There are many statistics that an owner COULD track, but which are more important than others? In this episode, Nathan Shields’ guest, Craig Ferreira of Survival Strategies, Inc., answers that question based on his greater than 35 years in the physical therapy industry. Not only does he share the key stats to track, but he has also developed software to track, graph, and project. The power of tracking stats is based on the objectivity of the data, which tells you exactly what needs to occur to improve the status of your company and achieve your goals. Every successful PT owner that Nathan has interviewed and met is tracking and acting based on the key statistics they regularly assess.
I've got a returning guest to Craig Ferreira. He is the CEO and Owner of Survival Strategies, which has been helping physical therapy owners for many years. He is also the CEO of Hands-On Diagnostics. I wanted to bring him on because not only does he have a wealth of information, experience and expertise in relation to helping PT owners. If you want to learn his story, you can refer to our past episode. I want to talk a little bit because you've developed a software program to help us gather the most important statistics, especially those related to growth and where you can capture losses quickly that might be a detriment to your business. I'm trying to summarize it there, but first of all, thanks for coming on.
How are you?
I'm doing good. Let's jump into it. You've developed this program and I'm sure it's because of the decades in which you've worked with PT owners and its key statistics related to your business ownership. Talk to us a little bit about the statistics that are involved and some of the key components to it. In my conversation with Will Humphreys, and I'm sure you would agree, one of the key aspects of being a successful PT owner is to lead by statistics to measure those stats and see which trends are happening over time and work off of those statistics to improve your business. I'm getting my head of myself, but that's the importance of it. Tell us a little bit about what you're seeing and why you decided to develop this.
First of all, this came from my years of experience working in clinics. I worked in about 200 clinics myself onsite as a consultant in the ‘80s and the ‘90s and before the computers. There was one of a few items that I realized that people didn't have and to this day, they still don't have, which is you can keep a statistic. Let's call it new patients. That's good, but how many of these do you need to pay your expenses and to make some profits? People sit down with Excel and this and that and you can figure it out, but my software does all that automatically. You can say, “I want 20% profits and I have this expense and so on.” The system I designed automatically creates what is that bottom line, which is an important thing to know.
The other side of the coin is people don't know what could they do? What's my potential production with my existing staff? I made the software do that too. You not only get what are we doing? You also get, what could we do, what do we get to do or what must we do? With those parameters, you can also educate your staff as to, “Do you see this graph we've got here? Here's a red line. We got to be above this all the time. We could do this. This is what we're doing.” The owner has to include in that red line though, reserves and profits. If they don't put that in, they're not running their business as we know. They're just running it to pay themselves and hope that they can make some profits.
I find that with a lot of the clients, the people that I talk to and I saw it in myself back in the day, but we simply run along. As long as the bank account shows us that we have some extra money, then we would assume that we were doing well because we had none of this financial and formal business training. One of the first things I have to get some of my coaching clients to do is say, “How many visits do you need to break even?” Sometimes they don't know or, “What's that dollar amount? What do you got to make every month to not only cover all your expenses but also to provide you a little bit to put away in reserves and that 10% minimum profit margin?”
What are those numbers? Not to have those numbers is simply flying blind. As I said, you're hoping and wishing that the money shows up. If it doesn't show up, then you're scrambling with your head cut off. It's better to not be in that position but to be working from a place of certainty. I love that you said you have to share that with your team. Not only is important for the owner to know that, but the team should know that. They need to know when they're producing well, when the clinic is going well, and when the clinic's not going well. They should know that so they can do something about it.
I remember I had a PT once. It was in Arizona in the middle summer and it's a slow season for us. I said, “I don't know if we'll hit 150 visits this week.” She stared at me like, “I don't know what that means.” She had no clue. This was an experienced PT and it was no fault of hers. It was all my fault. I thought, “I'm not teaching my team the importance of the members and when things are good and when things are bad.” That was a learning experience for me. I'm glad that you said that.
Most of the people that come aboard with you are not trained in economics so they don't understand it. The point is that whole subject by its own definition would indicate that you need to understand the business, what could it do and what does it have to do? What are the areas of loss that eventually ended up to you losing money? I can guarantee you that I can look at any clinic. I don’t care who's it is and show at least a 10% loss at the front desk and another 10% loss in the billing and collection area. I've never found one I couldn't do that with. It's easy to say that you need to know how many new patients come in to make your bottom line. What's even more important is, what are the sub-things you see that make that happen like?Click To Tweet
One statistic that you must track or referrals that don't arrive and some people just don't do it, the front desk doesn't do it, or they don't even know that anybody that contacts that clinic for any reason is a referral. That has to be the concept. There is a phone call, an email, fax, a friend, a family member like, “I heard about your services. I want to come in. The doctor sent me.” Consider that to be a self-referral. Do they get in the door? If you don't track referrals versus evals, you can't see that you're losing about $1,000 every time you don't get that patient in the door. Nationally, I think that's about the average these days. Your front desk needs to know that. That's a $1,000 loss.
I don't think they understand that when people call and say, “Where are you located? What are your hours? Do you take this insurance?” That's not what they're calling about. They’re simply fishing and those are potential referral sources. If your front desk isn't trained to be the salesman that they need to be, they're going to simply answer the question and hang up.
The clarification I'd make there, if it's a patient calling, that's not the referral source to follow, but that is a self-referral. Those things have to be tracked. It then comes in and now they start canceling. That's the other area of loss. What do they do? They don't get it made up. They don't control the schedule. They take excuses. That front desk has got to be trained and good at communication and skilled. One thing I found out is that people don't track dropouts. I asked, “Do you get dropouts?” They answered, “Yes.” I asked, “What is it?” A dropout is self discharged patients. That's the way to think about it. They don't track it by the therapist so you don't see whose patients are dropping out more than others and all that other stuff.
Here's something you can do. This is a suggestion that I have for the whole profession. At intake, you should have a form that says, “It's a medical necessity that at the time of completing your services here, we need to see you in person.” It has to be done in person. That is a procedure that will help at least with the front desk and the patient. When they say, “I don't want to come back, I feel better, it hurts too much,” or whatever they're saying, “I understand, Joe. Remember in the intake stuff, you got to come back in. We got to complete the paperwork,” or whatever you want to say, the reason is you get the patient back in.
I've said it a million times on the show. I share it with my clients, but we both know the average number of patients who complete their full plans of care in most outpatient physical therapy clinics across the country is something 15% or 20%. If that stat alone is measured and improved, that can do wonders for your revenues and your bottom line.
There is no doubt about it. That's another area of loss. Those statistics you see need to be tracked to point dropouts, cancellations and no shows. That's a whole other thing, which has to be tracked. In my software, I track all this by therapists and then it automatically makes it by the percentage of arrivals. It does it mathematically so you can see the percentage of arrivals of each therapist and the clinic as a whole. You can also do this in Excel.
It's important to track that by provider because your clinic on average could be doing well. If you don't track provider, it could be a situation where 3 out of the 4 providers are doing above expectations, then the one provider is below expectations, bringing the average down to where you want it to be. When you go by provider, you're able to have the one-on-one conversations that need to be had and people need to be held accountable. Otherwise, you're going based on feeling. It seems like their interactions are going well with the patients, with the other team members and they're seeing the right number of people. If you don't get down to by providers statistics in terms of their billing and their dropouts, then you get a feel for exactly how well they're doing in your clinic.
The other thing you want to keep advance schedule, “What's scheduled next week?” That’s an important statistic. If you've got the advanced schedule, you can see what's coming up and you can also go, “This person normally does 60 visits a week. Next week he only has scheduled 40, what happened here?” For therapists, it's evals. The other thing that happens is discharges go out of crazy. If you don't track the evals against the discharge, it gets to be nuts. The advance schedule, the percentage of arrivals, which is calculated by the no shows, the cancels, and the dropouts. You've got the average treatment charge, which we haven't talked about. That's a whole other area where you're losing money. There's a thing called percentage capacity.
This guy should be doing 100%. He did 60% this week. What did he do for the other 40% of the time? Those are the statistics. What I did with the software is I've made it so that each therapist, the clinics that have been using this, the staff gets to the point where they fill in their own numbers. They sit there and they fill in their own numbers and graphs are automatically generated. It also shows their bottom line and their individual bottom line of potential. Personally, how many of these do they have to do? It doesn't show them anything about finances unless the owner wants them to because the software has four access levels. It's done extremely fast. As a matter of fact, I timed it. If you gather the numbers and you put it in a spreadsheet and you press enter, each therapist takes about three minutes a week.
It's the gathering of the data that could be theoretically the “problem.” They don't have the data. They don't keep the data. They don't know where the data is. That's a whole of the situation. The last thing that I realized and created was a thing called profit. This is the thing that we will love. It was the profit projection sheet, where you can take your expenses and a few other parameters and you say, “I'm going to hire somebody.” I plugged them in. I plugged in your salary, your taxes and they're going to add X more visits per week. What does this do to how many more visits do I have to do? What kind of money can I make on that projected income?
Here's the other thing that I've never, ever seen to be untrue. I have done hundreds upon hundreds of these profit projection sheets with clinics random from all over the place. When people sit down and tell me that they are not making any money, and then I sit down and show them, “What are you talking about? Let's take a look at this. With your existing resources, you could be making an extra $200,000 a year.” They go, “What do you mean?” I was like, “You can be. The reason you're not, we need to find that out.” Normally, it’s that they didn’t get enough new patients. They don't know how to control that. That's a whole other thing. In some cases, they have enough new patients. In pediatrics, for instance, we're working a lot with pediatric practices. Most or all of them have waiting lists, but that's not where they lose their money. They lose their money from inefficiencies internally, scheduling, charging, billing, no planning and no goal setting.
The software is made to do that, but with all this said, that's all nice we can talk about this. The last thing, the break-even point and the viable practice, there's only one. It’s when that owner recognizes that they cannot be in the treatment room all the time. There's no leadership. There's nobody looking at the numbers. There's nobody even designing the numbers. What I try to do is make it for a business where other people could be involved in the stat tracking so it's not all on the owner, which helps the owner out.
I love the financial projection portion of your program. I talked to clients when they're talking about growth, bringing on another PT and adding that salary. They say, “I don't see how it's going to work.” I say, “This is where you need to get your CPA and your bookkeeper involved and start adding some of those numbers and projecting and seeing what new patients or total visits you'll have to hit in order to make the numbers you want to make.” If you can do it on your own, that takes a step out of the process because you and I both know that you're going to have to set up an appointment with the CPA. That's a month out and it's going to take an hour on top of the other stuff. It's going to cost you something to do that. If you can start plugging and playing some of those numbers, knowing your reimbursement rates, you're going to be able to create that financial outlook on your own, which can be super powerful.
The other part of it and I made it a little section. It's like a, what if, “I'm going to open up a new income source or I'm going to open up a new clinic.” “You can do a projected budget.” You don't need to go to your CPA. You can sit there and put the numbers in. I've already done that work. It's fun. It also tracks the referral sources to see who is referring, what their specialty is, what part of town they're in, and the demographics of the referrals. It creates pie charts, graphs and all that other stuff.
You've been doing this for many years. You've been preaching the importance of key statistics, tracking, graphing and watching them. What do you find in most clinics that happen to the owner and the clinic itself when they sit down and take the time to measure their statistics on a regular basis? What transformations do you typically see?
I believe and know that anyone has a high intelligence level. That's my own thing. What I have found is most people can make decisions and do something, but the step that's missing is the observation of enough information to make the decision. What you see when an owner starts to see, “This affects that and that affects this. This is the bottom line. That's my potential.” I've been listening to people tell me that they can't produce, but I go and look and see that they're not producing. It starts to get rid of all the confusion. They get unconfused. The confusion starts to become a way and now they have stable things to view and understand their business from. It calms them down. The stress level comes down.
It's emotional at that point and it's completely objective. I love that it's analogous to a dashboard because when you see the stats, they tell you what you need to do next. You don't have to sit there and think, “What's going on? Why aren't I doing this? Why aren't I profit? What's happening to all my new patients?” You look at the stats and it tells you the story. You simply have to follow those stats and take action.
I'm going to give you an example I am seeing with every clinic we've ever seen. When the new patients go crazy, the discharges all of a sudden, go crazy. The therapist starts discharging.Most people can make decisions and do something, but the step that's missing is the observation of enough information to make the decision. Click To Tweet
They get busy and they start discharging patients or letting them fall off or whatever.
We then go and interview them. We put in what we call a chart review. The owner, somebody sits down with the chart and says, “Can we take a look? I noticed you discharge Joe here at the end of four patients. There are a few of the discharges, what's happening?” “I got too many new ones.” “Did we establish the goals with this patient? How come? What are we doing here? Aren't we supposed to be treating and helping people achieve their goals? Did we discharge him because we're too busy? That's a management problem. You've got to let us know we need more therapists. Don't just start discharging the patients.” It happens all the time.
My point is this, if you don't objectively measure, Joe, has new patients on an uptrend and all of a sudden, the discharges are above the evals or they spike. What do you do? You go and look interview Joe. The way we found it is chart reviews because the therapist will agree that, “I could have done some more. I didn't have enough time.” “We've got to get that fixed not financially, but because we're not getting the patients what they need.”
Now, you have a patient that hasn't fulfilled their goals and they're going around town telling family and friends that the physical therapy doesn't do anything for you. They're not telling everybody that they only went to four visits and they expected miracles. They're saying that, “The physical therapist didn't work for me so I'm not going back.” That comes down to the responsibility of that particular provider, not getting full buy-in and engagement with the patient and following them through to the full plan of care.
A long-term client of mine, Paul Salkovskis mentioned to me many times he's been treating for as long as I've been consulting, “The most important aspect of the whole therapy thing is the first interview with that patient, where I bring them to an understanding. Not only am I their therapist, but our job as a team is we're going to go the whole later and I need your agreement to stick with me. We're going to make that happen.” That’s key.
On top of what you already said, it seems like the owners that look at their stats on a regular basis and act accordingly are simply in greater control. They're in a more powerful position to do what the clinic needs. If they're in the treatment room full-time, then they're not seeing, observing, and not taking the actions that are necessary. What can help those providers who are treating full-time is if they number one, take control of their schedule and set aside at least a half-day a week initially, to gather the data, measure the statistics, break it down by clinic and provider and then act accordingly. Start from there.
Over time, you'll team members start reporting their own data up to you and you'll see changes in their behaviors as they see the data for themselves because that's their scorecard. It shows how they're doing. They tend to start taking control of their own areas and that provides them a powerful base off of which they can work, improve, set goals, and show progress. Once it starts with the owner and works its way down to the team members individually reporting those statistics, that's when you can start gaining some traction.
We have some long-term clients who I can think of one, in particular, has about 50 staff. All her staff is in my program and they play games. They'll go, “How many did you do this week? You did that minimum visit? I'm going to beat you this week.” This fun and they also get rewarded.
If people wanted to find out where they can get your software program, how can they find it, whether it's online or in contacting you? How can we get in touch with you?
The easiest thing to do at this point is I'm going to give you my personal email. The reason I'm doing that is because of COVID. I'm all over the place. We do have an office still, but everybody's working from home, at least in my profession. It's CraigLuisF@yahoo.com. If you have an interest, shoot me an email. Somebody can shoot me an email and I will ensure that either my assistant or myself sets up a demo if you want to see what am I talking about here? That would be the easiest thing to do.
I'm excited to hear about the part of your software that projects things. I think that's missing with our PT owners because they go off of feel. They might see numbers in terms of new patients, the total visits, and their bank account and they're like, “It's time. Let's grow,” but they don't know exactly what it's going to take? How that's going to affect things? What the financial implications are going to be when they do expand, and what they can expect? Having this software available to them can provide them some opportunities to look forward appropriately and know exactly what to expect and what needs to be done in order to be profitable.
It gives them a great tool. It's a fast tool as well. It provides the data quite fast and then it makes it a lot more fun, frankly, because you can see what's going on.
If you got a numbers nerd or something like that in front of a spreadsheet, you start throwing numbers up there and see, “What does that do?” Can it also reverse if I want a 20% profit margin, will it tell me the number of new patients I would mean once you have all the data?
You can automatically change the percentage of profits to anything and they'll tell you the new patients, the visits, the charges you need after your write-offs in the account. It does everything like that so you could see it. It's not just a spreadsheet of numbers. It's in a graph. You can look at it and it's got color to it. It's got an aesthetic.
I love this stuff, especially for PT owners. More resources are coming available to us, but there needs to be more of this and you don't find it available in the EMR. I'm glad that you created something like this.
Thanks for your time, Craig. I appreciate it. Do you want to share anything else with the audience?
I hope and know that everyone is pushing through what we all have to push through the stuff that's been going on. It seems to be getting better. One thing I would like to communicate that I noticed, because of COVID, the communication level has greatly increased between people. What I'm hoping is that when it's done, you don't decrease the communication level. Keep it up there because that's, what's keeping everybody's hope factor. I call it alive and creating, and what are you doing? Who's helping who? If somebody is in trouble, they can talk to somebody.Because of COVID, the communication level has greatly increased between people. Click To Tweet
I agree because as we were going through the middle of it March, April and May 2020, there were more webinars, free consultations, and that stuff that I don't think that's necessarily fallen off. It's important. You stressed for owners to know that the consultants at Survival Strategies are more than able to do a free consult with you. I'm willing to do the same for people at Hands-On Diagnostics. If people are still trying to push through, the resources are still there. We haven't backed off of our willingness to work with you.
You might not hear from us as much because there's not as much coming through the pipes day-after-day from Medicare and everyone else. They're still available. They're still there to help. They want to help people through and the resources there, the communication on the owners has to continue as well. They need to maintain a high level of communication with our teams. They need to maintain a higher level of marketing and promotions that they did to the doctors back then. They make sure they keep it up and don't let it back off.
It should be doubled or tripled. We have many clients now in the training company that are doing better than they've ever done. The reason is that their communication level to their community has been quadrupled. That's an important factor. It's a pleasure. If you ever want anything again, I'm always available to help.
As always, it's great to have you on and learn from your wisdom. I appreciate your time, Craig.
Thank you very much.
Have a good day.
Craig Ferreira has been around the PT block thousands of times. He knows the inner workings better than almost anybody and can break down any situation into easily digestible nuggets. Thus, I had to have him on when I found out that he's about to give a talk on how to improve productivity and, specifically, sales in the PT setting. Most PTs hate "sales" as we know them, but doing it in the right way isn't "sales" at all. How we present that to our teams can be super easy. Craig knows how to do it. If you simply do a little footwork, have some conversations, practice the art of "selling," create and hold expectations firmly, then just wind it up and let it go, you can see results quickly! Follow Craig as he'll walk you through it.
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