Jerry Henderson got into physical therapy the same way a lot of physical therapists did, as a patient. Jerry was fourteen years old when he had a skiing accident that fractured his femur and left him hooked on a skeletal traction for about a month and a hip spike for about six weeks. After going through the treatment with a guy who was helping him get mobile again, he understood what physical therapy is all about and knew that’s what he wanted to do. Fast forward years later, Jerry founded Clinicient, a cloud-based EMR software for physical therapy clinics. Clinicient helps their clients on getting up to date on the changes that are coming in the PT space so that they can continue to improve more lives.
I get to interview Jerry Henderson of Clinicient EMR Software program. He is the Vice President of Clinical Community at Clinicient. Clinicient acquired his company that he started for the purpose of developing an EMR application for physical therapy and other professions. Prior to Clinicient, Jerry was practicing physical therapy for over 25 years, twenty of which he was in private practice. He started Physical Therapy Clinics, Incorporated, PTCI, a multi-clinic physical therapy business in Seattle in 1979. He also started a second physical therapy practice called PhysioCare Incorporation in 2003. While still in clinical practice, he started the PT Link Corporation in 1995. PT Link was an early version of physical therapy documentation software system and was later acquired by the Pathways Group and became a part of a public offering and gradually led to Clinicient.
We'll learn a little bit from Jerry and his experiences as a physical therapy clinic. More importantly, we're going to talk about the inevitable changes that are coming to the PT profession in regards to changing from a fee for service relationship to value-based services as it pertains to payment and reimbursement for physical therapy. Although not that exciting, nevertheless, important to keep up on top of the topics that are coming down the plate in regard to this. Jerry will share some of his insights and definitions as to what's going on and also gives us direction in figuring out how we can stay on top of this change in our profession. He has a wealth of knowledge and as someone that you want to follow through his webinars at Clinicient.com.
We have Jerry Henderson who is the Founder and Owner of Clinicient, a cloud-based EMR software for physical therapy clinics. Thanks for taking the time to be on our podcast, Jerry. I appreciate it.
My pleasure, Nathan. Happy to do it.
Every time we have an interviewee, I like to hear a little bit about your story, how you got into physical therapy and what led you to where you're at now.
I got into physical therapy the same way a lot of us did as a patient. I was a fourteen-year-old knucklehead and my best buddy and I decided we would take his toboggan to the top of the local ski hill and try it out that he'd just made. I had a cognitive fracture in my left femur, really bad. I ended up in a skeletal traction for about a month and then ended up in a hip spica for about six weeks thereafter and had some physical therapy after that. I had never heard of physical therapy before that like many of us. I decided from that point on, after going through this experience of being in a hip spica and then having this guy help me get mobile again, it made a huge impression on me. I didn't understand what physical therapy was at that point, but I knew that's what I wanted to do as a fourteen-year-old.
You started practicing physical therapy and then eventually you had a clinic yourself.
Yes, I started in my first job, which I’ll always be thankful for. I was a staff therapist at Group Health Cooperative in Seattle, Washington, which many of you probably know is a large, closed panel HMO similar to Kaiser. It was a great clinical experience. We saw such a variety of patients, always be grateful for that. About three years of that proved to be frustrating for me because I didn't have the power to do what I wanted to do to improve things in our physical therapy department. It was bureaucratic. I left there and became what we used to call a registry therapist back in the old days, a fill-in therapist, contract basis. I did that for about a year, which was also great experience because I saw excellent physical therapy and I saw shameful therapy and everything in between during that year of experience. I decided that I thought I could do a better myself. I had a grand total of $15,000 business loan and started my first clinic in Woodinville, Washington, which is a suburb of Seattle.
What year was that?
That would've been about 1984. What I always tell people is that at that time, I'm pretty convinced that anybody with an ounce of common sense and a physical therapy license could start a private practice and be pretty successful. It was truly pretty easy. Those times have changed.
How long did you have the practice there?
I sold that practice to my partner in about 2005-ish. I started another series of physical therapy clinics in the Seattle area. I started a competitive clinic to my ex-partner down the street in Woodinville, Washington. In between all of that, I was starting Clinicient. It became a fool's errand to try to do a good job running my practice and starting a software company, so I sold to a younger group of therapists about 2007 or 2008. They're doing great. It’s fun to follow them.
You started Clinicient while you were also owning clinics?
I started the predecessor to Clinicient about 1998, 1999. It became Clinicient, Inc. by about 2004.
What made you decide to start the software company?
Frustration. At the time I started Clinicient, we had two clinic sites. We're doing fine. We had probably nine or ten full-time PTs at that point. There were a couple things that bothered me. One was I had no visibility to what was going on in my business day-to-day. I had no idea and I had no control over the quality of our clinical documentation, which was important to me. To me, that was the marketing to my referral base. I would look at a couple things about that.
One is I will get at how much effort it took to do an initial evaluation, when you dictated it, had it transcribed. You corrected it and all that. It would be a three or four-day turnaround. The quality was variable and there are many good PTs who are horrible writers and vice versa. It was embarrassing to me. I wanted to start it. I was so naïve. We all think that we do better job than our competitor. I haven't met a PT yet who doesn't do high quality care.
I’m no exception. I thought we did better than our competitor yet I felt like, “I'm getting paid the same amount that my competitor is getting paid and I'm doing a better job. That doesn't seem fair.” If I can somehow do this software that standardizes our processes, standardizes our clinical documentation, improves our efficiency and helps me prove that my outcomes are superior, then insurance companies are going to come flocking to me. They want high quality care too. I know that sounds super naïve and it was. if I had known better, I probably wouldn't have done it.
What you did was great because of where you're at now. What's telling is that as an owner, you recognized that number one, you wanted to have some systems in place, some standardized systems for your business. You also recognized that you needed the statistics to measure exactly where you're at at any given time. Reports, statistics, KPIs, whatever you want to call them, you needed those things as an owner and you weren't able to get those somehow.
It's telling because a lot of owners don't consider those two functional or foundational things that they need to have as owners. They need to create and have systems in place, so there's some consistency throughout the clinic and expectations to follow up on. They need to have a mechanism to pull statistics and reports so they can measure and also predict what their business is doing at any given time. You inherently did that and started creating Clinicient out of those two needs.
I remember keeping a three-ring binder with graph paper and I would literally graph things like patient visits per day with colored pencils. As silly as that sounds, it was as useful as anything I can get my fingers on at that point in time. I learned to use Excel later and started doing pretty much the same thing on a spreadsheet. It didn't have that much more utility. It gradually dawned on me that you needed to have all of this integrated into one system. It's not like this was an epiphany and it happened overnight, you evolved into these sorts of things.
Back at this time or even now, have you used consultants, coaches, and anyone like that to help you along? One of my tendencies is to step out, reach out and network. Did you utilize anybody to help you along this path?
Not as much as I as I should have. I did everything the hard way to a large extent. A specific example is, and it may be hard to believe today, I thought that marketing was a dirty word. I didn't put any effort into it, didn't hire anybody to help me with that piece. I was lucky to have a good accountant who was more than an accountant and served as a sounding board and a great financial advisor. That was lucky. It wasn't that I sought that out. I did the typical things like with community involvement, the chamber and those sorts of things, which were helpful for networking. In hindsight, I tried to do this today. I try to find people that are a heck of a lot smarter than me to work with. That's always my advice to younger therapists is to get a team of coaches. Luckily, you can get a lot of that help for not much money. It's worth it.
The ROI is obvious. I don't think I’ve found a single successful physical therapist, whether it's a clinic owner or in the physical therapy business that hasn't utilized a consultant, coach or some kind of other mentor. Even if it's the CPA, get on the horn with them once a month to help them go through the financials that hasn't had one of those.
I don't think you could do it the way I did it today. It's too complicated, it's too complex. Anybody with an ounce of common sense and a PT license could do okay in 1985, but it's not the case today for sure.
Now that you have Clinicient where you are now, what are some of the strengths that you think Clinicient offers as an EMR?
In hindsight, we did a lot of things right from the beginning. One of the biggest was designing a system for our profession and a totally integrated system. The scheduling, clinical documentation, charge capture, billing and claims management, all of that is in one system. That was a stroke of luck. It wasn't me that thought of that by any means. I was fortunate enough to have some smart people involved early on who helped me make that decision.
Thinking it through from the therapist work flow perspective was important. Back in the day, many of these systems were what we used to call practice management systems. This meant their billing and claims management systems tack an EMR onto the side somehow. That has never worked very well. Where we decided to start with the patient interaction out, that's worked very well.
What are some of the things that you're working on here going forward to improve Clinicient?
We’re rolling out a new version of our system we're calling INSIGHT Go. It's designed for physical therapists, totally browser-based, works on any standard tablet device as well as on your PC, totally mobile. You can do some limited documentation on your smartphone if you wanted to. It's a little bit of a small screen, but I was playing around with it and I could see myself using my smartphone as part of my daily routine using INSIGHT Go. We still don't have all of the features and functionality from our base system rolled into INSIGHT Go, but that's coming. It's gone better than I would've ever expected.
The bigger piece for us is we want to help the profession prepare for this transition from fee for service that we're in today to value. I can tell you that the pace of change is accelerating. We want to be on the forefront of that. That's one of the reasons we purchased a patient engagement application called Keet Health. We're integrating with Keet. That in turn will help us with this whole transition to value. As we go forward, it's going to be much more patient-centric and less insurance-centric hopefully.Majority of everybody's businesses today is fee for service. Click To Tweet
I'm hearing this for the first time. We're going from a fee for service now and we're moving to value-based services in terms of reimbursement. Break it down for us step-by-step. Will this start taking place or are we seeing some of that now?
We're seeing a lot of it now. I know that the majority of everybody's businesses today is fee for service. I always counsel people to look at Medicare to forecast the future. If you look at Medicare as a model, what they have done is they've decided they're going whole hog on these episodic bundles. An example would be Comprehensive Care for Joint Replacement model. There's also something called a BPCI model, which is bundled payments for care improvement model.
In simple terms, the way this works is everybody gets paid the same way you get paid today on a fee for service basis but Medicare is tracking the cost of an entire episode. After they have calculated that cost, whoever owns the bundle, whoever is at risk for that bundle may get a bonus check if you keep your costs under control. There's a certain sliver of quality in there.
It's not much. It’s mostly about cost containment. Using the CJR thing as an example. This is the first time that CMS has tracked costs across the care continuum from hospital to outpatient services. Taking a look at that and provided incentives for containing that cost. I’ve often called CJR as the stealth program for many of our colleagues because you are probably seeing patients today who've had a total knee replacement or a total hip replacement that were part of that bundle and you don't know it. You aren't getting any of the financial reward or financial risk for taking care of those patients. Someone is watching your utilization, that person who is the bundle holder because they're incented to keep costs down.
Taking the CJR program as an example, there is an entity that's responsible for that bundle, for that episode. In CJR’s case, it's the hospital. The hospital takes risk for that episode. Everybody else was paid the same. The surgeon was paid the same, the hospital gets their DRG with a small discount but it doesn't amount to much. CMS will track the total cost of that episode, which is not only the hospitalization. It includes nearly all of the care that's done for that patient 60 days post discharge.
CMS takes that total cost and they either reward or penalize the bundle holder, which, in this case, is the hospital for cost containment. I’ve often told PTs that you're probably treating patients that are in this bundle and you don't even know it. You're still getting paid the same way you always paid. If it's a bundled patient, someone else is watching your cost very closely because they're incented on that. Yet you don't get any of the reward if you save money.
Do physical therapists need to be concerned or know that that’s happening in the background?
You need to be concerned and needs to start working with physicians, hospitals, reaching across the aisle and figuring out how they can participate. These bundles, I’ve used Medicare as an example, are being picked up by commercial payers. They're hugely interested in them because CMS has shown that they have a significant cost savings with these episodic bundles. The big payers, they're all starting those programs. These episodic bundles are reality and we need to get in the game.
How is this going to affect payment for our services in the future? How soon do you see that happening?
It’s probably happening now, probably utilization, authorization sorts of ways. If you have a physician, as an example, is referring you are patient and that physician is incented to decrease post discharge costs somehow, because they are part of a bundle and you aren't, they're going to be pretty stingy about referring that patient to you for remaining episodes.
You're also saying that the authorization that you might receive from a commercial payer might be dictated by some of this data that they're collecting?
What can we do to prepare for that? What is your recommendation? Do you have any ideas?
This ultimately could be the best news ever for us because we are effective, low cost providers. There's good evidence to show that early physical therapy saves downstream costs. The problem is that the payers don't necessarily know that today, although they're beginning to get the message. They're beginning to understand it. It's difficult for a smaller physical therapy entity, one to two clinics to three clinic places without a lot of management, administration, and all those things to play in that. You can't even get in the door most of the time.
One of the solutions is to work with your competitors. It's a tough deal to do. You need to sell your network of providers and you need to have a common evidence-based philosophy and a product with a capital P that these other entities can understand and to show your value. I was wrestling with it in 1984. I wasn't getting paid differentiated on value. We're finally getting to the point where if we play our cards right, we can be in the game. It's going to be fun time.
Is the APTA doing some of that for us? Are there other networks or foundations out there that are doing some of that work that we can become a part of?
I haven’t seen a lot from the APTA. It's going to have to come more from a grassroots networking effort on a local level than it is at the APTA. One place that I would look at as a model to consider is Therapy Partners in Minneapolis, Minnesota. Jim Hoyme is one of the founders of that organization and they fought this battle in the early 2000s. Minnesota has had alternative payment models for a long time. They've been ahead of the rest of the nation.
A lot of the independent physical therapists are being frozen out. Jim can tell the story a lot better than I can, but they spent the better part of ten years getting a group of hardheaded, independent physical therapists together to have a tightly integrated network. In this case, it happens to be MSO, managed services organization. It's an interesting model to look at. It's hard to get in the door if you're a small entity. We've got to have numbers.
What do you recommend a small entity do? How do they get abreast of this information? Should they consider coordinating or organizing an MSO? What do you recommend they do first of?
First step is to spend some time studying what Medicare is doing because they are a good forecaster of what's to come in the commercial world. Understand these episodic bundles. Begin to understand these other alternative payment models. If you look, you'll see that the information is all there on how these things are structured. Try to get rid of your fee for service mindset, which is difficult. We have been whipped into focusing on units per visit and visits for patient.
How can we keep these patients coming back longer for more services? That's not going to work in the future. We've got to change to this more population health mindset where we're doing a better job of taking care of patients outside of the four walls of our clinic. That's why we’re interested in Keet Health. That's why we bought them. It's a mobile patient engagement strategy, so we can do a better job of managing these patients, which we think is going to be critical for these alternative payment models going forward.
How can we expect to get reimbursed in the future?
You're going to see more of these episodic bundles coming.
We’ll get paid upfront or at the end of the care? Do you know?
It will be a combination of reduced fee for service and some financial incentive based on quality and total cost containment. You'll see that model, but that only works for a specific episode. Hard on the heels of that, you're going to see more multidisciplinary, condition-based bundles. Instead of thinking about a total knee replacement bundle, think about a knee pain bundle or a low back pain bundle, those sorts of things. That would involve more than just PT. You might have a behavioral psychologist involved, you might have a nutritionist, a physician, a surgeon even, might be all part of that bundle.
Beyond that would be these more far reaching alternative payment models where there is the classic capitation where they say we’re going to pay you to take care of all of the conditions for this certain patient population for X dollars per month. In that world, you have to get good because you only have so much therapist time to sell. You want to sell all of it you can. In the future, you want to conserve as much of that as you can. Having therapists doing the stuff that requires those one on one interpersonal skills and do a better job of helping patients take care of their problems themselves.
What kind of metrics does an owner need to look at to be prepared for fee for service? What statistics do they need to start tracking that they might not be tracking now?
I did an article on that that was inside Impact Magazine. Think about all the volume metrics that we pay attention to today. Visits per day, units per visit, visits per patient, that's what people track today. Instead of thinking about that, think about things like active patient census per therapist. How many patient lives is this therapist able to manage, which I know is way outside the way we think today? How good of a job are we doing at following up on patients? What's our patient home exercise compliance like? How do we measure that? Are you tracking that?
If you are tracking it, how do you do it? We have some ideas around that. Another example is how many patient education modules were we able to send the patients? Did we test them on their knowledge? How are they doing? Are they picking up on it? Going from being a provider of procedures to educators, coaches, managers, that mindset. If you think about that, wouldn't that be a lot more fun if you could do the stuff that required the skilled, knowledgeable, physical therapist mind and training? To do the difficult stuff.
When I was still in practice, I loved doing initial evaluations. I do initial evaluations all day long because that’s the fun part, that's the detective work. Think about being able to do more of that and more managing the patient holistically and delegating some of the other stuff off to people who don't need to be a physical therapist necessarily. We're not incented to do that. You can't get paid for having an aide do things that an aide could do, as an example.
This isn't going to all come at once and take a whole weekend’s training for our staff and whatnot. What are some things that either we can do or that our EMR’s should be doing? What is Clinicient doing to lead us down this path that we’re eventually going to get to?
That’s one of the reasons we're integrating Keet. It’s a big piece of this. Having this constant communication between the therapist, the patient, the physician, other providers for the patient and helping to coordinate that patient's care, we think is going to be critical. We think that organizing, as we discussed earlier, so that we have a well-defined a set of services that is understandable. I don't think people, including payers, understand what physical therapy is. They certainly don't understand the difference between good PT, bad PT and mediocre PT.
It's incumbent on us to, first of all, control our own quality. Second of all, make sure that all these other constituents understand the difference. We need to differentiate. It's going to be a long evolution, but we're in discussions with a lot of different entities, especially on these episodic bundles. For an independent PT in particular, you're going to need a partner to help you with this transition for sure. One of the things we are going to begin emphasizing in our webinars and everything is concrete steps you can take to prepare for all this.
We're going to need some handholding in that regard it's been so long that we've gone off of volume metrics that you were talking about that to change over to these other metrics and statistics is going to be a complete mind shift. It's going to be hard for some of us for sure. Do you still recommend or is it even more highly essential now that therapists look at their functional outcome statistics?
It's critical but it's going to be much more than patient reported outcomes in the near future. Patient reported outcomes are useful to a point. I’ve always been a big fan of them. One of the things we're working on is we want to make sure that we're not measuring those. We’re also using functional reproducible testing that's done in the clinic as another piece of the data set, end cost, end patient satisfaction, all of that. We’re getting to the bang for the buck number. How much better? How do we measure better? How much better can we get a patient for X dollars? That's easier said than done, but patient reported outcomes only tell a piece of the story. We've got to integrate that and marry that with a lot of the other data that we can get to in an EMR, as an example.
What is the timeframe for some of these bundled payments to affect us directly, where we’re going to see maybe a discounted fee for service rate, and then the bonuses that you’re talking about?
A lot of PTs are becoming involved in these on a very sporadic basis in different geographies today. There are people that are participating that I know of some folks in Florida, as an example, who were participating in a hip and knee bundle. Instead of being invisible, if your cost statistics look pretty good, you stand a pretty good chance of seeing more referrals from that bundle holder, which you may or may not know is happening. You may see a change in referral patterns because the bundle holder is not happy with your costs.
Physicians or hospitals, or some other larger healthcare organization type entity who negotiated a bundle with a payer of some sort, all of those cost statistics are visible to the bundle holder. They know how much your services cost. You probably won't be, but you may be approached by one of these bundle holders that says, “We like what you do. Let's formalize this relationship but you need to take a little bit of risk if you're going to do this as a piece of it. You'll also get a potential bonus if you do a good job of doing what you do.” I don't think they're going to approach you though. We've got to be proactive. We've got to figure these things out. Who to approach, how to get to them and how to get at the table is going to be a big piece. You're going to need help to get there.It's incumbent on us to control our own quality. Click To Tweet
You're expressing a lot of change that's going to be happening in the near future to the physical therapy industry. What's your rosy picture? What does this look like on the backend? Should we fear for the future of physical therapy? What do you see?
It’s the opposite. For our colleagues who start changing their mindset and start thinking about this transition now, doing a little bit of homework and preparing, the future has never been brighter. What we're doing now is not sustainable. Payers can't continue to reduce reimbursement the way they have and expect you all to be able to pay your overhead, pay your therapist and your DPTs who are loaded with debt. It's not sustainable. This is all for the good. It will be tremendous for our profession but there are going to be winners and losers.
The people who do it right and recognize what’s coming up on the front end may see an increase in revenue. They’ve got to be knowledgeable like in the fee for service mindset is what I’m hear.
The value proposition for physical therapy is really compelling. We need to get to the table.
Is there a concern that somewhere along this process, the individual practitioner with one or two clinics might get phased out? Do they need to coordinate and organize? What do you see with them?
That’s my background. I was the small, independent PT. This is about the third wave of mergers I’ve seen, all kinds of consolidation going on. People buying up PT clinics left and right. There's a reason that these large entities are buying up PT clinics left and right. They see the value and they see how they can play in this environment. I'm fearful for the smaller clinics who are not preparing for this, not partnering up and all of that. There will always be a niche for the super specialty providers. Women's health comes to mind. They do well and they do well without insurance payment. There are only so many of those niches and only so many people who can afford to pay out of pocket for our services. We've got to figure out how to play in the insurance game sooner or later and in the non-fee for service insurance game.
It makes it all the more important to make sure that therapists aren’t simply spending 50 to 60 hours a week treating patients if they own the clinic.
I’ve made every mistake and that was one of them. I’ve treated patients twelve hours a day, five or six days a week. I did that for a long time without paying much attention to my business. Like my dad always says, “Do as I say, not as I do.” You should not do it that way. It's a fool's errand. I can tell you that from my personal experience.
They definitely need to recognize what's coming in the future and if their head is down treating patients, they're not going to be able to do so. Take advantage, it's an opportunity to keep your head down, noble to an extent, but you're going to get run over if you're not part of this. Take advantage of the wave that's coming. Thank you so much, Jerry, for taking your time and explaining some of this. For me, personally, it was great, but also for the audience. If people wanted to reach out to you and get to know you and Clinicient, how can they do that?
My email address is JHenderson@Clinicient.com. When we named the company, we named it so it was hard to pronounce and spell, which was a stroke of marketing genius. My Twitter is @HendersonPDX. PDX is the airport symbol for Portland, Oregon here. Marketing hasn't been my strong suit but either one of those ways that are great. People can email me anytime and I'm pretty good on that. I might direct people to our website as well because there are tons of resources there. If you go to Clinicient.com, go to resources. There's a lot of stuff I'm proud of that we've done both for clients and non-clients alike to utilize.
On your website, do you have some of the webinars that you’ve in the past posted?
Those are all recorded and they’re on the website as well.
Thank you so much again for your time, Jerry, and for enlightening us. Good luck with everything.
My pleasure, Nathan. I want to reiterate, the future's very bright. It's going to be a lot better ten years from now than it is today.
Thank you. Take care.
Jerry Henderson, PT has been in the PT profession for almost 40 years and thus has a great perspective to share. In this episode we talk about what led him to creating his documentation software system, Clinicient, and also how the landscape of physical therapy reimbursement is changing in the very near future. Soon fee-for-service payment schedules will be out the door and replaced with a value-based system. Jerry explains that in detail and also shares what PT clinic owners need to do to stay on top of it. I'm thinking this isn't the last time we'll be talking about changes in the profession with Jerry.