Roundtable Discussion of Purchasing Strategies

Physical therapy practice owners compare approaches to making capital expense product purchases

Physical Therapy Products recently hosted a roundtable discussion panel about capital expenditures and purchasing plans for 2014. Participants addressed questions about budgeting for capital equipment purchases, return on investment, and strategies each participant’s practice uses to optimize capital equipment purchases for a clinic’s needs. 

Neil vicki  jacques 
Neil Chasan, PT, MMT  Vicki Buchanan, PT  Jacques L. Beauchamp, PT, DPT, SCS, OCS, ATC, CSCS


 The participants selected for this roundtable are clinic owners whose practices represent a variety of specialties, and have expanded their operations amid a difficult reimbursement environment. Featured in this roundtable are: Jacques L. Beauchamp, PT, DPT, SCS, OCS, ATC, CSCS, founder and chief executive officer, Spine & Sport, with practices in southeast Georgia and Florida; Neil Chasan, PT, MMT, founder, Sports Reaction Center, Bellevue, Wash; and Vicki Buchanan, PT, owner and chief executive officer, Regional Physical Therapy Inc, with practices in Midwest City, Okla, and Oklahoma City.


Physical Therapy Products (PTP): What capital expenditures did you make in 2013, and did you budget for them? Why did you make the purchase?

Jacques L. Beauchamp, PT, DPT, SCS, OCS, ATC, CSCS: We purchased items to outfit a new clinic that we opened in February. We did not budget. We purchased the equipment for expansion purposes.

Neil Chasan, PT, MMT: We added only a couple of items this year. We upgraded a table and clinic machine by purchasing them from a clinic that was closing. We simply expensed the items because they were made available and we needed to make a quick decision.

Vicki Buchanan, PT: In 2013, I made substantial capital expenditures on first time purchases to outfit a new clinic in my area. I had budgeted for the new equipment purchases.

PTP: How do you research the products you earmark for capital expenditures?

Beauchamp: A mixture of personal use, online research, and trade shows.

Chasan: For larger items, we generally did our research at trade shows.

Buchanan: The primary research I do is based on visits with other clinicians that I then follow up by speaking with the sales reps. I typically decide what equipment we will purchase based on the highest population of patient diagnosis and the equipment that will assist in those treatments.

PTP: What capital equipment have you purchased that has given you the best billing? Which equipment would you buy again, or recommend to a colleague? Which would you not buy again, and why?

Beauchamp: One item that has been a good investment has been Hi-Lo electric tables with a face hole. Another has been an electronic medical record (EMR) that combines scheduling, billing, and note-taking in one suite. I would definitely recommend TheraOffice (Hands on Technology, Westmont, Ill) to all of my colleagues. Best bang for the buck in regards to EMR.

Chasan: None of the items for which we made capital expenditures provide billing per se, but we use them in day-to-day services. The Alter G anti-gravity treadmill (AlterG, Fremont, Calif) and Dynavision D2 light board (Dynavision, West Chester, Ohio) we purchased are good tools that differentiate us.

Buchanan: The equipment that gives me the best billing is equipment that I can tie to functional activities with a neuro reeducation aspect, such as a shuttle or fitter. I would not purchase weight stack machines such as circuit training pieces. I use my abstabilizer frequently and would definitely purchase it again.

PTP: How do you feel about purchasing equipment from new manufacturers or new reps, compared to those with whom you already have a relationship and whose products you already own?

Beauchamp: I try to support those reps whom I have used in the past and have been pleased with their level of service and commitment to my company. I tend to purchase similar products when we are expanding, as it is tried and true for our environment. I try to get my new equipment requests through people I know. If I cannot, I have no problem working with new reps to get the equipment I have targeted.

Chasan: We generally buy from whomever has the technology we want and need.

Buchanan: I find that it takes me longer to make a decision with new reps or manufacturers, and I tend to spend more time researching their products online and with other clinicians compared to people with whom I have an established relationship.

PTP: In which area of your practice do you see the most potential for growth in 2014? What type of capital expenditure would you make to support that growth?

Beauchamp: We will continue to focus on arthritis and joint pain, as that market is searching for solutions and so many still need help. Basic clinic components will remain on our radar, such as treadmills, ellipticals, NuStep, treatment tables, and other basic exercise equipment.

Chasan: We see potential in anterior cruciate ligament (ACL) Risk Assessment and Prevention. In light of this, we might consider purchasing a force platform.

Buchanan: I believe items that work to promote trunk strengthening/core stabilization are those for which we will see the largest growth. If an item can produce codes payable for therapeutic activities or neuro reeducation and produce quick results, I would make a substantial contribution toward that piece of equipment.

PTP: Have you begun budgeting for capital expenditures in 2014, and when will that budget be implemented?

Beauchamp: We do not budget. Our expenditures are based on need and cash versus bills. If we need it and have the money to purchase, we purchase any item.

Chasan: None are planned for this year or next. But then we have been in business for about 30 years, so most of our equipment purchases are to replace outdated or failed equipment. So we have a small budget for emergency purchases.

Buchanan: I usually spend the money in December, but this year I opened a new clinic and spent most of my capital already. For 2014, I will budget monthly to spend in the last quarter of the year.

PTP: How has your purchasing differed before the recession to after the recession? Have companies changed their terms? Have you demanded different terms? Any wisdom you can share in this regard?

Beauchamp: Our purchasing remains the same. We run our business on a strict financial policy of cash versus bills. We have noticed that some companies have changed their terms to shorter pay cycles. We have altered our collection practices to be more aggressive with our accounts receivables, specifically in relation to the patient’s portion of the bill. We have implemented a program that collects some of their bill on the front end rather than waiting until insurance has paid. This has been received well and is working to get our money faster.

Chasan: We made some big capital equipment purchases in the depth of the recession because prices had dropped dramatically. We picked up the Alter G, a regular treadmill, an exercise bike, and an elliptical all during the recession. It was bold, but physical therapy is a lagging indicator of economic recovery, so once the economy recovers then physical therapy recovers later. We anticipated that we would grow eventually, and we have.

Buchanan: Prior to the recession, equipment purchases ranged from flashy equipment that was somewhat quirky to highly used “workhorse” pieces that have patients standing in line to use. Now, due to financial considerations and space limits, before I make a purchase I must be convinced that the equipment will pay for itself many times over in terms of efficiency of use, reimbursement for time spent in use, and speed at which it can be paid off per billable codes. PTP