Paul Wright outlines why and how physiotherapy business owners should confidently set fees that reflect the true value of their services.

I believe the power to determine fees should firmly rest in the hands of the business owner, with market considerations being the only real determinant of your fees.

The dangers of letting a third party set your fees

One of my early mentors gave me a piece of advice that has served me well over my career as a physiotherapist, multi-practice owner and health business mentor. 

He said, ‘Avoid any business where someone else controls what you can charge for your product or service.’

Not long after hearing this, I received a letter from a private health insurer talking up the virtues of their preferred provider scheme and how they would send my practice lots of new clients—provided I agree to charge these patients a predetermined fee set by the insurance company.

With my mentor’s advice ringing in my ears, I remember defiantly screwing up the letter and throwing it in the bin. 

Unfortunately, many practice owners have not had the benefit of my mentor’s words.

Imagine running a business where someone else controls how much you can charge for your service. 

As ludicrous as it sounds, this is the reality for many health professionals who rely heavily on third-party payers such as insurance companies, Medicare or regulatory bodies like the NDIS.

These organisations often have predetermined fee schedules, leaving practice owners feeling powerless and forcing them to settle for rates that do not reflect the value they provide to their patients.

In my career, I have encountered countless health professionals who are frustrated by these imposed fees and feel their hands are tied when it comes to increasing prices. 

Many physiotherapists believe they are simply charging what the industry dictates rather than considering the unique value of their services. 

It’s no surprise that this approach leads to stagnation in revenue and the commoditisation of our profession.

The real issue, however, is not with the insurance companies or regulatory bodies but with us as business owners. 

By choosing to remain part of these systems, we are, in effect, accepting the limitations imposed on our earnings. 

To reclaim control over pricing, physiotherapy business owners need to understand the value they deliver and be willing to communicate that value to the market.

Pricing: who should decide?

Simply stated, as a business owner you set your fees and your clients determine if they are willing to pay them. 

If your practice fees are currently based on what other clinics in your area charge—or worse, what insurance companies will pay—you are missing the opportunity to distinguish yourself in the market and to build a sustainable, profitable practice.

If you’ve ever experienced the frustration of dwindling rebates or felt disillusioned by the rigidity of third-party payers, then it’s time to look inwards. 

A sustainable business model minimises dependency on these payers. 

This can mean reducing the number of insurance-based patients you see or choosing to work exclusively with private-pay patients.

It’s time to increase your fees

During events and in my mentor program, I will often ask attendees, ‘How would you know that you have raised your fees too much in your practice?’

I usually get answers such as: my total weekly consult number would drop, my clients would complain, doctors would stop referring patients to me, my admin team would be upset or my weekly clinic revenue would drop with fewer clients coming in.

In my world—and I know this will ruffle a few feathers—the only metric that matters when you are determining the potential negative impact of a fee increase is whether your profit drops as a result of your higher rates.

Paul Wright.

Yet, in over 20 years of coaching and consulting, I’ve never seen a physiotherapy clinic increase its fees to the point where profitability has dropped, which means we still have not reached the true ceiling because the market is agreeing to pay your new fees.

I find most practices that raise their fees discover that patients continue attending and profits increase. 

This outcome is not a coincidence; it’s a testament to the real value physiotherapists provide.

Complaints from patients or a slight decrease in appointment volume shouldn’t be the deciding factors. 

If your profit remains steady or increases after a fee increase, the market has accepted your new pricing.

Packaging services for greater value

A common mistake physiotherapists make is to base their value solely on the time spent with their patients rather than on the outcome provided.

I often see practices advertising 30- or 60-minute sessions as if patients are purchasing time. What patients pay for is the expertise and outcomes you deliver. 

A 10-minute consult with the right outcome is more valuable than an hour-long session without results.

One way to address this issue is through service packaging. 

Create programs like a ‘Better back program’ or a ‘Running recovery package’ that shift focus onto outcomes rather than time spent.

Once you start packaging your services around a specific result, you become the only provider of that solution in your market.

This effectively eliminates ‘apples-to-apples’ comparisons and makes it difficult for prospective patients to shop around based purely on price.

When we introduced our ‘Better back program’ at my health clinics, it consisted of an initial assessment, a tailored exercise plan
and multiple follow-up sessions. 

However, by presenting it as a packaged solution, we were able to set a fee that reflected the true value of the outcome rather than the time it took to deliver.

Navigating price sensitivity

Price-sensitive patients can pose a challenge, especially when they are accustomed to low-gap fees or insurance-based pricing.

The solution is not to lower your prices but to differentiate your services. 

Focus on attracting high-quality patients who value your expertise, not just the cost of the consultation.

If your business is full of patients who are sensitive to price, consider segmenting your services. 

For example, junior therapists can handle routine follow-ups and maintenance sessions at a lower rate. 

Meanwhile, senior therapists can primarily focus on complex cases or new patients. 

This structure allows you to maintain a diverse patient base while ensuring your services are priced according to the value they provide.

Understanding your practice’s true value

Another obstacle to fee setting is the health professional’s own self-worth. 

Many physiotherapists undercharge because they lack confidence in the value of their services. 

I’ve seen practitioners recommend fewer visits or avoid offering premium services because they assume patients can’t afford them.

To combat this, I encourage every business owner to ask, ‘What does my best service look like?’

My best treatment recommendation script starts with the words, ‘If you were my…’

For example, ‘If you were my father, brother, son, daughter, etc., this is what I would do.’

This shifts the focus from money to quality and enables practitioners to provide their best possible care, free from self-imposed financial limitations or a false expectation of what the client can afford or is willing to pay.

If clients respond negatively to our treatment recommendation or say ‘I can’t afford it’, I teach physios to say something like, ‘My job is not to tell you what you can or cannot afford. 

'All I can do is tell you what will give you the best outcome.’

You did not spend years at university studying finance and financial planning; you learned to be a high-quality health professional, so stay in your lane.

Take back control

Health professionals often have the mindset that they must conform to external pressures, whether it’s from insurance companies, associations or competitors. 

However, the reality is that as the business owner, you hold the power to set your fees and test the market to see what it will pay.

It’s time for physiotherapy business owners to embrace this responsibility and regain control of their practice’s financial health.

By setting fees based on value, confidently communicating that value and structuring services to highlight outcomes, practice owners can build sustainable, profitable businesses that are not reliant on external payers.

Let the market—and your own belief in the value of your service—be the final judge of what you charge. Your patients deserve the best care and your practice deserves to be compensated accordingly.

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>> Paul Wright is a physiotherapist and former owner of multiple allied health clinics in Australia. He is the author of How to Run a One Minute Practice and founder of the Practiceology™ health business program.