Aquatic therapy has long proven its efficacy as a treatment modality for a wide range of conditions. Experts agree that patients recovering from injury or surgery can begin therapy sooner using water as a medium. They can progress to regular, weight-bearing therapy faster, and generally recover more quickly by means of aquatic therapy. In addition, aquatic therapy can provide beneficial treatment for a range of physical and neuromuscular conditions for both children and adults.

However, many practitioners hesitate to make the hefty investment—and take the associated risks—required to install an appropriate pool and establish an aquatic therapy program. In this article, we will look at the business aspects of aquatic therapy. We'll discuss some of the reasons why aquatic therapy can be good for a physical therapy business, whether private or institutional. We'll look at what you need to consider to assess the potential for your particular practice, and we'll walk through the financial aspects of estimating costs, determining return on investment, and determining profitability based on patient utilization.

Why Add Aquatic Therapy

There are generally three reasons why practitioners consider adding an aquatic therapy component to their practices. The first, of course, is for their patients. The many benefits of aquatic therapy are beyond the scope of this article, but as noted above, it can help your patients get better faster.

Second, an aquatic therapy program can provide your business with a differentiator, a way to distinguish yourself from the competition. As a business, physical therapy has gotten increasingly competitive in recent years with multiple private practices serving many communities, and hospital and other institution-based practices vying for patients as well. And while aquatic therapy is rapidly becoming more popular, the number of practices offering it is still relatively small. So putting in a therapy pool can give you an advantage.

The third reason is to improve your bottom line: to generate profit. Aquatic therapy can do this principally in three ways. First, having a therapy pool can get people into your clinic sooner. Because aquatic therapy is nonweight-bearing, patients can often begin a program sooner than they can begin traditional, land-based therapy. Second, you can often supplement land-based therapy with aquatic therapy, thereby treating each patient more often.

Third, you can use your therapy pool for other, cash-based activities, such as postrehab fitness and conditioning, for patients whose insurance coverage has run out. There is also a wide range of wellness, conditioning, and personal training activities that can be done in therapy pools that are outside the scope of physical therapy itself, but which can be offered to increase pool utilization. And as many of these activities do not require a therapist, their profit margin can be higher.

Assessing Suitability for Your Practice

The main consideration in assessing the suitability of your practice for aquatic therapy is your physical plant. The ideal, obviously, is to build a new facility, where an aquatic therapy center can be designed, an in-ground pool installed, and a building put up around it. However, most of the time, therapy pools are installed in facilities where the building already exists, and there are a number of prefabricated pools on the market that can readily be installed in these situations.

However, there are limitations. If your practice is on the third floor of an old wooden building with seven-foot high ceilings, you're probably not going to put a pool in. If, on the other hand, your physical structure can take the weight, you have room enough around the pool, and you have 10 or 12 feet of headroom available, an above-ground installation is probably feasible.

Much of this is dependent on local, county, and state building and health codes. Some states are very stringent, some states aren't. The first thing to do, then, is to contact your local health department and figure out the exact codes that will apply to a therapy pool—or a special-purpose pool, as it is often called. Some states require 4 feet of decking or space around each side of the pool, some states require 4 feet on two sides, it runs the gamut. Your pool manufacturer can probably also help in this area. At SwimEx, for example, we have pools in virtually every state and are familiar with most of the codes.

Your manufacturer should also be able to assist with installation, either by providing or recommending an installer, or by working with you to manage the process. Some states require a local architect be involved, others don't. Some communities are very stringent on building inspection, others are not. Working with a knowledgeable team will help you negotiate the various bureaucratic idiosyncrasies.

Another interesting thing about installing a therapy pool as opposed to regular pools, is that from a financial standpoint, they are considered as equipment and not as part of the building. Thus, whether you own or lease your facility, install in-ground or above, you can not only depreciate the pool for tax purposes, but when you move, you can take your therapy pool with you.

Figure 1. A cost/revenue spreadsheet we use to help customers analyze the financial aspects of buying a pool and establishing an aquatic-therapy program. The sheet has been set up to show a representative example for the purposes of this article. View in a larger size.

Cost/Revenue Analysis

Figure 1 is a cost/revenue spreadsheet we use to help customers analyze the financial aspects of buying a pool and establishing an aquatic therapy program. The sheet has been set up to show a representative example for the purposes of this article. The sheet is divided into three sections: The top two are used for entering estimated financial data; and the bottom section does the analysis, projects annual income for the first 6 years, and calculates estimated return on investment for pool and construction costs. The example here is based on a 5-year financing arrangement and assumes a 5% annual growth and inflation factor. Let's look at each section and consider some of the variables.

If you have a practice now, you are already familiar with your own insurance-reimbursement structure, which is typically based on 15-minute units. For aquatic therapy, there are two ways to gain reimbursement. Depending on the insurance provider, you can either use an aquatic therapy billing code, which is one amount, or any of the specific therapeutic exercise codes. Aquatic therapy usually pays the higher rate, if the provider covers it, but it's incumbent on you to determine the best option.

For our example, we've used an average reimbursement of three units, or 45 minutes per treatment. Entering the estimated average number of treatments you expect to provide per week (including any projected cash-based treatments) and the number of weeks your facility is open per year yields the patient-revenue figure shown in the analysis section below: $117,000 for the first year in our example.

The expenses section of the spreadsheet is also fairly straightforward, although it is the one most practitioners find intimidating. The cost of the pool is simply that, plus whatever options and accessories you have decided on, and delivery. Construction costs include total installation, including whatever building or rehab costs are associated with the installation. If you build an addition onto your facility for the exclusive purpose of housing your aquatic therapy center, all costs associated with that construction—including the actual installation of the pool—should be entered here. If, on the other hand, you are doing an above-ground installation in an existing room of your facility and no structural changes are required, your construction costs will be significantly different. Your contractor and/or installer can help with this section.

The section for ongoing annual expense is the one that gives people the most trouble, but it's also the one on which your manufacturer can provide the best guidance. You will know your rental or mortgage costs, based on a pro rata portion for the aquatic therapy section, and also your insurance and tax costs, divided on the same basis. If you provide the manufacturer with your utility rates, they can help figure operating costs. They can also provide good estimates for pool maintenance and chemical costs. Labor is what you pay your therapists for those hours spent doing aquatic therapy with patients.

The bottom, analysis portion of the spreadsheet simply crunches all these numbers and presents results in terms of yearly cash income for 6 years. As you can see from our example, the results look pretty good!

Keep in mind, however, that these numbers are only an example, and even the ones you enter will not be absolute for your situation. But the beauty of the spreadsheet is not to show you the rosiest scenario. It is to let you work through a number of scenarios, from worst- to best-case, so you can get the broadest perspective possible and make the best decisions for your practice. With help from the manufacturer or your own accountant, you can also use the spreadsheet to help evaluate other options, such as financing with loans instead of leasing, or using your own cash.

Marketing, the Last Piece of the Puzzle

The biggest mistake we see when people invest in aquatic therapy pools is that they do not market their capability. We see this less among private practices than hospital or institutional facilities where managers have perhaps less incentive to actively market, but if no one knows you're offering aquatic therapy, your pool won't be utilized sufficiently and no rosy cost-justification scenario on a spreadsheet will help. Again, your pool manufacturer—who has probably helped similar organizations all over the country—is a likely source of helpful information.

The bottom line is that adding an aquatic therapy component to your practice is as straightforward as any other aspect of your business. It is not without risk, but if you do your homework to make the right equipment choices, plan the installation properly, and market it effectively, aquatic therapy can become a very real asset, both for your patients and your business.

Bob Peck is the vice president of marketing for SwimEx Inc, Fall River, Mass. Leslie Becki, MS, ATC, is an athletic trainer who focuses on aquatic therapy. For more information, contact .