, surgeons, discharge planners and athletic programs whose patients you could serve, and how many have said they would refer | Public directories; conversations with the offices, using only what they volunteer | Counting referrers who already have a practice they trust |
| 2. Unmet demand | Wait time for a first visit at existing practices, from what they publish and what referrers report | Their booking pages and listings; referrers' own accounts | Reading a full calendar as a full market; it may be a slow front desk |
| 3. Payer environment | Which payers dominate, what their policies say about referral, authorization and telehealth, and how the state board rules on referral and supervision | Each payer's published policy; the state physical therapy board; for Medicare, the CMS therapy services page | Assuming a payer's rules in one state apply in the next |
| 4. Labor supply | Therapists and assistants available to hire, and the pay the area asks | The Bureau of Labor Statistics page on physical therapists and its state and area data; local postings | Planning a second column in an area with no one to fill it |
| 5. Cost of space | Rent per usable treatment room, build-out, accessibility work, parking | Landlords, quotes | Cheap space with an entrance patients cannot use |
| 6. Population fit | The age and activity profile of the area against the service lines you run | Public census data for the area; the practice's own line design | Population counts treated as booked demand |
Scoring
- Name the candidates: the market you are in, and any others you are seriously considering. Two or three is plenty.
- For each factor, write the evidence for each candidate on one line, with the source and the date.
- Score each factor for each candidate on the same scale, and weight the factors by your model: a cash practice weights factors 1, 2 and 6; an in-network practice weights 3 and 4; a home-visit practice weights 1 and 5 differently again.
- Read factor 2 twice. Wait times are the market telling you what it lacks, and they are the factor most owners skip because there is no dataset for them.
- Keep the sheet, and re-score the market you are in every year, because factors 3 and 4 move.
The SBA business guide has a general section on market research that is a fair introduction to the public sources; nothing in it knows about payers or supervision rules, which is why factors 3 and 4 are on this page.
The market you are in
Most practices asking about the best market already have one, with referrers who know them. The expansion and market guide argues that growth belongs where the referrers are until the lease or the market stops it, and the scoring above usually agrees: factor 1 is where a new site starts from zero and an existing site starts from a list. Score your own market first, and treat a second market as a project only if it scores clearly higher on the factors your model weights.
After the score
A market that scores well is a market where the practice's first evaluation can still be a month away, because the score does not open doors. The referrers in factor 1 have to be met, which is the subject of the marketing and growth guide; the therapists in factor 4 have to be hired and trained on the practice's template, which the hiring and training guide covers; and the state board and payer answers in factor 3 have to be obtained in writing for the new location, which the licensing and compliance guide sets out. A score is a reason to start those, not a substitute for them.
Common questions
Is a growing area a better market?
Growth in population is factor 6 and only one of six. A growing area with a dominant health system that employs its own therapists and refers inward can score lower than a stable area with independent physicians and long waits.
How do I find wait times at other practices?
Their booking pages show the next available evaluation; their listings and reviews mention waits; referrers' offices know exactly how long their patients waited and will often say. Use only what is public or volunteered.
Should I pick a market where nobody else practices?
Ask why nobody does. Sometimes the answer is an unserved need; sometimes it is that the referrers, the payers or the labor supply are not there. The six factors distinguish the two.
