Rehabilitation organizations

The Major Business Challenges of Rehabilitation Organizations

Patients admitted to rehabilitation centers range from being accident or stroke victims and those suffering with a specific illnessfor which recovery time is needed (often called a therapy centered business) to a business focused on those people recovering from drug or alcohol dependency issues (often called a substance abuse recovery facility). Although they are often quite different services, both are focused on getting people back to where they were and operating independently(as much as possible) and have similar business challenges that are summarized below.

Marketing the Service
Almost anywhere in the US, and especially in urban areas, there are many rehabilitation centers, clinics or practices, making this sector one of the most competitive in the healthcare industry. However, apart form the very large ones or ones with high profile sponsors (the Betty Ford Clinic being a good example here) most of these establishments struggle to stand out in the market and therefore need to work hard to be top-of-mind when they are needed (and not just a listing online or in a directory of rehab providers.) There are many marketing strategies that can overcome this relative invisibility and the challenge is to come up with the one that will work best given the location and services being offered.

Operating efficient and effective processes at all levels
There are two major drug rehabilitation treatment program types – outpatient (where individuals visit for treatment or therapy but then go home) and residential (where individuals stay for days, weeks or even months on end in order to get intensive treatment or therapy). The processes for providing one or both of these two models of care needs careful design and detailed planning in order for efficient and effective service to be delivered on a consistent basis. In other words, it is important for rehabilitation centers to think about all of their processes of dealing with both kinds of patient from registration to the point when they are signed off as fully recovered.

Hiring and Training the Right Staff
Rehabilitation facilities need a wide variety of staff from doctors and nurses, therapists of all kinds, clerical/administrative people, janitorial workers, case managers, and many others. Not only do qualified, certified and competent people need to be hired to fill these roles but ideally with experience of the rehabilitation world. Unfortunately, there is a shortage of experienced staff in many of these areas so effective training (both technical and interpersonal) needs to be made available to bring people’ skills up to standard and to keep them there.

Dealing with Greater Regulation
Regulatory requirements for rehabilitation services have always been long standing challenge, but in recent years, standards organizations and authorities in the US and all over the world are applying additional regulations and expecting rehab clinics and centers to have even better control over patient records, treatment pathways,and tangible outcomes. In addition, issues such as privacy, software use and database securityare all much more onerous as basic business requirements. This can all add considerably to the time and money it takes to run the business profitably.

Carefully controlling Costs
Rehabilitation in all of its forms can be a costly business to run, mainly because a facility does not know exactly how much service and at what cost for every individual patient that is admitted. Outside core therapy sessions, there are many add-on services have an incremental cost implication and these need to be carefully calculated to ensure that expenses do not exceed revenues, especially when the price of intervention has been negotiated or fixed or insurance reimbursement is likely to be slow or less than needed.

Running any kind of rehabilitation center or business is not easy. It is competitive and customers for the services offered may not come steadily or with enough cash on hand to afford to pay some of the time (and the complex world of patient financial responsibility and insurance reimbursement has to be then navigated). However, if the challenges above can be tackled it is a very rewarding business for those involved in it. RX4 has experienced all of these rehabilitation organization challenges (in both of its forms) in many different healthcare environments and can provide considerable insight and options where the knowledge is limited or does not exist internally.

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Dr Jon Warner

Dr. Jon Warner
CEO-RX4 Group-Taking Care of the Business of Healthcare

Jon is the CEO of RX4 Group based in Los Angeles, California. He can be reached at

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