The Private Practice Section of the APTA established the Peer2Peer (P2P) Network a few years ago and since then has provided a great opportunity for PT owners to collaborate with fellow PT owners and discuss how to improve their businesses. In this episode, Nathan Shields interviews Randy Roesch, PT, owner of Business Solutions Consulting Company, and Steve Anderson, PT, Executive Coach for Orange Dot Coaching. They are also current facilitators for P2P. Both have personally benefited from networking during the course of their careers, making them a great resource about the benefits of networking and what P2P has to offer. Nathan then also highlights his mantra for successful business ownership, which is Reach Out - Step Out - Network.
We are going to talk about networking. I've got Randy Roesch and Steve Anderson, both physical therapists and facilitators for the Peer2Peer Network in the PPS section of the APTA. If you don't know much about it, I highly recommend you look into it and possibly apply because the application process is closing during the month of January to join the network. I specifically want to talk about not only the network but also the importance of networking, whether it's the Peer2Peer Network or Entrepreneurs’ Organization, Vistage or BNI to name of the few networks that are out there on the country. Networking has provided to the people in my network, the benefits of growth and accountability. I'm sure there's more to it than that. The Mastermind concepts have been around a long time and seem to be initially labeled by Napoleon Hill in Think and Grow Rich. In terms of growth, usually what I find is that the benefit that leads to that growth is the fact that you've got multiple minds coming up with solutions to problems, specifically your problems.
You also now have access to resources, people that may have been there and done that or they may know a company that might be able to help you solve that problem. They might have someone in their network that they can refer to you to help you improve or grow. Secondly, the accountability as owners, we don't have anyone holding us accountable other than maybe our spouses, but the health of the business maybe. There is no one to hold us accountable to the goals that we set forth initially. We all know that if we have an accountability buddy, we'll do better when it comes to achieving our goals. That being said, I wanted to highlight The Peer2Peer Network, especially since it pertains specifically to us as PT owners. From a greater perspective, I want to make sure you all understand the importance of networking with whatever network it is. Let's get to the interviews.
I have Randy Roesch and Steve Anderson. They are both facilitators of the Peer2Peer Network in the Private Practice Section of the APTA. I wanted to bring them on because if you've heard my mantra before, it's, “Step out and network.” Not very often we talk about the importance of networking, especially as independent physical therapy owners, but it is huge. First of all, I want to thank you, Randy and Steve, for coming on.
Thanks for having us.
Randy is the Owner of the Business Solutions consulting company but also a doctor and a physical therapist. Steve Anderson is also a doctor of physical therapy. He's a former CEO of Therapeutic Associates on the West Coast and is an Executive Coach for Orange Dot Coaching. They both are working hard on the Peer2Peer Network and they'll share a little bit with us about the details here as we go along. Before we get into the details, I want to learn a little bit about you because you were both successful physical therapists in the past. I want to know a little bit about your path. Randy, do you mind sharing with the audience a little bit about your professional path and what got you to where you are?
I graduated from the Mayo School of Allied Health in 1973. I've been a PT for a long time. It started out, as most of us do, in acute care and decided that I wanted to do something on my own. I was practicing in Florida and the director in a hospital. I talked to the hospital about getting a piece of the action and they said no. I went out and started my own private practice. Over the course of years, I built that company. The name of the company was RehabWorks. Some of you may have heard that name. I think it's still around in some areas. Eventually, I had four partners and we had a company in 26 states. We employed 1,800 therapists at that time. We were in hospitals, nursing homes, school systems and outpatient clinics. It was a wonderful experience.
We finally reached the point where we couldn't continue to grow without some influx of funding. We pulled interest and joined a company called Continental Medical at the time and that company eventually went public. I've been in the corporate world too. It was an interesting experience. I stayed on for four years and then decided that getting back into private practice was what I wanted to do. I joined my husband in his private practice for several years and then started my consulting company. I've been working with PTs in private practice for the past years. It is a fun ride.
Steve, how about you? Tell us a little bit about your path and what got you to where you are.
It's a little bit similar in the sense that I started out as a staff PT. I joined a company that I was impressed with. The name of the company was Therapeutic Associates. I started with that company. In a few years, I became the director of one of the clinics in the company and eventually became the CEO. I was with the same company for 37 years. I was the CEO for 19 years. It's an interesting company because it is a shared ownership company. It's a legacy company. It's owned by physical therapists. When I retired at the end of 2016, I believe there were 50 PT partners. The directors of each of the clinics have ownership. It continues on and it's doing great in the Pacific Northwest. We also have a hospital contract in Southern California that we've had interestingly enough since 1954. I retired at the end of 2016 and I did what has always been my real passion, which is helping leaders become better leaders. I started Orange Dot Coaching. I now do coaching services for executives, NPT and in the business world as well.
Since we're talking a little bit about networking, specifically the Peer2Peer Network. For either of you, did networking play a part in your progression in your professional path?Everybody is willing to share in Private Practice Section. Click To Tweet
It did for me. I was active in the Private Practice Section beginning in the early ‘80s when I started my private practice. It was an amazing experience. I met many wonderful people. The thing that I found in the Private Practice Section was that everybody was willing to share. It was amazing. You would go to these meetings and people would tell you what to do and what all the resources were. It was great. It was one of the reasons that I've stayed active in this section. I wanted to give back because it helped me so much in the development of my company.
For me, I felt like I was on an island when I opened up my own clinic at the younger stages. I thought I had to figure all this out on my own. I felt like it was up to me to figure everything out. Little did I know, once I started networking, that there are other people out there that have already been there, done that and know all the answers or can give you the resources. If I had only tapped into something like that earlier in my career, things would have gone so much smoother. What was your experience, Steve?
The Private Practice Section was great for me too. I've heard her say before and I felt the same way that you go to your first meeting or two and you say, “I've found my people. They understand me and they helped me.” Some of my dearest friendships continue to this day that I found at the Private Practice Section meetings. I love them. My story also goes in the sense that I was part of this big private practice company, Therapeutic Associates. I was elected by the board to become the CEO at 41 years old. I was excited and felt pretty cool about that. The real truth, I was scared to death.
Just like a lot of my clients, I’m overwhelmed with the enormity of the job and to do so networking was extremely important to me. I got a lot of help from friends in the Private Practice Section, but I also found something that we may touch on here a little bit too. I joined a group called Vistage, which is an international group that puts groups of CEOs together and there were 12 to 15 in a group. I did that for seven-and-a-half years. We met on a monthly basis and that was extremely valuable to me. I learned a lot in that period that we're going to talk about, how I learned a lot after that type of setting. A huge proponent of it, I felt that it took me to the level where I needed to be interacting in life in that environment.
That's a great point, Steve, because my business partner and I were part of the Entrepreneurs’ Organization. Much like Vistage, it gives you an opportunity to network, talk with and share issues with people who are outside of the healthcare, specifically the PT industry so that they can maybe challenge some of the perspectives that you have. “Why do you have to do it that way?” They don't come from where we're coming from. Sometimes it's helpful to talk to people outside of the PT industry to look for some of the answers. It gets a little bit different perspective on how things go outside of the industry, what expectations are, what company norms or business norms are. Whether it's a Peer2Peer Network, Vistage, Entrepreneurs’ Organization or BNI or any number of this business that can be hugely helpful in your ability to overcome some of the issues that you're having, but also mingle with other professionals.
The key to that set up or organization, which I know Peer2Peer does as well, is that you need to get to a level of trust and vulnerability with people to get to them to the bottom of things. The way they're set up like that, you can get there because you get to know these people. It's amazing. There were tons of business stuff that came up, but quite frankly, there was some personal stuff that came up too that shocked me at first. When you're running a business and you're working these long hours and doing things, sometimes you have issues at home that you'd like to run by people, “How did you handle this?” If you have that trust and vulnerability, I'm already set into the group, but you can go there and help there as well.
As far as Peer2Peer Network is concerned, Randy, what's the history around Peer2Peer Network? How long has it been going? What got it started?
A couple of people that were on the board, they always laugh about how they were out having a beer one night. Mike Horsfield and Jeff Ostrowski got to talking about how nice it would be if they had a board of directors that they could talk to and they could share problems. They talked about how they could maybe create this group. They thought they came up with this brand new idea that nobody had ever thought of. As Mike says, we realized that the Mastermind concept has been around forever. It started in the early 1900s. That's what it's patterned after is that Mastermind concept. We call it networking on steroids because it's a way for PTs to network with each other and learn from each other. They went to the board of directors of the Private Practice Section. They said, “We'd like to try a couple of pilot groups and if it's successful, then maybe this is something the section would want to offer.”
They had two groups, five people, who were in companies with gross revenues of less than $2 million and five people who were in companies with over $2 million. They started working together on how to better their company. They talk about the problems they had and the things that they had in common that they didn't understand and could help each other with. They loved the experience. They brought that back to the board and said, “How could we make this happen?” They decided to try this Peer2Peer Network. At the point that I joined them, I had been very active in the section as was Steve has for many years. I was very excited about the opportunity to do something like this that would be so beneficial for therapists. We opened it up. During the first year, we had 35 new people join. Now, we have 157 network members and 29 groups.
The groups are made up of 5 to 8 people. As I said, we have this arbitrary cutoff at $2 million. Steve and I interview everybody that's coming into the programs. We get to know them and then we put the groups together. We look at what your strengths and weaknesses are, so if somebody wants to learn more about social media marketing, we might put them in a group with a younger person who's got a lot of experience with that. If someone wants to own a building, we'd put them in with somebody who owns a building. We build and put these groups together. The groups meet on an annual basis face-to-face. We have a summit every year in April. It's a three-day summit and then the rest of the time, they meet on a monthly basis. Usually, video conferencing and then there are tons of emails and texts going back and forth. Most of them have a Dropbox as a way to communicate with documents that they want to share and so on. We're getting amazing feedback from everybody that's in the program. The one thing that I often hear is, “It's the best thing that PPS has ever done. These are the people who saved my practice. They helped me make some of the decisions I needed to make or learn how to move forward. I was stuck.” It's been a great program.
The person who turned me onto Peer2Peer Network, and I didn't know much about it at all, was a friend of mine who owned a clinic up here in Alaska. He said the same thing. He met with a group of about 6 to 7 people. He was having issues with recruiting physical therapists, especially up here in Alaska, how to retain therapists and how to move his clinic forward in different aspects. He grew 85% over the course of one year and attributed a lot of that success to Peer2Peer Network. It sounds like that's not an uncommon success story.
It's really not. As I said, we've had several people who have said that it's made tremendous in their business. The thing that I find interesting and Steve maybe found this Vistage, but what people are saying is a lot of times, especially solo owners didn't have to be accountable to anybody. They had great plans but they weren't accountable. A lot of the stuff, you go to these meetings, you're all these great things, you come back with great ideas and then you get busy and it goes away. This is like having your own little board of directors and you have to go back and talk to and say, “I did that. I didn't do that.” “Why didn't you? What's up?” These people are setting goals and they're holding each other accountable. That's what they say has made a tremendous difference.
Would you agree with that, Steve?
Absolutely. That's what I experienced when I ran a bigger group. We hold each other accountable. I think for the smaller practices that don't have that, it’s a huge benefit. People you know and trust, you don't fool. You don't show up to the meeting and BS them because they'll call you out in a second. Sometimes, as humans, we need that. I would totally agree with Randy on that.
I've recognized the same thing as I've been in some of those groups. It's hard to make excuses for some of the things that you didn't get done and that you had committed to because they'll call you out on it. They'll say, “You can't use you are busy as an excuse. We're all busy. How are you going to prioritize and get things done?” I love that you brought it up, Randy. That accountability piece is huge because who's holding the owner responsible to get things done? If it's an employee, they can huff and puff and maybe they might even leave. It's nice when you don't have to get to that point and someone else out of empathy and an environment of security is providing that ability to hold you accountable. That's huge in the growth of small business owners.
In the groups, we talk about the rules of engagement. The things that people learn and help each other with is that they trust. They have this huge trust. As Steve said, that was important in this group, the commitment to the group. They show up for the meetings. They schedule these monthly meetings and everybody shows up unless there's some kind of emergency. Everybody comes to the summit every year. They work hard on balance sharing so that everybody's talking, sharing and not just one person taking over the group. It's important. We don't have any competitors in the groups. Number one, we have a wide variety. We have people who have been in practice for 30 years and people who have been in practice for three years and they might be in the same group.
We also are very careful that they're from different geographic areas. That vulnerability, you're not to talk about opening a clinic if you know that your competitors sitting there. I'm moving into that area. The confidentiality piece is extremely important and then the ability to play well in the sandbox. We've been fortunate because we've had very good results with the people who have been in the program. Very few people have left. We've had a few people who have left because they sold their practice. One of the criteria is that you're the CEO in your practice and an owner and some people are not able to continue anymore. We've had a few people who have said, “This isn't quite for me. I've gotten all that I could get.” We've had less than 10% attrition. I think that's pretty good.
What are the criteria? I think you've covered a few of them.
It’s a PT or a PTA and you have to be a member of the Private Practice Section. You are the chief executive in the company, which typically is the owner. I think we only have one person who was the CEO and not an owner, but he was the CEO of the business. There's a fee. It's $750 a year and that covers the costs of the summit as well as what we do for the program. It also covers benchmarking. PPS, we developed and started in Peer2Peer Network. Some people have probably heard about benchmarking opportunities through PPS. We have twelve KPIs that we monitor. That's done on an annual basis. We have an outside firm that does all the work. It's all anonymous, but we use it so that you can compare yourselves regionally and nationally to all the benchmarks and the groups use it to extensively compare to each other, “How come your cost per visit is this? Let's talk about how we can make me more like yours.” That's been a huge benefit for the members of Peer2Peer.
That is huge, especially when we don't have the business acumen and the ability to compare some of those finances like, “How much of my gross revenues am I spending on the payroll? What is my cost per visit? What is my average number of visits per new patient?” Those kinds of KPIs you want to compare and see where you're at. Am I below average? Am I above average? It's good to have an idea of what's happening in your clinic compared to the industry. There aren't a lot of benchmarking data out there for physical therapy owners. It is a huge benefit to have that available to us.Solo PT clinic owners do not have to be accountable to anybody. Click To Tweet
We've expanded it now. We've opened it up so that other members of the Private Practice Section can also get into the benchmarking program. I think we are offering 500 slots, but we thought the more the merrier. We can have more information and more data. That's why we opened it up beyond Peer2Peer.
Steve, you're talking to some of these people who are considering joining the network. What are some of the issues that they have that you have to address? What kind of encouragement do you find yourself reiterating to the PA owners that are considering joining the network or any network?
Whenever you're running a business, it doesn't matter the size of it. There are two things that I see. One is being overwhelmed like, “I know I've got so many things to do, but I still have to treat patients. I still need to do this. How am I going to get it all done?” Seeing what others do and how others have handled that is extremely important. The other thing I see in my clients a lot too because I know I have it big-time is what's known as the impostor syndrome. When you're sitting there thinking, “Everybody thinks I know what I'm doing because I have a successful practice and I don't have a clue.” That's a hard thing to deal with. When you're in a group networking like this, there are two things that happened. One is you hear about people in the same boat so you can say, “I'm not weird thinking this.” Secondly, people are going to reassure you that you're not clueless, that you do have some skills and you are successful for a reason. You can build on that and that's what that group brings to you. They say it's lonely at the top and I would totally agree. Sometimes you need people that are very objective and willing to tell you what you need to hear and not just tell you what they think you want you to hear to the organization.
Randy, what are some of the common concerns that they bring up as to why they don't want to join the network?
I don't talk to very many people that don't want to join because my job is to find people who want to join. I would say that some of the people who have decided not to remain, it's been primarily a time issue. They don't feel like they have the time to devote to it. Even though in my mind, it's not a huge time commitment. It's probably a few hours a month for the call and then some emailing back and forth and those kinds of things. I don't know if it’s the true reason why they didn't want to stay with it. To reiterate what Steve was saying, we're finding that a lot of people, no matter what size the practice have a lot of similar problems. They appreciate the opportunity to be able to have someone to talk to about it and learn from other people.
To add to that, I find this with people I do work with as well. Sometimes they said, “I really want to do this, but I don't have the time.” It's a funny thing to say because the reason you do it is so that you can find more time and be better at what you're doing. It's like, “I need to hire somebody, but I'm not going to hire him because I don't have time to train him.” You just need to find the time to bring them on and train them and then help you expand it. The same thing goes with leaders is there's never going to be a good time. There's never going to be, “Now it's exactly the time to do this.” You have to decide, pull the trigger and go.”
I think you have to recognize that and I want to get your feedback on this as well, whether it's networking or something else that you might commonly recommend the PT owners do, but they've got to take the time to put on the owner hat and recognize that they are the leaders, the owners of their company. Sometimes, if they're treating patients full-time, they do not recognize that. They're putting on their owner’s hat sometime around midnight when they've already lost a ton of energy. They're neglecting parts of their business because they're not fully executing in that ownership seat. If you were to go back and talk to yourself or maybe a younger version of yourself that owned a clinic like some of these owners do, what are one or two things that you would highly encourage them to do? What kind of mindset or encouragement would you give to them at this stage if they are treating full-time, not much time to run the business type of situation? I'll start with you first, Steve.
You mentioned earlier when we first started about working on the business and not in the business. We probably all read The E-Myth book and understand what that means. It's one of those things where I find that when you're in small business and you've got all these pressures on, you tend to think very short-term. What I try and tell leaders is that you need long-term strategies so you can kill it for six months, nine months, a year, maybe a couple of years and do well and be profitable. At the end of it, you can't sustain it. A long-term strategy is what can I do to set things up now so that when I am 2, 3, 4, 5 years down the road, I can sustain what I'm doing and continue to grow because otherwise, you're going to hit it. There are only so many hours in a day one person can do and you're going to tap out unless you're preparing for that growth along the way.
What would you share, Randy, in terms of talking to that younger owner?
I think Steve’s spot on. They use the phrase, “We're running our business by the seat of our pants,” and that's how it feels as a PT because we didn't learn any of this stuff in PT school. I think as Steve said, we can work as we all did really hard, but at some point, you got to figure out how you're going to run this business and be able to not be working 80 hours a week and trying to have a life besides your business. Looking ahead and trying to make a plan, you got to start somewhere and you're going to work hard for the first few years. It's important not to neglect thinking about your goal, where you want to take this thing and how are you going to get there and plan it out rather than go day to day and figure that somehow it's going to work.
I love that you shared the long-term aspect because a lot of times we were thinking short-term, how many visits are we getting this week and new patients and not looking long-term as to what we need to grow in terms of company. If someone wants to join the Peer2Peer network, Randy, how did they go about doing it?
We take applications and the application period is open now until mid-January. They go to the PPS website, which is PPSAPTA.org. There's a networking tab right on the main page of the webpage and that's where the Peer2Peer Network lies. Once they go into networking, they'll see Peer2Peer and they'll see the application. There's a list of FAQs in that tab. Steve and I are also available to chat with anybody at any time to talk with them a little bit more about the program and see if they think that it's right for them. We often do that.
Is your contact information on that webpage? Would you be willing to share?
I'm willing to share it, but our contact information is on that webpage so that they can send us an email and then we get back in touch and talk with them, answer their questions and do interview calls with everybody to where I'm in. We want to make sure that they feel it's a fit, that they're going to enjoy the experience. My email address is RRoesch@Ymail.com.
They can reach out now. You said that the application period starts now, but did that start in September or October?
The application period is open all the time but for the class coming up, we're going to have to cut off probably about mid-January. Steve and I interview everybody who's coming into the program. We put the groups together and then we do some group calls before the summit in April. We have a lot of work between January and April. We try to get things tied up by mid to late January. If people are interested, they need to apply as soon as possible.
It only comes around one time a year.
We do a new class and we bring in 50 new people a year. That's 8 to 9 new groups every year. We're continuing to grow at that pace, which is great. We're very excited about it.
The exciting thing this year is the conference is in San Diego, which I'm excited about.
We held it in Alexandria, Virginia, which is where the Private Practice Section headquarters are. We did that for the first four years and we have people from all over the country, like, yourself, from Alaska. We had people asking if we could possibly consider moving it. We said, “That's only fair.” This year we're on the West Coast, in the beautiful San Diego.It's important not to neglect thinking about your goal, where you want to take it, and how you are going to get there. Click To Tweet
That's April 22nd to 24th or something like that.
The meeting starts on Wednesday afternoon. We end at noon on Fridays, so people can get back home for the weekend.
Anything else you want to share, Steve, in regards to the Peer2Peer Network or some of your insight to the audience?
I think we've covered most of it, but it's a wonderful program. I commend the people who came up with it, Mike, Jeff and Randy for driving it for the first few years. It is a top-notch thing in the Private Practice Section. I believe everyone could benefit from it. My advice to you is don't say you don't have the time. Find the time. It's not very expensive. If you take a look at Vistage and some of those other groups, you're spending some pretty big dollars and this is done very economically. I don't think the cost is an issue. You just need to find the time.
Thank you, both, so much for taking the time to join me here. I appreciate it. Thank you so much for sharing your insight and the work that you've done in the past.
Thank you, Nathan.
It has been fun being on the program.
Dr. Roesch began her career as a Physical Therapist, graduating from the Mayo Clinic School of Allied Health in 1973.
She practiced at the Mayo clinic for 6 years and then moved to Sarasota, Florida where she was the Director of Rehabilitation at Blake Memorial Hospital for 4 years.
In 1983, Dr. Roesch opened a private practice outpatient clinic and began providing rehabilitation contract services to local nursing homes, Easter Seals, and the local school system. Over the course of the next 6 years, Dr. Roesch acquired 3 partners and grew her business, known as Rehabworks. Rehabworks employed 1800 therapists, and provided rehab services in outpatient clinics, hospitals, long term care facilities and school systems in 26 states.
Rehabworks was sold to Continental Medical Inc. in 1989. The new company then went public. Dr. Roesch stayed on as Chief Operating Officer for 4 years. In that capacity her primary role was to value and acquire businesses as well as lead the transition team for these new acquisitions.
In 1994, Dr. Roesch started Business Solutions, a consulting company to provide services to therapists in private practice. Today she concentrates her business in the area of succession planning and practice valuation.
Dr. Roesch has been very active in the Physical Therapy profession over the course of her career, including volunteer service with the APTA. She has served on the Board of Directors of the Florida Chapter, the Private Practice Section, and as Director, Secretary and Vice President of the APTA Board of Directors. She served as the Interim Executive Director for the Private Practice Section. She is currently a Trustee and Board Secretary of the Foundation for Physical Therapy Research. She is also the Facilitator/Director of the Private Practice Section Peer2Peer Network program. Dr. Roesch has received our professions’ highest honor being named as a Fellow of the American Physical Therapy Association in 2016.
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Jerry Henderson got into physical therapy the same way a lot of physical therapists did, as a patient. Jerry was fourteen years old when he had a skiing accident that fractured his femur and left him hooked on a skeletal traction for about a month and a hip spike for about six weeks. After going through the treatment with a guy who was helping him get mobile again, he understood what physical therapy is all about and knew that’s what he wanted to do. Fast forward years later, Jerry founded Clinicient, a cloud-based EMR software for physical therapy clinics. Clinicient helps their clients on getting up to date on the changes that are coming in the PT space so that they can continue to improve more lives.
I get to interview Jerry Henderson of Clinicient EMR Software program. He is the Vice President of Clinical Community at Clinicient. Clinicient acquired his company that he started for the purpose of developing an EMR application for physical therapy and other professions. Prior to Clinicient, Jerry was practicing physical therapy for over 25 years, twenty of which he was in private practice. He started Physical Therapy Clinics, Incorporated, PTCI, a multi-clinic physical therapy business in Seattle in 1979. He also started a second physical therapy practice called PhysioCare Incorporation in 2003. While still in clinical practice, he started the PT Link Corporation in 1995. PT Link was an early version of physical therapy documentation software system and was later acquired by the Pathways Group and became a part of a public offering and gradually led to Clinicient.
We'll learn a little bit from Jerry and his experiences as a physical therapy clinic. More importantly, we're going to talk about the inevitable changes that are coming to the PT profession in regards to changing from a fee for service relationship to value-based services as it pertains to payment and reimbursement for physical therapy. Although not that exciting, nevertheless, important to keep up on top of the topics that are coming down the plate in regard to this. Jerry will share some of his insights and definitions as to what's going on and also gives us direction in figuring out how we can stay on top of this change in our profession. He has a wealth of knowledge and as someone that you want to follow through his webinars at Clinicient.com.
We have Jerry Henderson who is the Founder and Owner of Clinicient, a cloud-based EMR software for physical therapy clinics. Thanks for taking the time to be on our podcast, Jerry. I appreciate it.
My pleasure, Nathan. Happy to do it.
Every time we have an interviewee, I like to hear a little bit about your story, how you got into physical therapy and what led you to where you're at now.
I got into physical therapy the same way a lot of us did as a patient. I was a fourteen-year-old knucklehead and my best buddy and I decided we would take his toboggan to the top of the local ski hill and try it out that he'd just made. I had a cognitive fracture in my left femur, really bad. I ended up in a skeletal traction for about a month and then ended up in a hip spica for about six weeks thereafter and had some physical therapy after that. I had never heard of physical therapy before that like many of us. I decided from that point on, after going through this experience of being in a hip spica and then having this guy help me get mobile again, it made a huge impression on me. I didn't understand what physical therapy was at that point, but I knew that's what I wanted to do as a fourteen-year-old.
You started practicing physical therapy and then eventually you had a clinic yourself.
Yes, I started in my first job, which I’ll always be thankful for. I was a staff therapist at Group Health Cooperative in Seattle, Washington, which many of you probably know is a large, closed panel HMO similar to Kaiser. It was a great clinical experience. We saw such a variety of patients, always be grateful for that. About three years of that proved to be frustrating for me because I didn't have the power to do what I wanted to do to improve things in our physical therapy department. It was bureaucratic. I left there and became what we used to call a registry therapist back in the old days, a fill-in therapist, contract basis. I did that for about a year, which was also great experience because I saw excellent physical therapy and I saw shameful therapy and everything in between during that year of experience. I decided that I thought I could do a better myself. I had a grand total of $15,000 business loan and started my first clinic in Woodinville, Washington, which is a suburb of Seattle.
What year was that?
That would've been about 1984. What I always tell people is that at that time, I'm pretty convinced that anybody with an ounce of common sense and a physical therapy license could start a private practice and be pretty successful. It was truly pretty easy. Those times have changed.
How long did you have the practice there?
I sold that practice to my partner in about 2005-ish. I started another series of physical therapy clinics in the Seattle area. I started a competitive clinic to my ex-partner down the street in Woodinville, Washington. In between all of that, I was starting Clinicient. It became a fool's errand to try to do a good job running my practice and starting a software company, so I sold to a younger group of therapists about 2007 or 2008. They're doing great. It’s fun to follow them.
You started Clinicient while you were also owning clinics?
I started the predecessor to Clinicient about 1998, 1999. It became Clinicient, Inc. by about 2004.
What made you decide to start the software company?
Frustration. At the time I started Clinicient, we had two clinic sites. We're doing fine. We had probably nine or ten full-time PTs at that point. There were a couple things that bothered me. One was I had no visibility to what was going on in my business day-to-day. I had no idea and I had no control over the quality of our clinical documentation, which was important to me. To me, that was the marketing to my referral base. I would look at a couple things about that.
One is I will get at how much effort it took to do an initial evaluation, when you dictated it, had it transcribed. You corrected it and all that. It would be a three or four-day turnaround. The quality was variable and there are many good PTs who are horrible writers and vice versa. It was embarrassing to me. I wanted to start it. I was so naïve. We all think that we do better job than our competitor. I haven't met a PT yet who doesn't do high quality care.
I’m no exception. I thought we did better than our competitor yet I felt like, “I'm getting paid the same amount that my competitor is getting paid and I'm doing a better job. That doesn't seem fair.” If I can somehow do this software that standardizes our processes, standardizes our clinical documentation, improves our efficiency and helps me prove that my outcomes are superior, then insurance companies are going to come flocking to me. They want high quality care too. I know that sounds super naïve and it was. if I had known better, I probably wouldn't have done it.
What you did was great because of where you're at now. What's telling is that as an owner, you recognized that number one, you wanted to have some systems in place, some standardized systems for your business. You also recognized that you needed the statistics to measure exactly where you're at at any given time. Reports, statistics, KPIs, whatever you want to call them, you needed those things as an owner and you weren't able to get those somehow.
It's telling because a lot of owners don't consider those two functional or foundational things that they need to have as owners. They need to create and have systems in place, so there's some consistency throughout the clinic and expectations to follow up on. They need to have a mechanism to pull statistics and reports so they can measure and also predict what their business is doing at any given time. You inherently did that and started creating Clinicient out of those two needs.
I remember keeping a three-ring binder with graph paper and I would literally graph things like patient visits per day with colored pencils. As silly as that sounds, it was as useful as anything I can get my fingers on at that point in time. I learned to use Excel later and started doing pretty much the same thing on a spreadsheet. It didn't have that much more utility. It gradually dawned on me that you needed to have all of this integrated into one system. It's not like this was an epiphany and it happened overnight, you evolved into these sorts of things.
Back at this time or even now, have you used consultants, coaches, and anyone like that to help you along? One of my tendencies is to step out, reach out and network. Did you utilize anybody to help you along this path?
Not as much as I as I should have. I did everything the hard way to a large extent. A specific example is, and it may be hard to believe today, I thought that marketing was a dirty word. I didn't put any effort into it, didn't hire anybody to help me with that piece. I was lucky to have a good accountant who was more than an accountant and served as a sounding board and a great financial advisor. That was lucky. It wasn't that I sought that out. I did the typical things like with community involvement, the chamber and those sorts of things, which were helpful for networking. In hindsight, I tried to do this today. I try to find people that are a heck of a lot smarter than me to work with. That's always my advice to younger therapists is to get a team of coaches. Luckily, you can get a lot of that help for not much money. It's worth it.
The ROI is obvious. I don't think I’ve found a single successful physical therapist, whether it's a clinic owner or in the physical therapy business that hasn't utilized a consultant, coach or some kind of other mentor. Even if it's the CPA, get on the horn with them once a month to help them go through the financials that hasn't had one of those.
I don't think you could do it the way I did it today. It's too complicated, it's too complex. Anybody with an ounce of common sense and a PT license could do okay in 1985, but it's not the case today for sure.
Now that you have Clinicient where you are now, what are some of the strengths that you think Clinicient offers as an EMR?
In hindsight, we did a lot of things right from the beginning. One of the biggest was designing a system for our profession and a totally integrated system. The scheduling, clinical documentation, charge capture, billing and claims management, all of that is in one system. That was a stroke of luck. It wasn't me that thought of that by any means. I was fortunate enough to have some smart people involved early on who helped me make that decision.
Thinking it through from the therapist work flow perspective was important. Back in the day, many of these systems were what we used to call practice management systems. This meant their billing and claims management systems tack an EMR onto the side somehow. That has never worked very well. Where we decided to start with the patient interaction out, that's worked very well.
What are some of the things that you're working on here going forward to improve Clinicient?
We’re rolling out a new version of our system we're calling INSIGHT Go. It's designed for physical therapists, totally browser-based, works on any standard tablet device as well as on your PC, totally mobile. You can do some limited documentation on your smartphone if you wanted to. It's a little bit of a small screen, but I was playing around with it and I could see myself using my smartphone as part of my daily routine using INSIGHT Go. We still don't have all of the features and functionality from our base system rolled into INSIGHT Go, but that's coming. It's gone better than I would've ever expected.
The bigger piece for us is we want to help the profession prepare for this transition from fee for service that we're in today to value. I can tell you that the pace of change is accelerating. We want to be on the forefront of that. That's one of the reasons we purchased a patient engagement application called Keet Health. We're integrating with Keet. That in turn will help us with this whole transition to value. As we go forward, it's going to be much more patient-centric and less insurance-centric hopefully.Majority of everybody's businesses today is fee for service. Click To Tweet
I'm hearing this for the first time. We're going from a fee for service now and we're moving to value-based services in terms of reimbursement. Break it down for us step-by-step. Will this start taking place or are we seeing some of that now?
We're seeing a lot of it now. I know that the majority of everybody's businesses today is fee for service. I always counsel people to look at Medicare to forecast the future. If you look at Medicare as a model, what they have done is they've decided they're going whole hog on these episodic bundles. An example would be Comprehensive Care for Joint Replacement model. There's also something called a BPCI model, which is bundled payments for care improvement model.
In simple terms, the way this works is everybody gets paid the same way you get paid today on a fee for service basis but Medicare is tracking the cost of an entire episode. After they have calculated that cost, whoever owns the bundle, whoever is at risk for that bundle may get a bonus check if you keep your costs under control. There's a certain sliver of quality in there.
It's not much. It’s mostly about cost containment. Using the CJR thing as an example. This is the first time that CMS has tracked costs across the care continuum from hospital to outpatient services. Taking a look at that and provided incentives for containing that cost. I’ve often called CJR as the stealth program for many of our colleagues because you are probably seeing patients today who've had a total knee replacement or a total hip replacement that were part of that bundle and you don't know it. You aren't getting any of the financial reward or financial risk for taking care of those patients. Someone is watching your utilization, that person who is the bundle holder because they're incented to keep costs down.
Taking the CJR program as an example, there is an entity that's responsible for that bundle, for that episode. In CJR’s case, it's the hospital. The hospital takes risk for that episode. Everybody else was paid the same. The surgeon was paid the same, the hospital gets their DRG with a small discount but it doesn't amount to much. CMS will track the total cost of that episode, which is not only the hospitalization. It includes nearly all of the care that's done for that patient 60 days post discharge.
CMS takes that total cost and they either reward or penalize the bundle holder, which, in this case, is the hospital for cost containment. I’ve often told PTs that you're probably treating patients that are in this bundle and you don't even know it. You're still getting paid the same way you always paid. If it's a bundled patient, someone else is watching your cost very closely because they're incented on that. Yet you don't get any of the reward if you save money.
Do physical therapists need to be concerned or know that that’s happening in the background?
You need to be concerned and needs to start working with physicians, hospitals, reaching across the aisle and figuring out how they can participate. These bundles, I’ve used Medicare as an example, are being picked up by commercial payers. They're hugely interested in them because CMS has shown that they have a significant cost savings with these episodic bundles. The big payers, they're all starting those programs. These episodic bundles are reality and we need to get in the game.
How is this going to affect payment for our services in the future? How soon do you see that happening?
It’s probably happening now, probably utilization, authorization sorts of ways. If you have a physician, as an example, is referring you are patient and that physician is incented to decrease post discharge costs somehow, because they are part of a bundle and you aren't, they're going to be pretty stingy about referring that patient to you for remaining episodes.
You're also saying that the authorization that you might receive from a commercial payer might be dictated by some of this data that they're collecting?
What can we do to prepare for that? What is your recommendation? Do you have any ideas?
This ultimately could be the best news ever for us because we are effective, low cost providers. There's good evidence to show that early physical therapy saves downstream costs. The problem is that the payers don't necessarily know that today, although they're beginning to get the message. They're beginning to understand it. It's difficult for a smaller physical therapy entity, one to two clinics to three clinic places without a lot of management, administration, and all those things to play in that. You can't even get in the door most of the time.
One of the solutions is to work with your competitors. It's a tough deal to do. You need to sell your network of providers and you need to have a common evidence-based philosophy and a product with a capital P that these other entities can understand and to show your value. I was wrestling with it in 1984. I wasn't getting paid differentiated on value. We're finally getting to the point where if we play our cards right, we can be in the game. It's going to be fun time.
Is the APTA doing some of that for us? Are there other networks or foundations out there that are doing some of that work that we can become a part of?
I haven’t seen a lot from the APTA. It's going to have to come more from a grassroots networking effort on a local level than it is at the APTA. One place that I would look at as a model to consider is Therapy Partners in Minneapolis, Minnesota. Jim Hoyme is one of the founders of that organization and they fought this battle in the early 2000s. Minnesota has had alternative payment models for a long time. They've been ahead of the rest of the nation.
A lot of the independent physical therapists are being frozen out. Jim can tell the story a lot better than I can, but they spent the better part of ten years getting a group of hardheaded, independent physical therapists together to have a tightly integrated network. In this case, it happens to be MSO, managed services organization. It's an interesting model to look at. It's hard to get in the door if you're a small entity. We've got to have numbers.
What do you recommend a small entity do? How do they get abreast of this information? Should they consider coordinating or organizing an MSO? What do you recommend they do first of?
First step is to spend some time studying what Medicare is doing because they are a good forecaster of what's to come in the commercial world. Understand these episodic bundles. Begin to understand these other alternative payment models. If you look, you'll see that the information is all there on how these things are structured. Try to get rid of your fee for service mindset, which is difficult. We have been whipped into focusing on units per visit and visits for patient.
How can we keep these patients coming back longer for more services? That's not going to work in the future. We've got to change to this more population health mindset where we're doing a better job of taking care of patients outside of the four walls of our clinic. That's why we’re interested in Keet Health. That's why we bought them. It's a mobile patient engagement strategy, so we can do a better job of managing these patients, which we think is going to be critical for these alternative payment models going forward.
How can we expect to get reimbursed in the future?
You're going to see more of these episodic bundles coming.
We’ll get paid upfront or at the end of the care? Do you know?
It will be a combination of reduced fee for service and some financial incentive based on quality and total cost containment. You'll see that model, but that only works for a specific episode. Hard on the heels of that, you're going to see more multidisciplinary, condition-based bundles. Instead of thinking about a total knee replacement bundle, think about a knee pain bundle or a low back pain bundle, those sorts of things. That would involve more than just PT. You might have a behavioral psychologist involved, you might have a nutritionist, a physician, a surgeon even, might be all part of that bundle.
Beyond that would be these more far reaching alternative payment models where there is the classic capitation where they say we’re going to pay you to take care of all of the conditions for this certain patient population for X dollars per month. In that world, you have to get good because you only have so much therapist time to sell. You want to sell all of it you can. In the future, you want to conserve as much of that as you can. Having therapists doing the stuff that requires those one on one interpersonal skills and do a better job of helping patients take care of their problems themselves.
What kind of metrics does an owner need to look at to be prepared for fee for service? What statistics do they need to start tracking that they might not be tracking now?
I did an article on that that was inside Impact Magazine. Think about all the volume metrics that we pay attention to today. Visits per day, units per visit, visits per patient, that's what people track today. Instead of thinking about that, think about things like active patient census per therapist. How many patient lives is this therapist able to manage, which I know is way outside the way we think today? How good of a job are we doing at following up on patients? What's our patient home exercise compliance like? How do we measure that? Are you tracking that?
If you are tracking it, how do you do it? We have some ideas around that. Another example is how many patient education modules were we able to send the patients? Did we test them on their knowledge? How are they doing? Are they picking up on it? Going from being a provider of procedures to educators, coaches, managers, that mindset. If you think about that, wouldn't that be a lot more fun if you could do the stuff that required the skilled, knowledgeable, physical therapist mind and training? To do the difficult stuff.
When I was still in practice, I loved doing initial evaluations. I do initial evaluations all day long because that’s the fun part, that's the detective work. Think about being able to do more of that and more managing the patient holistically and delegating some of the other stuff off to people who don't need to be a physical therapist necessarily. We're not incented to do that. You can't get paid for having an aide do things that an aide could do, as an example.
This isn't going to all come at once and take a whole weekend’s training for our staff and whatnot. What are some things that either we can do or that our EMR’s should be doing? What is Clinicient doing to lead us down this path that we’re eventually going to get to?
That’s one of the reasons we're integrating Keet. It’s a big piece of this. Having this constant communication between the therapist, the patient, the physician, other providers for the patient and helping to coordinate that patient's care, we think is going to be critical. We think that organizing, as we discussed earlier, so that we have a well-defined a set of services that is understandable. I don't think people, including payers, understand what physical therapy is. They certainly don't understand the difference between good PT, bad PT and mediocre PT.
It's incumbent on us to, first of all, control our own quality. Second of all, make sure that all these other constituents understand the difference. We need to differentiate. It's going to be a long evolution, but we're in discussions with a lot of different entities, especially on these episodic bundles. For an independent PT in particular, you're going to need a partner to help you with this transition for sure. One of the things we are going to begin emphasizing in our webinars and everything is concrete steps you can take to prepare for all this.
We're going to need some handholding in that regard it's been so long that we've gone off of volume metrics that you were talking about that to change over to these other metrics and statistics is going to be a complete mind shift. It's going to be hard for some of us for sure. Do you still recommend or is it even more highly essential now that therapists look at their functional outcome statistics?
It's critical but it's going to be much more than patient reported outcomes in the near future. Patient reported outcomes are useful to a point. I’ve always been a big fan of them. One of the things we're working on is we want to make sure that we're not measuring those. We’re also using functional reproducible testing that's done in the clinic as another piece of the data set, end cost, end patient satisfaction, all of that. We’re getting to the bang for the buck number. How much better? How do we measure better? How much better can we get a patient for X dollars? That's easier said than done, but patient reported outcomes only tell a piece of the story. We've got to integrate that and marry that with a lot of the other data that we can get to in an EMR, as an example.
What is the timeframe for some of these bundled payments to affect us directly, where we’re going to see maybe a discounted fee for service rate, and then the bonuses that you’re talking about?
A lot of PTs are becoming involved in these on a very sporadic basis in different geographies today. There are people that are participating that I know of some folks in Florida, as an example, who were participating in a hip and knee bundle. Instead of being invisible, if your cost statistics look pretty good, you stand a pretty good chance of seeing more referrals from that bundle holder, which you may or may not know is happening. You may see a change in referral patterns because the bundle holder is not happy with your costs.
Physicians or hospitals, or some other larger healthcare organization type entity who negotiated a bundle with a payer of some sort, all of those cost statistics are visible to the bundle holder. They know how much your services cost. You probably won't be, but you may be approached by one of these bundle holders that says, “We like what you do. Let's formalize this relationship but you need to take a little bit of risk if you're going to do this as a piece of it. You'll also get a potential bonus if you do a good job of doing what you do.” I don't think they're going to approach you though. We've got to be proactive. We've got to figure these things out. Who to approach, how to get to them and how to get at the table is going to be a big piece. You're going to need help to get there.It's incumbent on us to control our own quality. Click To Tweet
You're expressing a lot of change that's going to be happening in the near future to the physical therapy industry. What's your rosy picture? What does this look like on the backend? Should we fear for the future of physical therapy? What do you see?
It’s the opposite. For our colleagues who start changing their mindset and start thinking about this transition now, doing a little bit of homework and preparing, the future has never been brighter. What we're doing now is not sustainable. Payers can't continue to reduce reimbursement the way they have and expect you all to be able to pay your overhead, pay your therapist and your DPTs who are loaded with debt. It's not sustainable. This is all for the good. It will be tremendous for our profession but there are going to be winners and losers.
The people who do it right and recognize what’s coming up on the front end may see an increase in revenue. They’ve got to be knowledgeable like in the fee for service mindset is what I’m hear.
The value proposition for physical therapy is really compelling. We need to get to the table.
Is there a concern that somewhere along this process, the individual practitioner with one or two clinics might get phased out? Do they need to coordinate and organize? What do you see with them?
That’s my background. I was the small, independent PT. This is about the third wave of mergers I’ve seen, all kinds of consolidation going on. People buying up PT clinics left and right. There's a reason that these large entities are buying up PT clinics left and right. They see the value and they see how they can play in this environment. I'm fearful for the smaller clinics who are not preparing for this, not partnering up and all of that. There will always be a niche for the super specialty providers. Women's health comes to mind. They do well and they do well without insurance payment. There are only so many of those niches and only so many people who can afford to pay out of pocket for our services. We've got to figure out how to play in the insurance game sooner or later and in the non-fee for service insurance game.
It makes it all the more important to make sure that therapists aren’t simply spending 50 to 60 hours a week treating patients if they own the clinic.
I’ve made every mistake and that was one of them. I’ve treated patients twelve hours a day, five or six days a week. I did that for a long time without paying much attention to my business. Like my dad always says, “Do as I say, not as I do.” You should not do it that way. It's a fool's errand. I can tell you that from my personal experience.
They definitely need to recognize what's coming in the future and if their head is down treating patients, they're not going to be able to do so. Take advantage, it's an opportunity to keep your head down, noble to an extent, but you're going to get run over if you're not part of this. Take advantage of the wave that's coming. Thank you so much, Jerry, for taking your time and explaining some of this. For me, personally, it was great, but also for the audience. If people wanted to reach out to you and get to know you and Clinicient, how can they do that?
My email address is JHenderson@Clinicient.com. When we named the company, we named it so it was hard to pronounce and spell, which was a stroke of marketing genius. My Twitter is @HendersonPDX. PDX is the airport symbol for Portland, Oregon here. Marketing hasn't been my strong suit but either one of those ways that are great. People can email me anytime and I'm pretty good on that. I might direct people to our website as well because there are tons of resources there. If you go to Clinicient.com, go to resources. There's a lot of stuff I'm proud of that we've done both for clients and non-clients alike to utilize.
On your website, do you have some of the webinars that you’ve in the past posted?
Those are all recorded and they’re on the website as well.
Thank you so much again for your time, Jerry, and for enlightening us. Good luck with everything.
My pleasure, Nathan. I want to reiterate, the future's very bright. It's going to be a lot better ten years from now than it is today.
Thank you. Take care.
Jerry Henderson, PT has been in the PT profession for almost 40 years and thus has a great perspective to share. In this episode we talk about what led him to creating his documentation software system, Clinicient, and also how the landscape of physical therapy reimbursement is changing in the very near future. Soon fee-for-service payment schedules will be out the door and replaced with a value-based system. Jerry explains that in detail and also shares what PT clinic owners need to do to stay on top of it. I'm thinking this isn't the last time we'll be talking about changes in the profession with Jerry.