Physical therapy clinics expect growth

The physical therapy marketplace runs the gamut from small operators with one or two clinics to huge companies with hundreds of locations.

Luke Drayer wants to be somewhere in the middle.

Drayer recently established Hummelstown-based Drayer Physical Therapy Institute, which operates six clinics in Pennsylvania, Maryland and New York.

Drayer expects to have 10 to 12 clinics open by October and to add an additional 10 to 12 clinics in 2004.

Within five years, the company could have 40 to 50 clinics, he said.

But Drayer's plan doesn't include becoming mammoth like Birmingham, Ala.-based HealthSouth Corp. or Select Medical Corp. in Lower Allen Township, Cumberland County.

For example, Select Medical operates more than 730 outpatient rehabilitation clinics in the United States and Canada.

"As soon as we water down our ability to serve the patient consistently, we stop," said Drayer, chief executive officer of Drayer Physical Therapy Institute.

Drayer was a principal with Harrisburg's Joyner Sportsmedicine Institute Inc. when NovaCare Inc. purchased the company in 1998. Select Medical subsequently purchased King of Prussiabased NovaCare.

Drayer left Select Medical in August 2000. Drayer Physical Therapy Institute opened its first locations last year in Bel Air, Md. and Binghamton, N.Y.

Because of a non-compete clause Drayer had with Select Medical, however, the company could not open its Hummelstown and Linglestown clinics until April.

The company also has clinics in Lewistown and Elizabethtown. The clinics specialize in outpatient orthopedic physical therapy.

Drayer Physical Therapy Institute expects to focus much of its growth in the eastern United States, Drayer said. Areas targeted for development include Maryland, Delaware, New Jersey and the Pittsburgh area.

The company will own and operate most of its clinics, but it will manage some for other entities. For example, the company manages the clinics in Binghamton and Elizabethtown, but it does not own them.

In addition, Drayer said the company plans to grow mostly by establishing new clinics, not by acquiring existing facilities.

Drayer Physical Therapy Institute has 65 employees, a number Drayer said could rise to 300 to 400 within three or four years.

By the end of this year, the company should be on pace to have annual revenue of $5 million, he said.

By the end of 2005, the company should be on pace to have annual revenues of $25 million to $30 million, he added.

Demand for physical therapy has increased in recent years, said Susan Hartman, regional director of business development for HealthSouth.

One reason for this growth is that the population is aging and is more likely to need physical therapy after an injury or surgery, she said. In addition, active people are becoming more aware of and educated about physical therapy.

For example, HealthSouth's outpatient centers in York County logged about 60,000 visits in 1999 and about 73,000 visits in 2002, Hartman said. Those centers offer physical, occupational and speech therapy services.

"We see continued growth in our outpatient operations..." Hartman said. "We have more active people who want to remain active."

Drayer said Drayer Physical Therapy Institute has an advantage over larger and smaller providers because the company is small enough to have a local presence in the communities it serves, while also being large enough to have the resources to attract well-known physical therapists.

Drayer said his company is especially attractive to physical therapists who have thought about opening their own clinics but don't want to take the risk or don't have the money to establish a business.

"We try to run our facilities like a locally based private practice instead of a corporation," he said.

Drayer said that Drayer Physical Therapy Institute plans to form a research foundation in 2004 that will conduct clinical trials to examine current physical therapy techniques and theories.

The company also will continue to look for invitations to open additional clinics from individual doctors, physician practices and hospitals.

"We run to invitations," Drayer said.