Making a greater impact in the community is a dream for many medical professionals. Alicia Backer, PTA has spent the past 7 years developing a culture and a clinic that is focused on doing just that. In this episode, Nathan Shields interviews Alicia as she shares what her clinic does to find team members who share their mentality and are ready to do some of the things they do to integrate themselves into the community. Alicia and her team have generated a fun culture that looks forward to working and playing together. Their patients sense that and gravitate to them as clients.
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I’ve got Alicia Backer, PTA, out of Thief River Falls, Minnesota. Alicia, thanks for joining me. I appreciate it.
Thank you, Nathan, for having me.
I don’t have a lot of PTAs on the program but you wrote a great article in the April IMPACT Magazine about becoming a community alliance champion and you had some good insight that I liked. It spurred some thinking on my own and thought it was worthwhile to bring you on and talk about the things that you brought up in the article and want to get into that. Before we do that, tell us a little bit about you. Where you’re coming from? What you’re doing nowadays?
I’m from Thief River Falls, Minnesota. It’s up in the Northwestern corner. We’re pretty close to Canada. It gets pretty cold up here. Most people don’t think there are humans that can survive this element but we do. I work at a private practice outpatient clinic. I live in a town that’s approximately 9,000 people. It’s pretty rural. We have a lot of outside communities that come in to see us, too. I graduated from the Physical Therapy Assistant Program in 2010. I’ve been in a physical therapy community for several years now and had some good experiences in a few different settings that gave me some of the knowledge that we’ll talk about. I have 5 kids, step kids, 2 of my own and 3 step-kids. It keeps me busy outside of all the other stuff that I do at work and for different parts of the physical therapy world.
Do you do something in your clinic that provides a lot of outreach to the community? Your article was about community alliances. What things are you doing then in terms of reaching out to the community in your setting? Your supervisor allows you to reach out. I’m assuming you have different aspects that you’re involved in the community. What do you do?
I’ll take it back a few years before I started working in private practice. I worked for a larger outpatient clinic in a hospital setting. While I was a part of that setting, I never was involved in marketing opportunities. I wasn’t involved in the process of planning it, what it meant, I didn’t care. It was much more based on productivity and seeing lots of patients. I didn’t have any knowledge at all working in private practice but once I started working here, we’re community-based. We have a high percentage of direct access patients. Instead of marketing to physicians, we spend more time marketing to the community. There’s a large employer in town that probably has about 6,000 to 8,000 employees that has a great insurance policy and they give us a high percentage of their direct access business.
We’re involved a lot with them. We partnered with them to create a work readiness program or injury prevention program for their business which was a huge step in the door for people getting to know us by coming in and being present and giving them that program. We do a number of things in the community. We put on the raises and we host chamber events. A lot of our employees are coaches in the community. There are a lot of things outside of the marketing box that we do that you don’t necessarily think are marketing. It’s not paying for marketing. It’s being present. It’s your time rather than money.
Is there an expectation in your clinic that you do some of those things that you lead out and either generate the race yourself outside of the ownership, taking responsibility for the team members in the community, certain things in the name of the clinic?
It only takes to have one person that's not coming to things or isn't fully engaged to bring down the morale. Click To TweetWhen we hire our people, the expectation is pretty much set in the interview. That is a big part of what we do and what makes our clinic successful and a part of our culture. We have a pretty unique culture. When we hire people, we make sure that they know the community events that we do. It’s not required but it is a volunteer. We look for people who are very highly engaged and high achievers that are looking to also do that type of stuff. We have a great team. There are eight people that work here. Everybody is excited when we do events. It makes it fun. It doesn’t make me worried when I delegate tasks because I know everyone’s going to follow through. I’m not great at delegating. I like to do everything myself. That also helped me learn more about the right way to go about marketing because involving your team, which are your huge stakeholders in this. It’s huge in your success.
It’s part of the interview process. It’s coming from the culture you’ve generated. I would assume if your supervisors or the owner was hiring somebody and they shied away from doing community events and weren’t that excited about it, they’re just not a fit. They’re not going to come in the first place. The fact that you bring it up in the interview process sounds like a huge part of it. You guys know who you are and you’re looking for a certain type of person.
When we hire people, I can’t say that we wouldn’t hire someone based on that solely but it does sway to us pretty heavily in one direction or the other because we have made that mistake in the past. It does end up not working out in the long run. You feel like when you have all the team members on board, everything feels good. Everybody’s enjoying it. Things are going well. It only takes to have one person that’s not coming to things or isn’t fully engaged to bring down the morale.
Those people probably self-select more than anything. They’re very, “I don’t fit in. This isn’t a fit for me.” It seems obvious, maybe like a natural party-wise, but the fact that you guys make it part of the initial process, you’re upfront about it. It sounds like there’s not necessarily an expectation that the team members are going to generate community-based events but the people need to be excited about doing so.
That’s an option, too. We can probably hear passion projects or people work on passion projects. That is what we say to them. “We want you to be involved but you’re never required to plan anything but if you want to, you’re more than welcome to do so.” We welcome all the ideas and creativity. Anyone who brings something to the table, it’s always talked about. You never shut it down because there’s always a way that you can figure out how to make it work.
The fact that you also have a culture that’s open to that because there are many scenarios where it is about productivity. “We’re talking about the members. Let’s move on. How can we improve?” It’s not as much about the culture so much.
We have a staff meeting every week that we hang out at lunch. It’s very informal. We talk about certain stats and stuff but everyone gets a chance to talk about whatever it is that they have to talk about that week. A lot of times, it’ll be about planning our next event. How we should make it better and what we should do or somebody will bring something new to the table that you’re like, “That’s crazy. I never thought of that but it’s fantastic.”
When you go out to these community events, what have you found are some must do? What mindset do you have going into these community events?
I always think about smiling and moving. It’s a book as well. Sam Parker has a book called Smile & Move. I don’t know if you’ve ever read it. It’s fantastic. I stumbled across it. It totally resonated with how I live. I thought, “This is amazing.” When you go to a community event, if you’re smiling, people are going to think that you’re approachable and likable. Moving means to serve people so be engaged. I don’t ever go to an event saying, “I work at Rehab Authority. I’m a physical therapist assistant. Have you ever been to PT?” It’s more like getting to know them then eventually it comes up, “What do you do?” You can talk about, “This is what you do. This is why you’re here. If you ever need us,” it’s more of a casual, “This is where we’re at. We’d love to help you,” but it’s never pushing yourself on.
You talk about this quite a bit in the article is having confidence in what you’re doing can help a lot of that. It makes it easy to smile and move if you have that confidence that lacks in our profession, knowing that we are the musculoskeletal experts. For some reason or other over the years, we’ve shied away from that. Some people might be afraid of saying that but if you go to these events knowing that you’re the musculoskeletal expert in town, your area, your niche, you name it, it makes it a lot easier to stand strongly in your space and be open to helping.
I know when the patient comes in our doors and has set up that visit or that free ten-minute consult. Once we get them in our doors, I know we’re going to help them. We’re going to do the best that we can. I have all the confidence in our staff to do that. It’s getting them there. We sell our culture and the type of people that we are by how we act and that we’re likable, you smile and we have fun. One of our core values is we have fun. That’s one of the top ones. If you get the patients in here, they forget why they’re here and the pain that they’re in. They are having a good time. A lot of times, they don’t even want to leave. It isn’t about selling what you do necessarily. It’s getting them in your doors.
Many people buy on what they feel. Buying is an emotional experience. Physical therapy is not exempt from that. I talked about this in an episode long time ago with Jerry Durham about improving the patient experience. Simply by focusing on them and the experience around physical therapy, not so much about the therapy itself can improve engagement, increase internal referrals, improve culture and an ability to have a greater impact in the community.
Culture is my favorite thing to talk about because I live in a great one. It’s easy in respect but first, you have to surround yourself with great people, which you talked about in hiring. You got to make sure. Just because they’re not the right fit for you doesn’t mean they’re not a good therapist. We all have a place that we are meant to be. Having expectations that we’re a high achieving, high energy makes a relationship. It’s all about building relationships with people then they’re going to keep coming back. They’re going to tell other people to come here. A lot of times, patients will come in because their friend has told them to come here. They’re like, “My friend said I need to come here because you are so much fun.” It’s never initially because, “You’re going to help my pain. You’re going to make me feel better. It’s because you guys are fun,” we love hearing that.
Tell me a little bit about that. It’s not necessarily related to your article but are there certain things that your owner has done to generate that culture? Whether it’s a routine. You talked about the weekly staff meetings and your agenda lens to that. You know your core values. Those are established and you probably talk about that quite a bit. What are some things that have generated this culture you’re talking about?
It first starts with good people. We have great people here. In the environment that we’re in, we have a pretty open clinic. We have two private treatment rooms. We solely use those for evals, anything that requires an enclosed room, exposed skin and then if anyone feels uncomfortable in that area. There’s a very small percentage of those people. We’re set up to have a great environment for not just us to communicate with each other but patients to talk to each other. We yell at everyone when they walk in the door and when they’re leaving. They relate us to Cheers, Everybody Knows Your Name. When they graduate from therapy, we announce it over a megaphone. We have a dance party. We have a graduation gown. We always do the extra. We have Fresh Cookie Fridays every Friday. We have dress-up days a lot where we’re dress ridiculous. They love that.
I bet National Physical Therapy Month is a month of a party for you.
COVID really challenges the marketing calendar because when everything's closed down for a year, you just fall off the wagon. Click To TweetWe have a chili cook-off and a pumpkin painting contest. It’s pretty intense.
You got the patients involved and all that good stuff.
It’s fun. We do a lot of competitions, too, like sprinting and flippers or something random. These people are crazy weird but they’re fun.
The cool thing about your open gym concept, it’s one thing to have it. The other thing is to get what we called crosstalk. It’s like shouting to the therapist on the other side of the room or having a conversation over there. Inevitably, whoever’s between me and that other person is going to get involved in the conversation, too. We’d even generate that by having a whiteboard that would have the trivia of the day. If you don’t have anything to talk about, there’s something on the whiteboard to talk about.
You can think of so many things to put on a whiteboard. Fun-Fact Friday, where we talk facts about each staff or competitions. It’s great.
Culture is so huge. You talk about culture, thinking that this is what’s going to get the best-aligned employees and retain them. It carries over. The patients feel that as well. It improves the patient experience and the desire to come. They might know that so-and-so down the street provides a certain amount of physical therapy that might be equal to, maybe even better than yours. If they simply like coming to your place more than 2 to 3 times a week, they’ll probably going to come to your place.
That’s the best part. Therapists are competitive. It’s our nature. We want to be the best.
Talk to us a little bit about the marketing approach as you talked about in the article. It sounds like you know who your niche is. Your marketing strategy revolves around where those people are most of the time. In the community or on social media, you’re spending time in those spaces.
Being so rural, we do see from 0 to 100. We see women’s health, vertigo, all the things. When we get a new therapist in our clinic or interviewing, we ask them that like, “What is it that you’re passionate about? Do you love pelvic health?” You have to cover all the niches per se if you want to maximize your success. When we go out, we have a new therapist who loves athletic rehab or sports injuries. What direction would you go to market that? If you love women’s health, where do you go to market that? How can we make that good? We take a case by case and we market to that population.
I love the wording that you use because as you bring in that person, you talk to them about where their passion is and what they want to focus on maybe but you don’t then stop the conversation. The next question is where are you going to go to find them? Many times, maybe you had this feeling as a new grad but newer grads come out thinking, “I’m going to join this clinic. Some other person’s going to provide me new patients,” and they don’t have to do any work for that.
You have to push especially if it’s a newer grad. You have to encourage them along and keep motivating them to like, “What’s the next step?” We had one here, start women’s health program. That’s an area that doesn’t have a lot of PTs are interested in that area. It’s a huge need and super rewarding. She’s working through that process. I said, “What are you going to do next?” She’s like, “I know I need to do it but I just like,” “Go. Get it done. Take action.”
I love how you set them up for that success, recognizing that they have some responsibility and accountability to develop their niche and that growth in that. This isn’t going to be handed to them. They have an active role in that. It was at the very end and there’s a lot like the last paragraph, you talked about the importance of a marketing calendar. Talk to me about that.
COVID challenges the marketing calendar because when everything’s closed down for a year, you fall off the wagon. We talk about that in our weekly staff meeting. In the year, we know in a timeframe we’re doing these things. Say around Christmas time, we always do this. We always have a Christmas dress-up week. In the summer, we always have friends and family appreciation day. We’re in the big parade in town in July. We have hosted a 5K in August. We were constantly talking about what’s next and what more do we want to do. They’re having a CrossFit challenge in town. How do we get involved in that? There are some kids that want to do a scholarship because of mental health awareness. How do we help them? You hear about something and it doesn’t always work where you can’t necessarily get involved but it’s worth giving it a try.
The cool thing is that you’re talking about on a routine basis as well and you’re looking ahead on the calendar. Say something like Halloween comes up, you start talking about it on October 27 and like, “What are we going to do in four days for Halloween?”
You don’t love it.
It sucks because we’re under the gun and there’s pressure. I’m assuming that these events don’t take you by surprise. You’re able to be fairly well prepared for them and that makes it more fun.
It really isn't about selling what you do necessarily. It's just getting people in your doors. Click To TweetIt does. When everybody is on board, it’s pretty easy.
It makes it so much easier especially if you’ve done it before. If you have some traditional things that you’re doing, you know what we got to do and what everyone’s strengths and weaknesses are, you play to people’s roles and everyone knows what they need to do. It’s also, at that time, a lot easier to add on and make it an even better 5-star, 6-star, 7-star experience.
That’s a lot of the challenge when somebody is maybe opening their own practice or looking into starting a marketing plan is they want to do so much like, “We got to do this.” You’re better choosing the populations in the areas that you’ll receive the most return from and also knowing your payer mix, where you should focus most of your energy there and then build on it. That’s what got me a little bit more knowledgeable on this subject. When I started working here, it was just one PT and I. He opened it. We quickly needed help in the front office area. It was three of us for a long time. I’m also the clinic administrator so I take some of the buffering between the rehab director and the rest of the staff.
I was doing everything. I’m an achiever and maximizer. I feel good at the end of the day if I get all these things done. If I don’t, I feel lousy about it. I wanted to do everything and be a part of everything. I used to be bad at delegating tasks because I don’t always trust the people who are going to do them as good as I can. I got to the point where I started not enjoying them as much because I was feeling tired and burnt out. I realized that I needed to rely on people and trust that they were going to do as good of a job, if not better. It did turn out that way. I did start encouraging other people to take on more roles with these different events. I have my one area that I love. I love running so I love doing the 5K. Somebody else loves planning Halloween. Delegating those tasks so that you continue to enjoy them rather than feeling like it’s a bunch of work was huge for me.
You sound like a lot of burned out PT owners that I know. It’s the same thing with most owners and maybe your owner feels the same way or he or she doesn’t feel that way because you do all that for him or her but it’s that same thing. “I got many things on my plate. I know I can do them better if I do them myself,” but then you can only do so much. For me, it had to come down to, “Could they do 80%? Would I be happy with 80% of what I could do? If that’s okay then let’s hand it off. Let’s systematize it if possible or find someone who gets excited about that.”
For me, I’m not excited about marketing, like going to the doctor’s office to talk to the doctor who doesn’t want to see me and get past the front desk person whose job is to deflect and redirect me. I don’t want to do any of that. I had a PTA, she was awesome as a PTA but when I talked to her about marketing, she’s like, “I would love to do that.” Inevitably, there are people on your team who have strengths and get energy from things that don’t give you energy and are not your strengths. You have to rely on those people. That’s how you get a diverse marketing strategy in place and expand your presence in the community.
You’re talking about the calendar. That’s where we started with this conversation. It’s revisiting it and staying consistent. You don’t have to have 50 things on the calendar for the year. Pick something once a month, big or small and try and be consistent with that then you can always add to it.
You talked about payer mix in the article in here. We’re in a business. You don’t want to go towards the low payers all the time. If you know where the insurances are that pays better and you can find your niche within those and find out where those patients live, work and breathe then that can make things a lot easier on the business.
We have a couple of businesses in town. The one I talked about who has no medical responsibility. It’s 100% free healthcare and that’s all direct access. That’s huge for us but then you also have another large employer that has a high out-of-pocket responsibility. We market to them. We want to see them but we don’t spend a ton of our energy over there. That’s why we started the program with this business because we wanted to keep them coming through our doors.
That’s smart in that way because every owner has to deal with that if they’re taking some insurance but even if they’re not taking some interest, they want to find their ideal client. That ideal client could be a certain athlete, a geriatric population, a certain patient within an insurance payer but knowing who that is and targeting your message towards them will generate more of those. It also has some carry-over to generate more patients from the other ones that aren’t your niche. We covered a ton of stuff. Is there anything else that you remember or recall from the article or from your personal experience that you think is valuable in reaching out to the communities and establishing good relationships?
You spend at what is it like the 80/20 Rule, 80% of your time preparing for your marketing plan and 20% is doing the work. You need to spend time thinking about these different things. Making sure you got good people and you utilizing your assets, using your people then get out there and find things to do that you enjoy. There’s nothing on our marketing calendar that I don’t look forward to. It doesn’t seem like work. It takes some energy. You usually are exhausted after the event’s over but I would do that 100 times before going and talking to a physician. It’s nothing against doctors but I literally would rather watch paint dry.
It sounds like based on your experience now and to flip that 80/20 Principle, you know what your 20% of work is that gets you 80% of the results. You’ve found a groove there. You have probably been to some community events where you’re like, “I won’t do that again.”
This is one thing I want to leave you with, 2020 has been challenging for everybody. We’re all coming out of it now. We’re feeling good here at our clinic, finally but everyone has gotten a little bit lazy. Getting out and about and putting in the extra effort and doing more than people expect like the whole Zoom meetings, get face-to-face if you can. Go and see people and start doing these things again and don’t just say, “We didn’t do it in 2020. I don’t know if we want to do the race this year.” Do it because you end up doing it. You realize, “This is why we did it in the first place.” It’s so rewarding.
Thanks so much for your time. Thank you for the article. If people want to read it, it’s in the April IMPACT Magazine. There’s a lot of good information in there. If people want to connect with you and maybe talk to you a little bit more about it, Alicia, how would they do that?
I will give you my email. It’s ABacker@RehabAuthority.com.
Thank you so much for your time. I appreciate it.
Thank you, Nathan.
Alicia Backer is a Physical Therapist Assistant and Clinic Administrator at Rehab Authority in Thief River Falls, MN. She started her journey in 2010 when she graduated from Northland Community & Technical College in East Grand Forks, MN.
She has experience working in various settings since graduation but has spent the past 7 wonderful years working in the private practice community. Alicia was recognized as Rehab Authority’s Administrator of the Year in 2015 and 2016 as well as being chosen as MN APTA Outstanding PTA in 2020. She has presented at numerous national conferences including PPS and CSM as well as many local venues.
Alicia has been a co-developer of Injury Prevention and Performance Enhancement Programs and has created and implemented work readiness programs. She is an editorial board member for Impact Magazine where she has authored articles on clinic culture and building community alliances and has served on a PTA Advisory Board for Northland Community and Technical College from 2017-2021.
Outside of the physical therapy community Alicia coaches women’s basketball at a local junior college and works with young athletes as a speed and agility coach. Family also keeps her busy as she chases her 2 kids, Camdyn and Josie, to all of their activities while also finding time to run, read, and enjoy friends.
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Enriching the entrepreneurial mindset is a process that involves executing strategies and having the openness for new ideas. A great group of peers that would guide, motivate, and help you develop your skills would be a great way to enhance your skills and learn new things. Stephen Rapposelli, PT has been a long-time listener to the podcast and takes advantage of the opportunity to put Nathan Shields on the hot seat in this episode. They talk about why he likes the podcast, the best books to read, and a few things in-between. They delve into a great mastermind group, how to become a better CEO, the pros and cons of a PT, and a non-PT mastermind group. They also discuss the difference between masterminds and coaching.
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In this episode, I've got a frequent flyer. He's been on a number of times and it's been a little while. I've got Stephen Rapposelli, a physical therapist from the great state of Delaware. Delaware is representing on the show. Stephen, thanks for joining me again.
This is excellent. I want to preface this show by letting your readers know ahead of time, Nathan has no idea what I'm going to do. This is a huge experiment where the host does not know what's going to happen and we're just going to see how it goes.
That is true. Stephen is catching me off guard. He says he's got topics in mind, but he has not shared with me those topics that he would like to discuss. We’re going to go off the cuff.
I'll read them off to you if you're ready.
I'm going to essentially turn over the show to you at this point and let it fly. This is Stephen's show at this point.
This is a mishmash of different topics but they're all timely. This is going to be an interesting conversation. Number one, why I like your show. Number two, mastermind groups. Number three, being a better CEO. Number four, the future of orthopedic outpatient physical therapy. Number five, especially, I had a bonus for your readers, some recent books that they would like to read probably. Readers, Nathan has no idea what I'm about to say. I'm watching your reaction very intently. I like your show and I got no dog in this game. I can assure you, I listened to every one of your episodes because I find them valuable and I'm going to tell you why. First of all, you have no idea where this show is going to go and you're okay with that. How cool is that? You're a guy who's pretty comfortable in being flexible, adaptable and letting your guests go where they want to go if that's where they're going to go.
As long as they're presenting value, let’s go ahead.
A lot of shows don't do that. Number two, you have great guests. I have enjoyed every one of your guests. You curate a wonderful set of people, me being top of the list. In general, your guests are great. It's a good mix of theory as well as tactics. As a CEO, there are times when you want to get down into philosophical ideas and that's wonderful. There's a place for that. There are times where you want some tactics and I've seen a good mix in your show of both. Finally, your show with your guests is in general conversational and that is entertaining because there are a lot of things that are vying for our attention as CEOs. If it doesn't have an element of entertainment, you're going to lose people. Consistently, week after week and it continues to get better, you have good conversations with people. Hats off to you. I hope you feel good. Now, let's see if we can knock you off your perch a little bit.
Let's throw some mud on this.
Masterminds, it seems like everyone is in one. It seems like they're everywhere. Nathan, what is the purpose of the mastermind group? I asked you because you have one.
I've got two now. The purpose of the mastermind is essentially an internal concept. When you look at ancient civilizations or go back to the Knights of the Round Table, it was a mastermind. Go back into the Bible, they had what we call the apostles, a mastermind group, you name it. Masterminds have been around forever. Coining the term mastermind, if I'm not mistaken, was done by Napoleon Hill in Think and Grow Rich. I leaned towards his definition. That it is a gathering of individuals who are together to help each other overcome, learn, explore and become better, where one plus one equals three. The accumulation of minds is gathered to affect and improve a single individual. That's the purpose of the mastermind.
Compare and contrast mastermind with coaching.
You will get more out of it the more you put into it. Click To TweetAt least in my mastermind, I'm going to be the moderator per se. I'm not necessarily taking a turn in the conversations, but each person gets their time to talk about their issue, their concern, and where they want help. I'm going to moderate and say, “Joe over here might be able to speak to that,” or take your turns and then I can elaborate from a place of experience as well. The mastermind is going to be a lot of different varying inputs into one individual's issue. Whereas the coaching is going to be singular input based on experience with more guidance.
Where you could see a mastermind coming together sometimes as a brainstorm, sometimes as multiple experience shares where coaching is going to be one-on-one, individually, and it's going to come from, “This is where I'm seeing a weakness and this is what I need you to do next.” It’s like what a coach would do. Let’s say on a basketball team or a personal trainer, “You have a weakness here. We need to strengthen that. Go off and do those exercises and when we come back, I'm going to hold you accountable.” If a mastermind’s working well, then they will hold each other accountable but that can be difficult at times.
Is there a place in the CEOs world for both a coach and a mastermind group?
For sure and there has to be. I haven't referred to it much as I'm looking over the past year of show episodes, but my mantra of reach out, step out and network. The formula for a successful owner in PT practices is number one to reach out and get some training. That could be a coach or consultant. Step out means step stepping out of full-time patient care, and three is to network. Networking, if you're going to get a lot out of your network, you need to be communicating with them on a regular basis and we don't naturally do that. The mastermind is another word for networking in my mantra.
You have two mastermind groups. Why do you have two?
Simply, I had a group of five guys and I had another three that wanted to join a mastermind. I thought it might be a good time to split up and have four and four, so now I have two groups. That makes it easier. With that group of four plus me, we'll spend a couple of hours or a month talking about issues.
Is being in more than one okay in your mind?
For sure. I see no harm in that. I'm coming from a place where I've had multiple coaches over the years. I've been a part of multiple masterminds. I'm doing these masterminds through Physical Therapy Owners Club. I'm also part of one of the peer-to-peer masterminds where I'm not a moderator, I'm just a member of the group. I also have a local mastermind here with some friends where we talk more about personal stuff, and not necessarily business-related stuff. I'm personally in four masterminds at the moment.
That last statement is a perfect segue to my next question for you, which is what are the pros and cons of a PT versus a non-PT mastermind group? What is the value of all PTs forming a mastermind versus non-PTs and you, participating in that mastermind group?
The PT mastermind, the conversations we're going to have are specific to the business. We don't delve into personal issues much. Sometimes we can if that's affecting our business. I've been a part of business masterminds that have spoken to both depending on where the owner is. If they're going through a divorce, we're not talking during his or her segment about his business, we're talking about their divorce." My focus with the Physical Therapy Owners Club is the PT-specific business-related issues and anything else that might be affecting the business outside of that. Whereas the non-PT-related one, honestly, there's a little bit less format to it. It's a little bit more free-flowing. We do have one guy who essentially leads, but we come together as far as what we're going to learn together, the books we're going to read and issues that we're dealing with. Sometimes in that situation, one or two people might dominate a little bit more of the conversation than the others. Whereas in the PT format, I try to keep it a little bit more strict.
You might agree with me, Nathan. In general, we PTs are some weird people as business owners. Sometimes we're our own worst enemy. When we talk business with non-PT business owners, you could be shocked. You can be shocked at the response of other non-PT business owners in how we think. You probably have experienced a non-PT business owner saying to you, “Are you out of your mind,” about certain things. You have to come in with a little bit of humility and openness to be able to think differently because we are, whether it's by our genetic blueprint or training that we see the world a certain way that not everybody else does.
Usually, the reaction I received in those situations was, “Why you are guys doing it that way?” We have been brought up in this industry where we accept some things as truth, and when you talk to other owners outside of PT and they say, “Do you have to do it that way?” My only response was, “That's how we've always done it,” and not necessarily that it's right.
That's part of opening your mind up, which is extraordinarily scary, yet important as you continue to grow as a person both personally and professionally.
That's why it's good to be part of networks that are not PT-specific. Find some more generalized small business networking groups. The first networking group that Will and I joined was Entrepreneurs' Organization, which is a national organization of small business owners and that's the group I'm talking about. I have an electrician, a website designer, a graphic designer, and a dentist in my group. We would share these issues and that's where I get the kickback. Sometimes I would get some bright ideas and from their industries that could be applicable to mine. It opens up your perspective and your mind a little bit.
I came back from a peer-to-peer conference in Alexandria, Virginia and I love my peer-to-peer network. These are PT owners who get together, a subset of the private practice section and a more concentrated experience. It's a great mastermind group and I try to think about what made it great. As a group, we meet every week. It's a commitment. I thought I knew these people because we meet every week and I do, but then we went to the conference and we had 2.5, 3 days together in a room. It was an exponential jump in value.
The reason I say that is you need to make the commitment to get to a level of trust that only comes with sharing a portion of yourself. Rudyard Kipling tells us that that is the only true gift, a portion of yourself. We are called to lay ourselves out. There are very few opportunities for a business owner to get the feedback that is necessary to make them better, because nobody in your organization is going to give you that, they're not because the dynamic is different. If you can get a level of trust and allow yourself to have that 360-degree feedback where people really get to know you and understand what makes you tick, that's mastermind group gold right there.
The hardest thing to do in the mastermind and that can be difficult is to be vulnerable, and also to come in with some humility. Maybe it's a gendered thing. When you have a number of male owners, we guard our weaknesses, we cover them or we put forth our best foot in order to hide the weaker foot. I say that simply because I haven't had any females in my mastermind groups up until this point. In order to get the most out of the mastermind, you have to be more vulnerable. You have to ask more questions and that comes from a place of humility and not knowing and understanding that I don't have all the answers. It's the only way you can get a lot out of it.
Diving a little bit deeper at that and I'm going to reference Patrick Lencioni's book, The Five Dysfunctions of a Team is you have to have a level of trust. If there's no trust, you won't feel safe in being vulnerable. Even that word vulnerable can make some of your readers tense up a little bit like, “Here we go,” but that's where the good stuff is. That's where you need to go as a business owner to improve yourself. That's what a mastermind group when done well, does and it only comes from you making that emotional deposit into that group.
From the surface or at the beginning of the mastermind experience, all the attendees come into it thinking, “What can I get out of it?” If you go into it with that mentality, you're not going to get a lot out of it. I like to make it analogous to a potluck dinner. If everyone comes to the dinner thinking what am I going to eat, then there's not going to be anything to eat. Everyone has to bring something to the table in order for all to benefit. You have to flip that mindset from people who are thinking about the mastermind and what they can get out of it. You will get more out of it, the more you put into it. It's a mindset I have to get people to change.
Your nickname is now Alexa to me because I suspect that you've been listening to me as I'm writing stuff down because I literally wrote down your third thing, which is network. Network with a purpose, which means you go into it giving, you don't go into it getting. When you give, that's when the getting comes back to you automatically and in abundance. What can you give? That's key. Let's keep going forward into topic number three, which is how to become a better CEO.
If you and your readers are interested in becoming a better CEO, I have a couple of tips. Number one is you got to eat the frog. That's the concept that comes from Brian Tracy who says, “Do that least palatable thing first thing in the day.” Nobody wants to eat the frog. If you wait until the end of the day to eat that frog, that frog is not going to get eaten. Eat the frog first thing. You and I both know that there are things in our lives where we would prefer not to do. We can come up with all kinds of ways to delay that inevitable. There are things that you don't want to do. Honestly, the thing that you don't want to do is the thing that you must do. As Ryan Holiday would say, “The Obstacle Is The Way,” another great book.
One of my coaches said something similar. I'll never forget it. He said, “If it looks like death, run to it.” I can say from a coaching perspective and from my own lived experience, the one common thing that is the dread of most owners and maybe this isn't just PT-related. It's a small business thing and there's a reason why The E-Myth Revisited was written. It was because owners don't want to write down the policy and procedures and put systems in place. Many times in my coaching scenario, I can get them to the point but at some point, the owner has to sit down and write or according to Michalowicz even videotape it. Something has to be done in order to put systems and policies and procedures in place for everything that's done in the clinic. It takes time, it's laborious, it's no fun, there's no immediate reward, and no one's going to pay you for it, but that's one of those eat the frog things that has to happen.
That's been one of my annual goals for decades. It's the most unsexy thing you're going to do as a CEO, but it's one of the most valuable. You can have a whole episode on that and I think some of your previous guests have had wonderful tips about doing that.
It would be best if you made that commitment to get to a level of trust with your group that only comes with sharing a portion of yourself. Click To TweetIt's the only way you can replicate yourself. You get to that point in your business growth cycle where you move from a mom-and-pop organization, where you're not only checking people out at the register and stacking inventory and purchasing all the materials for your store to going to an enterprise where other people are doing it for you and there's a level of expectation that needs to be met. In order for that to run well and be successful, they need to follow systems and procedures. It's a tough part.
Here's a controversial statement, and I don't know where you fall on the spectrum, but I've come to the conclusion that I'm either reading too much or I'm reading not enough. It's one of those two. In 2015, I started my personal development journey and I would say, “I'm going to try to read one book a month,” just getting my life in order and my head straight. That year I wound up reading an average of one book a week. I read 54 books that year, a tremendous amount and some of them were great. I kept going for a while. I have a stack of books right next to me. Two of them I’m going to recommend to you, but a lot of us can get caught up in that, “I can't get enough. I have to get that next book that's going to give me that 0.25% edge that I'm looking for,” versus going back to that original 53 books and reread the great ones over again and get that down pat.
For example, every year, I read The 7 Habits of Highly Effective People. You can't read that enough. You really can't. It will take you your lifetime to implement just the concepts in that book. I can give you a dozen other ones, at least, that are just as profound. We need to be careful that the next best thing isn't necessarily around the corner and isn't necessarily in that next book that somebody recommends, although I'm about to recommend two books. We have that schizophrenic thing of, “I'm either reading too much or I'm not reading enough.” Do you ever get that feeling?
Yes. I listened to a podcast about 1 year and 1.5 years maybe. A really smart guy and he said, “I'm not impressed anymore with the number of books that people read. In an ideal world, I would rather recognize someone for the few books that were read and fully implemented.” If I were to turn the tables on you, Stephen, of those 54 books, did you implement at least 54 concepts that year into your business? If someone were to read one that's chockfull of stuff that you could implement, let’s say Traction by Gino Wickman.
I know plenty of people that have read it, but when I go back and say, “Have you considered an organizational chart for your organization? What is the structure of your business?” They're like, “I don't know what you're talking about.” Let's go back to page 96 of Traction, which I know you read and he gives you some examples of organizational charts. A business owner could read Traction and take a full year to implement all that stuff or Clockwork where he talks about making videos. The whole concept behind the book is to get to a four-week vacation where you have no connection to the business. In the end, he gives you guidelines for what you need to do at months 18, 16, 12, 8, as you're getting closer and closer to your vacation. If you took the concepts of that and implemented them, that's the only book you need to read during the year business-wise. You focus on some of those things. Maybe it doesn't take twelve months but if you read less and focus more on implementation, probably it would be better for your business and you as a CEO.
You got to wonder sometimes when you come in with all these fresh new ideas when you come back from reading that course or taking that Tony Robbins thing or whatever, the next thing your know your staff is feeling whipstalled because you're coming in and you're changing everything up. Sometimes, I think you got to stick with your knitting. The next concept, you must do less, in general. As a business owner, you should be doing less. The problem that happens to all of us is because you can do everything, it doesn't mean you should do everything. You remember back in the day, you could do it all. You can document, you can treat, you could clean the bathroom, you could write a policy or you could do that schedule. What happens and what you're doing is you're diluting your focus. The best thing that you can do for everybody is to do less and do those fewer things better. It's a very hard lesson to learn.
What your team members want from you is they want leadership and guidance. They don't want you to come in and clean the bathrooms and treat patients. Even though you might feel like you're not pulling your weight, that's not true at all. What they want is leadership. What does that look like? It means implementing a sound policy, procedure and structure. They might kick back and the people who aren't aligned with your business will kick back against the implementation of structure and procedure. They will self-select and you'll get rid of them and you'll find better people. They want better people around them. They want someone to be the head of culture and generating a culture in their business. They want someone who's looking forward and saying, “We've got vacations coming up in eight weeks. What are we going to do so that's not a hiccup to our business? Let's make this all smooth.”
They want someone who's going to recognize them when they do well, reward them when they do well. They also want someone who's going to hold them accountable when they are falling out of line. Whether they know it or not, they need someone to guide them directly. They want that. If we're doing less, we're doing more of those things that they want. That’s the tough part is as PTs, we've spent how many years through schooling, recognizing that, “I hammer this one nail and I get paid for it. I treat patients and I get paid.”
Even when you start your clinic and you're the alone therapist, “I treat a patient, I get paid.” I'm coming in as a coach and telling you, stop treating patients and you'll get paid more. They're like, “Hold on, I just spent the last twenty-plus years of my schooling and education in my life to learn that I hammer this nail and I get paid. Now, what am I going to do? I'm not a therapist anymore? That's what I've been working the past years trying to do. What am I then? How do I have value and where do I find my worth?” There's a mindset shift that has to change for most owners to get to that point where they recognize that they're more valuable doing what the business needs and not treating patients.
That is excellent and it is a mindset. Sometimes when you feel that you can't pull yourself out of clinical care, there is a mindset there, there's a reason that it happens. Some of it is based on fear, to be honest with you because people are wrapped up in their identity in what they've been doing. They don't realize they have a higher calling and they can help more people if they would train other people to hammer the nail.
The fear is legitimate because part of it is, “What am I going to do with my time now?” Because they don't know what to do. No one's taught them how to be an executive or an administrator, “I'll pay my bills and I'll look at some numbers, but then what?” Once they start recognizing how much the business wants them to work on it, then they start recognizing the plethora of things that they have to work on and then it tips the scales and like, “I've got too much to do. I need to start prioritizing.” There is a fear initial thought like, “If I have all that time, what am I going to do? How am I going to be valuable?”
That goes from a mindset where you exchange your time for money versus when you exchange value for money. If you have a lot of value, the time has nothing to do with the value. The last point about how to be a better CEO is to use the WAIT method, Why Am I Talking? That's what that stands for. As an owner, you walk into that room, you can take a bowl of oxygen into your way or the highway and you can pretty much dictate how things go. Because you like to get things done, GSD, Get Stuff Done, that's at least how I call it, you just go in a bowl in a China shop and you get it done. What happens is you make everybody stop. You keep people from being their personal best and bring a perspective that you need. Start every meeting, write the word WAIT down in front of you on a piece of paper.
This conversation reminded me of a quote from a guy that does something called Mind Your Business Podcast. The quote he said was, “When you value your time more than money, you'll have more of both.”
That's one to meditate on.
Going back to what you initially said that you need to do less or recognize that when you value your time more than money, you'll have more of both. Because you're going to use your time wisely at that point. The American mentality is to work hard, work long, and it pays off. Whereas that's not the society we live in nowadays. It worked well up until 2000 or so, but now in the information age, your value comes more from what you provide as a leader than it does as a worker.
With that said, let's get into the controversial part of the show, the future of orthopedic outpatient PT. I want to start a ground rule with what my dad told me, which is your most important function as a CEO and as an executive is to think. These statements are designed to make you think. It's a little bit controversial. I may believe this stuff, I may not, but it's designed to make you think. In general, we're steadily losing our edge in the marketplace as PTs. We are putting obstacles in our customer's way to use us by our own mindset and the way it's been done in the past. The marketplace is different now. The reality is we all as customers, as consumers, all want a combination of good, fast and cheap. As PTs, we should offer two of those unapologetically. There should be good and fast, good and cheap, cheap and fast.
If you want next-level business smarts, offer your customers to pick what option they want. If somebody walks into my office and they have an acutely sprained ankle, they want a fast. That's all they want. “I got to get in now.” Somebody calls in and says, “I want to be treated by Nathan and only Nathan." "Nathan's first appointment is two weeks from now." They're choosing good over fast. If someone wants cheap, "I don't want any out-of-pocket expense at all." "Here's the list of exercises. See you later." It's not going to be good and it's not going to be fast, but maybe you need to start thinking like a business owner of can you offer people that choice and you do it in a diplomatic way, you have to send the message correctly. We need to start thinking like that as physical therapists in delivering services because we are losing market share. Not a lot of people say this in public but I will. Why not? We're losing market share to pretty people on YouTube and TikTok who look good in a bathing suit because they're telling a better story than we are. They're telling a story better than we are as physical therapists. We don't even know how to tell our own story the right way. That is, “What's your customer wants? Not being able to tell your story well is how a business dies.
We're starting to see that, I believe, in all of the things that make people outraged when they see, “Did you see that guy on YouTube who was telling me how to fix my back pain fast and he wasn't even a PT. He didn't even have any medical background than I do.” Guess what? He removed all obstacles to his customer and he wins, you lose. We need to start thinking differently as PTs. You need to find out what your customer wants and give it to them. I'll tell you a funny story. Back in the day when I was treating people and it will be at the end of the day and they were coming in for a bad neck or whatever.
She would say to me, “When you put me on that heat, my neck, it feels so good. I would pay you just to put that on.” After about twenty years of hearing that, it finally dawned on me what if you did offer then to somebody? What if you said, “You come in here, I'm going to put you on heat. I'm going to put you on the heat for fifteen minutes and we’ll close the lights off. You're going to lie here in a dark room. Your husband can't call you, your kids can't talk to you. You can basically take a nap if you wanted. We thought that was the funniest, goofiest thing until I put a name on it.
We started a napatorium and people paid for it. You might say, “You're crazy, you're unprofessional, you're cheapening this profession.” You know what? That's $15 or $20 cash that we didn't have before. That's how a business adapts and survives. For people who say, “I'm done with physical therapy. I wouldn't get stretched out. I love it when you stretch me out.” We started a Stretch-N-Go program where we charge cash for people to get stretched out. We've doubled that line of business since January because we put a funny name on it, but we gave people what they wanted and we presented it in a very clear way. If physical therapists don't start thinking like that because people don't search for physical therapy, they search for, “I want my back pain to go away. Who can help me make my back pain go away?”
No one wants to go to physical therapy.
I don't even know how to describe physical therapy and I'm a physical therapist.
They may still mistake us with chiropractors and massage therapists after how many decades. What's interesting to your point that came across my mind this week as I read the Impact Magazine and recalled something that a mentor of ours said 6, 8 years ago. This is a guy who owns large multiple practices. He's a chiropractor that owns large medical practices that include chiro and diagnostics, all the bells and whistles under one roof and has done very well. In fact, he even owns an insurance company. He said, “FYI, do you guys know that physical therapy as you know is not going to exist in another couple of decades?” I'm like, “What?” He said, “It takes too long to take that time out of someone's day and you have to come too often and people want it done quicker, faster and cheaper.” I thought he was silly but I could see what he was saying.
Lo and behold, I read something in June '21 Impact Magazine. Someone referred to Telehealth and referenced, and I'm counting this to be true, but studies are showing that some of the TelePT services are getting similar results to physical therapy services. Why would insurance companies pay for someone to go to a clinic anymore? If they had a slew of physical therapists in a call center during TelePT, why bother sending someone to a brick and mortar?
It’s okay to ask questions because you don’t have all the answers in the world. Click To TweetThat hurts your feelings, doesn't it, as a physical therapist? Honestly, the marketplace doesn't care.
It's going to go that way. It also had a great article about concierge PT and it provides some concierge services. It blew my mind. I thought, “Why aren't we offering discharge patients a monthly subscription to have access to ask us a question 24/7 to our clinics? Say, pay us $20, $25, $50 $100 a month and you'll get 24/7 physical therapy advice consult. You can call about your sprained ankle and you don't have to come into the clinic, we'll FaceTime. You can call about your exercise equipment or, “This flared up, what exercise should I do?” If it goes beyond that, then you say, “I need you to come into the clinic or let's set up a Telehealth evaluation,” and bill their insurance. Outside of that, just have that accessibility. Those concepts came to my mind as I read the magazine this week, and I thought, “Maybe my mentor did have something there.”
That is mind-blowing. For example, I'm assuming that you go to the dentist for regular checkups twice a year. Why do you do that, Nathan? You don't want your teeth to fall out. Why don't physical therapists give twice-a-year checkups for the musculoskeletal system and charge people $200 to do that? Not everybody cares about that but that's okay. You don't have to have everybody. You just have that segment that values what you're offering. At my age, I will definitely value that. If you can look me over twice a year and tell me the things that I need to work on because my right shoulder and internal rotation are getting tighter. My left gluteus medius is weak and you're going to give me a specific exercise, I'm going to pay you $200 for that. That's something that we should be thinking of.
In addition, cash-based services. There is nothing wrong with that. It was drilled into my head that as a PT, you do not make recommendations on equipment, you do not sell equipment, you do not sell anything for cash, it's all through insurance. Honest to goodness, that is like walking into McDonald's buying a hamburger and then refusing to sell you the French fries. That's like, “I'm going to take a big Mac.” They're going to go, “You can get French fries, but why don't you go down the street to get those, because they're a little bit cheaper.” You’re like, “What?” That's what we do as physical therapists all the time. Shouldn't I know what the best pillow is for your neck? Shouldn't I know what bed is good for your back versus the MyPillow guy? We're going to get out of control if we keep going. Let's finish this with a couple of good books that I think are good. Are you ready?
I want to know.
Who Not How by Dan Sullivan and Benjamin Hardy.
Most influential book I've read in years. There's my impact filter. I've never shared books before. I've shared at least fifteen copies of that book.
That book is super good because it changes your mindset from thinking not how am I going to do it, but who am I going to get to do this. Because you don't do your taxes, do you? You get your accountant to do it because they're better at that than you. You're paying him for a result and that's not going to jail. That's painful. That's the book in a nutshell, but you should read it. Everybody should read it, I think.
I've even thought about doing a whole show about it.
You should. That's excellent. The other one that I like lately is Business Made Simple by Donald Miller. You might say to yourself, “You've been in business for 30 years, what the heck you reading a book called business made simple?” Even after 30 years, you should be open to learning some things. The thing that I love about Business Made Simple is this other book, Building a StoryBrand. It is making your customer the hero of the story, not you. You're the guy. There's a separate show. That book really puts your thinking upside down and you look at all your marketing a different way after you read that and you understand the concept of how customers respond to that message.
I love both of those books. The one I'm excited about right now is called Effortless by Greg McKeown. He had a bestseller called Essentialism a few years ago and then I heard him on Tim Ferriss’ podcasts. It’s a great book, great ideas. He's not going to give you a lot of nuts and bolts like the Who Not How but, I love Effortless and the importance of finding those things that are easier for you and letting go of some of the other things. For example, starting from ground zero and building up instead of saying, “Look at this complex issue, how can we simplify it?” Start with, “What is the minimum viable product we've got to achieve and how do we get from point A to point B with the least amount of steps?” Essentially, that's Effortless in a nutshell.
It's a great non-trivial exercise when you recommend a book to be able to synthesize the major points because it forces you to distill out of that. What was it about that book? That's a great exercise for somebody to do. It’s to say, “Why am I recommending this book Effortless? What's so good about it?” Also, trying to verbalize that.
It solidifies that in your head.
I hope that you weren't uncomfortable in this show. I think you did very well.
I'm not uncomfortable at all. It's always great having you on. You're always going to throw me for a curve somehow.
Seriously, you had no idea what I was going to talk about. That was real, authentic interaction and that's super valuable. As someone who values their time, that's why you tune in to a show like yours because you know it’s going to be authentic and you're going to get genuine value out of it.
The last question I have for you is how do I title this episode? You left me in a lurch. We covered a ton of stuff.
You'll come up with something. Don't miss this episode no matter what. I hope this discussion spurred some thoughts in your readers and they will reach out to you, either on your Facebook page or the email, and start a dialogue. That's what we as PT owners need more of. That is some cutting-edge thought to open up our minds.
I always love it when the audience emails me simple questions, business questions, maybe we'll hop on a call if necessary via email. I love seeing the interactions that people have had on the Facebook group, people coming from different backgrounds, but also with different questions that aren't necessarily for me like, “What do you do about this?” To see other people in the group respond to them gives me some fulfillment.
You're definitely doing what you should be doing. This is your ministry.
Stephen, thanks so much for your time. If people wanted to make you part of their network, how would they do that? Are you willing to share your contact info?
They can search for me on LinkedIn, they can email me directly. I'm one of those crazy Italians, so I have a long last name. It's SRapposelli@PPTAndFitness.com. I'm hoping nobody wrote that down correctly, but if they do, they can reach me that way. I'm always happy to help anybody. I've got nothing to sell, but I'm hoping we can move the profession forward. That's what it's all about.
Thanks for your time. I appreciate you taking the time.
I'm always a better man after I speak to you, Nathan.
Thanks, Stephen.
Peace.
Stephen opened his private practice in Delaware in 1992, at the tender age of 26, because he was told by his former employer that he couldn’t afford to buy into that existing business. He has since grown to 3 clinics and has been voted best PT business in his state for numerous years.
He also serves as Vice President of the Delaware PT Association, as well as sitting on the IMPACT editorial board. Stephen plans on devoting the rest of his career to promoting independent practices across the country.
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A lot of people follow one compensation model their whole life, that changing it would be difficult. But not everyone wants to follow guaranteed salaries and occasional bonuses. Especially in the PT industry, people want some control of their salaries. Jason Wambold believes that giving people the power of choice would help them achieve a lot. The Cofounder and Physical Therapist of OnusOne, Jason is leading the charge to bring compensation models up to date in the PT industry. Join Nathan Shields and Jason Wambold as they examine what people want when it comes to compensation. Learn how to balance the risk and reward of production to satisfy both the employees and the owners.
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I have Jason Wambold of Onus-One. Jason's going to talk to us a little bit about what he's doing now as a Physical Therapist and Owner of Onus-One. Jason, thanks for coming on. I appreciate it.
You're welcome. Thanks for having me, Nathan.
You've had an article in IMPACT Magazine about different compensation models for physical therapists. This is something that I'm dealing with in talking to my coaching clients as they're trying to recruit and incentivize their therapists to be more productive. Compensation is one of those ways to incentivize them. You've got some great strategies. I'm excited to bring you on and talk about that. First, share with the audience a little bit about your professional story and what got you to where you are.
The early part of my career was similar to most. I am a physical therapist, and when I started my career, I obviously had a lot of student debt, as many young graduates do. I was excited to start my clinical career and felt very fulfilled clinically and professionally, but I was struggling financially. I couldn't quite understand why there wasn't more earning potential given the value that I brought to the marketplace and to my patients. Not just me, but physical therapists in general. That struggle persisted.
Fast forward later on in my career, where I was in positions of management and leadership and overseeing clinics and teams, I was on the other side of that trying to grapple with how do we provide earning opportunity and potential for our employees without jeopardizing the viability of the company or the practice. It always seemed that either one or the other was suffering, and we could never seem to get that in balance. After years of being a little bit frustrated by that first on the employee therapist's side and on the employer manager/leader side, we started to look at this and look at the marketplace to see if there was anything that could help us to bridge that gap and there wasn't. We decided to go down the road of building something ourselves, and that's what brings us to where we are now.
I love how you recognize both perspectives. As an employee, I want to have greater earning potential as an employer like, “We got to remember our profit margins.” This doesn't come free. You want to provide that opportunity for the employees, especially the providers, physical therapist PTA's, etc., but there has to be a meeting of the minds. From the leadership perspective, you're thinking, “We've got to help them understand.” From the employee's perspective, they're like, “I don't feel like I'm valued. No matter how much you talk about purpose and values, I still need to make ends meet and pay off my student loans.” It's great that you got to this point to develop a company like OnusOne to help people with compensation models. Tell us a little bit about what you're seeing that in the industry now and where compensation models are changing nowadays? What are employers and employees looking at?
There are some major shifts happening right now in the industry across the country, unlike anything that we've ever seen. Let's put COVID aside for a second. That's another conversation entirely. Even without that, now that we're moving thankfully back to some degree of normalcy, the process of becoming a physical therapist is more expensive than it has ever been in the history of our profession. That's number one. Number two is reimbursement is continuing to decline. You have graduates coming into the marketplace not even necessarily expecting to earn a certain amount but needing to earn a certain amount to make ends meet because they have so much debt. Simultaneously, the revenue that they're generating for services rendered is lower than it was a few years ago through no fault of their own. This creates a point of critical mass.
We're at the point right now where historically, practice owners felt that they had to essentially roll out the red carpet for employees and give them whatever they wanted in order to get a therapist in the door. If they tell me that they need to make X, I have to be able to pay them that even if paying them results in me losing money as a practice or as an owner or jeopardizing the financial viability of the company in order to get licenses in the door. That's what I have to do. What's changing now is that we're seeing practices essentially get to the point of critical mass where these owners are saying, “I can't do this anymore. There's no room left for me to keep giving more without tying it some way to production or relative value revenue brought into the practice.”
The process of becoming a physical therapist is more expensive than it has ever been in the history of the profession. Click To TweetYou are already starting to see practices trying to come up with their own models to address this issue. For that reason, when we talk to practices that are interested in making a change, many of them have already been thinking about these concepts, but some of them are not quite sure how to go about it. It would be very difficult to find a practice owner across the country who would say, “Changing and reforming compensation structures in the rehab industry is a bad idea.” Everybody agrees we have to do it. We're ten years behind every other healthcare profession that has already long since switched compensation structure. For whatever reason, we as the physical therapy industry are lagging behind. We all realize it. We're not quite sure what to do about it.
What are some of the issues that owners are coming up against in switching over to a compensation model that does not strictly salary and with a few bonuses here and there? What are some of those pain points?
The main issue is if you've got people in your company who are already used to getting a full salary and some sort of a bonus model, converting those people over to other types of models where there's a risk-reward type situation, that's a challenge. We always talk about the science and art of reforming compensation models. The science math party fun part. Let's crunch the numbers, look at spreadsheets, and create the models. The art is the hard part. That's where you have to deliver the message effectively to the employees that are used to being guaranteed a full salary and may no longer have that opportunity. On top of that, there are three primary reasons. If we understand that practice owners and executives all agree that we need to do something, the question is, why don't they do something?
There are three reasons why. This would be in the order of frequency. The first is fear. I'm worried that if I make this change, I'm going to lose all my therapists and not be able to replace them. The second is lack of time. Time poverty is a real thing in the rehab industry. If you're trying to keep your head above water, the last thing you're interested in doing is completely revamping your compensation structure for your entire team. Even if you know how and you're not afraid to do it, there are only so many hours in the day. We struggle with that as an industry. The third is knowledge. There are a lot of practice owners, typically smaller practices out there, who agree that we need to do something, but they're not even sure where to start. It’s paralysis by analysis, “Where do I even start? I'm not going to start at all.”
I can see that from my perspective. I could crunch numbers and have a little bit of faith in this new compensation model. Some people might feel like, “I can do the numbers, and I have the time to put it in,” but it comes down to the fear. “How are my numbers going to do what they say they're going to do? Am I making promises I can't fulfill? Is that going to, in turn, come across poorly? Am I going to lose confidence? I'm ultimately going to lose that provider?” That does come down to that fear. You talked about bringing that to the table. How does an owner overcome that? What would you say to them?
There are very specific strategies that you'll need to employ in order to overcome that fear factor. If we think about the workforce nowadays and what they want, by and large, this is a generalization, but it's accurate enough that it's worth mentioning. The workforce of rehab professionals wants freedom, flexibility, and choice. They don't want to be told this is how many patients you have to treat, how to treat, how many hours they have to work, and what continuing education courses are worth going to and which ones aren't. They want a lot of that freedom and flexibility. To the extent that you can give them flexibility, that will help to overcome any fear that your existing staff may have about moving to different types of models.
Here's a concrete example. Rather than changing your entire compensation structure from one approach to another, why not change it from one approach to three different approaches. For example, letting your therapist choose from a menu of compensation models and pick the method that is most appropriate for them. A new grad may pick one type of model, but a twenty-year veteran may pick another type of model if you take that one step further, what if you allowed them to change plans annually, almost like re-enrolling in a new health care plan. That way, your providers and therapists are not feeling locked into this new model. They're getting the sense that, “I have now more choice than I did before. While it's true I don't anymore have a fully guaranteed salary of X number of dollars to show up, what I do have is all these different options now. It's empowering to me as a therapist to choose the plan that is the best fit for me.” That's one approach that we recommend.
A new grad who's concerned about, number one, their capability to treat, and number two, the amount of student loans might appreciate the security of a salary and say, “I will agree to meet your minimum standard of productivity and push a little bit more. I don't want to worry about that. I want to work on my skills, improve, and gain confidence.” Whereas someone who knows their job and has a full tool belt of skills like, “Lay off my back. I want to kill it for four days straight and have a three-day weekend every week. I want to get paid well for it.” They can choose a different model if they're not stuck to the salary. Giving them those options represents your ability to work with those people in different scenarios.
If you ask the practice owners across the country the question, what is the most common question that someone that a prospective employee will ask in an interview? The number one question that is asked of people that you're interviewing is, “How many patients am I expected to treat if I work here?” They're coming to the interview with a number in mind. Let's say that number is twelve. If you say to them, “We expect that you see ten a day.” They're going to want to continue the interview process. If you say to them, “We expect that you see fourteen a day,” it's very possible that at that moment, they may say, “I'm not interested.” They've already shut down. They've already tuned out.
The beauty of offering choice and different types of models where the compensation is variable to their performance is that your answer to that question can be, “That's up to you. You decide how productive you'd like to be. You're going to be paid accordingly if you want to produce less. We have a place for you in our company as long as your KPIs in metrics checkout, and you're delivering high-quality, evidence-based care, but you happened to be delivering less of it. We have a place for you here. Just understand you're going to make less money, but that's your choice. Somebody else may be producing at a much higher level. As long as their KPIs are checking out and their quality of care is still at that same standard, they're going to make more.” A lot of times, in particular new grads, they think that quantity and quality of care are mutually exclusive. They can never co-exist, but that is largely a function of a lack of experience because we don't know what we don't know as a new grad.
Anything else you could say to those who are coming from this place of, “I want to make a change and I'm interested in making a change in my compensation models but don't know exactly where to start?” Anything else you can share with them?
You mentioned earlier about crunching the numbers and feeling pretty good about it, but that fear of, “What if I have it wrong?” You want to make sure you get your numbers right before you roll out new models. That sounds intuitive, but believe it or not, we've made that mistake a few times. We try very hard to never make it again because the fastest way to lose trust with your staff is to say, “We messed up the numbers. We have to change your compensation strategy.” The approach to that is, number one, take your time. Number two, before you've ever even mentioned what you're planning on doing with your staff, build your models, get them to the point where you think they're correct, and then run real historical data from your staff through your models to see if you've got it right. The numbers will tell you if you have it right or not.
If you think you've got these models built, you grab your performance data and run those numbers in the models and say, “I gave everybody a $30,000 raise and I didn't mean to.” You can go back to the drawing board and fix that before you have to pull $30,000 off the table from your staff. You want to crunch the numbers, use real data, analyze the data, make sure you've got your numbers right, make sure the plan is structured properly before you introduce them to your staff. That'll go a great way in making you feel better as an owner and certainly building trust with your staff.
That'd be powerful if an owner does that exercise that you're talking about. Crunches the numbers with past data and were able to approach an individual provider and say, “Based on last month's performance, according to your current model, you're making $4,500 a month whereas, with this incentivized model pay for production, you could've made $5,200 in the past month.” To bring those kinds of real numbers to the table after doing the full exercise would be powerful and give a lot of confidence to the owner to say, “Here is a model that could work for you if you're interested.”
It's a best practice rollout strategy that we highly recommend. We have to remember too that a lot of times, people might not be motivated by money. That might not be what they're after. They might not be interested in which plan pays me the most. They might be interested in this concept in general if it provides them some additional professional and personal freedom and flexibility. There are a lot of therapists out there that will trade higher salaries for a work environment that they feel good about, that treats them like a professional and gives them freedom and flexibility.
They may be perfectly fine making $5,000 less. There are others who are not okay with that. The key is to let the therapists figure that out. Give them choices. Let them pick the plan that is best suited for them. We, as owners, have to be careful not to project what we think our therapists want onto them. That's the beauty of giving them a choice because they're going to make those choices based on their personal viewpoint of where they're at their point, personally and professionally. That may be a very different point than we're at as an owner or a manager.
As you've been working on OnusOne and implementing that and helping physical therapy owners implement this into their practices, have there been some unforeseen results either for the positive or the negative after breaking these out?
A lot of times, we think as owners that we know our staff. Let's say you roll out three models, and one of them is very conservative. It has a relatively high guaranteed base and a little bit of performance-based pay opportunity. You can think of that as a 90/10 plan, 90% guarantee, 10% risk/reward. Conversely, you go in the other direction and offer a 50/50 plan, a very low base that you cannot live off of, and then high-performance pay earning potential. These two models, the way they would fit together is if you had two people, one on one model and one on the other in the same clinic, they were performing at exactly the same level, same caseload, same productivity.
The person that chose the 50/50 model would be making more money total than the person that chose the 90/10 model. That's the way we typically put these together. In terms of unexpected results, a lot of times, those people in our company that we say, “They're going to take that 50/50 model. We know for sure that their risk tolerance and confidence are going for the 50/50.” A lot of times, they'll go for the 90/10 and completely surprise us. Conversely, that person that you're thinking is never going to go for a 50/50 model. They're going to want maximum security. That may be the first person in line who says, “I want that 50/50 plan.”
A lot of times, we think we know what our team wants, and they may surprise us. The other thing is over time, what they want might change. The longer we do this, the longer we realize how powerful it is to give a choice to your staff. If I have five roommates, I can go with the 50/50 plan, but if I have a house and two dogs and a couple of kids in school, maybe one in college, I may or may not be interested in the 50/50 plan, depending on my life circumstances. You'll see your employees change every year from one plan to the next based on their life circumstances in a way that we may not have been able to predict.
Have you seen the implementation of different compensation models or at least the choice and the flexibility you're alluding to that change our culture within the clinics? Do you see a different vibe or culture?
Yes. There are a couple of primary objections that we typically prepare practices to overcome as it relates to how their employees will react. There are three primary objections. I don't even want to call it objections. Maybe concerns would be the best way to phrase it. The number one concern raised by staff therapists when you introduce OnusOne is, “I don't like this model because it will incentivize care of poor quality.” We are incentivizing the quantity, not the quality of care. That is a very understandable knee-jerk reaction for someone who hasn't thought it through. The reality is the opposite is what occurs among those individuals that are enrolled in this one.
We talk a lot about mandatory versus optional enrollment. We always recommend mandatory enrollment because if you don't make it mandatory, you may very well end up with two competing cultures in your practice. The people that are enrolled in OnusOne care about cancellations. The people that are not enrolled might not quite care as much. If you have a snow day in your practice, the people not enrolled in OnusOne are high-fiving each other going home early. The people enrolled are on the phone with their patients rescheduling them later in the week. That is something that we've observed over time that is very interesting. It happens automatically when you roll this out.
Most business owners think they knew their staff. They really don't. Click To TweetWhen you say OnusOne, you mean at least picking one of the three compensation models and not taking a straight salary. Is that what you mean by that?
Yes. It doesn't even need to be our company. If you choose to put some a model together yourself. In the article that I wrote in IMPACT, we're not talking about OnusOne. We're talking about concepts. Whether you choose to have us help you put these concepts together or do it yourself regardless, those are the typical changes in professional behavior that you'll see when you eliminate a full guaranteed salary concept.
The same people who might say, “I question the quality of care,” are the same people who are excited when people cancel or could be. I don't want to label them as such, but they could be the same. There's a dichotomy there, and you want to make it appropriate when you're saying as an owner, “These patients need to come in 2 to 3 times a week in order to get better.” We're not talking numbers in the clinic and the bottom line of financials for them to see objective results. They have to come in for care. Yet, you're excited when they go home and you're done in a half-day, that doesn't jive. When they have some skin in the game, then it's easier for them to follow through on that and make sure that their patients are getting the care that they need.
Therapists, especially young ones, need to understand that's what's good for the patient is good for the business. You put the patient first, then your business. The numbers will take care of themselves. Another thing that we struggle with as new grads. Not always, but in many cases. Our perception is that we are only responsible for caring for the people that show up that day. The reality is we have a caseload of people that we're responsible to care for regardless of whether they show up or not. If somebody is under your care and they're repeatedly canceling, you have a professional responsibility to care for that person. A lot of times, therapists don't understand that. Maybe they hadn't been taught that effectively in their clinical rotations. Managing cancellations is part of delivering high-quality care, and if you do that effectively, the numbers are going to take care of themselves.
Anything else you want to share about switching to compensation models and helping owners overcome that hurdle or mindset shift to consider a situation like this?
There are a couple of components that you want to consider. The first would be the timing of rolling this out. You want to make a change, roll out new plans and hit the go button when you anticipate that your clinic is ramping up and getting busier. You don't want to hit the go button at your slowest time of the year because your therapist might panic. What goes along with that is how long of a runway you provide for your staff or what we call a grace period? The longer the grace period, the easier the transition will be for your staff. Let's say your company tends to get busier on April 1st. January 1 would be a good time to introduce new models and tell your staff, “We're not going to start paying you according to these models. We're giving you access to the models so that you can understand how they work, learn how the calculations are performed.” You have between January 1 and April 1st to learn how everything works. Ask your questions, change your behaviors, and we're going to go live on April 1st.
You wouldn't want to go live on January 1 because most practices, not all, but most tend to be slower. That's when deductibles are resetting, and people are trying to pay off their holiday bills, but then when you get to April, everybody's thinking about the summer. They want their knee replaced so they can enjoy the summer. That's where volumes tend to tick up quickly. That's where you want to hit the go button so that everybody fully gives themselves a raise right when they go live with the system. Timing is very important.
Do you have some people who go through that ramp-up stage and hit the go button and excited and feel like, “It doesn't work for me? I'm not aligned anymore with the company. They’re going in the direction I don't like.” Do you see that sometimes? Is that a legitimate fear that owners could possibly see?
Yes. There are a lot of reasons why you might introduce these types of models, use our system, or however you choose to do it. One of them could be to weed your employee garden. Let's say you've got people who are not necessarily doing anything that is a terminable offense, but they're not the type of person you want in your company for whatever reason. One way to take care of that is to have them exit themselves from your company after you introduce these models. The attrition rate for practices that introduce these models where we have been involved is under 5%. It's very unlikely that you're going to lose staff if you follow the best practice guidelines. However, 5% is not 0%, so it does mean you could lose a person or two, or if you're a larger company, it would be more than that. Almost invariably, those are the people that you've been trying to figure out how to get off your bus anyway. They did you a favor because it's a lot easier for them to exit themselves than you trying to figure out how to get them off your bus.
As you start by introducing structure and some accountability, and this is a form of accountability because it affects them financially, and not financially, but also in terms of standardized policies and procedures, some people tend to weed themselves out and tap out.
That's very true.
Jason, thanks so much for sharing so much awesome information. Is there anything else you want to share before we wrap things up?
One thing you want to consider as a practice owner or executive is if you're going in this direction, what is your intent? It's not always to improve the bottom line. That could certainly be part of it. If you're a practice that is struggling with your profitability and you feel your salary cost is out of control, this would be a way to address that, but that's only one option. Another option would be maybe you're worn out as a practice owner and tired of the daily grind of managing people, and you want less leadership headaches, but you're happy with your profitability. You want more freedom as an owner. That is an appropriate reason to go down this road. Even if you're happy financially with where you're at, you feel good at that point in your career. That might be a reason to do it.
Another reason might be you're considering selling and you're concerned that your EBITDA isn't strong enough and you don't think you're going to get the multiple that you're after. That's another reason to introduce these models because it will strengthen your EBITDA and you'll look more attractive on paper if you're interested in selling. The difference there is you're selling on your terms, not selling because you're backed into a corner. You've painted yourself into a corner and you don't have any other option other than to sell. That's a very different situation. Think about why you might be interested in going down this road, and don't lose sight of that as you go through the process.
If people wanted to get in touch and learn more about OnusOne and what you do, how would they do that?
If they're interested in getting information in general, they could email us at Info@Onus-One.com. If you've got a question for me directly, regardless of whether you're interested in OnusOne or not, if you're working on doing this on your own and you want to bounce some ideas, I'm happy to do that. We want to try to get information out. What we're trying to do is change the landscape for the better for all parties involved. That's our goal as an organization. If you'd like to contact me, you can email me directly at JWambold@Onus-One.com.
Can you share with the audience before we finish up what OnusOne does in terms of helping owners with compensation models?
What's good for the patient is good for the business. Click To TweetWe have a software program that manages this entire process. It gives your employees a portal where they can see their pay structures, the different plans that are available to them, how much they're earning, perhaps more importantly, how much they're not earning. Maybe what they're leaving on the table, and what they could achieve if they produce a little bit more. We can customize models depending on what people are interested in, whether it's units, minutes, RVUs or visits, revenue share models, actual versus predicted. We have a six-step implementation process that we go through with every practice to build these models. Our system sits in between their EMR and their payroll system. Data comes in from the EMR system into our system, we convert that information from EMR into payroll data, and they export it when they're ready to pay their employees, so they know how much to pay them.
Considering those in the audience that might be a little bit strained already in terms of time, does this add a lot of time and in typical payroll period for an owner to figure this all out, or is this done without their involvement?
They have some decisions to make about what they'd like to offer. If they're not sure, we can help them decide.
That's on the upfront. You'll walk them through that process, how they want a bonus, and give them some standardized models?
Yes, but in terms of workflow on a weekly basis, if you're a practice that has 500 therapists, it will take you five minutes to download what you need into our system and to pull the data out on the other end to run payroll. It tends to very oftentimes save time, in particular for the small practice that's trying to do this manually.
Thank you so much for sharing the insight. Very much a conversation and a practice that needs to be implemented many years ago. That's the standard for the physical therapy world. We’re usually a decade or two behind.
Unfortunately, yes.
Thank you so much for taking the time. I appreciate it.
It’s my pleasure, Nathan. Good talking with you.
Jason graduated from Gordon College in 1996 with a Bachelors degree in Kinesiology. He earned his Bachelors/Masters degrees in Physical Therapy from Thomas Jefferson University in 1999. Jason has 23 years of leadership experience in the rehab industry. He served as a membership committee volunteer for the NYPTA, and regularly lectures at local PT programs focusing on professionalism and fiscal responsibility.
Jason has recently begun to consult with newly developing physical therapy programs who desire to introduce curriculum content which will better prepare future therapists to excel under alternative compensation models. In 2016 he cofounded OnusOne, an online employee compensation portal system that is currently being utilized in practices in 31 states. Jason is an internationally recognized expert in best practice design and implementation of alternative employee compensation models, and he regularly speaks on the topic at national, state, and regional conferences.
He has authored 2 separate articles for Impact magazine between 2020-21, and is a regular guest contributor to various podcasts both in the US and abroad.
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Does your business fail in providing for your family’s needs? Then you need to make changes to force it to make more money. The show’s guest today is Eric Miller, the owner and Chief Advisor of Econologics Financial Advisors. Eric talks with Nathan Shields about how your business’s main purpose is to serve your household. You have to treat your family as your parent company. Pay your family first to protect its assets and create more income sources. Change your mindset regarding business ownership and learn how you can make more money for yourself and your family!
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I’ve got Eric Miller of Econologics on again.
People are getting tired of reading about us.
Personally, I love having you on because I love talking about money and talking about business with you and you’ve always got some awesome stuff to share. Eric is a Financial Advisor and works specifically with private practice owners through many different industries, not physical therapy but also veterinary, dental, etc. I got turned on to what you’re talking about from a video by Christopher Music and his conversation about how the household is the head of your organization.
I want to get into that a little bit because I want to talk about household KPIs and then a little bit as I teased on the Facebook group, about how to protect some of your business assets and also if you’re selling, how to avoid capital gains. We’re hearing a lot about possible inflation or in the middle of inflation happening. Before we get into all that, tell us a little about your thoughts regarding the household and the head of the organization, certain KPIs that we need to watch.
Take any nation. The household is the building block of any civilization. The financial condition of any nation is the sum total of all the conditions of the households in that country. Every piece of land, aside from that stuff that’s owned by the government which is becoming a bigger problem because they’re owning more assets than people are, companies, corporations, bank accounts, real estate, all of that is owned by individuals. It may be owned in limited liability corporations, trust or anything like that but those are owned by individuals.
The reason that we’re so bent on making sure that practice owners look at their household as the parent company because, in Corporate America, you’ve heard that there are big organizations, they have parent companies and then they own assets or businesses and all of those assets then feed for the benefit of whatever the goals and purposes are of that parent company. We took that concept and said, “That is when you look at it, that the household is the parent company,” because as a practice owner, you own the business but the business is there to provide for the benefit of the household.
This is my constant battle with a lot of private practice physical therapist owners is they’re not looking at that from that perspective. What that does is that they neglect to pay the household what they should from the business. They don’t adequately compensate themselves as the owner of the parent company. That’s where we try to make sure that they’re incorporating that in as an expense every single week. You got to pay the parent company. Even some of these private equity groups out there charge a management fee for managing all these practices. You can look at it the same way. Your parent company has goals and purposes. You want to have multiple income sources, get out of debt, have a vacation home, pay for your kid’s college and do all these things from the household level.
You got to make sure that the business is compensating you correctly to do that. A lot of PTs pay themselves like a W-2 wage for a practitioner role. You may take out distributions over and above that to pay for your lifestyle but very few are compensating their owner hat. That’s where, as we’ve talked about many times, is incorporating that 10% of the practice revenue. That’s your owner's compensation. It’s not there to buy a boat. It’s there for you to expand your household, the parent company. It’s there to insulate it, protect it and create other income sources. That’s what that is for. You talk to a lot of PTs like I do. They get to that point of burnout. I’m like, “You’re not burnout.” The business is not in an exchange with you as it should be. You got to change that.
I never even thought about it where my household stood in relationship to my business. If you were to ask me and pin me down, I would say, “The business is up here and the household serves the business.” My wife takes care of things at home. We’re lucky enough to have that situation so that I can go work at the business, thus the business stands above the household. That whole thought process, upon learning it, switched my thinking and the mentality that the business was set up by me. I lost this somewhere, maybe because I didn’t codify it like you’re talking about. The business is set up to serve my family. It’s to serve me, my family, my future and my kid’s future. That’s the reason I set it up in the first place. Setting it at the top of the org chart, if you will, that this business serves the household and needs to flow money to it in order for the family to fulfill its purposes and its goals were new and novel to me. It could be for many other owners if they don’t have that mentality.
The financial condition of any nation is the total of all the household conditions. Click To TweetI think it really does. It makes you look at your business a little differently. It makes you want to structure it so that it can run autonomously to a degree. If you own it, you’re always going to have some attention that you have to pay to it. At the end of the day, you should want to set it up so that you can manage from above and have it still provide you compensation. I’ve heard so many practice owners think that the sale of their business is where they’re going to create their wealth. I’m never going to pull any money out of the business. I’m going to put everything back into it. The value of the business is going to be my “retirement.” I’m like, “Why can’t you have it both ways? Why can’t you build a very valuable practice and at the same time have it pay the household so that you can create other income sources so you’re not dependent upon it forever?”
A clinic that’s valuable and gets more in the sale is one that is generating cashflow and abundance. In that case, it would be generating cashflow for your family and your household in abundance. That’s what provides value to a potential buyer. You have some KPIs for the household that you wanted to share with us because we have KPIs in our business and we should. If you don’t, talk to me. I’ll share with you some KPIs that you should be tracking in your business on a weekly basis. I was intrigued because some possible topics we could talk about are KPIs for the household. I want to hear those.
As a financial advisor, I tell people that the first thing that they automatically assume is that I manage portfolios, which is I manage stock and bond. That’s what most people’s experience has been with advisors in general. They manage my IRA or my 401(k).
Usually not well.
You said that. I didn’t.
My experience is my financial advisors in the past have not done a good job.
That’s where they spend their attention and time. There’s nothing wrong with that. If you’re going to manage a household and be an advisor for a practice owner, number one, you got to understand their biggest investment, which is their business. You got to understand how it works and how to set up systems for the money to channel to the household. If you don’t know that, it’s almost negligent as far as I’m concerned because there are hundreds of thousands of dollars. If you have a $1 million or $2 million practice and it’s not being used correctly, there are hundreds of thousands of dollars that are being lost every single year.
From the household level, I try to direct people because there’s so much noise out there about Bitcoin, cryptocurrencies and where to put my money in case there’s a crash. People have their attention spread all over the place. I’m like, “If you had some key performance indicators for your household, financial indicators. These are the things that are important.” Regardless of what’s happening out there, if you focus on these things then you’re going to be okay.
The first key performance indicator is what we’ll call your business growth rate. I say that because for most practice owners, your practice is your household’s biggest investment. You want that thing to grow at a certain rate. I would say minimally you should see a 25% growth rate over a three-year period and not one year. Now you’re asking me where I came up with that number, I forgot exactly how we came up with that but it sounded pretty good. Why is that important? Everyone’s worried about my investments, my 401(k), what kind of rate of return they are earning. What about your business growth rate? Are you tracking that? That’s where you’ll see your net worth increase by a lot.
Any purchasers want to see that too. They want to see your growth. It’s budgeting out a 10% growth rate annually.
It’s pretty close to that. You can do the same. That’s a 10% growth. If you want to do it that way, that’s fine. It shows that there is a growth rate occurring in that practice so that if I’m looking at that from a buyer perspective, this thing isn’t dying. It’s growing and expanding. There must be some attention to the marketing, promotion and all that stuff. From a household perspective, you should be looking at that like, “What has my business growth rate over the last three years?” If it’s sideways, that’s no bueno because that means that the business is only going sideways and the value is only going sideways. Your personal net worth is going to go up as the growth rate of your business goes up. That would be what I would call one of the KPIs.
You would measure it not necessarily as a business growth rate but you would measure maybe your personal net worth as something that is increasing 25% over three years.
The 25% business growth rate is a KPI but if it’s doing that then I would assume that the business value is increasing as well. When I talk about the growth rate, I guess I’m talking about the revenue of the business over that period of time. That’s one indicator that we would look at. Another one would be are you doing your 7% to 10% as your owner compensation? We’ve talked a lot about that. That’s a key performance indicator. I say 7% to 10% because it’s not real for a lot of people to do 10% right off the bat. If you’re in that range of 7% to 10% if you have a $1 million practice, are you taking $70,000 to $100,000 a year and channeling that to the household to create other income sources outside of the business? That’s a key performance indicator.
I would be frank with you. That’s probably one of the most important because if you can get that in place consistently over a 7 to 10-year period, you shouldn’t have any problems with money ever again. That would be one. Being on track to be personally debt-free in 5 to 7 years. What do I mean by that? That would be a key performance indicator. Am I on track to be personally debt-free? When I say personally debt-free, I’m not talking about your real estate debt. I’m talking about your house, credit cards, automobiles and anything that I would consider bad debt. I’d want to have that paid off in a 5- to 7-year period, including your house. People go back and forth on that just because they do but I’ve certainly never met a spouse that was unhappy because their house was paid off. I’ve said this before, there is a mathematical argument to not paying your house off. You can make that argument because of low interest rates and that but I’ve never seen anybody in a bad financial condition because they had their house paid off.
The opportunities expand if it is paid off.
They do because you feel secure now and this is the place where you have all your pleasure moments. How many kids did you get? You got seven kids. How many pleasure moments do you have at your house?
All the time.
It’s where you go to decompress and I think you should own that outright. I do.
You need to understand how to set up systems for the money to channel to your household. Click To TweetIt’s hard to compress with seven kids but I know what you’re talking about.
Another one would be your household income. I dare say that you should minimally have a target especially if you own a practice, of making over $300,000 a year of personal income. When you take into account taxes, kids' costs, food and trying to build wealth in other places, if you’re trying to do that and making $120,000 a year, it is not going to work. It’s super hard. You have to have a bigger target and that and $300,000 is good and in excess of that would mean that you’re making enough money to be able to do all the things that you want to do in life and put away for the future.
If your target is under that, it’s going to be hard to do all three of those things. When I say, “Pay for your lifestyle, put money away to create other income sources and have discretionary income." Those are the three categories. Minimally, you need at least $300,000 to be able to do those effectively. Everyone’s different. I get that. They live in different areas but that would be the minimum. More would be better.
I’ll give you two more. Your effective tax rate would be a key performance indicator. Your effective tax rate is simply the amount of total tax that you pay compared to the income that you make. It’s a key indicator because if it’s 40% or 50%, that’s bad. It should be under 30%. Now, I got all the people in California and New York pissed at me because they’re like, “It’s impossible. How can we do that?” I’m like, “You need to be proactive and find tax strategists out there that can help minimize that and stop going to your accountant to try to minimize your tax bill because he doesn’t care.”
I, unfortunately, learned that the hard way that the CPA doesn’t have the answers. When he told me after I sold my clinics some ideas that I had been shared with me on how to avoid capital gains tax on the sale, he was like, “You could have done that.” “What? You didn’t tell me that before.”
That makes me mad. It’s almost like if you would have done that to somebody as a healthcare professional and said, “You could have done that.” You got sued out of your pants.
Don’t rely on your CPA. Find someone who knows tax strategies and but follow the tax guidelines that help you avoid paying more taxes than you have to.
There are two million words of the tax code. There is nobody that knows that thing up and down but there are people that have looked through it and certainly could find different strategies for you. Two quick other ones would be the profit margin of your business. It’s more of a business indicator but I’m sure you’d want to keep track of that. It should be 20% or higher but from the household perspective, you would want to look at and then emergency reserves.
My viewpoints changed a little bit on this because, in the past, people are like, “You only need like 3 to 6 months of cash to pay for your expenses.” I’m like, “Maybe in that 6 to 12 months would be better.” For the business, you should have at least two months of business expenses at least because of what’s been happening and you have that factor of safety in case something bad does happen where you have to get shut down, get attacked or get sued or Medicare comes in there, audits and says that you owe $100,000 for whatever reason.
Pay the lawyers.
You got to be able to defend yourself or you’re going to go bankrupt. It’s okay to have money sitting in liquid cash as long as there’s a purpose assigned to it. Most people can’t stand it. They’re like, “It’s money sitting there. It’s losing value.” I go, “That may be true but it’s there for a purpose.” That purpose is for the protection of the organization.
It was a big push of mine with my coaching clients to make sure they have lines of credit and maybe increase those especially during the pandemic and make sure they’re in a place now, even though there’s not a foreseeable event coming and they’re usually unforeseeable. Make sure it’s together now. Would you recommend the same thing as a household, even if your home is paid off, to have access to a home equity line of credit?
People are like, “Why don’t I use the lines of credit as emergency funds?” as opposed to having the cash there. I’m like, “Why don’t you do both?” I would absolutely agree to get as much credit as you possibly can. If you have good credit, grab as much as you can. Get a home equity line of credit. If you even have a brokerage account, you can get what’s called a Securities-Backed Line of Credit. You can’t do this against IRAs and 401(k)s but if you have non-qualified money in a brokerage account, you can for most of the platforms, custodians would allow that but you can get a line of credit against the money that’s invested. Think about that. The rates are like 2% on those Securities-Backed Line of Credit. If your investments are making more than that, you can borrow money for really cheap and use that and your securities are the collateral for that.
Grab as much credit as you possibly can because you never know. You always do these things when the financial seas are calm. I would certainly do that. For your business line of credit, get as much as you can. If you have a building and a house that’s paid off, get a line of credit against that. You don’t have to use it but it’s sitting there. If you have reserves and you have a business line of credit then what happens is when everything goes to pot and you have practices out there that are trying to sell off at fire sales, you can swoop in there and pay cash. It can be a strategy for acquisitions as well. You can’t do that if you’ve got $5 million of debt.
Will Humphreys, my business partner, likes to say, “Profitability unlocks possibility.” The same can be said for cash. When you have cash on hand, the opportunities open themselves up to you.
They do and there are so many opportunities that you see out there. You hear that all the time, “If I had the money, I could have had this great opportunity.” You have to be worthy of that opportunity and put yourself in a good financial condition. I tend to find that when people are doing a lot of the right things financially and build up themselves to be financially worthy then good opportunities present themselves because they’re worthy of them.
Money attracts money, like attracts like. If you’re going to do good things with money then people will come to you because of that confidence then the universe works that way towards you as well.
It does and you’re right. It is all about confidence. People don’t give people money that they don’t have confidence in. Maybe they do but it doesn’t seem like it.
When you have good finances, good opportunities present themselves. Click To TweetThose are some awesome KPIs. To review, there’s a business growth rate that’s a 25% increase over three years, the 7% to 10% revenue set aside and it goes directly to the owner compensation and being personally debt-free at least within the next 5 to 7 years.
You got to have a pretty short-term target on that one.
Get a household income of greater than $300,000 a year, get your effective tax rate down below 30% (don’t rely on your CPA to help you with this.) Get your profit margin to the business above 20% and make sure you have a large supply of emergency reserves, keeping six months as the target.
Imagine what your life would look like if all those things were in place. Would you be worried about what your frigging mutual fund did last quarter or if the price of milk went up from $2 a gallon to $4 a gallon? Would you be worried about all those things? Probably not because you’ve put yourself in a position where you don’t have to worry about those things. That’s why we call them those key performances. That’s where people’s attention should be as opposed to all the knucklehead stuff that they see out there.
Talk about that. Those are our household KPIs. What can we do with the conversation regarding inflation? For anyone that’s reading, what can we do to hedge against inflation knowing or seeing what’s happening?
There are a couple of things that you can do. The best hedge against inflation and people are going to say gold, silver, maybe cryptocurrencies and I’m not going to disagree. You should own those things as insurance. Those are insurance in case there is a currency collapse, which inevitably is the end result of inflation. It makes the money completely worthless. There is some validity in owning maybe 5% to 10% of your net worth of those types of things. You don’t have to own all. In commodities or something like that, all of your investments don’t need to go. Some people are like every dollar that they make goes into buying gold and silver. You don’t need to do that. It’s a lot.
Things that produce income are your best hedge against inflation. I use this example. Warren Buffett doesn’t care if the price of eggs goes from $4 to $10. Why? Because he owns so many businesses and means of production and his income is so high that it doesn’t affect him. Whereas if you’re making $50,000 a year on a fixed income and those things go up, it does affect you. Inflation hurts people that are on a fixed wage or a fixed salary because of that.
Going back to the whole trying to create multiple income sources, that is probably your best hedge against inflation is having multiple income streams. If you have a business that’s producing revenue for you and you have real estate or maybe you have other kinds of wealth-building vehicles, stocks, bonds or insurance products or whatever it is that’s feeding you income, that to me is going to be your best hedge against inflation. It’s investing in things that are going to pay you to own them. Those things should be whatever those things are. Having insurance with the precious metals commodities or crypto, although I’m not 100% sold on the crypto yet but my mind is changing.
To make some connections here. The 7% to 10% of revenues that you recommend the owner set aside as their distribution should be going towards some of these wealth creation vehicles, towards the future purchase of the real estate, into insurance vehicle for retirement, stocks, bonds, 401(k)s, you name it. It should be going into that stuff.
That’s where it should be going. It should be going to things that are going to either be able to produce income for you now or future income at some point in time but it shouldn’t be something that has those characteristics. If you do that consistently over a 7 to a 10-year period then that’s your passive income right there and then whenever it is that you decide to sell your business, that’s now another pile of money that you got to invest to generate more passive income. It’s a successful action to do that and that to me is probably a better way to fight inflation than to worry about buying 50 rolls of toilet paper.
Don’t put all your money in Dogecoin, people.
You got to be a bit intelligent but certainly owning assets that have the ability to produce something of value and that is the best hedge against inflation.
We were talking a little bit about this in terms of asset protection, having your emergency reserves and access to lines of credit. What more can you say about asset protection for our businesses?
Asset protection is like you own an asset, whatever it is. You can talk about asset protection would be like to prevent lawsuits. Take a lawsuit. Everyone is probably going to get sued at some point in their life and you don’t know when it’s going to happen. I’ve had clients that have had kids and their kids on their insurance. They get into a car wreck and all of a sudden, “Who’s going to get sued?” The parents are going to get sued. With asset protection, it’s trying to build some layers of obstacles around an asset. That’s it. It makes it more difficult for a creditor to be able to get ahold of the money. There are some tools that you can use for that. One would be liability insurance for your household, like a personal umbrella policy. It would be something I would highly recommend.
Having more income streams is your best hedge against inflation. Click To TweetYou don’t hear about those a lot. Those are things that you have to reach out to your insurance agent and ask about.
It’s phenomenal how every time we write a plan for someone and I’m like, “Do you have an umbrella policy?” “No.” “Go get one.” Call up your property and casualty person and inquire about how much a $2 million or $3 million umbrella policy would be. They’re not that expensive. It may range from $300 a year to $1,000 a year but that’s pretty cheap insurance.
The umbrella policy is almost like GAP insurance. It covers anything that the other insurances don’t cover.
It’s over and above. Your auto and your homeowner have certain limits of liability. If you got in a car wreck, think of how benign it has to be. You go out and have some wine, you’re with your friends, you’re on your way home and you get in an accident. Either you hurt someone or you kill someone. All of a sudden, you’re staring down at a $1 million judgment or $2 million judgment. It happens. Where are you going to get the money for that because the creditors are coming? That’s where an umbrella coverage would kick in to cover that expense right there. The limit you can get is $5 million. That’s the most you can get but I would recommend that you get at least $1 to 3 million, dependent on your net worth.
Insurance would be one category. Another layer of asset protection would be putting something in a business entity. This is why people have their real estate in LLCs because it’s difficult for a creditor to get ahold of that or to force you to take distributions or pay them from the LLC account. Anything over $250,000 of liquid cash, I would probably have that in either LLC or a limited partnership.
We’ve got lawyers that set up an organizational chart for your family. They’re the same for me. Our family has an LLC and our real estate is in a different LLC from our business. Each business has its own LLC so that those layers are limiting for anyone who wants to come after them.
Everything is compartmentalized so that they’re all in their own little entity. You can sue this one but that doesn’t mean that you can get access to the other ones as well. I took a lot of time and money to set all that stuff up but it’s worth it because now you don’t have attention on that and you can go out and acquire more assets and those things. Everything’s set up. It’s a pain to set some of this stuff up but what’s worse? That or staring down the barrel of a $2 million lawsuit. Pick your poison. For $10,000 or $5,000, you can do all this stuff. That would be business entities. What else could you use? Each state is different, too. In a lot of states, annuities and cash value life insurance are completely protected assets. You can have any money in there as protected and in certain states, your home is protected. You can look at the state statutes and find out which of these investments are assets. Those are some of the tools that you have.
The last thing I want to talk about is how to minimize capital gains on the sale of a practice. This isn’t something that a lot of owners that are reading are in that stage. We’re not necessarily catching them at the right time. What can owners do as they foresee a potential sale in the future to minimize their capital gains here?
This is where you have to sometimes think outside the box but the sale of your business is going to be one of the largest financial transactions of your life. The capital gain tax on there, regardless of what happens in the next year or so, as far as it going up to 40% or whatever it’s going to be, even 20%, 25%, 26%, 28%, that’s still a lot on a $3 million sale, $5 million sale or $20 million sale. That’s a lot of dough. There are strategies out there but you’re going to have to consult with more of what’s called tax strategists. They can come up with ways that are certainly legal, that would help you either defer the tax, like a 1031 exchange would be a tax deferral strategy for real estate to be able to not have to pay all of the tax upfront.
There’s one in particular that we work with. It’s called a monetized installment sale. It’s a strategy using an installment note. An installment note is something that you get and then you’re going to give payment over a period of time. You combine that with a loan from a private lender and it’s a strategy for you to defer your capital gain for the length of the installment note. That would be 30 years or so. You would be able to get maybe 90% something percent of the sale in liquidity up front and then you’d have the ability to invest that money. You’re still going to owe the tax for 30 years.
The amount of the tax doesn’t change. If you owe $200,000, you’re still going to pay $200,000.
It’s depending on what capital gains rates are in 30 years but you get the time value of money. I get more money to invest over a 30-year period. Are you better with money than the government is?
I would rather have that money.
I’ll give it to them but in 30 years. That’s fine. That’s why it’s not like tax evasion. It’s tax avoidance. You defer it for a 30-year period. There has to be a legitimate reason why you’re doing it and you need to go to a professional. There are certain things that you can do but you can always call me up. We have relationships with people that can do that.
I love the conversation. A lot of the stuff that I’ve been espousing on the show and also to my individual coaching clients, the fact that you could cover a lot of those bases is huge. I appreciate it. If people have more questions, how do they get ahold of you?
They can go to our website. Go to Econologics and there’s a lot of information on there. You can download a book for physical therapists called The Financial Success Guide For Private Practice Physical Therapists. We have plenty of financial assessments on there that measure the condition of your household and your practice as well. We have a plethora of resources or you can email me directly at Eric@Econologics.com. Those are the ways you can connect.
Thank you so much for taking the time. I appreciate it.
It’s my pleasure. Until the next time. Have a good time.
Thanks. We’ll talk to you later.
Bye.
Eric Miller has been in the financial planning industry for over 20 years. He’s a co-owner of Econologics Financial Advisors – awarded an Inc. 5000 honoree for 2019. As the Chief Financial Advisor for the firm, Eric has had the good fortune to have over 10,000 financial conversations with private practice owners in various healthcare industries and helped guide them into a more optimum financial condition using a proven system.
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Recruiting has changed over the past two years. How you find your next PT now is much different than it was prior to the pandemic. The show’s guest today is Brian Weidner, the President of Career Tree Network, is a recruitment advertising and human resources firm that helps physical therapists connect with career opportunities. Brain discusses with Nathan Shields in this episode how PTs are now making employment decisions with a greater focus on personal dynamics and lifestyle. That’s why we need to show PTs how the job can fulfill their lifestyle goals and their own needs. If you want more on how to find your next PT, tune in!
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I’ve got a frequent guest, Brian Weidner, President of Career Tree Network which is a human resource company and a recruiter for PT employers. Brian was letting me know that he does 95% of his business with physical therapy employers and physical therapy owners. Brian, thanks for joining the show. I appreciate it.
Thank you. It’s nice to be back.
We’ve talked in a couple of episodes in the past about recruiting physical therapists and what we need to do to procure and acquire physical therapists. Once they’re on the hook, how do we get them in the door? Those have been some valuable episodes. Over the past years of doing the show, the recruiting environment has been essentially the same as it has been most of the time. Sometimes it’s hard to find physical therapists, especially on your geography. It’s cool to bring you on to talk about what you’ve noticed. We’ve noticed a lot of changes since the pandemic started and what it takes now to get physical therapists in the door. I’m excited to bring you on. Let us know about what you’re seeing in the environment right now, what owners need to know, and what they need to do to start finding talent.
During COVID, the height of it was an interesting time to be a recruiter as all of our clients stopped hiring and started laying off people. It’s not great days to be recruiting talent when all of your clients are letting people go and furloughing. There was a period of time when we have a lot of active projects and then all of a sudden, our clients no longer had needs. Since October of 2020, I’ve started seeing our clients coming back. As the vaccine is rolled out and continued to have more people adopt that, we’re seeing pretty much everybody and their brother is hiring a PT. The market is the strongest that I’ve seen.
We started the company in 2007 and it’s the strongest demand for PTs that I’ve seen in our time. Not only is the demand strong now, but we also have a few other factors that are interesting to where we are. One of those is that during COVID, the employment has been like musical chairs where PTs are in a position but it’s maybe not full-time. They might get furloughed or their employer closed. There are all these factors. Even new grads from May of 2020, a lot of them are still without their first full-time position. It has been an interesting time where a lot of times we look at people that are changing positions frequently. We use different indicators based on the resume to make decisions and evaluations of people.
With COVID, we would have to be more lenient to be more understanding of that short-term employment or that PT that hasn’t been comfortable seeing patients at all. They haven’t worked since the pandemic began. We’re seeing some interesting trends around that. It’s easy for me to recommend flexibility. It’s easy to say, “Be more empathetic to PTs,” but it’s trickier when you’re the clinic owner and you have someone that hasn’t seen a patient since April of 2020 and now their resume is on your desk. Due to the fact that everybody is hiring PTs, we’re seeing that speed of the hiring process is important. It’s always been a factor but now with such high demand and the job market is incredibly strong, if you’re not acting quickly on candidates, they’re moving on to other opportunities.
If we’re looking back on what it was like immediately during the pandemic and for the first six months or so, either people were letting people go or scaling back their hours for a period of time. As they started ramping up 2 to 3 months after the big hit, they had their pick. It was an odd time to be a PT owner because rarely, if ever, has it been such that there were PTs available to hire like there were at that time. Some of my clients had an easy time finding some physical therapists and bringing them on and preparing ahead of time for the ramp-up. Now that we're back into the full swing of things in most places, it's June of 2021. It has been hard for my clients to find PTs. They're having some success with the new grads but it's getting harder. It's getting back to the way things were or even tougher than they were prior to the pandemic.
New grads are like a unicorn in a certain sense. They’re always very attractive for clinic owners to hire but signing a new grad to your team is sometimes a difficult task. Even when you do have the new grad signed, a lot of times, they make another employment decision without telling you after they’ve signed. The clinic owner thinks they have the new grad lined up. Everything is in place and they’ve done credentialing. All of a sudden, on the first day, they say, “My parents decided to go to Hawaii,” or “I move to my girlfriend.” You couldn’t even predict and now, they’re gone. It’s a tough scenario.
If you’re not acting quickly on candidates, they’re moving on to other opportunities. Click To TweetWhat are some of the things that you’re noticing now compared to pre-pandemic? What does an owner need to be aware of in order to secure some of these available PTs? What are you advising PTs to do compared to what you might have recommended before the pandemic?
What we’re seeing now is that PTs are making employment decisions with a greater focus on personal dynamics and lifestyle. COVID has woken a lot of people up to say, “Do I want to work in this setting? Do I want to drive this distance from my house? Do I want to live in my current town? Should I move back to be closer to my family?” When they look for positions, they’re looking for jobs that are going to better meet their lifestyle. This is something that might be a generational thing as well. We’re seeing it clear now with COVID where they care more about the work schedule than they do about your mission statement.
As a practice owner, a lot of our clients have to buy into our values and believe in our mission statement. That’s important to a certain extent. However, PTs are more concerned about their own work schedule than they are in your mission statement. We need to ensure that we’re showing PTs how the job can fulfill their lifestyle goals and their own needs. Always being clear about the logistics of the job is something that is important. Oftentimes, those logistics are not used within the recruitment process by a lot of private practice owners where the practice owner leads in more with, “Come and join the team. We offer a great work environment.” They’re using loose marketing phrases when the candidate is more concerned about the logistics of the job.
What you’re recommending then is making sure that your ads are more focused on what you can provide in terms of the lifestyle that they want, whether that’s in the community that your clinic is in or in the schedule that you’re able to provide a greater focus on in terms of lifestyle.
It’s being clear around the flexibility of work schedule, the hours that the clinic is open, any weekend requirements, mentioning the number of holidays that you give off per year, compensation and all those logistics of the job. Especially now, because of the fact that there’s such a high demand for PTs, we need to be more upfront about the salary and benefits which is also uncomfortable for a lot of organizations. I had a PT that I was talking with. He’s relatively happy in his position. He’s in an outpatient setting. He said, “I could get another part-time position or I could leave my current role and go somewhere else.” I said, “What would it take for you to leave your current position?” He was like, “Honestly, the salary.”
There are a lot of PTs that are sitting on the sidelines that are willing to explore and change positions but they don't want to jump through all the garbage of the recruitment process. They don't want to apply online or do multiple phone screens. All they want to know is, "My kid has a soccer game every week at 5:00. Can I go to my kid's soccer game? My current job pays me $68,000 a year. Is this new job going to pay me more?" There are all these logistical things that people are factoring in.
Being more upfront with some of those things, would you recommend they put all that in the ad? Is that something they would simply introduce earlier in the conversation than they normally would?
Putting it all in the ad is a good thing. What we’re seeing is that PTs especially are not coming forward until they’ve done a good level of research. When we contact someone via text message about one of our clients, they don’t respond to the text right away and say, “Tell me more.” They want to know who’s the employer and what’s the address of the clinic. They’re researching. In recruitment for some areas, you have more of a chance to play with the candidate back and forth. You can, “How are you? What are you interested in?” There’s this conversation that unfolds. Unfortunately, with the PT market and the high demand for their skills, they are able to be blunt in terms of what they want. A lot of times, that bluntness is uncomfortable.
It can be uncomfortable for an owner that’s not sure of what they would offer somebody. It’s important as the owners go into this knowing, “What is your salary range?” Don’t start talking about what you’re going to offer that person with that many years of experience after the interview. It’s important to have your salary ranges determined ahead of time, salary and/or hourly. If it’s a new grad, I’m going to offer them this. If they’re out 2 to 3 years and they have a couple of certifications, I’m going to offer them this. If they’re ten-plus years of experience and productivity in the outpatient clinic, I’m going to offer them this. Would you recommend they be more sure about what they’re going to offer ahead of time?
You have it worded correctly as well especially if the pay for new grads is set in stone. For example, you could share in the advertisement that, “If you’re a brand-new grad, we start our new grads at whatever it is per year or per hour. We go up from there based on experience and qualifications.” That way, you’re not sharing everything with the candidate because you want a little bit of wiggle room. You don’t want someone to say, “They don’t pay what I’m making. I’m not going to come forward.” At least, they have that data point, “This pay for this position starts at whatever it is and then it goes up from there.”
Maybe this is hard to say across the entire country. What is a general range you’re seeing for new grads as they’re coming out in 2021?
I would refer people to APTA. They have salary data within the workforce development section of the website. They have robust salary data that I referenced as well. The only downside is it hasn’t been updated. The last time it was updated was in 2016. You can do some cost-of-living adjustment to bring it up. They have it broken down by practice setting, years of experience and geographic area. That will be the best because it’s all member-driven.
The last time I spoke with Will Humphreys about recruiting and he recruited our company, Empower Physical Therapy in Arizona. His range is somewhere in the low $70,000-ish for outpatient ortho staff. Maybe that’s higher nowadays because the demand is so great. I don’t want to say it got into the high $60,000, but it was at least in the low $70,000-ish from what I recall.
When you have a candidate surfacing, we need to be competitive with the salary and benefits. We also need to realize that the PTs are not just concerned about the money. If they ask about salary, that doesn't mean that that's the only thing on their mind. They are often looking at salary as a component of it. Some of our clients get scared or turned off from the candidate if they even ask about salary during the interview process. They would say, "That PT asked me about salary. He's only concerned with money and we can't pay as the other guys pay." We have to be competitive. Maybe salary, in particular, is not your strongest suit, but then how are you compensating for that in other ways? Can you be more flexible with the work schedule? Can you offer more continuing education? Can you do different things outside the box that are nonfinancial that would still differentiate you as an employer?
Maybe when they ask that question, it’s not necessarily their prime motivation asking about salary but it’s just checking a box, “Did you meet a minimum standard?” If you can meet that minimum standard and check that box. Now, I can move on and say, "Do I have the flexibility that I want? Am I able to have a lifestyle that I want? What are some of the other expectations? What is the clientele?" It might just be one of many questions that they're asking to cover all their bases. What are some other things that you're noticing that are different from how things were, pre-pandemic?
One additional area, we've seen PTs are physically moving and relocating to new areas which are somewhat new. In the past, we haven't seen these many experienced PTs that are willing to move somewhere. All of the moving that we're seeing is for personal reasons. They're looking to relocate to a certain area because their family is there or whatever reason is personal to them. The days of a PT relocating specifically for a job are likely behind us. We have travel PTs who travel around on the temporary assignments but it's very rare that I've seen a PT tell me like, "I'll go anywhere in the state of California. What do you have in California?" It would be great if people were more flexible, but there’s not that level of flexibility.
PTs are making employment decisions with a greater focus on personal dynamics and lifestyle. Click To TweetNow, we see it more on the PTA side, the physical therapist assistant side. Maybe if a clinic was looking for a physical therapist assistant, you could find someone that would relocate for the job, but on the PT side, we’re not seeing PTs relocate for a specific job. That means then, the best candidates for your job already live in your geographic area or have some personal connection to your community. We often have clients in more remote areas and they’re like, “How do we get a PT to move here for the job?” It’s a very difficult scenario because PTs don’t move just for jobs, at least what I’ve seen.
The recommendation around that is those PTs that are in your geographic area, that’s a prime audience for your talent pool as you’re looking to hire. Finding a PT outside of your geographic area to relocate to where your clinic is, is a very difficult and costly challenge. The strategy is since those local candidates are the best candidates and are the ones that we need to pay attention to, A) We can’t discount people without fully considering them for the jobs and B) We also need to look at making direct contact with that pool of candidates. We can’t just post the job on Indeed and hope that the small audience of PTs see it.
One action that we did in the past was emailing out the list of licensed physical therapists in the state and getting their attention in that regard. Is that something that you do quite often?
Yes. Email is still a good source. We’ve been doing a lot with text messaging. First, I was nervous to do text messaging but over the years, we’ve found that it’s even more successful than email. We send multiple emails to the licensure list and then we do additional research to identify email addresses for people. What’s interesting is within those multiple emails, we send at least three email messages about one job to people. Usually, it’s the 2nd or 3rd email that gets the person to reply. If you’re sending out emails, I would recommend sending at least 2 or 3 email messages to the same person.
Interestingly, you’re using texts more and understandably so because people typically respond or at least they read their texts. Whereas you might not have that open and read rate with emails like you do with texts. I can see how you might use that more often to your advantage.
The texting is great. Originally, we were texting people individually. We would individually research phone numbers and we don’t know which phone numbers are correct. If we were trying to find your phone number, Nathan, we use an online people search-type software website to find possible phone numbers. The websites give us multiple phone numbers. We would send a text to every phone number that we would find for the person. Later, we came across different ways to automate that process and make it easier. It’s still very time-consuming because when you send out the text, that’s just half of the process and then you have to respond to the texts. If you send out 500 text messages, you have a lot of replies coming back in, questions and updates but that’s what we’re paid to do.
Have you used any social media ads whether it’s Facebook Ads or other social media avenues to access people and promote?
Yes. The easiest way would be to post the job on those social platforms. LinkedIn and Facebook would both have ways to post jobs. Otherwise, you can do a lot of cool targeting ads on Facebook. There's a lead generation ad that we've used in the past where we're posting it and we can narrow it based on job title or people that have an affinity to certain organizations. The targeting function is good there. You are getting leads coming in. The downside is sometimes the people don't realize what they're clicking on. It's not like they're applying for the jobs which is a good thing for us to talk about. There's a difference between the candidate on Indeed who hits submit after uploading their resume versus the guy on Facebook or Instagram who just happens to click. All of a sudden, you get access to his email address. That second guy on Instagram is not applying for your job. He's maybe interested. He's open to talking to you.
There’s still a lot of work to do after that.
It's asking questions like, "Why do you want to come work for us? Why should I hire you?" That's way too early to ask those kinds of questions. It's more of developing those relationships, nurturing the candidate and answering questions. In that aspect of recruitment, it's an important aspect right now with where we are because a lot of candidates are interested passively and open to exploring where we like it when a person uploads their resume and sends it to us.
That’s the easy part.
Unfortunately, we’re not quite in that same spot anymore. Being willing to engage with talent, talk with them and have some dialogue back and forth are important.
What do you find the success rates are with these different channels to access potential candidates? Whether it’s social media versus text, email, posting on Indeed, ZipRecruiter or any of the other sites, is there one that’s far and away the most effective or least effective?
The least effective and the most costly is direct mail. It used to be that my wife is a PT. We get letters and multiple postcards every week. I’m sure you’ve gotten them over the years. Companies are realizing that direct mail is very costly and the response rate is low. When you’re doing proactive recruitment, you need multiple follow-ups. When we’re sending out the text messaging, we’re not just sending out one text. We’re sending out 2 or 3 texts to the same people.
It’s the same with the email address. We’re sending at least three emails to the same person. Direct mail would be the one to avoid. It’s tempting because we have the licensure data and there are a lot of mailing addresses on there. Instead of using those mailing addresses for direct mail, I would recommend using those to develop a list of the candidates that live closest to your clinic and then trying to research those people, sending them emails, texts and calling them rather than sending the direct mail piece.
Has social media worked very well for you in the past?
When you have a candidate surfacing, we need to be competitive with the salary and benefits. Click To TweetNot really, for the cost of it. When we first started doing Facebook Ads, they were pretty good in terms of generating people that are willing to talk but over time, it got more expensive and fewer quality results. The targeting was not great. It's good to try it and see how it goes, but what we find in terms of the most successful would be emailing, text messaging and posting it on Indeed.
If you were going to recommend a plan of action or a recruiting strategy for a PT owner it would start with the obvious. Place the ads where there are supposed to be the state boards, local colleges, Indeed and ZipRecruiter. Make sure the ad is out there where it needs to be. If you’re going to do some active recruiting, then it’s going to start with getting that list of state-licensed providers, especially the ones that are near you and start honing in on their email addresses and texts. That’s how you’ll be more active.
You want to do a geo-targeted list based on the people that live closest to your clinic. We found that you need at least 300 people on the list in order to get a slate of candidates to surface. You may have to play around with the zip codes to get more of a closer radius if you’re in a larger geographic area. Once you have the 300 people on the list at a minimum, then you would go out to online search websites to try and find phone numbers and email addresses. Usually, the state licensure data does not provide that. You’re manually researching each and every person on that targeted list. You’re getting multiple email addresses and phone numbers, then you’re able to do the direct contact via email and text. You could also cold call people too but we found that cold calling has become less effective as well. A lot of the recruiting tools that we started with and that historically, direct mail and cold calling shifted into more email and text messaging. In some ways, it has become easier to recruit because when you’re sitting and cold calling people all day, it’s draining. Sending out mass emails is easier in some ways.
Even then, dealing with the geotracking, finding emails and cell numbers, at point, I would think most owners would say, “Who else could do that for me?” I don’t know if I have a lot of time. Maybe I have a couple of hours a week if I’m set up in such a way that I have some admin time that I could focus on that. Even touching it just a couple of hours a week means that the rest of the week, nothing is getting done to recruit that next PT.
That’s why we’re in business to a certain extent. Even if you get the licensure data, and then you do all the research or you have someone on your team do it, then you have to start thinking about, “How am I going to email these people? Do I just put them in the BCC line? Do I subscribe to email software? What’s that going to cost me? What do I put in the message? How do we ensure that they get a quick reply to it?” On the texting side, “Who on my team is going to send out these texts? How are they going to reply to them? Do I have to buy them a cell phone? How long is it going to take to send out these individual texts? What do I say in the message?” There are all these factors. It’s easier said than done. That’s why when a practice has a position open. There’s a lot of stress and anxiety around it because they don’t know what to do. They have the job posted and are like, “I have the job posted and we’re not getting people coming in.” They know that there’s something else they could be doing but the barrier to perform those step is pretty rigorous.
If they were to take that step and try to send out emails and texts, are there any particular topics or subjects that get a better response rate? I’m sure you don’t want to be all about how amazing you are or maybe you do. What kind of content should an email or a text consist of to get a response? You have to do it multiple times. One email or text might not do the trick. Is there a certain topic or a thread that is followed through with each of those?
Conceptually, we have two different hurdles to jump over. The first is, "Are you even open to exploring a new position?" That's the first one, yes or no. "Are you open to exploring any job out there?" A lot of people are retired or happy in their current position. Once you have that dialogue going, then you lead in with the logistics of the job where you're trying to show people like, "This clinic is close to your home. It's located down the road. We offer flexible work schedules. We're utilizing these technologies. We're doing a continuing education annually of $2,000. Would you be open to exploring further?"
The first is, “Are you even open to explore any jobs?” The second is, “Are you open to explore the job that I have?” I try and keep the messages short as possible. I like to do more back and forth with candidates. It’s more time-consuming. It might be called drip marketing where instead of blasting all the content all at once, you go back and forth and drop little marketing elements within the conversation that you’re having because then people feel more invested in the conversation. They’re more engaged to continue talking to you versus if you just send them like, “Here’s a link to the whole job advertisement.” I feel like you’re giving them too much information.
I like how you address it because it’s not, “We’ve got this position open at this great facility. Come check it out,” and promoting you. It’s rather, “What do you need? How can we help?” and more focused on the potential candidate.
It needs to be around their needs and the logistics. The other thing that I would say is that you should sell first and screen later. My wife got something from a private practice owner, trying to recruit her for the job. It said something like, “Come and see if you have what we need for our position.” It was like, “Come forward, send me your resume and see if you are what we want.” It was like, “You’re contacting me about this job. I don’t want your job. You can screen me later but first I need to raise my hand and say, ‘I’m interested.’”
You don’t want to start being competitive around like, “We only hire the best. If you’re not going to work hard and be passionate about our practice, you don’t even need to come forward.” It feels fun to say that kind of stuff. It feels powerful to be like, “I’m the employer. I’m building a great team here. Do you have what it takes to become part of our growing team?” To me, that’s like nails on a chalkboard. Thinking about it from the PT perspective and for me talking to PTs all day, most of the PTs I’ve talked to are relatively happy in their current position. They don’t need to leave. They’re fine staying where they are but at the same time there, they want a job closer to home, better benefits or schedule.
That's where you want to focus on those things. Maybe you also have to know your audience. These people are in demand. If you're going to someone who's in demand and say, "Are you good enough to come work for me?" You're out of touch.
It’s a matter of building that interest first and then screening later. Screening is always important. Everybody wants to hire the best people. We need to do a thorough screening and interview process but we don’t need to start interviewing someone until they’ve been excited about the job and we know that they’re interested. If I’m contacting someone through a resume database, my first thought process is, “How do I share details with them about the job? How do I learn more about what they’re looking for?” I’m not worried about screening them at all until the very end of the conversation after I’ve confirmed that they’re interested. Once you start asking, “Are you willing to work until 6:00 PM? Are you willing to do all these logistical things that the job requires?” They feel almost threatened sometimes if you’re asking those screening questions too soon.
There’s a lot of the stuff that you shared in recognizing how things have changed away from direct mailers and more towards engaging through electronic devices. Is there anything else you would like to share about how things have changed since the pandemic?
I have one more area. We’re seeing some hesitancy from PTs to leave their current employer, maybe with some feelings of loyalty where that employer was good to them during the pandemic. Maybe they did extra hours, kept their pay going or survived the pandemic at their current employer. There’s a question mark of, “Is this future employer going to be stable? I’ve already built my seniority at my current employer. If another wave of COVID comes, will my new job be secure? I know what I’m getting with my current employer and I feel safe but what about this new opportunity?”
There are some themes in there. You can play that up for your current staff who might be looking to leave where you can start playing into like, “We were good to you guys during the pandemic. Here’s a list of the things that we did. We want to try and keep you. Now that things are more stabilized, we want to build and retain our team here.” That’s one area because we’re hearing a lot of our clients saying that their current staff is leaving and that’s why they’re hiring. It’s not all due to growth. It’s, “I could have had a growth hire but then my person gave notice and now I’m scrambling.”
You should sell first and screen later. Click To TweetThe first step in recruiting is the retention of your current team, but then also thinking about that hesitancy and trying to reinforce the stability of your organization within the interview process. It’s talking about how long you’ve been in business, the stability of what happened during the pandemic and how you took care of your employees during the pandemic. Also, showing to the PTs that are maybe interested to come and work for you like, “We have an employer here. We are an employer that’s stable with a solid foundation."
It’s not only highlighting and promoting that to potential recruits but also highlighting that for the PTs that are on board.
That’s important. It has only happened a couple of times where the private practice owner realizes that the person leaving is due to their own fault. It’s always that the PTs are leaving the team due to outside circumstances. You wonder if that’s true or not like, “Is there something else that you could be doing now to maintain and build your current team so that the person thinking about leaving or the person that has their resume posted online stays and sticks around with you?” Maybe it’s time for the person to leave. There are all different circumstances why people leave jobs. When you have good people on your team, it’s not specifically tied to recruitment but more on human resources.
You want to try and retain your current staff and think about that. It’s some of the stuff like the stability piece, reinforcing of the benefits, doing a salary adjustment, offering a retention bonus or other factors like, “We’ve been through COVID together. We want to give everybody a retention bonus for sticking around and staying on with us through COVID. We’re having a celebration now that COVID is behind us.” Trying to retain that current team is important because as you grow, we can’t always be replacing people. We have to be adding to the team as well.
The last thing you need when you’re ramping back up is for the current team members to step aside or step out of practice altogether. That’s a double whammy. You’re not only looking to hire for growth. Now, you have to hire to replace and you don’t want to be in that position. Thanks for your time, Brian. It’s awesome you shared so much great information, especially noticing the difference in how recruiting has evolved over the past years. If people are in that situation where, “It’s time to grow. I’m ramping up. I’m in that place. I need to replace somebody,” how do they get in touch with you and get your help?
Our website is CareerTreeNetwork.com. We have all the information about our company and services on there. There’s also a link where people can book a time to chat with me on the phone. I’m always happy to talk and help. Even if it doesn’t turn into a client relationship, if I can help out, I’m always happy to do so.
Thanks for your time. I appreciate it.
Thank you, Nathan. This was a lot of fun.
Brian Weidner is the President of Career Tree Network, a recruitment advertising and human resources firm based in Milwaukee Wisconsin that helps Physical Therapists connect with career opportunities.
Since 2007, Brian and his team have helped thousands of Physical Therapists achieve their career goals within a new position.
Outside of the office, you might find Brian playing princess with his daughters, watching heist movies, or eating sushi.
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Treating patients isn’t just about getting them through the door. You and your team also need to make sure their plan of care is completed. Our host, Nathan Shields, flies solo today as he talks all about making sure no patient falls through the cracks. Nathan discusses how to plan and execute a weekly walkthrough to make sure all active patients are attended to. We also hear about the benefits this brings, not just to the patients, but to your health care providers as well.
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I want to share with you something that I’ve been working on quite a bit with my coaching clients. Something that we use to address issues regarding retention, situations in which maybe there’s a busy season or you’re expecting a busy season, but you’re not as busy as you think you should be or just those situations when you might be thinking, “Whatever happened to that guy? Whatever happened to that girl? She came in a couple of weeks ago for her knee and now she’s not here anymore.” Worst of all, “We had a ton of new patients and our total visits aren’t going up significantly this week. It seems like people have dropped off.”
That issue came up routinely for us in our clinics. There was one thing in particular that we did that helped it out and that was called the weekly walkthrough. You might be doing your version. You might even call it something different and that’s great. I’d love for you to share with the other owners what you’re doing. Share with me and I’ll let other people know, especially if it’s a good idea. The issue generally comes up that patients are falling through the cracks. You’ve got poor retention efforts or we’re not doing anything retention-wise to keep patients in the books. They’re canceling, not rescheduling, and going on vacation and then not returning for physical therapy, you name it.
The statistic that we want to improve with this particular action is increasing our percentage of completed plans of care. Click To TweetUltimately, that leads to poor outcomes for the patients, lost patients, and revenue. That poor outcome for the patient eventually leads to a poor reputation for you because now they’re not getting the results that they want. Hopefully, but routinely, it gets back to the physician, “That physical therapy clinic didn’t work for me. We need to move on.” That ends up being a loss of referrals for you, not in terms of the physicians, but also, they’re not going to refer to their family and friends. What is one thing at least that we did on a routine basis to help with these issues? That was called the weekly walkthrough. This is where it was simple. We got an Excel spreadsheet, listed all of the active patients and their future appointments with notes available to list any communication efforts that we’ve made. First on, list of active patients, next few columns the appointments that they had scheduled coming forward, and then lastly, any communication efforts that were made.
Each patient on the list was addressed, whether they’re scheduled or not. What is their status? What are the communication efforts? If you can take it to the next level, the frequency in which they are scheduled at an appropriate level for their appropriate plan of care. Lastly, we would talk about who was formally discharged and informally discharged from that list. Formal discharge was obviously who agreed with the physical therapist that they’re not coming anymore. They popped the champagne, got the coffee mug and t-shirts, they high-five, celebrity walkthrough, and lead them out the door. They were formally discharged versus those who simply aren’t returning your calls. Those are the informal discharges. We’ll talk about the important statistic to track that.
Ultimately this walkthrough is focused on patient retention and that patient retention leading to happy and engaged patients meeting their goals. The statistic that we’re going to try to improve with this is the percentage of completed plans of care. That’s the statistic I was talking about with the discharges. That percentage of completed plans of care is notoriously poor for our profession. Depending on who you listen to, that could be 10% to 20% of all patients that come through our doors are actually completing their full plans of care and meeting their goals, which is horrific. It’s lost money, lost revenue, and poor reputations, you name it. It’s all that stuff.
The statistic that we want to improve with this particular action is increasing our percentage of completed plans of care. Another byproduct of it could be increasing the frequency per week that we see those patients. Inherently, if we’re only seeing them one time a week in a typical orthopedic clinic, they’re probably not getting well and not meeting their goals. They’ve got to come 2 to 3 times a week, so you want to address that as well. What can the results be from the weekly walkthrough? The results are increased total visits, which leads to increased revenue, increased bottom line, profits, and the patients ultimately are getting better. They’re following through with their plans of care. The weekly walkthrough is a must and we called it the weekly walkthrough because we literally walk through each chart back in the day of each patient in our file folder in the file cabinet. We’re old school. That was how it was back in the day. Now your EMRs can print out some of those sheets. Some of them aren’t very trustworthy, depending on your EMR. It might be better for the front desk person to literally print all of the active patients and keep that active patient list going. That’s the kicker.
Here’s the secret. This is the front desk’s responsibility. This is not your responsibility. Your responsibility is to make sure that this meeting happens, same day, same time, every week. Ensure that it happens and that all the active patients are addressed. The responsibility to keep that active patient list up-to-date and fully communicated is the front desk’s responsibility. They should be living in that form throughout the week, knowing where all the active patients are and exactly what efforts have been made to get those patients on the schedules.
Ultimately in an ideal situation, I, as the leader, would come into the meeting. The front desk would hand me the Excel spreadsheet with all the patients listed, all their scheduled appointments. If they don’t have any scheduled appointments in the near future, especially the next week, notes are made as to what their communication efforts have been and where that patient is. Maybe they’re on vacation or something that’s happened that they can’t come in. Everything is listed and they report to me exactly what is happening with all of our active patients.
Recognize this is the front desk responsibility and it needs to be reported up to you. That is their job to ensure that all the patients are on the schedule and make sure all their patients who are scheduled come in. That’s why one of their main products is arrival rate, but make sure that all the patients who are on the schedule to actually come in for their visits and ultimately, fill the schedules of the providers. That’s their job. Make sure that this one meeting happens and what will you benefit from it? You’ll see an increase in total visits. You’ll see an increase in revenues, increase in patients’ plans of care being completed. Happy patients that are engaged in referring friends and family and doctors who are happy that the patients are getting better and thus, willing to send you more patients. This one thing can help you with all of those byproducts and increase all of those statistics, making you a happier owner. Recognize that the secret to it all is that you’re not in charge of it.
Yes, initially you’ll have to do some training. You’ll have to show them what to do and how to do it, but then eventually, they have to take ownership. This is their responsibility. They are supposed to lead out in this meeting and show you exactly what’s happening with all the active patients that are coming through your doors, so they are not falling through the cracks and not getting better. The weekly walkthrough, I highly recommend it. It has to be done on a routine basis and if you do so, things will improve in your clinic. That’s my moment for the day.
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Businesses can’t survive if their cash flow is not consistent. You want to make sure you always have a good amount of money coming in. Nathan Shields sits down with top financial adviser Eric Miller from Econologics as they discuss what you need to do to ensure and increase in cash flow. They discuss seven tips that will help create a better cashflow for your business. A must-listen, especially when you need to learn how to increase profitability.
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A long-time frequent flyer, Eric Miller of Econologics is our guest. Eric, how are you doing? Thanks for joining me.
It’s always a pleasure. What are we talking about?
We’ll be talking about cashflow.
That’s good.
We’ll talk about cash. We want to talk about how we can increase cashflow in our PT clinics. I’m going to give you a minute to talk about where you’re coming from so people know. If they haven’t heard from you before and why you can talk into this subject. As PT owners, we think we’re limited to the cashflows that we simply see with the patients that are coming through and don’t know how to necessarily increase that per se. We want to talk about what we can do to fill up our buckets a little bit more. Increase that profit margin and some of the cushions that we have in our clinics. Before we get into it, let’s share with the group quickly about you and where you’re coming from.
I’m a financial advisor by trade, so I learned how to be a financial advisor over the years. Years ago, I had the first realization that if I was going to help practice owners become better in their personal finances, then I had to understand a little bit about how their practice work. Let’s face it. That is the main generator of wealth for most practice owners for their household. Most of them were very dependent upon the cashflow of their business for their household’s financial survival. If I was going to teach people, I had to learn how to be better with money. I wanted them to have more income sources, less debts, pay less taxes and all the things that they want. I had to know where it was coming from and show them how to improve the income-producing ability from that source. That’s where our whole niche of working with private practice owners, specifically physical therapists, came from.
Your whole business model is around helping private practice owners. That’s in physical therapy to become more financially viable and successful.
We make your business more valuable and make sure that that translates into personal financial success. As many practice owners, you can have a great big practice that’s producing a lot of money, but if it’s not translating to the benefit of the household, what’s the point?
Talking about increasing cashflow, where do you want to start?
We can talk about the number one thing in increasing cashflow. It all starts with having the correct numbers. Many times, you hear people say, “My cashflow is low,” or “It’s not where it needs to be.” I’m like, ”Where does it need to be?“ I’ve said this before, “You got to make sure you understand the two golden rules of income and expenses.” Those golden rules are your business. Just face it. It’s good to try to spend everything that it makes and then some. Don’t fight that it will, but it’ll also make what it needs to make to be able to function and survive. There’s a natural demand for money. If you want money, you practice and needed money, you needed to pay a bill or your kid needed surgery, that was going to cost X amount of dollars. You would do whatever you needed to get that money together and pay it. Why? Because there’s a demand for that money.
Make your business more valuable, and then make sure that translates into personal financial success. Click To TweetIt’s the same thing in a business. You have to have this almost obsession with, “I need this much money for us to be able to be solvent, expanding and profitable so I can have business reserves, pay off my debt and pay myself as an owner.” It comes down to making sure you know exactly what that number is. Whenever I talk with private practice owners, the first question I asked is, “What is your make and break number? Are you including all of your profits in that number?” Nine out of ten of them said, “No, I wasn’t.” You’re operating on the wrong number. Once you get that number, at least you know what your target is. That’s where you start. That’s the first thing. You have the right target.
I can think back to my experience that things started changing in my business when I did a few things. One of those fundamental things was sitting down with my CPA monthly. I told him, “You need to teach me how to read a profit and loss statement and show me.” This is many years into ownership. “Show me my cashflow and all that stuff. Help me figure out what my break-even number is, then I could translate that into visits per month.” I just knew that baseline standard for every clinic after that going forward because I did that on a routine basis. I knew my numbers, but the one thing that I know you guys push hard for, that I didn’t do. I wish I had. I would have much more money in the bank if I set aside that 10% of gross revenues to owners as an expense line. It’s one thing that I know what you didn’t cover right there, but part of knowing your numbers is putting that expense line in there.
I think you have to include that. Remember, you have three roles in your business. You have your practitioner role, your executive role, and then your owner role. Most private practice physical therapist pays themselves a salary through W-2 wage. You may take some distributions out of the business at certain times. Maybe you call that your executive compensation, but most people don't compensate themselves as owners. You need to because it’s vital that you do that. Number one, it increases the demand for more money in the practice. It also handles the financial issues at your household because if you’re doing $1 million, $2 million or $3 million in revenue, 10% is an awful lot of money. It builds up and then uses that to create other income sources. Remember that the factor in your payments to each other when you're coming up with that make or break number.
Know your numbers, that would be your number one. Number two, if you're having difficulties with cashflow or you feel like it could be better and it's just not, you have to inspect your finance lines. I worked with other types of practice owners, but in a PT organization that relies heavily on collections and reimbursements, who's doing that? It's not automatic. There are people who are doing that. They are responsible for your finances. Whether you like it or not, their emotional viewpoint or attitude towards money does have something to do with it. I'm sure you've met those people who if you gave them money, would be out the door the next day.
When you’re looking at the people who are responsible for your collections and billing, you got to have someone that has a bulldog mentality. I’ve seen so many PTs who have so many difficulties wasting money and money that was never built that should have. You've heard the stories. I had one guy who said, “I found $20,000 of unreimbursed treatment sitting in a desk drawer,” and stuff like that. If you’re having difficulties with cashflow, you’ve got to go inspect that line. What’s going on here? Are there good systems in place? Do we need to create more? That’s where your eyes should be especially on your finance lines.
I think so much money in talking to Will Humphreys, my business partner and now the owner of In The Black, a billing company for physical therapists. He onsistently loses money at the front desk because those people at the front desk are scared to ask for the copay. As you said, the bulldog mentality has to be there. My best front desk people and my best billers were the people who said, “We’re not emotional about it at all.” It was simply, “This is the transaction that needs to take place. This is the agreement that you made with your insurance company, not with us, regarding your copay. Your insurance plan says blank is owed when you come to physical therapy. I need to collect that $20 copay. I need to collect $100 to go towards your deductible. How would you like to pay?” The best one is, “Why don’t we just get your credit card on file so we don’t have to go through this each time? You don’t have to remember it. We’ll have it on file. I’ll give you the receipt as you’re walking out the door.”
That was the other thing I was going to say. You got to make it’s super simple for people to pay you.
That can be tough for owners as well because we might own the company, but that doesn't necessarily mean we know how to manage the front desk personnel. We could run it ourselves but we don't know how to manage somebody per se. The same thing can be said for billing people. Even if we have billing in-house or outsource it, we don't know how to hold them accountable. That's where you can look at previous episodes. You can talk to my business partner. We talked about how to hold your billing people accountable. You need to know your numbers on the billing side as well, and not rely on them saying, “Here are the reports. We’re doing a great job. Hopefully, your cash and your bank account are still going in the right direction.” As physical therapists, we know how to manage that. We have the ability to do so. We just have to talk to the right people. As I said, I’ve done an episode on it.
I have the right numbers of what those collection ratios should be. All those things that are going to result in money need to be addressed. Have a stat on them so you can inspect that. We've all had these people in our companies at some point in time who are doing pretty well for a period of time, and then they have massive problems. They're like a yo-yo. They go up and they go down. Find another place in the organization for that person other than the finance lines.
Don’t let them touch your money.
Do not get them anywhere near the money lines because the result is awful when that happens.
It’s when I turned a blind eye and trusted people to get the job done where a lot of money got pilfered away. I assumed things were happening and I wasn’t inspecting it. I didn’t have my pulse on it. I just assumed things were happening and they weren’t. Money’s got taken away from my clinic.
It will spread everywhere if it’s not channeled correctly. That is for sure.
I remember in my consulting that you can take your hands off of almost every position in your company, but CFO is the one that you rarely step away from.
I want to make sure that you’re getting very heavy and accurate reports in that area constantly. There are some other areas that may not have as much attention on, especially if the results are good. Going forward here, that is an area that’s a little bit more difficult in a physical therapy office because it’s not like there’s a lot of cash. That’s just the transaction-wise that are changing hands. Employee theft is a big deal for small companies. It’s becoming more and more rampant that we are seeing embezzlements occurring. Criminals can get very creative when it comes to this. That's why you have to make sure you have your attention in this area.
Much of it can be that simple transaction at the front desk. That $20, $25, $10 or $50 here and there adds up over time.
It’s a simple thing. I have four more. Do you want to keep going?
Of course.
Here’s a good one that everyone can do. All of these things we’re going over. I know it seems sometimes that there are outside forces but when you start looking at it, it’s always an inside job. There are always things you can do inside of your practice.
We might not necessarily be breaking new ground here, just put more attention on these things.
Increasing the speed at which everyone does their jobs. Time gets a lot in the way of production. What I’ve seen, especially in practices that have a lot of patients coming in the door, you need to work on speed of service. Wherever you look in your organization and say, “Where can I increase the speed of this service getting done what I wanted to do?” Even when you’re doing the therapy, it doesn’t take away from the care. Some of the best practitioners I’ve seen work really fast. Not just so much in the healthcare areas but also in any other areas of your organization where things need to get done very quickly. When you start doing that, you take time out of the equation and you will see income go up. It's one of those things. You're like, "What would a speed have to do with it?" Think about it. When you complete something, it's done and now it opens you to do more things. If you can get people to increase the speed at which they get their products, you'll see your income go up quite a bit.
A lot of that depends on the clarity that they have regarding their position. If they know that their main product is to get patients in the door, then they'll probably be going to focus on getting patients in the door. If you add the elements of time to it, we not only get patients in the door but we get the patients in the door within 24 hours of receiving the first phone call, fax or how we receive it first. We’re not going to sit on it for a week and then call them, and see if they call us. Our job is not only to get them in but get them in now. If they’re going to reschedule, we’re going to push for a reschedule later this afternoon versus two days away.
Any area in your business, whether it’s scheduling, collecting money or whatever it would be, how can I increase the speed of this? How can I get that done faster? That’s where you’ll see the production increased because of that.
In the billing sense, Will has recommended that when you’re looking at your AR, aging report, you want that aging report front-loaded with cash. The money that you’re expecting to see should be within that first 0 to 60-day accounts receivable aging timeframe. Maybe only 5% in the $60 to $90, 5% in the $90 to $20, 10% in the $90 and above because you have worker’s comp or liens out there that take longer naturally. Your insurance stuff should all be front-loaded up into that 0 to 60-day timeframe if you’re doing things well in the collection spaces.
It’s a missing element that a lot of people don’t think about. If they looked at their organization and they found out ways where, “This has taken too long. It doesn’t need to take this long. We can increase the delivery of this,” they would find that it would have a dramatic impact on their cashflow.
Not to belabor the point but I know there are studies out there that if you don’t collect that copay at the time of service and they walk out the door, the percentage that you receive on that dollar immediately goes down to $0.65 on the dollar. If it goes out 30 to 60 days, it gets down to 50%. Twenty-five cents of every dollar that’s out there is going to get collected if it’s not collected as soon as possible.
When time enters the equation, it stops. It slows things down. You want to make sure you try to do everything as instantaneous as possible. I’m lazy by nature. There are certain things I’m lazy about and there are certain things I know I have to do it now. If I don’t do it now, it will cost me down the line. Number four, this one is off the wall but I will tell you this. I’ve seen this happen. Have you ever walked into a place like a facility that’s full of clutter, it’s not very kept and it looks like crap?
Make it super simple for people to pay you. Click To TweetThere are magazines all over the place and lots of stuff on the walls.
Do you think their cashflow is good or bad in an office like that?
You’d question it. You’re considering that lack of organization.
It’s bad. Make sure everything is very neat and orderly. Get rid of clutter, things that you don’t need and things that you don’t use. Make sure that the appearance of the people is nice. A lot of people wear, not necessarily a uniform, but they have the name of the company. It makes a difference when people see that. The cleanliness of the place matters right now to people as far as how safe people feel when they’re in that particular practice. Make sure that the facility is clean and not cluttered. Nobody likes clutter.
You can see that not just in the front desk area. That's where we initially go when we think about clutter in the healthcare setting. In a PT setting, it’s also in your gym. Make sure you have plenty of space between tables, especially during this time. Anytime that you can declutter the area and make it look less busy, it lends toward our mutual friend, Sean Kirk's theory, "If you want to increase the number of patients in your clinic, add more tables." If you add more treatment tables, then it seems like there's a space for that person to be. The last thing you want for the patient is to come out of a treatment room or come from the front area at the front desk to start their visit, and there’s no place for them to lay down on the table and get the treatment that they need. When you go to church, the last thing you want is to not have a seat.
You want to go in there and you want to feel comfortable. You want to feel like, “This place is clean and I can sit down and I’m not going to feel dirty.” It does make a difference. When you ever went to a restaurant or someplace and it was nice. It was a good environment. Everything was presented and then you want to go back and you pass. It’s the same thing with your practice. Make it spic and span and aesthetic. If you do that and get rid of a lot of the stuff, then open up new space so you can deliver more services, it’s going to improve your cashflow.
One thing to consider also, and I didn’t think about this until after I opened up my first clinic, I used an interior designer to design some of the front waiting room and treatment rooms. I got a lot of compliments on that. I didn’t think much of it until I had another experienced physical therapy owner come by my practice. He’s like, “Smart move on the design stuff,” because who makes the decisions in healthcare? It’s the moms. The moms are making the decisions for their parents, for their kids, for their spouses so if you can make it nice and presentable for the females, then more than likely, you’re going to gain their trust.
Did you take credit for that when he said that? You’re like, “I meant to do that the whole time.”
I was thinking so far ahead. That’s me as a new owner thinking it awfully.
Number five, make sure you don’t have people that should be out there doing your marketing trying to get you more referrals. Don’t stick them in the organization with stuff that is going to clutter what they’re supposed to be doing. You want to make sure that the people who are supposed to do your promotion or marketing are allowed to do that. A lot of times, it’s hard to expand an organization if you’re doing all the functions especially when you first start. You want to make sure that you have marketing people or whatever.
Those people are internal. They’re there to deliver. People who are going out there, doing the promotion and marketing, talking to the doctors, trying to get referrals, trying to manage the social media and all that, don't bog them down with other stuff that's going to not allow them to do their job, which is going out there and trying to find new patients. That would be one of them and that also goes for the CEO. Don't bog the CEO down with things that are going to not allow them to strategize and make sure that things are getting done in the organization. They're getting drawn back down in the organization instead of being able to look at, “How do I expand? I want to buy this new practice.” You keep that person outward. Let them be them.
A couple of things come to mind. In my mastermind group, one of my clients talked about this because he’s growing, expanding and hitting some great numbers. What he recognized on the marketing side is he was doing all the marketing, going out and visiting the doctors. He would make the marketing pushes, especially when the holidays come around and stuff like that. That means he’s only getting out once a week or twice a week for a few hours at a time. By hiring someone part-time to solely focus on marketing, that marketing strategy went crazy and their numbers increased because now there’s someone who is consistently hitting the doctors. It’s not dependent upon the owner who’s got plenty of other things to think about and do to get out and market when he has time.
That happened to me as well as I hated marketing, to begin with. I was happy when I found a physical therapy assistant that wanted to do the marketing and blocking out time in her schedule to go out and market on a routine basis. Number one, I was happy because I didn’t have to do that crap. Number two, someone was excited and doing it routinely instead of me and not just when I had time. As owners, numbers go up a lot of times so we don’t have marketing time to get out and visit. Inherently, the numbers go down. Now it’s time to market again. We go out marketing and we ride that roller coaster, whereas if there was some consistency to our marketing efforts with someone who is dedicated to marketing, then you wouldn’t have to worry about that so much. You’ll have a consistent increase.
To that person’s point, that CEO that hired that person part-time, I wonder how much that increased their cashflow by having that person do that. It’s a huge number.
The hit to their expense line was simply the part-time salary of someone who’s going out and doing marketing, whereas all their other expenses are saying the same that essentially goes right down to the bottom line until they have to hire the next person.
I got one more. When is the last time you've looked at all of your income sources inside of your business and made sure that you are focusing your marketing efforts or whatever your efforts are on those that are providing not only the highest profit margin but have the highest demand and the easiest to deliver? If you’re going to form a business and you have a product or a service, you want it to be profitable. You want a lot of people to want it and it should be fairly easy to deliver that service optimally. In a PT practice, what are some of the income sources that you have? You have reimbursed patient care and non-reimbursed patient care. You have supplements performance marketing and cash pay line.
Even within reimbursements, there could be commercial payers versus workers’ comp versus motor vehicle accident/leaning patients. There could be different avenues that way.
I would break all those down. We have an exercise that I can make available that people can download. It would allow them to look at their income sources and all the different services that they’re providing. Making sure that they’re pushing or marketing those services that provide a reasonably good profit margin. That they are in good demand and fairly easy to deliver because that’s what you would want to push. If you’re not pushing those, what can help increase your cashflow is finding some of those things that would be able to do those. You always want to look at your services. Where can you expand? What can you add? What are some things that you can introduce that you’ve always wanted to that could increase your bottom line? Adding HODs or services like that, you can increase your profit margin by doing those things. That is what I would do. Inspect, review my income sources and market those that are going to give me those three things.
I know it's helpful for some of the clinicians here in Alaska to have massage therapists on staff because there are insurance companies that will reimburse patients for a massage therapy as long as it’s directed by a healthcare professional. They’ll have massage therapy onsite. That adds to the benefit and it’s another cashflow. That’s pretty easy to implement. You don’t have to have any additional equipment necessarily. You just have to give them space to do it.
It’s not that hard. You just have to look at it and say, “What would it take to get this thing going right now,” and just execute and do it. That’s a pretty good list right there. If people did those things, it certainly wouldn’t hurt them. It’s the little things. It’s that 1%. You can look across an organization. If you could prove to every area of your organization, that 1% or 2% will have a big impact on the organization somewhere. I think that’s going through these things of what you can do. It may not seem much. I don’t think any one of these is going to change your life right away, but a combination of doing all these things would improve your cashflow tremendously over time.
I remember you did a presentation once about what to do when someone is in a cashflow crunch. They're having issues and they're bleeding money. One of the things that I recall and always stuck with me is to focus on your purpose again. Make sure the employees are focused on that purpose again. As you start pushing some of these, some resistance might come up like, "You're all about the numbers,” or “You’re all about the money.” Number one, if it hasn’t been clarified and solidified amongst the team, then it’s going to look like that but when you can say, “No, our purpose is to serve people. Here’s our purpose blank.” It’s to do some kind of service to help empower, get people out of pain, you name it. If we can do it faster and we can see more people, that means we're doing a better job and having a greater impact on our community. Tying some of that stuff back to the purpose helps people look past the superficial complaint that you’re just about the numbers or money.
You are a genius because that's the number one thing to help improve your cashflow. Everything you just said was correct. All these other mechanical things you can do in an organization, you can look at the numbers, you can expect your finance lines, you can increase the speed of service, clean the place up and all these other things. If you get everybody motivated and coordinated behind you and the purpose of the organization as a unit or a team, that’ll show more fruits of labor than anything else. That will show more rewards and results than anything else if you could do that. That was beautiful. I’m glad you remembered that.
You brought it up in times of cashflow crunches. We were talking about people who might go in. If you want to get a huge return on your investment, spend the time and energy to focus on clarifying your purpose. Make sure it's somewhat inspirational and get people out of bed to work for you. That generates culture, and now this culture wants to see itself improve, grow and greater expand our purpose to affect more people. That’s when you start seeing some serious cashflow changes for the positive and an increase to the net value of the company. It’s when people are looking for opportunities to organize, increase the speed, and know their numbers as it pertains to how they fit in the company. It all works together and starts creating a better organization. Thanks for joining me. If people want to get in touch with Eric Miller of Econologics, how do they do that?
If you could improve every area of your organization by one or 2%, that will have a big impact on the organization. Click To TweetThey simply go to www.Econologics.com. When you get to the homepage, it’ll say who we serve. You can go to Physical Therapists because you’ll be right there. We have Financial Success Guides and plenty of downloads that you can utilize to help you on your journey, assessments and all kinds of things.
If they want to inspect their income streams as you mentioned in number six, is that where they’d find that as well? Is that readily available on the website?
I do believe that there is an exercise on there. If it’s not, we can put it on there or they can email me directly. It’s Eric@Econologics.com.
Thanks for sharing. It’s awesome. It’s all about the money and all about the Benjamins. Thanks for your time.
Eric Miller has been in the financial planning industry for over 20 years. He’s a co-owner of Econologics Financial Advisors – awarded an Inc. 5000 honoree for 2019. As the Chief Financial Advisor for the firm, Eric has had the good fortune to have over 10,000 financial conversations with private practice owners in various healthcare industry and helped guide them into a more optimum financial condition using a proven system.
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To NOT be the answer-person in your company should be the goal of every business owner. You can achieve this by creating simple job descriptions, handbooks, and training manuals that efficiently answer every possible question your employee may have. “Systems-dependent, not people-dependent” – that's what we learned in EMyth Revisited, but how do we get there? Where do we start? In this episode, Sean Miller, PT shares with us exactly where to start and what a functional job description and handbook look like and how they bring value to your company. Tune in to discover how you can implement this in your organization!
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A longtime friend and guest is on the show, Sean Miller. Sean, thanks for coming on. I appreciate it.
Thanks for having me. I’m super excited to be on the show.
I'm excited to have you because you shared with me what you did when you owned your clinic in regards to generating job descriptions, handbooks and training manuals. You made it so simple. You broke it down easily. I thought, “We need to share this with people.” That can be a real stumbling block for owners when they know, “I've got to put together a policy. I know I've got to do it. I've read The E-Myth Revisited. I know that's what I’ve got to do but I don't know where to start.” I wanted to make sure we share it with as many people as possible. We did a Facebook recording and shared it on the Facebook group. If you guys aren't on the Facebook group, that's Physical Therapy Owner's Club. Join the Facebook group. I shared a fifteen-minute clip there.
In this episode, we want to go into a little bit more depth about creating job descriptions, handbooks and the benefits of them. The benefits are relatively obvious but how to get them organized and put them together, how to start from square one. First of all, thanks for coming on, Sean. I appreciate it. When you started generating your job descriptions and handbooks, what was your mindset? What was your thinking? How did you get started to begin with?
Thanks for having me on. I’m super excited to share this because it was super valuable for me. A little bit of my past history to give some base foundation of where I came from and why this is so important for everyone to have is I had my clinics previously with a previous business partner. He and I struggled to make things work and run well. He and I unfortunately ended up separating from each other. I was stuck with two facilities all by myself as the owner. I was bound and determined to figure out how to make this thing work. I sought out coaching. I had some great coaching that taught me a lot of great stuff. In the framework of this state, they teach you the importance of what we're going to talk about.
We came up with our own little method and process to put it together that is successful and works well. Why this is so important is when you provide organization and structure to your business, things will then start to run and flow. Your growth goes so much faster. I found that whenever we were not growing is because we weren't organized somewhere. As we organized it, we grew. This is your foundation. This is like the walls and structure of your house. You need to have these in place. All you have is a foundation, no building. What we're going to go through, we’ll build the walls here.
This is a great place to start because a lot of owners might get stuck here or they might make it more complicated than it needs to be. Break it down for us. How do you recommend we get started here?
This is building job descriptions and handbooks, how to do it. It took me years to figure out how to do this. This is why I'm excited to share this. I've learned from others and I love giving this out to other people so they can learn as well. This is why we're doing it, which is. We start off with, I read a book called The E-Myth Revisited by Michael Gerber. If you haven't read it, go read it. If you have read it, you may have been stuck on how I produce what he's talking about. Michael Gerber talks about producing consistent and predictable results within your company. That's the goal of his book. What that does is once you can produce consistent and predictable results, it gives you freedom as an owner. It frees your time up. When I started doing all this, I was working 60, 70 hours a week to make things work. In the end, my time was flexible however I wanted to spend it.
To go further with that, in order to be successful, you've got to reproduce those results over and over again in spite of who's sitting in that position and in spite of you. That's where this creates so much value. It's not dependent upon you or people dependent then become systems dependent.
You, as the owner, should know how to do everything in your company. Too often as owners we find ourselves doing everything in the company. By creating these job descriptions, it frees you up so you're no longer the one doing it. You have other people doing it. If you have multiple clinics, you can do the same thing at all clinics across the board. That's giving you success.
Even if you're not doing all of those positions and you're growing to that point, you don't want to become the answer to them all the time. You'd end up being the point person, the go-to like, “Have you got a minute all the time on the door?" or, "I've got a problem. You're the only one that can fix it.” When you put some of these systems in place then they can refer to the handbook versus you.
When you provide organization and structure to your business, things will then start to run and flow. Your growth goes so much faster. Click To TweetA great management lesson to learn is when someone comes to you like, “What does the handbook say?” They go back to the handbook and they assume they learn to go to the handbook first and they begin to manage themselves. That's where this comes from. How do you create predictable results for your practice? You do that by developing your successful systems and processes that are reproducible and consistent. That's the key. A successful system process is one that you can reproduce and are consistent. You do this by creation of your job descriptions or handbooks. We ended up calling them playbooks in our company because I love sports and the playbook is what you do to win the game.
Our playbook is what you do to win the game in our company, essentially. Whatever you want to call them, it's what we're talking about. With these handbooks, once you've got them written up, that then becomes what you train and educate all your employees on so that they know exactly how to do their job successfully. How you create these is what we want to talk about. There are three simple steps when you're creating these to think about. Number one is what's the job title. A receptionist, a physical therapist, an aid, a biller, a lead biller, whatever your different jobs titles are, you want to create those job titles first. The second thing is you then list all of the successful actions that someone has to do for that job title to succeed.
Third is you then want to list what's called the outcome that you get from them doing these successful actions. This is better known as your product as well. We'll talk about products here. The outcome is what do you get if this person does these successful actions. What's great about this is that when you have the outcome, that then becomes a KPI or a stat that you can use with the employee to measure how well they're doing their job. That's key because once you have the stat, the stat then tells you, “You're doing a great job or you're not doing something. Let's figure out what it is and get it back in.”
It's cool that you broke it out simply. I know that we're going to talk a little bit more about a table of contents that may have everything involved in the handbook or the job description for any particular job. The basic three principles are job title, successful actions and then their outcomes with the appropriate measurable statistic.
Once you understand that basis, then it becomes so much simple to put these together where you can get complicated. We'll talk about why it gets complicated here and how to make it even easier. The first thing you want to consider if you look at those three things is too often what we do is we list the job title and then we try to come up with all the successful actions. We'll say, “A receptionist. What does the receptionist do?” We'll list all of these things that they think they do. What ends up happening is we don't know what they end up producing what the outcome is. You first want to think about the outcome or the product, not the successful actions. If I'm a receptionist, the outcome is I want my patients to arrive and paid in full for their visit to be seen.
I know that that is what the receptionist is trying to achieve with their job essentially. That's what we want to first start focusing on is what their outcome or their product is. Let's talk about what the product is so we understand that a little bit better as well. Product, technically, it's a finished high-quality service in the hands of the consumer as an exchange for something of value. If you can't exchange it, there's no value there. If I try selling you a half bottle of water, only half-filled and the cap's open, it's not complete. You're not buying a full bottle of water. In our case with physical therapy, if the patient comes in, their insurance benefits aren't verified and they're not paying their copay, we can't necessarily see them. We're not completing the process, essentially.
With this particular job, if you're talking about a front desk, receptionist, front desk coordinator, patient care coordinator, if you haven't figured out their product, the exchange is the salary that you'd give them. If they are not performing and producing that product, then they are not living up to what is worthy of a salary and then there's not proper exchange there. You want to be clear about what they're exchanging for payment for salary.
You're exchanging with the front desk and your therapists and age things back by achieving these goals for you in return. The key is to first know your product and name it. What is it so that they know what they're trying to achieve? What are you paying them for? For example, we were stuck on the receptionist but it applies to your therapist. The way you would start is you go, “It's a receptionist. You can see here successful actions are blank. We don't list them but then we list the outcome or the product.” The product is, for me, it was patients arrive at all their prescribed appointments with payment in full. That’s what I wanted my receptionist to achieve for us. Our KPI or our measurement was patient visits. We want patients to arrive. How do we track that? Patient visits. Some sub stats that supported patient visits was the percentage of arrivals and percent of copay collections. We knew if the receptionist did those things, make sure that patients arrived and that they paid their copay, then they were achieving their outcome of patients arrived at all their prescribed appointments with payment in full.
It's a higher arrival rate with all the copays and deductibles collected at the time of service. That's their product. You start from there.
Now that I know what I want the receptionist to do, I can create successful actions to give me that outcome or those products. That's the next step that you do is you start thinking, “What are all the successful actions that someone needs to do to obtain that product or that outcome?” What I always encourage people to do is create a bullet point list of what they have to do. Answer the phone, enter patient information into the EMR system. Don't get too specific. Collect copay, keep your area clean and organized. People are like, “Why is that part of the product?” You want people to arrive. If your facility doesn't look nice and clean, they may think less of your facility and not come back. That's an important part of their process.
You think of everything that could affect patient visits and people arriving. Obtaining authorization, you create this checklist of successful actions. You've got the premise of the foundation of your handbooks, essentially. Once you've done that, we then are going to make sure that everything is on that bullet point list, how it should be and then we're going to go in and then define how we want to answer the phone, how we enter patient information into the system, how we collect the copay. That's where you get more detail. This is where you get to write down exactly the successful action of doing these different things. A good example of this is I'm going to write up my playbook about how to answer the phone. Answer the phone would be in the manual. It would say answer phones and direct calls as needed or handle as you can. The subsection would be to always answer the proper greeting. This is key. If you don't put in how to answer the phone, they're going to answer it, “This is Sean. How can I help you? What do you want? Why are you calling me?”
You train. This is what I want you to say, “Thanks for calling blank Physical Therapy. This is Sean. How can I help you?” That's what I want you to say every time you answer the phone. We put in there always answer the phone within three rings. Why? How many times do you hear that phone ringing? It’s like, “Somebody get the phone.” The policy was within three rings you answer the phone and then you go on spelling out what do they do with the phone calls, how to route phone calls. We have a thing in here that if it's ever a doctor calling to speak with a therapist, ask them to hold and go get the therapist. Do not take a message. Too many times our receptionist, when I first started, “Tell Dr. So-and-so I'm going to take a message for you.”
It's important to find out. We’re going through it but this is something that takes some time. Job titles are obvious. You can figure out the products in the course of an hour or two for all of your positions and the appropriate statistics related to them. Even the bullet points could be this part where you're getting into the weeds could take some time. It might be some feedback or back and forth. I shared this on the Facebook group video. This is something you could also hand off to people who are doing it successfully already. If you have someone at the front desk that is awesome, how freeing is it to say, “You do a good job. If you could write down how you answer the phone on a regular basis and all the things that pertain to answering the phone, all the ins and outs and details in different situations. Take fifteen minutes, write that out for me. I'd appreciate it.” You could have something to go off of for the next week or two and figure out the answer to the phone bullet point.
When you involve your employees, they feel like they're part of the process and helping you build your company as well. Click To TweetIf you want to overwhelm yourself fast, sit down and try to create these for everybody in your company in a couple of days by yourself. It's not going to happen. This took me probably six months to a year to create these. Even when they were created, we were constantly modifying them and tweaking them to make them even better over time. Once we finally understood this, it even got even easier. You’re probably not the best receptionist in your company, you know what needs to be done but you probably have a rock star somewhere in your company that does a great job at it. Why are you the one writing this? They should be the ones writing it for you essentially. The one thing I like about it too is when you involve your employees, they feel like they're part of the process and helping you build your company as well. Everyone wants to feel included, participate, give their feedback, can be better advised in creating these and having somebody else helping you create them for each position as you go.
It's a real way of recognizing their value. People want to be recognized. This is a way for them to say, “This is how I do well at my job. Let's codify that and put it down for people that follow.”
If someone's crushing it, you want to know how they're doing it. What are they doing to crush that? You can turn around and give that to all your other facilities or even train your other receptionist so they can do a good job as well. The other thing to point out too as you start to write these is don't get caught up in writing too much detail. Answering the phone as an example here. I don't want to put in here, "Answer the phone with your right hand and bring it to your ear." It's self-given. Write these out about a 3rd to 5th level of understanding of instruction. I say 3rd to 5th grade because you can get too detailed and you cannot have enough details in there as well. You can put, "Answer the phone when someone calls." How do I route the call if it's a doctor's office? How do I do this? What do you want me to say? Those details need to be in there as well. Always think 3rd to 5th grade level of if I'm telling someone how I want to answer a phone of my company, 3rd to 5th grade level of how I want that done. Simple instructions with it. Let's go to the outline of how to create the full handbook.
Are you talking like a table of contents of what a handbook would look like?
You've got all these checkpoints lists. How do I organize these, how to answer the phones, how to put the copay in? That can be a process for you as well too. We came up with a pretty good simple outline that can be helpful for these guys as well. For creating a front desk receptionist manual, what we did is our first page would be the cover page, our company logo. On our second page, we had a welcome letter from the owner. We then list our company's purpose, mission and values on page three. We listed our communication lines or organization board, that's a whole other topic of discussion. If you don't have one of these, it's great to let your people know who I go to if I have a question for my position.
Who's my supervisor? Who’s my supervisor’s supervisor? Where do I fit in the organization? It's always good to know.
Who’s my boss? Who gives me orders? Who can tell me I'm not doing a good job? Who can tell me I'm doing a great job? On page five is where you would then list the position. You would say receptionist and you would list their purpose and their products. You then list their KPIs, which we worked out from doing our first step there. What we did from there is we found it helpful to create a daily, weekly, monthly checklist. A lot of times, people have their receptionist checking the mail. Is that daily or weekly? They do the deposit. Is that daily or weekly? On a day-to-day basis, this is what you do. On a week-to-week basis, this is what you do. Once a month you would do this. What you find in these daily, weekly, monthly checklists are things like answering the phone, check patients in, call referrals, things like that would be on your daily checklist.
Confirmation calls, how often are you doing those? If you're assessing the active patient list with the clinic director or the owner, is that a weekly thing? Is that a bi-weekly thing?
You're laying out successful daily things that they should be doing to achieve their outcome or achieve their product for them. Once you have those daily, weekly, monthly checklists done, within those are your specific actions which we created, which is answering the phone. How do I maintain a high arrival rate? How do I schedule patients? How do I attain authorization? How do I handle referrals? How do I collect copays? How do I verify the insurance? All that would then be after the checklist written in there. On the daily checklist, let's say it says, call all referrals and schedule them appropriately. How do I do that? Number 9E tells you how to handle the referrals and what to do. Spell it all out for them nice and simple. It gives them a great layout of how to put all this together, essentially.
That's the bulk of the handbook. A lot of that is the how-tos. Some of them could be written. Some of them could be videos, “Watch this video from the EMR company about how to enter a patient.” Many times, we might lean on ourselves to do things that the EMR companies typically have already generated videos for or it could be helpful if we generated our own videos instead of people putting pen to paper, which they don't do so much nowadays. If they could record the screen, there's so much software that can do that, talk along with it. I know Loom does that. I've used it before and say, “I go to this screen, I'll type in their name then I do this and that. That's how I collect the copay and implement it into the EMR.” It could be simple. If anyone finds a problem with that in the future, their job is to then create the next video.
They give you an idea. When I first created my first handbook for the front office, it was about a 30-page document. As technology got better, we started creating screenshots of where to put the copays. My last handbook before everything was around 110 pages by the time it was done. It was detailed with photos and here's this and that. If somebody was like, “How do I record the copay?” Here's a screenshot picture that gives them a visual of where it is on the computer and to do it. Nowadays, video is the next step to go in creating these things. I don't need someone who's an experienced front desk receptionist in physical therapy. I need someone who is competent and can get things done because I can train them, give them this handbook and they can run with it. They're a person who can get things done essentially, which is great.
The cool thing about this handbook and to take it further, the value of it is so much of it you can essentially cut and paste. It then becomes the training manual with its own checklists or checkboxes that you can check the initial date that the training got done. It can guide you on the training. It's not the job description in the handbook of how to do things. It's also, “You are now a blank. This is your handbook. Let's go over it step-by-step and we'll check it along the way to ensure that you're fully trained.”
What we always did is we would take these bullet points right here. We would take them, put them on a separate page and call it the training page. We would say, “Has Nathan been trained on how to answer the phone?” “Yes. Check.” “Has he been trained on how to get a high arrival rate?” “Check.” We go right down the list of everything that's in the handbook, that he can do it and then he knows what he's doing. It becomes a simple training manual as well.
The accountability on the backend is someone complained about answering the phones or our arrival rate dipped. You have a section in there on how to handle cancellations, how to reschedule patients, how to maintain a high arrival rate so if your arrival rate dips, you can go back to the handbook and say, “Are we following all the steps that we are trained on? Are we missing something? Do we need to re-input what we were trained on because it fell out? Do we need to modify what's being trained because our rivalry continues to go down?” You can go back and inspect those statistics that they're responsible for.
If you think about it, it's the training manual. It's something on a day-to-day basis for me to refer to. If my stats or my KPIs are out of whack, we already have all the successful actions. If we're doing everything right in this handbook, our stats shouldn't be out of whack. We go right back to the handbook and figure out what am I not doing essentially to achieve the result that I'm looking for. It's all in the handbook.
I like that you have other sections in there about definitions for words that you might use. The last section that you have is some anatomical terms and definitions. We can't assume that these front desk people are going to know what we're talking about when we throw out some of the medical terminologies.
You get someone who's never been in healthcare or even has been in healthcare, not physical therapy. We have all the little acronyms that we like to use. Even insurance like BCBS, Blue Cross Blue Shield. We know that. UAC, we know what those are. Even the word KPI. What's a KPI? Any acronym you might use you want to give everybody an understanding of what that word is so when they see it, they know what you're talking about.
We even had a video of the difference between copays, coinsurances and deductibles. I had to find out online and have them watch that a couple of times so that they understood the difference between them as we're talking about the differences and as they're dealing with insurances.
Is there a more important person in your office that should know what the difference between those three things are? There’s no one more important than a receptionist. Patients don't know. They have no idea.
I love that you talked about going into the product first because if you simply would sit down and write down all the successful actions, you're going to apply equal priority to all these things. All of them are urgent. All of them are 8 out of 10. They've got to get it done. When you focus on the product first, then you can say, “This is the crux of your position. Other things could possibly fall by the wayside. If you're not getting patients in, not collecting their copays and deductibles but you have verified all the insurances, you're not doing your job.” It all comes down to these specific things that you've got to get done.
A lot of people will cross-train their receptionists to help with other things like, “Go back and help do the laundry.” That's important. What's more important is calling the referrals or getting those other things done specifically. Focus on that product.
We focused on the receptionist. Did you find that was the most training that you did? Were there other handbooks for physical therapists as time-intensive and consuming?
The therapist one is time-consuming for different reasons. When I'm teaching you how to be a receptionist or a front desk person, how to answer the phone, how to treat patients, how to do all this stuff, with the therapist one I'm not putting in there how to treat a patient. You've got your license. You should know how to treat a patient. A lot of the therapists don't know how to manage patient expectations. They don't know how to make sure a patient is on the same page with you in terms of your treatment, their progress and what they're doing. We put a lot of successful things in there on how to successfully manage your caseload. For most people, the number one complaint in therapy is documentation. We developed a step-by-step process of how to successfully have your notes done before you go home every day. There was a whole flow of how to do your notes throughout the day. We would teach them those successful steps so that at 5:00, 6:00 at night they don't have 15, 20 notes to do for that day. They've only got 1 or 2 to finish up.
It sounds like a lot of what you're training was more of the soft skills related to physical therapy. That was more of the handbook for the physical therapist. I interviewed Tom Dalonzo-Baker. There was a time in his clinics where they sat down and said, “If Tom's not going to be here all the time, we need to agree on some basic fundamental stuff on how to treat a shoulder.” You could maybe throw some of that in there, certain basic fundamentals, these are the proven methods to treat certain diagnoses or body parts. You could get into that. The bulk of a physical therapist handbook is going to be how to get patient buy-in to your plan of care, how to maintain compliance so they don't fall off or drop off after 3 to 5 visits. How do you keep their goals in front, number one? How do you extract what their goals are with physical therapy? How do you keep those goals in front of them so that keeps them coming?
I love the fact that you put in their documentation. To borrow from Sean Kirk, our co-mentor, coach, consultant, the three things a physical therapist has to do when you boil it down is treat the patients well, document your visits appropriately and bill appropriately. Those are your stats. Get your total visit number and documentation in a timely manner and bill appropriately and ethically. Don't under bill and over bill. Bill appropriately for what you do according to your documentation. Those are your three things. Manage those stats but so much of their handbook then is it's almost like the sales process of physical therapy.
I have a little bit of one here, some of the actions we would train them on like how to properly schedule your patients, how to manage your time, what a standard visit looks like. Number one complaint of patients is that therapists never put their hands on the patient. Always put your hands on the patient. How do you control the conversation? Many times, the therapist would complain to us that a patient comes in and they start telling you their entire history from when they're eight years old. That doesn't matter or doesn't relate to what you're treating them for. How do you control that conversation so you can manage your time? We would put in proper documentation, proper coding and billing expectations because not every insurance is the same in your state. You’ve got to understand and train them. On this insurance, you need to bill this way. You put all these things in here to be successful as a therapist.
Much of this stuff they didn't come to you with, typically, if they're coming out of physical therapy school. They may have learned other ways than other practices or maybe they didn't get any training whatsoever. How awesome is it for you to then be able to put this in front of your PTs then provide and then have some consistency like we're talking about? How do we reproduce similar results over and over again? If someone can't follow these instructions the way that we do it at blank Physical Therapy, then I'm sorry. We'll find someone else who can.
This was great about these books. You train them on it, they start doing their job and they start performing well. If they’re not performing well, you go back to the book and then they get back in line. They start following the successful process to get the results again. If they can't do it, it's either A) They don't want to, or B) They can't do it. That's where we have to make the move of letting them go and finding somebody who can.
How long did this take you from beginning to end? You said about six months before you felt comfortable that you had the beginnings or the basics of handbooks for each position in the company.
At about six months I had the handbooks for all of the positions within the company. We were refining them throughout that first year. The best advice I could give you is don't wait until you have six months to start rolling stuff out. An example of that would be when we came up with a standard visit procedure for a physical therapist. We would roll that policy out. When somebody comes in for therapy, this is what we want or expect to happen. We had this thing called five points of contact, which is when a patient comes in you ask them five things. You do these five specific steps every time they come in for a patient visit. We would roll that out before I had the handbooks done as six months. What was great is by the time we got to the six-month timeframe, a lot of the staff already heard about and had been trained on. When I gave them the book they were like, “This is standard visit procedure. This is the proper coding and billing thing you gave us two months ago.” I was rolling it out at a gradient over time versus, “Here's this 80-page manual on how to do your job.”
I'm trying to think about it from the employee's standpoint that this probably provides them some comfort and structure. When you have some structure like that, there's some confidence in the system itself in the company like, “This is what we do. This is our playbook. This is what we rally around. This is how we know we're going to win the game.”
Ask other people what they did. You can learn from a ton of people. Learn from their mistakes, so you don't have to make them. Click To Tweet“This is our expectations and how we're going to win.” Whatever type of football fan you are whether it's a Patrick Mahomes or a Tom Brady, they go out there and decided to run their own place. Nobody knows what he's doing and then the place falls apart. If everybody's on the same page about what we're doing and how we do things then it rolls. It runs and it goes by itself. You'll know when something's out because it will feel like, “What's going on? Why are we struggling all of a sudden?” It's usually because somebody within the organization or in that clinic is not doing something they should be doing. You figure it out and then you move forward.
It's almost like the play was designed to go to the right and they, all of a sudden, went to the left for some reason. It's a lot easier for you to take this whether you're purchasing another clinic or opening another clinic, then the ease of that is significantly greater.
What's great about this is once you have the playbook, when you go to open another clinic, you move it over and put it in. It's cookie-cutter. I know when we bought a clinic and we brought this to them, everybody at that clinic was like, “This is so amazing.” Everybody’s felt like all of a sudden their jobs got easier because it provided structure and organization for them. We doubled their business in three months. They were like, “We're so busy but we feel like we're not as busy as we used to be.”
To take it further, since we're talking about growth and expansion, how easy is it then once you have expanded to have the clinic expansion checklist? This is what you do. These are the steps that you take. It has credentialing and it has equipment that you purchase. Here are some timeframes and make sure this is the lease that you have. All those kinds of things can then be an expansion checklist.
What are all the things that made you successful when you opened the clinic and you use to create that checklist, then you follow? It's a recipe. It’s a playbook on how to make it successful.
You are creating it from thin air. You were successful with one clinic building it up to that certain point. Try to take what you learned from that, the do's and the don'ts, write it down and put some timeframes to it. Be a little bit conservative and give yourself some time to get things done. It can be easily done if you take the time to do it.
Another part of that is like what we're doing here. That's network. Ask other people what they did. I learned from a ton of people. What's great is you learn from them what you like then you put your own flavor on it and it makes it work and go. Why make mistakes that somebody else already made? Learn from their mistakes so you don't have to make them.
That's the total benefit of networking. That's why I do this show and also have the Facebook group is to make sure people recognize that there are resources out there that can help you do this. Some of these playbooks are available on PPS. You can find some of them. Put your own flavor and spin on them or ask people specific questions in other forums.
Whenever you take anyone's playbook or handbook, make sure it spells out how to do the job successfully. Too many times it will say, “Answer the phones, check patients.” That's not enough detail. It's too high level.
Thanks for sharing the way you broke down this stuff so simply. It's almost too easy. It takes some time. If people wanted to ask you questions about some of the details that you shared, how do they get in touch with you, Sean?
The best way, if you're on the Facebook group, you can reach out to me through Facebook. Email is always great. My email is SAMiller8020@Gmail.com. This is what I'm doing is helping other businesses and business owners. It's a lot of fun. It's great to see other people succeed with it as well.
Thanks for your time. I appreciate it.
It was great. Thanks, Nathan.
Growing up, Sean always felt the desire to make an impact in others' life. It was in High School when a friend got hurt playing sports that Sean was introduced to the power of Physical Therapy and the impact it has on others' life. From that experience, Sean has set a course in his life to be a Physical Therapist and change others' lives. Receiving his Bachelors of Science from Brigham Young University in 1999, Sean then pursued his dream of getting his education in Physical Therapy.
In 2001 Sean graduated from Texas Woman’s University in Dallas Texas. Moving to Arizona in 2002 working for others Sean became very proficient as a Physical Therapist. After years of treating patients full-time, Sean realized that he was just 1 Physical Therapist and only had the ability to treat so many patients at one time. It was this realization that sparked the dream of owning his own practice. ”What if we had multiple therapists all with the same skill and passion. The impact would be even bigger than just 1 therapist”. From this, Sean opened Kinect Physical Therapy in 2012. “Opening Kinect Physical Therapy has been one of my greatest challenges, but to see the larger impact we have on the communities and in our patients is why I do this.”
As Sean was developing his outpatient practices, he noticed that there was a pattern in success being achieved. This success he noticed was not just applicable to his outpatient physical therapy practice but to life. These patterns of success he noticed are principles or laws. Principles because they are laws that are true. True meaning that when applied properly success has to happen. It was through this process of running his practice and life on these principles that Sean has found continued success.
Since leaving Empower Sean is passionate about sharing these principles with other physical therapists so they can enjoy these successes as well.
Sean when not making an impact on others' lives enjoys spending his time with his wife and their 4 children. He is often found on the sporting fields coaching his boys' teams, at the lake wake surfing, or headed to the beach to enjoy the waves and surfing. His favorite quote that he lives by is: "We are what we repeatedly do, excellence, therefore, is not an act but a habit." - Aristotle.
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