Physical Therapy Clinic Model
Healthcare Financial Model (Free Excel Download)
Model physical-therapy clinic performance through visits, therapist capacity, payer mix, reimbursement, cancellations, labor, rent, equipment, and location-level cash flow.
professionals from Deloitte
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About this model
This model helps you plan a physical therapy clinic or a growing group of clinics. It connects patient visits, therapist capacity, payer mix, wellness memberships, and ancillary sales to the staffing and operating costs behind each location.
Use it to evaluate a new clinic, acquisition, or expansion plan. You can test the assumptions that matter most and see their effect on revenue, profitability, cash flow, and value.
What every model includes
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
What's inside the Physical Therapy Clinic Model
- Clinic inputs: Year-1 clinics, new clinics per year, visits per clinic, therapists per clinic, average net reimbursement
- Utilisation: Year-1 utilisation with an annual ramp and a practical ceiling
- Payer mix: commercial, Medicare, Medicaid and work-comp-and-self-pay shares, per-payer rate indices and net margins
- Ancillary: members per clinic and annual membership fee, bracing and retail spend per visit, price escalation
- Cost structure: therapist and support comp and wage with benefits and wage growth, facilities, marketing, technology and SG&A as a percent of gross profit, depreciation, tax
- Capital and working capital: maintenance capex, clinic build-out cost per clinic, NWC, base-year revenue
- Valuation: WACC, terminal growth, net debt, shares outstanding
- Operations sheet: clinic roll-forward, utilisation ramp, visits per clinic, total patient visits, staff headcount, visits per therapist
Physical Therapy Clinic Financial Model: How the Operating Engine Works
This physical therapy financial model projects a multi-location outpatient clinic group over seven years. It connects clinic openings, visit volumes, payer mix, membership and retail attach to staffing, overheads, cash flow and an unlevered DCF valuation.
The public download is a values-only preview, but the structure shows how each operating assumption flows through to enterprise value.
Clinic roll-forward and the visit volume ramp
The model starts with a clinic roll-forward: opening clinics plus new clinics equal closing clinics. New clinics are set at a fixed number per year and drive build-out capex.
- Each clinic has a mature visit capacity, reflecting treatment-table count and therapist capacity. That capacity is multiplied by a utilisation factor, which starts at a Year 1 input and ramps by a fixed number of percentage points annually, capped at a practical ceiling.
- This recognises that new or acquired clinics take two to four years to build referral relationships and caseload. Closing clinics times effective visits per clinic gives total patient visits, the single most important volume driver.
Payer mix and service revenue
Patient service revenue is built payer by payer. Total visits are split across commercial, Medicare, Medicaid and work-comp/self-pay shares.
- Each payer's share of visits is multiplied by an average net reimbursement and a payer-specific rate index, then escalated at a fee-schedule step-up. Commercial and work-comp visits carry indices above one, while Medicaid sits well below, so the blended revenue per visit falls out of the mix rather than clinical effort.
- The cost to deliver patient services is each tier's revenue times one minus its net margin, capturing supplies, billing and write-off costs that differ by payer. This makes the reimbursement spread and its margin consequences explicit.
Ancillary lines and the cost structure
Two ancillary lines layer on top of patient services. Wellness and fitness memberships are driven by closing clinics times members per clinic times an annual fee, escalated.
- They are treated as a service add-on with no separate product cost, because delivery labour sits in the clinic cost stack. Bracing, DME and retail are visit-driven and carry their own resale product cost, since they are physical goods rather than payer-billed services.
- On the cost side, therapist and assistant/front-office labour are headcount-driven, loaded for benefits and escalated at wage growth. These labour lines sit in operating expense, not cost of revenue, so gross margin runs high and EBITDA margin is the meaningful profitability measure.
Overheads such as facilities, marketing, technology and corporate SG&A are set as a percentage of gross profit, acknowledging that operating scale is better proxied by gross profit than revenue.
Cash flow, valuation and practical use
The model derives unlevered free cash flow by taking EBIT, applying unlevered tax to get NOPAT, adding back depreciation, and subtracting maintenance capex, clinic build-out capex for new clinics, and the change in working capital. Working capital is a moderate drag because third-party insurance receivables run 30 to 50 days.
- Free cash flows are discounted at WACC, and a Gordon-growth terminal value is added to the present value of explicit cash flows to reach enterprise value. Net debt is subtracted for equity value and value per share.
- A dashboard summarises clinics, visits, utilisation, revenue per clinic, revenue per visit, revenue, EBITDA, EBITDA margin, enterprise value and value per share. The model is useful for evaluating new clinic economics, acquisition scenarios or expansion plans by flexing volume, payer mix, membership attach and cost assumptions.
Formatted to IB standards
Named theme colors repaint the whole workbook in one click, on top of an investment-banking structure with clear input, output, and cross-sheet reference styling - brand-ready, institutional-grade, and fully auditable.
Created by ex-finance professionals
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Frequently asked
What is a physical therapy financial model?+
A physical therapy financial model captures the seven-year operating economics and intrinsic value of a multi-location outpatient physical therapy group that runs rehabilitation care alongside cash-pay wellness memberships and a bracing and DME retail attach. It rolls a clinic count forward, converts a capacity-utilisation ramp into total patient visits, prices visits across a four-tier payer mix at a blended average net reimbursement and rate index, runs the high-gross-margin therapist-heavy cost stack to EBITDA, and discounts an unlevered free-cash-flow stream to enterprise value, equity value, and value per share.
How is physical therapy revenue built?+
Revenue is driven by the clinic estate and its utilisation: total patient visits equal closing clinics times visits per clinic times a utilisation factor that ramps to a ceiling, and patient service revenue splits those visits across a commercial, Medicare, Medicaid and work-comp-and-self-pay mix, each priced at a blended average net reimbursement times a per-payer rate index. Clinic-driven wellness memberships and visit-driven bracing and retail layer on to total revenue.
Why is the payer mix so important?+
The same visit, delivered by the same therapist, is reimbursed very differently depending on who pays, a commercial or work-comp plan above the blended average and a state Medicaid plan well below it, so the realised revenue per visit falls out of the payer mix rather than the clinical work. The model makes the per-payer rate indices and net margins explicit so an analyst can flex the mix and reimbursement and watch revenue per visit, gross profit and EBITDA move together.
Why an unlevered DCF instead of an EBITDA multiple?+
A therapy group still builds out each clinic and carries a month or more of insurance receivables, so EBITDA overstates cash. The model bridges to unlevered free cash flow, NOPAT plus depreciation, less maintenance and build-out capex, less the change in working capital, and discounts it at a WACC, then adds a Gordon-growth terminal value. The implied EV/EBITDA falls out as a sanity check rather than as the valuation input.
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