PTO 75 | Private Practice Owner Coach

 

Reaching out for help from coaches helps us gain the needed insights for the development of our practice. In this episode, we are following up on the owner of Druid Hills Physical Therapy in Atlanta, Georgia, Dr. Avi Zinn, PT, DPT, OCS, about how he has developed his business. Although he has been successful in the development of his practice to this point, Avi reaches out because he recognizes that he needs to gain more business knowledge as the CEO of the business. He shares the importance of the stuff they did not teach in PT schools, such as tracking KPIs, leadership development, culture creation, and more. Learn how he is managing as a PT business owner and get a real-life look into what a business coach can do for you and your practice.

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Listen to the podcast here:

Reality Podcast Ep. 1 - Avi Zinn, PT Reaches Out For A Coach

This is the first episode that I have with an individual PT owner in which I'm going to follow along with him as he receives coaching and implement some of the coaching programs into his independent PT practice. Avi Zinn is a Physical Therapist out of Atlanta. He reached out to me to get some coaching and see if maybe we could work together to help him achieve his goals. Full disclosure, he didn't end up going with me as we talked a little bit about what I could provide and if that might fit for him. I actually offered him a couple of friends that he could call and talk to about getting coaching and consulting services with them and he decided to go with a friend of mine, which I'm excited about. Avi’s ready to grow and he needs to take the next step. I wanted to bring Avi in order to not only follow his path but also because Avi is pretty unique. He hasn't followed the typical entrepreneurial path. He didn't go through the burnout, the crash and burn stages that many of us may have gone through before. He did something different. I want to share his story with you.

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I've got Avi Zinn, Owner of Druid Hills PT in Atlanta. I'm excited to bring on Avi because he reached out to me in regards to getting some coaching and we've talked a number of times about his needs and how I could help him out, but things changed a little bit. He is looking for some coaching and consulting help and I want to follow his progress essentially and see what the coach or consultant has done for him to forward his clinic and to achieve his goals. This is the first introduction of that series of interviews because I imagine that down the road I'm going to do some follow-up interviews with Avi. I'm going to show you what it's like and what you can expect out of coaches and consultants and how they can help you as an owner. Let's get to know Avi a little bit and some of his influences and what got him to the point where he was reaching out. First off, thanks for coming on, Avi. I appreciate it.

Thanks a lot, Nathan. I’m happy to be here.

Tell us a little bit about you. Tell us a little bit about your professional path. How long have you been a physical therapist? How long you've been an owner? All that stuff so we can bring everybody up to speed on.

I went to PT school in New York. I finished in 2009. Shortly after finishing school, my wife and I moved to California and we went to the Bay Area. We were in Berkeley. I started my PT journey there. I’m looking for places to work, trying to see what was there. I found a cool PT practice based off their website. They’re more independent. The pictures of the clinic looked personal. They had a good vibe. I reached out to them and they hired me on, which was cool. Starting there was a good experience for me in a lot of ways, which ultimately led me opening up my own clinic.

Did you always have aspirations of having your own clinic?

No, not really at all. When I first started there, they had just done some coaching and consulting. They were in the process of transitioning their whole business model. I soon found out that when I started on, there was a huge turnover right before I came. I didn't realize that at first, but after being there for a few months, the remaining people that were still there were starting to talk about the old days or how things were different and not necessarily bad, but I think the change of the business structure led to other people just didn't agree with what they wanted. From following your show and all the people you've had on, it seems like that's a pretty common thing. You guys talk about your culture and your team. If you're changing your business structure and you're changing your team, then you’ve got to make sure that people are in line with that. I would assume if they're not, then they're going to leave or they're going to get told to leave. That led me to start my own clinic because it was an independent clinic. It wasn't a chain and it was two owners and they had a few locations at the time. I started seeing what it was like from the owner's side of things because they were at the clinic all the time.

You have to take risks in order to have something you desire to create. Click To Tweet

Whereas later on when I started working for chains or hospital systems, you don't see the owners at those clinics. You just see clinic directors or whatever. Being there, I saw that the community and the PT practice had a great reputation. People knew about it but at the same time, the employees, the staff, the PTs weren't saying the same things that the people in the community were saying about the PT practice. It was interesting to see how there could be a different perception that the patients are loving it, but the PTs aren't. That probably happened because of the change in the business structure and however that played out. I started realizing that there could be different ways of going about this business. Clearly, we're providing good service because people were talking about it and people knew about it but the staff wasn't happy. That was interesting to see. That's what really started me thinking about like, "Maybe I could do this." Everyone thinks, "I could do this." I thought, "If I am going to do this, maybe I'd make it so people are happy at their job."

There are a couple of different reasons why people open up their own PT clinics. Either they have an entrepreneurial spirit and they want to own the job and that's something that they have a burning desire to do. I'm sure there are many other reasons, but the two that come to mind are the second one being, "Maybe I can do this better or maybe I can create something that I can fill a need or I can create some value that I don't see in my current position. I can treat the way I want to and expand on that.” There are a number of different reasons in your situation, in particular, you're thinking, "The owners are doing great. They've got a great connection with the community, but the internal structure and culture could be improved. Maybe I could do that myself and create my own thing." Is that about right?

Yes, that's right, Nathan. You have to remember, I was in the Bay Area, that's a hotbed for startups and entrepreneurs. I do think that was a part of it. I remember a good friend at one point. I was talking about a startup and entrepreneurs. He even said something to me that I could be an entrepreneur if I started my own PT clinic. At that time, I didn't know what that meant to be an entrepreneur. I didn't realize that starting a PT clinic would be the same thing. Getting that entrepreneur bug, that's what I'm sure we'll end up talking about pretty soon in The E-Myth what Michael Gerber talks about. I think doing it better though and realizing that maybe I can do this in a way that would provide that service and also have the people that work there happy as well. What I was seeing at that clinic that combined with getting that entrepreneur bug, those two started the process of me thinking about at one point starting my own clinic.

You eventually went to Atlanta and decided to do that?

My wife is from Georgia. She grew up in Savannah and I'm from St. Louis. We were in California and we didn't know totally, but we started thinking that we would want to be closer to family. Atlanta seemed like a pretty good city. My wife did an internship in Atlanta and that was when I stopped that job. We went to for the summer to Atlanta to do the internship, but also see if Atlanta would be a city we'd want to move to. We liked it and when we went back to the Bay Area, we knew we were going to move there. I knew I wanted to open up my own thing or start my own clinic, but also knew we were going to move at some point. I never really wanted to do it in California. At that point, I started doing other jobs and experiencing different types of PT. I did work comp for two years. I started doing home health, which was interesting. I did that for a bunch of years.

Eventually, we did move to Atlanta and started doing home health when we got here to learn the city also. It was a good opportunity that I learned the city, but I was driving around for home health. I was trying to get a sense of where I would want to start a practice. It all happened at a time where I was ready to do it. This location opened up right in my neighborhood. Literally, a four-minute walk from my house. It's on the main street. It's across the street from this big shopping center on this road where they say 50,000 people drive by every day. It was perfect. Everything worked out. That's when I started to get things going because we found this place and I had been thinking about this all these years. It was time when this place opened up.

How long ago was that?

That was the end of 2017.

During this time, had you been reading any books about business ownership or accessing any resources?

When I was doing home health, I was driving all the time and I stumbled upon Paul Gough's podcast. That was really the first one that I started listening to. That was talking about owning a business and how to run it. I don't know if this is exactly what he said, but this stuck. He said, "You don't have to have the best PTs, you just have to have good PTs. You can hire the good PTs and you have to be the one who's working on the business.” The truth is I could be combining that with some of the other, like Michael Gerber, your show, but I believe he did say that stuff and it started making me think about how I was going to set up a practice and what that meant.

The cool thing is that it set up a mindset for you, knowing where you are. You don't have to be the best physical therapist. Soft skills are more important than hard skills. You already had an idea that you were going to bring on some other physical therapists anyways. It wasn't going to be the obvious in a physical therapy clinic and a one-man show. You had aspirations for more right off the bat. You've opened up your clinic and how did you start working in it? How did you start developing it, so that it wasn't obvious in physical therapy clinic? 

PTO 75 | Private Practice Owner Coach
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It

When I was trying to figure out what to call it, I was really against calling it my last name, Zinn. A little back story. My father-in-law has his professional experience. He opens a lot of businesses. He was able to guide me through a lot of this in the beginning. Helped me set up the LLC. When I was looking at this place to rent and lease it out, he guided me through with creating a pro forma and talking to the landlords about having my financials in order, even though we didn't have the financials in order. Getting that set up and he was set on calling it Zinn PT. He wanted me to do that and I was like, "I don't want to call it Zinn PT. I don't want it to be about me." Maybe because of listening to the podcast and knowing Paul Gough’s podcasts, knowing that I wanted to bring people on and I didn't want it to be about me because maybe had a little foresight knowing that I would have to do the business stuff at some point and not always having people wanting to go to Zinn but to the PT practice.

What did you start doing initially to make it so that it was not Zinn? You ended up developing Druid Hills Physical Therapy, you were the initial physical therapist. How did you start the progress? This is an important part of the introduction of you. You did things a little bit differently and I'll highlight that as we go through the story.

First of all, I was still doing home health, which was a huge help because home health is super flexible and I was able to bring in some income while setting up the practice as a group. There was no other way to do it. I took out a loan. I could've taken out a loan three times the size and lived off of that for a while. That would have been a little overwhelming. Setting it up, I started getting things in order. I don't know if it was from the podcasts or not. I wanted to experience every part of the business at first to know what it was like so that I could start putting people in those places. When I started, I did everything. I was a PT but I was also running back and forth to the front desk to answer phones and schedule. Instead of a front desk person, I had an answering service, which was helpful and they would email and text anytime someone called. I had a doorbell. That was my front desk person. If someone came into the office, I knew someone was there and I could run back and forth to the front to greet them. I started getting things in place. Aside from the business things, I had to start getting patients.

I tried doing all that I thought would have been the normal way to do it, which was called doctors but that didn't work. It started with that. I was lucky that a third-party work comp insurance called me and they were like, "We want to give you a contract and send some people to you.” I was like, "I need people to send patients," which was also cool because work comp authorizes a certain amount of visits, they pay the rate, whatever it's going to be. You don't have to fight with the insurances. They're not going to like deny certain code, which was a great way to start. Because I got those patients, I knew those visitors were coming in and I knew they were going to pay whatever they paid. That was also a little bit of a hard part, to begin with, was the money part. How you charge people. All of it was hard. I didn't know how to do anything.

How long did you go like that before you took on your first hire and eventually before you got your next physical therapist?

I started at the end of 2017. We had our third kid in March of 2018. It was a great idea to start a business and have a kid the same year. Right after that is when I hired on the first PT. The business was growing slowly. Knowing that we were going to do this, I started looking back at the schedule and tracking what was happening. The schedule was pretty light. Looking back, I don't know how I was confident enough to even hire someone on.

That's the question I have for you. How many visits were you at per week before you hired that physical therapist because you went against the grain?

I don't know. At that point, I was doing three days a week at the office and still doing two days a week home health.

You brought on your PT at that point. This is why I wanted to bring you on is that you hired a physical therapist, what most people would consider is too soon. Based on my training experience and if you were to ask me, "When do I bring on my next physical therapist?" I'm going to tell you, you bring on the next physical therapist when you're meeting at least 90% of your slots that are scheduled out in a given week on average. That's the time when you know, I'm working hard or my other PTs are working hard. It's time to bring on someone else where these people are going to get overwhelmed. Maybe you even have a waitlist, but you went against the grain and you don't necessarily know why. You brought on a physical therapist because this is the thing, the typical entrepreneur story is we don't do anything until we get overwhelmed. Sometimes there's a crash and burn element to it. If you read to some of my previous shows and the successful entrepreneurs but you didn't get to that point, so you brought on the next physical therapist. You must've had some faith that things were going to go in the proper direction or maybe you had some real intent out there in the universe that things were going to grow?

It was a little bit of both, Nathan. I was thinking about starting a business, in general, is a huge risk and I've maybe realized that you have to take risks in order to have a business. That was the same move. I saw the trajectory and patients, it was growing slow but it was steady growth. It looked like things were going in that direction. It was time to hire someone on and keep it going.

During this time, were there some resources that you fell back on that might have stoke that faith or inspired you to bring on someone else so that it wasn't on you? Did you also maybe see that there were some aspects of the business that you needed to work on so the PT would take the treatment side of things off of you so you can focus on those things? Was there a combination of some of those?

Because of how busy things got, I realized that I had to do more of the business stuff. That was what it was. It was the beginning of 2019 or it must have been earlier when I started following your show. I remember in January of 2019 is when I started reading The E-Myth. I don't remember exactly when I found your show or how that happened exactly. Even before that, I realized that I had to be able to step away to do from treating, there were only so many hours in the day. I didn't want to be working all day long and then going home and working all night long. I realize that the only way to do it was to step back a little bit. It wasn't a lot, but it was by hiring another PT that I was able to step away and do a little bit more of the business side of things.

You have to take risks in order to have a business. Click To Tweet

The common fear when someone makes that first step is to bring on another PT. The biggest fear is, how am I going to justify that salary? I'm going to be paying somebody $70,000, $80,000. What if they don't work out and they don't produce? Somehow you overcame that fear. How did you do that?

After that first job in California and when we came to Atlanta, I did a traveling PT job. When we went back to California, I started doing PRN. When I learned about what PRN meant, that is ultimately when I hired my first PT, I didn't hire her on full-time. I hired her on PRN and it just happened that I found someone who wanted to do it. She was in a different job and she wanted to switch it up a little bit. She started doing two days a week with me. That is why I was able to not be so overwhelmed because essentially instead of making it five days a week for me, since I was only doing three days a week in the office, I made it a five-day PT but split between two people. I was able to have the patients coming in on all day, every day and then still have two days a week where I wasn't treating and doing some of the business stuff.

You were still running the front desk and taking all the calls and some of that stuff?

I was still doing that stuff and the billing, the front desk. Shortly after that, I got someone two days a week at the front desk. Gradually we started getting more patients, so that part-time PT ultimately wanted to switch all for hours over to this place. It worked out well because I didn't need to look for another person. She was already there. We were organically growing and filling those hours on the schedule without having to hire on a new PT and then have to be scared that you're not filling up their schedule for three months because we did it gradually anyways when she first started by two days and then added on more days.

She started taking on more hours. You started treating less it sounds like and you're working on the business during this time.

I don't think I really started treating less because for the most part, I was still treating the same amount, but it had blocked off certain times from the beginning to do billing, networking, calling people and driving around.

That's a huge part right there and I don't want to overlook that. You blocked off time on your schedule. As I'm talking to PT owners that are treating full-time, that's probably one of the biggest hurdles is to get them to commit to blocking off chunks of time, whether it's four days or 4, 5-hour blocks to work on the business. That is to look over your financials. That is to put together a pro forma like you're talking about. Consider what the future might look like. Do some networking. Even start developing some policy and procedures and hiring the right people to fill the spots that you either have open or are going to have open in the very near future. What you started doing maybe someone told you to or maybe you inherently knew you needed to do was to keep that time sacred for admin work.

Around the beginning of 2019 is when I read The E-Myth. That was transformative. I've heard people say it on your show a million times, working on the business and not working in the business. I think he came up with that. It made so much sense and you can't do it any other way. There's only so much growth you can have if you're working in the business. When I read the part about what a lot of people do is they create a job for themselves. That part was like, “I’m not trying to create a job. I'm sure I didn't try to create a business." I did somehow realized that I needed to keep that time separate to work on the business. Once I read that, it was when I started realizing I need to do more of this and if I want to grow, I need to not just hire more people. It would actually start taking more time to work on the business because once you start getting busier with more and more things going on, you need to have more time to figure out all the things that you had mentioned, which I still have not done yet.

We have to give it proper credit. The book that we're alluding to and referencing is The E- Myth Revisited by Michael Gerber. He does layout a lot of this stuff. When we say you working on the business, what are some of those things that you're doing? I have even some owners say, "If I'm not treating and I'm not catching up on my notes and I'm not paying bills, what am I doing?" What do you do in those admin times?

First of all, I still do the billing. That's part of it.

That's going to change soon. What are you going to do when the billings off your plate?

PTO 75 | Private Practice Owner Coach
Private Practice Owner Coach: The only way to implement your systems is if you take time away from treating and work on the business.

 

We'll find out soon. You did mention about policies and procedures. That's what I started doing was creating systems, which is what The E-Myth is all about. I created an organizational chart, which is another thing that they talk about in the book. Even though every single job in the organizational chart was me, I still was breaking up what created the business, all the different parts and all the different jobs that make up the business. I started writing out what happens under those positions, what one does for that job. Basically, I use Google Drive and Google Docs and I have a nice organized folders system of docs for every one of those job positions. Every time something happened that day that I had to troubleshoot or figure it out, I would put it in that doc and then I would try to create a system to make sure it didn't happen again or t try to delegate some tasks to the front desk person or the PT so that they can do it so that we wouldn't have to keep on going through the same mistake every time. We would know what to do every time. 

You wouldn't have to learn the same lesson twice.

Yes, we don't have to learn the same lesson twice. Also, we wouldn't have to be where someone had to knock on my door and asked me what to do for it.

This is why I love having you on. You're at a place in your ownership that I would say a majority of PT owners are not. I'm including the guys that have been out there for 10 to 20 years. They haven't taken the time to write up their policies and procedures. I can say I was in that boat 10, 12 years after opening up my first clinic. Didn't take the time to write down policy and procedures. I didn't have an organizational chart. It doesn't matter if you are in each position. At least know what the structure of your company is and what it should be and what it will look like when other people start filling those positions is huge. That comes as naturally to some people more so than others, but you're organized enough with your Google Docs to have everything written up underneath each job with a job description, the responsibilities and the tasks that are given to each position. That's huge and that is the reason why you are where you are is because you've done some of those things. How many therapists do you have?

We have three therapists besides me. They're all about 30 hours or so. Part-time but full schedules. One is actually reducing hours the same original one who wanted to take on more but also step out of her first position and try something different. She's going to try something different and reduce her hours, which is fine. Everyone wants to do different things. There's nothing wrong with it. We're about to hire another person and she's going to be my first full-time. We'll have one full-time, two pretty full-times, one part-time and then me.

Being less than a few years into your ownership. That would be unfathomable for some people. I'm talking to some owners who are one-man shows and they're overwhelmed and they're three years into it and they don't see a way out because they're treating 50 hours a week and not working on their business. Whereas you've set yourself up such that you have multiple providers and you're already experiencing some freedom that most PT owners don't have.

Nathan, you probably would agree with this, but for the people that are working crazy hours, I made sure I did this in the beginning, I worked at the office. I did some stuff at night, but for the most part, I was in the office 9:00 to 5:00, and that was it. I made it a point to stop at the end of the day. Of course, you do some stuff at night, you answer emails or you work on the website.

You had some intention behind putting an end to the day.

I think that's what it is. That has allowed me to keep going. It prevented me from burning out and I didn't get so overwhelmed because I was like, “This is the end of the day. We're going to stop, we'll pick it up the next day.” If I work an extra five hours, it's not going to be any different. You need to put a brake on it every once in a while.

There's some power to that. Number one, the time that you do have is limited. There's going to be an urgency to get things done. If you don't have that end stop, you're like, "I can work until 7:00 and I'll take my time getting things done.” Inevitably there’s something called Parkinson's Law that, "The amount of things to do will end up taking up the time that has allotted to do them." If you're available to work until 7:00, you'll have plenty of tasks to keep you busy. If you put that hard stop at 5:00, you've done two things. Number one, you've set a deadline, but also, you were concentrating your efforts on doing the admin work. You can get more done for the benefit of your company by focusing that time on your business than trying to get tasks done. Instead of trying to get payroll down or pay bills. I'm sure you were focusing on what some people call the MIT, the Most Important Thing of the day and that is developed policy and procedures. Get my organizational structure in place. You're doing the billing, but that's a separate chunk of time. The fact that you spent that time on the policy and procedures and the organization of the structure of the company means you've developed solid integrity around that and you've accelerated your growth as an owner and as a business to the point where you are.

There's only so much you know how to do. You need to reach out and ask people for help. Click To Tweet

To be clear, I still have a lot more work to do on the policy procedures and all that stuff. That's ultimately what we're getting at with coaching and consulting. In March of 2019, I hired on the second PT and then that's when I drastically reduced treating time down to twenty hours a week of treating.

Was that a scary transition or something that you're, "I need to do this?"

It wasn't scary at all. It was, "I need to do this." Partially because at that point I had read enough of your blogs and also had probably read to The E-Myth again for the second time or maybe even third time that I realized that it doesn't even matter if it's scary. That's what you have to do. There's no other way around it.

You recognize the need of the company was to go in that direction, right?

Yes and it was my business. If I'm treating, who else is going to work on the business? I have to be working on the business. There's no other way. 

You talked to me about doing some coaching and consulting. What led you to that point?

Where I've gotten myself have been a lot of working on the systems and policies, but at the same time, there's only so much I know. As the business grows and when we're getting more patients in one of the main things that I've noticed is there are cancellations and why are we having 30 new patients in a month. We had eighteen new patients in one week and that was awesome. That was the most we had. The following week the schedule was half empty and it was like, "How is that happening?" I started running analytics, WebPT. I called them up asking, "How do I find out how many times each patient is coming in?" I’m trying to see what their plan of care and how many visits per week? I find that a lot of patients are only coming once a week or they schedule two visits and then they're gone and no one was tracking that. I run this lost patient report from WebPT and then all of a sudden, I look and there are 50 to 100 people on this report of people that came in and we never got them back on the schedule. That was a huge thing.

You recognize that you need to start monitoring your metrics and if you haven't taken the time to do that, then the metrics will control you and sink you.

On the analytics and WebPT, they have their main KPIs. There are six KPIs on there and that was cool. I realized I don't know. I feel like I've done a lot to get myself here, but there are people who know a lot more to take those numbers to who've already gone through this, who can tell you how to use those KPIs, those metrics and what to do with them. How to affect them and also, one of the biggest things through all this realizing that I am not just the owner, but a CEO of the company. I need to learn how to do that. I need to know how to manage my employees, train them and set up different structures and have certain people responsible for different parts of the business. I realized that there's only so much I know how to do. That's when I was time to reach out and ask people to help me along that.

You realize that you are the final word. People are going to come to you because you need to have the answers for the company. I don't think a lot of physical therapy owners who are relatively new don't put on that hat per se. They think that the ownership somehow is not as separate from them. They know that they're the owner, but they don't act like the owner and that they should be monitoring all the metrics and the financials. They should have some idea of what to do when a statistic goes bad and how to look and investigate issues in the clinic. It sounds like you had that realization that you need to take on that hat.

Nathan, that part is hard. I went to PT school, I learned how to become a PT. I didn't go to business school. I don't even know if you learn how to do that in business school either. I don't know how to run a company. 

We're all in the same boat.

To answer your question, that's what it was. I realized that I needed to be the CEO essentially and I needed to learn what that means and how to do it.

You reached out to me and we had a conversation. I actually gave Avi some recommendations of other coaches to also consider outside of me and he has decided on another consulting company and I'm excited because he's going to do amazingly well. You can see that he's already set up the foundation. I want to follow you along this journey. How will you know if you've been successful with a coach or consultant? How will you know that they've met your goals? Is there a statistic that you want to see? Maybe gross revenues and net profits or is it more freedom for you? Is it growth?

PTO 75 | Private Practice Owner Coach
Private Practice Owner Coach: If you're changing your business structure and you're changing your team, then you got to make sure that people are in line with that.

 

I'm starting to understand financials and understanding gross revenue. I'm at the point where I can look at a P&L and understand it and gross revenue, of course. Let's get that up.

You need a return on your investment to the coach. You expect a multiple of your investment on the coach.

Having the patient drop-off, go away or at least get better. Maximize the utilization, which is something you were saying. If there's so many hours that the PT is treating, they should be treating patients that whole time or at least let's say 85% of it and figuring out how we can make sure that happens. Training the front desk also is the best way to take part in the patient's experience. Also, making sure that they're following through with their plan of care when the PT comes and brings them up to schedule. Making sure that they schedule it and making sure that they understand what it means and the cancellations are detrimental not to their progress but to the whole business. Probably a million other things at the front desk can do but hopefully, they'll help me out with all of that.

Are there some particular goals that you have then over the course of the next year or two? I'm sure the coaches will help you along with this, but what are some of your goals that you have?

As far as freedom goes, I don't need to be not in the office 200 days a year, which is great. Maybe one day. I like being in the office. I like working, but I don't want to work all day, every day. First, producing the treatment hours, that was key. I've done that myself, which is talking to you and talking to other coaches. That's what ultimately is going to set me up for success quickly with these coaches is because I've already done what a lot of people have to do initially once they start with the coaches is to back out of the treating.

You're a step ahead already.

That ultimately is going to allow me to focus on some of the goals a lot quicker. In 2020 who knows? Maybe this will happen in two months. If we have twelve hours of the day in the office, 7:00 to 7:00 and we have five PTs, I want to be able to fill up that schedule, which is ultimately going to bring in more revenue.

You're going to have to expand.

Yes, hopefully. These could be long-term goals. I remember early on Paul Gough that he’s talking about how he owns some of his own real estate and some of the practices. That could be a cool goal. I don't know so much about that on the numbers side. I imagine at some point it's beneficial, but maybe it's not always. That could be five years from now. I want to grow this space location that I have to maximize it. If I have to work twenty hours a week still treating patients, that's fine. I like treating, but I also recognize that I have to do other things. If I need to not and I can get someone else to do it, great. Maybe later on, in a few years, I can start treating again. Wherever the business needs, that's what I'm going to do. 

That your decision matrix has to be exactly that. Whatever the business needs. If you're not wanting to set aside time to work on the business and want to treat full-time, then go work for somebody and work full-time. Don't spend the stress and energy to own the business on top of it. If you're going to commit to owning a business, you need to put the business first. That comes first. What a lot of PT owners don't recognize is the clinic needs them to treat less, needs them out of treatment because it's a distraction to treat patients as an owner. You need to set aside times to work on the business and eventually what happens is they work themselves out of treatment because the needs of the business become greater because they were expanding and growing. I'm excited for you and what you're looking. From my perspective, looking at where you're at, you're looking to gain more knowledge so you can confidently and securely wear that CEO hat and become more efficient. You're recognizing that there is a lack of efficiency maybe in your company and you don't necessarily know how to affect it.

That's what I think when I pulled up that last patient report that one time and I realized, that's why our schedule is not full, even though we're getting all these new patients. We need to figure out how to make sure that doesn't happen. 

Work on the business and not work in the business. Click To Tweet

That's a dagger to the heart when you find stuff like that.

That was hard. 

It goes through a couple of things. That is a whole few pages, maybe one or two pages full of lost revenue. More than that, if you're looking at from a higher level, these are patients that didn't get the full complement of care. These are the types of patients that go back and say, "Physical therapy didn't work for me. I've been to Druid Hills Physical Therapy and it didn't help." You don't want that. That can happen unless you're focused on getting them to complete their plan of care. I said this in an interview that I did. I found out about it a couple of years ago when I interviewed Heidi Jannenga of WebPT, and they did their annual survey that most small businesses lose on average $150,000 a year because patients like those on that lost patient report don't complete their full plans of care. That's a detriment to you as a business owner. It's a detriment to them as patients because they're not getting better and the chance of recidivism or the chance that they didn't even get better is significantly higher.

It is a detriment to the profession as well.

We'd become a commodity. They say, “Physical therapy didn't work for me.” They don't say, "I'm going to try a different physical therapist." Like anybody would maybe with a dentist, they say, "Physical therapy didn't work, so I'm going to try something else." It's unfortunate. I'm excited for you and I want to follow along with you and see what you learn along the way and so we can share with the audience essentially the benefits of coaching. I wanted to share your story number one, because it's amazing that you haven't gone through the typical cycle of an entrepreneur that's even spelled out in The E-Myth Revisited. It's not in the physical therapy space, but I think she was a baker of pies and she had that burn out and she's like, "I can't do this anymore. I'm not seeing my family and I hate my job." You never experienced that because you looked ahead and started planning and started acting forward in faith that things were going to continue to grow and it's worked out well for you. You're going to continue to grow that you develop that foundation.

I want to say one funny thing that happened. We're in the process of moving houses. We're going through a bunch of things and I find a box of all my notes from PT school and I open up a folder from my business admin class, the one day that we spent on and pull out the handouts. There was right on the top was The E-Myth Revisited. I don't remember the professor ever talking about that back in the day. If anything, they were doing a good job teaching about business because they talked about The E-Myth. I'm sure there are other ways to look at it, but following that way of setting up systems and organizing the business and working on the business. That is what has allowed me to get to where I am.

What's different about you Avi compared to a lot of entrepreneurs, whether it's physical therapy owners or not, you've had it on the one book and I'm sure you've read other books, but this one's been influential for you. There are people out there that have read the book and I've read hundreds of others and aren't in the position where you are. The differences that you've actually taken action on what you learned. I read The E-Myth Revisited 6, 7, 8 years ago, but I didn't implement it to the level that you did it either. I would submit that people who are reading the business books, if they read The E-Myth Revisited, don't read it as a nice, good story, but to actually implement what he recommends. 

The only way to implement it is if you take time away from treating and work on the business.

You've actually put those principles into practice and that's what I separated you from somebody who is simply read the book. I'm excited to see your growth here as you get some greater insight and knowledge on how to improve your stats and become more efficient. We'll follow up with you and do another interview and see what you've learned and what's been influential for you. Maybe there are some pitfalls, maybe there are some things that happened along the way, who knows? You might experience for yourself what your initial outpatient company did in San Francisco. Maybe not everybody's aligned. That or everything is going to go in a great direction because you have your ducks in a row already. I'm excited to see what happens. Is there anything else that you want to share, Avi?

For anyone, if they are reading for the first time, reading your blog has been helpful also. I talked a lot about The E-Myth, especially because I've set aside some time to work on things. I'll read your blog whatever interview person you have on and then try to implement those things that day or that week. It's been also helpful to know other people's stories.

That makes me feel good. Not only a resource but an inspiration to you. Thank you for that. We will stay in touch and we'll come back around to the story that is Avi’s in Druid Hills PT.

I'm looking forward to it. 

Thanks.

Take care.

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About Avi Zinn

PTO 75 | Private Practice Owner CoachDr. Avi Zinn, PT, DPT, OCS is the owner of Druid Hills Physical Therapy in Atlanta, Georgia. He opened his practice at the end of 2017 and has slowly built it up—transitioning from a staff of one (himself) to a team of administrative staff and treating therapists. He continues to grow the practice gradually. Avi’s main mission for Druid Hills PT is to provide high-quality, personalized care to each and every one of his patients.

Avi has his doctorate in physical therapy from Touro College, and is a Certified Orthopedic Clinical Specialist. He lives with his wife and three children in Atlanta.

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PTO 74 | Internal Marketing Programs

 

Although Mike Bills, PT had plenty of managerial experience for a large hospital network, it did not prepare him for owning his own PT clinic. He quickly learned that owning and managing are two different ball games. Mike reached out and got some consulting support five plus years ago, stepped out of treating full-time, and has networked with other PT owners for the past five years. Now, his one-person clinic has turned to a 6,000-sf facility with thirteen providers, and they're continuing to grow in spite of the POPTs and hospital networks that have sprung up around them. What are they doing differently to thrive and survive? Today, Mike shares the formula to ownership success as well as their successful actions of obtaining new patients through their internal referral programs and social media/internet efforts.

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Listen to the podcast here:

Successful Internal Marketing Programs With Mike Bills, PT

I've got a friend of mine. I've known Mike Bills for a few years. We're both clients at Measurable Solutions. He's the President of Measurable Solutions for those of you that have been through any of their programs. Knowing Mike and the successes that he's had at his clinic, I had the opportunity to have a phone conversation with him. He shared with me how much they're growing and how well they're doing. I thought, “I need to bring him on because there's one aspect in particular during our conversation that stood out.” One of his most successful marketing actions is a robust internal marketing program to the point where a great percentage of their patients come from internal referrals from current physical therapy patients. They're not dipping their foot in the water here. They've been doing this for a number of years.

It flabbergasted me when I was doing the interviews. They do 30 minutes of drilling, training, and roleplaying with all of their 30 to 40 team members every week on how to get referrals from current physical therapy patients, not just providers. The entire team is responsible for this to the point where it's affecting their referral sources significantly in terms of internal referrals. Another example is that they've focused on internet and social media referrals. That's where they get the majority of their patients at this point. We go through that. He shares the powers and the numbers. They simply get a minor percentage of their patients from physician referrals. I want to share that with you because it's powerful what you can do with internal referral programs and the usage of social media and online marketing to the extent that I have seen from other physicians or physical therapy owners during the course of my show. I'm excited to share this insight with you. Let's get to the episode.

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I have Mike Bills, CEO and owner of Loudoun Sports Therapy from Sterling, Virginia. He is also the President of Measurable Solutions. For those of you that might've been through Measurable Solutions at one time or another over the past couple of decades, Mike is now the face of Measurable Solutions. Thank you for coming on, Mike. I appreciate you doing so.

Thank you for having me. I'm excited.

You've got a great expanding clinic in Virginia. In talking with you in the past, you've had some successful exit actions in terms of your marketing strategies and whatnot. I want to get to that, but I wanted to learn a little bit about you and your professional path. What got you to where you are now? Would you mind sharing it?

I started out as a physical therapist many years ago. I was a therapist for quite a long time, but I got started in therapy probably a lot as everybody else did. I wanted to help people. I had some injuries myself in high school and in college and it led me down that path. I was trying to decide between being an athletic trainer or a physical therapist. I had some physical therapy issues and I fell in love with it. I'll be honest, I never truly had any inspirations to be a business owner when I started out. I talked to a lot of guys and they come out of school knowing they want to own their own practice by the time they’ve been out for a couple of years. I never had that interest on my part. Physical therapy was a lot different then. I went to work for a company that I had been to the place where I had been a patient. I knew a couple of the therapists that were there. I had a good relationship with them. They helped me to grow skill-wise early on in my career. We got bought by a large hospital system, and I ended up somehow in management and not a hospital system. Maybe I got tricked into it.

I was the Outpatient Regional Head of about 37 different outpatient therapy centers up and down the different parts of the East Coast hospital system. I don't know how I get into that because it wasn't the direction I wanted to go. In the several years that I did that, I will honestly tell you that I never learned a single thing about running a business. I was responsible for all these places, who got hired and who worked when, but nobody ever taught me how to run a business. One day I said, “I am not happy with what I'm doing. I'm not happy working for this big conglomerate. I feel like I'm being told how to do everything.” I pretty much said, “The first opportunity that comes up, I want to get out.”

I mentioned that to my boss at the time. I said, “Anytime any one of these physical therapy centers in this area where I live here in Virginia is up for sale, let me know because I want to buy it.” Lo and behold, a few months later, Jane called me up. She said, “We're going to need to close a couple of places. Are you interested in any of them?” I said, “I sure am.” It fell into my lap so it's on my lap. I knew nothing about running a practice. There I was. All of a sudden I owned a practice. That was in 2005. A few days later, my wife and I bought a new house. A few months later, my daughter was born. A lot of things happened in a short period of time.

Here I am, I'm doing well. It was me at the time. I started to realize that I didn't want to be small. I wanted to help as many people as I could. I was in an area that was growing a lot. New doctors are coming in and things like that. I started to figure, “I got this. I can do this. I've run all these other places.” I started almost grasping at straws and pulling things out of the sky. Sometimes it worked and sometimes it didn't. Healthcare was a lot different back then. We got reimbursed a lot better and there weren't all of the authorization and restrictions that there are now. As those things started to creep in, I wasn't sure anymore what to do. I was starting to have some struggles. You mentioned Measurable Solutions. I was a client of them as well, that's where I found them. I started to learn how to run a business and that's what's become successful for me to the point where I've grown my business significantly.

What led you to reach out to Measurable Solutions in the first place or decide to get some help? What's intriguing is that you had all these years of management experience, yet you didn't learn how to run a business and you would assume that it'd be an easy transition for you to be successful in an outpatient clinic, which is a story itself. What led you? Was there a turning point where you're like, “I need to get on top of this. I need to find something else?” Is there a backstory behind that?

People don't buy what you do, they buy why you do it because they perceive how dedicated you are to what you do. Click To Tweet

Definitely, there is. Around 2011 to 2012, at least in my area, it's where a lot of physicians were starting to open their own PT practices. There were a couple of big companies that came into the area at the time, HealthSouth Physiotherapy came into the area. They started to open or buy a lot of clinics. I've run these outpatient centers, but I ran them underneath the guys in the management of this hospital system that I was part of. Here I am, I'm on my own. I don't know how to compete against HealthSouth Physiotherapy or PTs that are opening their own practice. I felt like I needed some help to help me to survive that period of time. That's when I reached out. That's what's been the impetus for me growing and being successful over the course of the last several years. We've expanded over 600% in terms of size and volume. It started from 2011 to 2012, where I was scared of what might happen if I didn't have a better plan in place to compete against these big guys that were coming in.

I don't know if the environment is all that different nowadays for new practice owners. Whether it's physicians that are taking their therapy services in-house if they haven't already done so or hospital networks buying up or larger nationally-run private equity firms or publicly-traded physical therapy companies that are coming and buying some of the smaller clinics. It's happening all over the place. Even though it's a little bit different than your situation, I'm sure there is a similar environment now where there are owners who aren't sure what their future looks like, reimbursements are going to go down, authorizations are going to be a lot harder, all that kind of stuff. There are plenty of questions out there. That's my mantra. You’ve got to reach out and get some help. Reach out, step out, and network. You’ve got to reach out and find somebody to give you some of that business training.

That's why I love your show because it exposes people to many other opportunities. Many other people had been through the same things. I was at PPS, I was talking to a lot of new guys that are coming out. They've been out for a couple of years and they're experiencing the same things. Here in my area, I forget about the fact that there is not even a primary care physician in my area anymore that doesn't own his or her own PT practice. I forget about that because I've got assistance ingrained. It works so well. As I was talking to some guys, it's happening all over the place pretty much no matter where you are from Alaska to Florida. It's the same situation.

It was you as a physical therapist when you initially got started. Where are you at now? How many providers do you have on staff? How many locations do you have?

I always like to look back on that. It truly was just me. I didn't have any office staff. I didn't have a tech. I didn't have anything. It was me. I answered the phone. I collected payments. I sent the claims to the insurance company. I treated the patients. I cleaned the tables. I always like to look back on that. Here's where we're at now. We had our fourteenth clinician PT that started. In PT/PTA, we have five athletic trainers that work for us as well. I wouldn't be doing it fair if I gave you a number, but we have a large number of the front office staff that includes billing and things like that. We'd probably have 8 or 9 people. We have a total of 38 or 39 employees now. We're all in one location. I would say I have six clinics. They're all in one building.

Every time we've needed or wanted to expand, we've been able to take on additional space in the building that we're in. It’s one of the things that I learned when I moved to this building back in 2007. We're in this direct center of the county and you have to drive through us to get to anywhere you go in our area. Rather than opening another place over here and another one over there, it's always worked economies of scale for us to take on another 2,000 square feet and turn it into that. We took on 2,000 square feet. We haven't knocked down the wall yet. We don't need the space yet, but it puts us at over 16,000 square feet. That's why I say I have six clinics, but they're all in one. Every time we do so, we've got to hire new office staff, new clinical staff and that's how we've grown.

I've always been envious of that. It's nice to say that I've got 4, 6, 10, 12 locations, but I've always been envious of you because you've got one location and a bunch of providers knocking it out. It’s economies of scale. You got immediate visual oversight of what's going on in the clinic and everyone is in connection with each other. It's easy to develop your culture and a lot of that goes on well. Your story is awesome but I want to talk about what ramped up your numbers. What were some of the successful actions? There's one particular program that I want to delve in with you about. What do you think some of the successful actions had been for you in terms of expanding your numbers?

I would say there are two pieces. One is getting more new patients in the door. I would sum that up as saying like marketing and promoting. Both internal and external things and how we look at and how we address a patient from the time they start to the time they finish, getting them to what I would call a successful discharge. Those are the two pieces where every year we'd rather bring in more new patients. We've expanded that way and/or we've tightened down our systems and made a much better process. We improved the process to make sure that we're keeping patients all the way to a successful discharge. Those two things have been the biggest driving factors in our expansion, especially over the last several years.

PTO 74 | Internal Marketing Programs
Internal Marketing Programs: We should address a patient from the time they start all the way to a successful discharge.

 

I love what you said there that you added tightening up the processes because many times, I find that many clinics if they're going through some tough times don't necessarily need a lot of new patients. What you find is that they have holes in the bucket, holes in the ship, however you want to analogize that, but they don't have the structural integrity to maintain the patients to get them through their full plan of care to a successful discharge. If you can shore up those holes and maintain the integrity of your system so there are people getting through to discharge successfully. You don't meet a lot of new patients, but when you do start getting new patients, you start seeing tremendous growth. That's what you see that you shored up your systems. I do have to put a plugin here. Your wife has been on the show before, her name is Dee Bills. She owns Front Office GURU. I recommend you go back and read her episode and when she recognized that she spent more than a year in fortifying the front office systems in your clinic to do exactly what we're talking about.

I am glad you mentioned that. I was going to say that in the year 2014, we had five fewer new patients came in the door in 2014 but it’s when we implemented and instilled all of the processes that she now teaches people out in Front Office GURU. We grew 31% in the year of 2014 both in collections and patient visits because we shored up all those holes. That's a great point to the fact that you don't need more new patients all of the time, you need to be sometimes look at improving your systems. We had fewer new patients over the course of fourteen from the previous year thirteen. We grew considerably because we shored up and plugged all those holes with all of the things that she now goes off and teaches other people. I'm lucky enough to be able to have learned that along the way with her. We continue to put it into play now.

I can't imagine how much money, how well that hit your bottom line, your net profits in that regard because your expenses were probably about the same. I did a show with Heidi Jannenga and they do their annual WebPT State of Rehab Survey Report. They found that the average small clinic loses about $150,000 per year in gross revenue. They haven't shored up their systems in there and patients essentially aren't completing their plans of care successful.

Think about it, you need to get a patient that finishes two visits, finishes themselves, two visits before they should have. You multiply that by however many patients there are. That's a ton of visits. It's a ton of money that we're losing as business owners.

What I want to talk to you is you've focused on and all of us are out there, “I need to get physician relationships, visits and referrals.” Those are super important. It's important to have those relationships with the doctors in the community, but you've been successful with your internal referral programs. Do you mind sharing with the audience a little bit about that and what you do?

We have done a good job in my opinion. We've done a good job of building relationships with patients that are current and how we get them to refer patients. You can call it a patient referral program, but anybody can give out a card that says, “Refer a patient or I'll give you a gift card to target if you refer me a patient.” I live hard on this philosophy of people who don't buy what you do, they buy why you do it. They perceive how dedicated you are to what you do. You talked about the culture before. You're creating a culture where patients want to share that with their friends and their families. It goes a lot into educating the patient. In Virginia, we have some loose direct access laws, which do help us. I would tell you, I'm working with a client in Texas that has some restrictive direct access laws. This is working gangbusters for them.

If you educate your patients on when they can come to you, how they can refer their family, friends, and you teach your staff how to have the right conversations, that program comes into play. I'll give you an example. If I'm working with a patient and I am talking to him about, “What do you do for work?” “I work around the corner at Oracle.” “Tell me something about the guys that you work with.” “We all sit around in these cubicles all day. We're all on our computers all day.” Let's say this guy is here for his knee because he hurt it running, but I will start to ask questions like, “Anybody at work ever complaining about their arms hurting them, their elbows hurting them, their necks hurting them?”

He was like, “We were having this conversation. We've got to figure out some way because at the end of the day, on Friday, our necks are always stiff and sore.” There's a light bulb for me. I'm going to educate him on what he should be saying to those five guys that he sits in a cubicle with. Before you know it, 2 or 3 of them have become patients in a short period of time while that guy that I was treating is still here. It's a matter of how do I educate him to go back to the office and educate those people so that the internal referral is walking in the door before that guy has ever been discharged. He's replaced himself 2 or 3 times over. That cycle keeps ongoing.

Train, drill, and practice. Click To Tweet

I love it because that takes it to another level. I love it because you're basing it upon your higher purpose. Whereas our internal referral program in the past, it was a little bit more like, “Who else do you know that's in pain?” Inevitably you might know somebody that has some issues with this, that or the other. It was surprising to me how many patients would sit there as we're working on their knees and they'd ask us, “Do you guys work with low back pain?” That's 75% of my patient load. Patients still don't know what we do essentially. We have to educate them on how we can provide value to them. For those patients who are coming with their knees, you ask them, “Are they having issues with their backs? Tell us about your family or whatnot.” You look for opportunities where you can instruct not only them but also instruct them on how they can help or guide their friends and family over to you by the value you provide.

I realized that it's a matter of I had to change my mindset that it was okay for me to tell them what type of patient to send me and when to send me that. If I'm having a conversation with a parent and they're like, “What'd you do this weekend?” “I was with my kids. My kid had this soccer tournament.” “Does anybody ever get hurt on the field?” “All the time.” “Here's what I want you to do.” I had to change my mindset. “The next time somebody gets hurt, I want you to give them this card. We're going to write your name on it because I want you to get credit for it. Once you give them this card, I want you to tell them about the experience that you're having in therapy. What do you like about therapy right now?” “I liked the fact that every time I come in, you guys remember my name and you remember what we did last time. You always want to know things. You're progressing me.” “I want you to share that with that child's parents.”

It helps that process of I'm educating that patient on what to do because they don't know that we treat backs because they're here for their knee. They don't know that somebody else can walk in off the street because they came to us from a referral from a physician. All of those points where we can educate them on, it might come into play when they're in therapy. It might come into play a few weeks from now, but we all are going to come in contact with somebody that's in some level of discomfort. I want them to be able to go, “I had a great experience. You should go see those guys.” For us, that was a big part of it.

That's a great example of how you're not handing over the card saying, “If you know anybody, you can get a free movie ticket if you pass them along to us.” I love how you give them the words, the verbiage to use when they're in that situation so that they do feel comfortable. Maybe they don't use the exact words, but they know the feeling that you're trying to portray it. Through them, they can express that feeling in those words to someone who needs physical therapy, honestly. What have been some of the benefits of that? Have you seen a significant amount of growth simply by pushing the internal referral program?

Yes, we've tracked a lot of different statistics. The ones that we track is how many of our new patients on a weekly basis are coming from what we call patient referrals, which would be that internal referral program. On an annual basis up through the end of the third quarter, after the end of September 2019, about 38% of our new patients had come from referrals from other people, which is only second to new patients coming to us off of the internet, social media. It's three times the amount of referrals that we get from physicians, we're getting patients referring family, friends. It's been successful. When you look at it if I used to get three new patients from that, let's say 27 is what we had. If I get 27 new patients from patient referrals, then let's think about how much that's going to help things to expand. It takes us back to the previous topic we were talking about.

If I referred you to someplace, you're going to go with you're already sold. I don't have to sell you on your plan of care. You're going to want to stay because your wife said it was a great place. You're going to do what I tell you because your wife said that. It helps that process much easier. I always tell my staff, “Wouldn't you rather treat the friends of the patients that you liked, then roll the dice on that guy that walks in off the street and you don't know anything about him? You already know that patient because they work with Joe at Oracle. You already know things about them. You already have things in common.” It's much easier to treat that patient. Put that energy into educating them on how to refer somebody.

You use the words well and I'm sure you established a great referral program. How do you get the other providers on your team to do the same thing, to have the same words, to use the same energy? It's one thing to do it as the owner because you own that program and process, but how do you get that to extrapolate into the rest of the team, even the front desk?

This is the message that when you ask me, what is the one thing that's been most successful for you across all aspects of your business? It would be what I call drilling or training. We drill and we train all the time. I'll use it as an analogy. The World Series is finished. Washington Nationals, I'm not a Nationals fan even though I live right here in Washington DC. Let's say I was, I'm a Yankees fan, but nonetheless those guys train year-round. They'll take a couple of weeks off, but even on a day where there's a game, they're in the batting cage before the game. Why? They're going to get 27 pitches or so over the course of the game, but yet they're still practicing that. I take the same philosophy with my clinicians, with my front office staff.

PTO 74 | Internal Marketing Programs
Internal Marketing Programs: You don't need more new patients all of the time. Sometimes you need to look at improving your systems.

 

We need to practice. I have to recognize that I didn't get good at having a patient referral program in the first few years I was a clinician. I probably was horrible at it back then. As the business owner, I've perfected that skill, which is what helped me to be successful as a business owner. As to help my staff, all of them, you have to be as successful as that. It comes to training. We train, drill and practice. How would you ask me for a referral? I wouldn't say, “Do you know anybody I know?” I would train them, drill with them, and practice with them how to have that conversation so that it flows They want to get those referrals. They don't know how to go about the process. They'll be like, “Have this referral card and bring it.” They'll get back to whatever they were doing because the conversation doesn't flow naturally. It's practice.

To get into the weeds a little bit, are you doing this one on one? Are you doing it as a group? I mistakenly immediately went and said that you're training this with the providers, but you're dealing with your whole staff. The entire staff should be on board with this internal referral program because they know the value that Loudoun Sports Therapy provides to the community. You shouldn't be holding that back. How often are you doing these drilling or training sessions?

I'll try to break it down for you this way. If we're talking about the referral program, it starts on day one. If you are a new employee, you're training and drilling on the referral program every single day. Whether you work at the front desk, you’re a tech, you’re a PT. There's some semblance of drilling on that every single day, five days a week as part of from day one of starting. Even my people that had been here from 5 to 8 years, they're still drilling a minimum of one time a week for 30 minutes on that one aspect.

We do drills on a lot of different things, but that is the key thing that everybody does. No matter what you do, everybody's drilling on that a minimum of 30 minutes a week, at least one time a week. There may be other things that you're drilling on. Every staff member for us drills a minimum total of 60 minutes a week. That's the inside of their 40 hours a week. It's not an addition. If you're newer, more of your 40 hour week is going to be on drilling. If you're older, you've been here longer, it's still that minimum of an hour and 30 minutes of that hour is always on the referral program.

Do you do that over the course of a year? You guys have become experts then at getting referrals from patients.

Yes, it’s the same thing. Think about the baseball players. They're still in the batting cage all the time. It's funny, we're having this conversation. My youngest daughter who's sixteen, who still is in high school, she's the only one that we have left at home. She is interviewing for a job here. She's going through the same process. She's worked there since she was eight, but she's still interviewing for a job. It'd be a position at the front desk. She came home, she had the interview process. She's like, “I won't say their name, but I might want to drill with Sally a little bit more because she wasn't as good at talking about the referral program as I think she should be.” There's always been a joke. My daughter has always said that she's the Deputy CEO of Loudoun Sports Therapy. It was interesting to see how somebody who's grown-up seeing that and to be able to see. She’s somebody who's been here for a couple of weeks and that's a new employee that she was talking about. She’s somebody that flows well but still has room for improvement on that.

You guys will not only train on the internal referral programming. Essentially, the goal with the training then is to get the referrals from the patient or to pass along the card simply. What is the goal of each training session?

The goal of the training session would be that they have an increased level of confidence in being able to help the patients to have a realization of somebody that's out there that maybe we could help. We're not looking for them to give us their name and their phone number. That's not the process we're following. If that's what somebody is doing, that's perfectly fine. What we're looking for is for them to have the realization. I dragged my trashcan down to the street and I was talking to my neighbor. He's like, “My knee has been bothering me.” What I want is for that patient to realize that's somebody that they could refer to us.” It's drilling with the staff member to have that conversation, help the patient to have that realization, and come to the conclusion of, “I don't have to send them here, shouldn't I? Do you guys do these?” “Yes, we do.” “Do you have something I could give them?” “I have this card. You could give them the card” We have a card that says referral card on it. We'll write the patient's name on it so they get credit for it. We'll send them a thank you, but we don't do anything else.

The goal of the training session is to have an increased level of confidence in being able to help the patients. Click To Tweet

You say you're getting 38% of your patients from this internal referral program. I'm assuming that with all the physicians on physical therapy clinics in your area, you don't get a lot of physician referrals. What's your percentage there?

It is 11%.

Where are you getting a majority of your patients from at this time?

If we look at beyond the patient referral program, what I would classify to be like social media, the internet. It's social media, internet, and the patient referral program tied together. We have an expectation that every patient who successfully completes therapy is going to give us a success story. Do an online review for us. We average about 13 to 14 online reviews a week between Facebook and Google. That's hard. It's an extension of that internal review or referral program. They give us that review.

The discharge patients give us that review so that somebody out in the community sees that, has that reality with it and reaches out. The majority of our patients, we've been successful in building the use of that direct access through that patient referral program. Patients come to us off the street, they'll see something that we put up on Facebook or an email that we send out or something that we mail out. It’s a whole own separate entity. That's the number one driving force. The number two driving force for new patients is the patient referral program.

Physician referrals have declined over the course of a number of years. The study, a couple of years ago, it declined 50% between 2010 and 2018. It's dependent on us to change our marketing strategy. Don't forsake your physician relationships, those are valuable. You always want to be able to the physicians that these patients are saying, but you’ve got to consider direct to consumer marketing is the way you need to go. If you're outside of the internal, the patients are already there. I'm assuming you've got emails or newsletters that are going out to past patients and you're constantly mining that group because that's an ever-expanding group. You've got the internal referral program that gets you some immediate patients based on the patients that are in the clinic. When it comes to social media, are you doing some Facebook ads? Are you simply having those patients post on social media?

We're doing both. For example, that patient that is discharged now, they'll do an online review for us. They'll put their success story up. We'll share that. We'll like that. They'll share that and like that with their friends with that piece. We are doing a whole semblance of things online. We do run ads on Facebook, Instagram, etc. Most of what we're doing is unpaid. Most of what we're doing is I would term to be organic. It's not following the organic definition of Facebook. We post five things a day on Facebook about different problems. It falls back to the notion of if I educate people that there is a problem, how the problem is affecting them, that there's a solution for it, they're going to be much more likely to take action because they understand what it will do for them to take action.

It goes back to that mantra of people don't buy what you're doing. They buy why you're doing it. I'm constantly putting out content that helps people to see that it's not normal at the age of 45 to have knee pain, despite where we might think in society. In society, we think, “It's okay because I'm getting older.” It shouldn't be that way. It doesn't have to be that way. “Here are some things you might be having problems with going up and downstairs, sitting to watch a movie. There's a solution to it.” After they see that a certain number of times, they will start to take action. We'll tie that success story into it. “Here's Joe who had knee problems. He came to us and here are his results.” That's part of that whole process.

PTO 74 | Internal Marketing Programs
internal Marketing Programs: When the discharged patients give us that review, somebody out in the community who sees that will be reaching out.

 

The majority of what we're doing when it comes to getting new patients off of social media, internet, isn't down that paid avenue as much as it's down the continue to educate them and give them good content and information. They will make that decision to take action in a relatively short period of time. I hadn't changed my mindset. I used to think, “One post a week was enough.” Now, I said, “We do a minimum of five a day and a minimum of two emails a day.” That's a minimum. If we just hired a new clinician and we're trying to fill their schedule, then it's 7 to 8 things a day and 4 to 5 emails a day. I had to change my mindset, but following that same philosophy.

Who's creating all that content?

We have all of our clinical staff create all of that content. We do all of our own social media stuff in-house. It's a requirement. It's an expectation. If you're a clinician that works for us, you're going to produce one blog every three weeks and one vlog every five weeks. We're constantly creating that content internally. I have full-time promotions, people that work for us as part of our staff. They're employed here, but that's her job as she does social media stuff. She's taking those blogs that she's getting, she's turning them into content, throwing a picture with it, putting it up online, deciding what to do with it. It's getting that stuff out, but all our clinicians are producing all of that.

Do you find you're getting a lot of patients that say, “I found you guys on Facebook?” Are you getting some of that?

When we look at it if I were to turn around here. If I'm looking at my referrals that came from online, 63% of our new patients came to us of some form of online, internet, social media.

I haven't talked to a lot of successful PT owners that have had as much success as you have when it comes to the internet and social media work. Do you attribute that sheer volume on the consistency of your posting?

It comes down to three things. One is the volume. It is the quantity of things that we're putting out. Number two, it's the quality of what we're putting out. We're not putting out, “Come to Loudoun Sports Therapy.” We're putting out, “Here's a problem. Here's how therapy can help. By the way, at Loudoun Sports therapy, we treat that.” We're telling a story to the patients that they come to have a realization that there's a problem. There's a solution to it. The third thing that I'd say that helped us to drive that as that I've spent a lot of time. The benefit of me being able to truly be an owner and not have to worry about being a physical therapist is I've been able to dedicate my time and hire staff who have the same desire to learn a lot about that avenue of marketing and promoting and using social media.

I've become a pseudo expert in marketing and promotion. That's one of the things that I do with Measurable Solutions is helping to pass that information on to other practice owners so that they can have the same results. It is something that's been successful for us. I talked to a lot of practice owners who tried it but it didn't work. I'll say it's because they didn't put their full attention and energy on it. They were paying somebody that's also marketing for the restaurant down the street, writing a blog for them about something. It's always driven towards, “Come to Loudoun Sports Therapy.” That’s a no-no. “Go to physical therapy. By the way, Loudoun Sports Therapy does the things that we're talking about.”

People need to see something an average of twelve or more times before they take action on it. Click To Tweet

That's one thing I know about myself is that I'm not the creative type, content creation is like nails on a chalkboard. Inevitably you probably have somebody on your team that would probably love to have that responsibility to do that. You have shown by the fact that your providers are doing content creation, have created a culture, and a group of people that are willing, wanting and anxious to provide that.

I'd say it's a lot later. Back to the drilling on teaching a patient how they can refer to others. A lot of times, we'd get very all worked up about a blog has to be this big fancy thing with a lot of stats and a lot of stuff. It's making it simple for that staff member, “If you were standing in line at the grocery store and the person in front of you kept rubbing their neck, what would you talk to that person about for 2.5 minutes? Go write that down. That's a blog. Making it something that's much simpler because that's the type of relationship we should have with our potential patients. Don't be all fancy and super-duper hyper stuff. Be simple and basic.”

They will have that realization if they see it enough. You've got to have stuff out there and enough content. The same thing with the patient on the patient referrals side, the internal referrals, you can't mention it one time. You've got to be like, “When you went back to work, did you talk to any of those guys that were complaining about their neck pain?” “No, I didn't.” You're like, “You have to keep coming back to that point.” It's the same thing. It's everything in quantity will give you what you're looking for later on.

I love how you brought that back around full circle to the internal referral program. The one-time conversation isn't sufficient. There need to be followups, there needs to be, “As you walked around, have you noticed other people with a similar condition? What are your friends and family like?

I might've been talking to you about the guys you sit at work with you had lunch with, but then you're telling me about the soccer game. You're talking about raking leaves with your neighbors. All of those things are opportunities where I keep ingraining in you. I keep having this relatively same conversation, but I keep ingraining in you how you can refer to other people. I don't just have it one time. It's like a shoulder that's frozen. I don't mobilize it one time and it's all better. I've got to mobilize it twelve times and it starts getting better. It's the same thing with getting somebody to refer, getting those referrals in. A lot of times we get wrapped into, “I tried that. We tried it three times over the course of three months.” You have that conversation twice with a patient on day five. On day fifteen, they didn't do what you needed him to do.

I read a study that said, “On this day and age of social media, we need to see something an average of twelve or more times before we'll take action on it.” It changed my mindset. If I'm putting out a blog a week, a couple of weeks from now, maybe somebody will go, “I should do that.” The reality is if they're only seeing it once a week, they forgot about it by the time they see it next week. The same is true for patients. If I had a conversation with you about referring your wife, but I don't ask the next time, “How's your wife doing?” You forgot that we had a conversation. I’ve got to have that conversation with you multiple times for you to go, “I'm going to have the conversation with her and get her off my back at a minimum.” You’ve got to hear and see something twelve times before you take action on it.

That changes my mindset hearing you say that. It's understandable because, in the past, my refrain growing up was that someone's got to hear it three times for it to sink in. If you consider the decreased attention span of people nowadays and how easily distracted they are. You tell me once and I'm going to forget that by the time I scroll up to the next thing on LinkedIn or Facebook. If I see it a number of times and especially, more than three times over the course of even a couple of days, then it starts sinking in. I can see where twelve is coming from.

If you watch football games, if you watch an NFL game in a span of 3.5 hours, how many times do you see the exact same commercial? Not the commercial for Bud Light or for Ford trucks. It's the exact same commercial. It's the same philosophy. You've got to see it many times before you're like, “I need that truck.” That's the society we live in.

PTO 74 | Internal Marketing Programs
Internal Marketing Programs: When you educate people that there is a problem, how the problem is affecting them, and that there's a solution for it, they are much more likely to take action.

 

Thanks for sharing so much about some of the successful actions that you're doing with your clinic. It's evident in the numbers that you have now and the growth that you guys have seen. If someone wanted to reach out to you to pick your brain, ask about Measurable Solutions, even get in touch with Dee, how would they get in touch with you?

That's the point I love about where I am in my career now is that I get a chance to help other practice owners. I am so much about helping the private practice owner to survive in this day and age of big corporations. Anybody that wants to reach out to me, I would love to sit down, chat and help in any way I can. The best way to get in touch with me is to send me a text, shoot me an email, or leave me a voicemail. I'll give you my cell phone number. It's (703) 470-5995. One of the great things about me, having built this business to my clinic is I've been able to give back to Measurable Solutions that was helpful for me.

They taught me a ton of the basics of these things that I've applied and talked about. I've been able to join their team. I'm the President of Measurable Solutions now. The best email to reach me at is my email for them. That would be Mike@FortisBusinessSolutions.com. Send me an email. I'm happy to figure out a time that we could talk or anything like that. I am always about being able to help people because I want private practices to survive. I do not want us to get eaten up by physicians and corporations. I'd love to help anybody that's out there that wants more information.

Thank you for your time. I appreciate it, Mike. It was great. There's a ton of value. Thank you.

You're welcome. Thank you.

Important Links:

About Mike Bills, PT

PTO 74 | Internal Marketing ProgramsMike Bills is the Owner and CEO of Loudoun Sports Therapy Center in Sterling VA. He started his practice in 2005 and did everything: answered the phone, treated patients, billed the insurance, etc. Since that time he has grown his practice by over 10 times. He now has a staff of well over 20 people, including 14 clinicians and a facility size of over 10,000 square feet. It was always Mike’s goal to have the time and ability to manage his business and not work in it and he has fulfilled that goal as he is the true CEO and no longer treats patients. Another goal Mike had was to be able to help other PT’s have the Freedom they deserved from their practice.

Mike was a client of Measurable Solutions where he learned how to truly manage a private practice and where he learned how to truly be the CEO. This is where he learned the basis for all of the systems that he uses in his practice that have helped him to be so successful. Recently Mike was named the President of Measurable Solutions and is now able to fulfill that goal of helping other private practice PT’s have the same success as him. If it weren’t for the perseverance and drive over the years to build a successful business this never would have been a reality for him. Marketing is one of the most important pillars of a private practice and I have worked hard to develop systems that continuously help my practice to grow and thrive despite the time of year or whatever else is happening in my community. I am happy to be invited onto the podcast to share just a fraction of what has helped us be so successful.

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PTO 72 | Billing In-House Or Outsourcing

 

It's an age-old question for PT owners - should I have my own billing department or outsource it? It's a dilemma that each PT will go through at some point. Let's get the answers from billing veteran Amy Sparks. Amy has 20+ years of medical and PT-specific billing experience and has a firm grasp of what it takes for an in-house billing department to run smoothly. IF you have the right people and IF you can monitor and manage them regularly (weekly and monthly meetings), then in-house billing may be right for you. But IF you outsource your billing, you still need to monitor, manage, and demand regular reporting. Make your decision to go in-house or outsource but never abdicate your responsibility to stay on top of your cash flow.

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Listen to the podcast here:

Bringing Billing In-House Or Outsourcing: The Pros And Cons With Amy Sparks

I get to talk with Amy Sparks. She is the Billing Account Manager out of Star Physical Therapy clinics in New Orleans. We're discussing whether or not to bring your billing in-house or to outsource your billing. After my discussion with Amy and based on my personal experience, I personally believe that in-house billing is the best way to go, but only if you have a couple of things in place, only if you have these two things. Number one, you've got to have the right person with the right personality type. The best billers that I've had seen billing and collections as a reflection of them personally. They take it personally if people don't pay, whether it's $5 or $500, they're in the pursuit of that money. They're willing to confront anybody that's not willing to pay, whether it's insurance companies or patients. They've got to be able to hold those conversations and demand payment when it's appropriate. The second thing is you've got to be able to have the time and the bandwidth to monitor and review and check up on the reports of the billing department that they provide you.

You've got to step out of treatment. Take the time on a weekly and a monthly basis to review billing reports with the billing supervisor, whether that's in house or outsourced to track your money. Whatever time you take away from patient care to review billing will come back in spades both immediately and in the future. That's your money, that's your cashflow, that's the lifeblood of your clinic and you've got to stay on top of it or else it will leak out. We talked about some of the reports, some of the KPIs that you'll want to review on a weekly, a monthly basis. Ultimately, the billing department did what's best for me when I demanded the most out of it. When I found the right person, I would talk to them about my expectations for the KPIs and they went along with it. I also talked about the reports that I wanted to see and they went along with it and created those reports and even added some statistics on top of it to show their performance and help them track the performance of people that they managed.

When you work in synergy like that and demand more out of the billing and collections, your billing and collections will improve. Your cashflow will improve. Those clinics that are growing have a heavy, solid, strong billing department. Those companies that are floundering typically also have a floundering billing department. We talk a lot about the ins and outs and the pros and cons of in-house versus outsource billing, some of the questions that you should ask if you are going to bring your collections in-house and some of the expectations you should have if you are going to outsource your billing. Let's get to that interview.

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I've got Amy Sparks. She is the Billing and Account Manager out of Star PT Clinics based out of New Orleans. They have eight locations. I came upon Amy because she wrote an article in Impact Magazine regarding in-house billing versus outsource the billing, what you should do and how to determine what if you should do either one. I'm excited to do this because it's a common question for all PT practice owners. First of all, Amy, thank you for coming on to the podcast. I appreciate it.

No problem. Thank you for having me.

Tell us a little bit about you, the experience that you have with physical therapy and billing in particular. How did you get to the point where you are now?

I was raised in New Orleans. I actually got involved in billing by accident about many years ago and I can't believe it's been that long. I started in billing for outpatient dialysis. From there, I ended up working at health insurance. I got to take those phone calls all day. I got involved as the biller for an OB-GYN doctor. About a few years ago, I got a job at an outpatient physical therapy clinic. That was my first experience in billing for physical therapy. I've been here at Star for two years.

Did you notice this significant difference in the billing between those other medical professionals and physical therapy?

If you billed for any sort of health care facility before, you can bill for physical therapy. Click To Tweet

Other than the coding, no. The codes are different, but pretty much the rules in the game are exactly the same.

I asked that because a lot of PT owners might be looking for that billing person. I never knew, is it important that they have physical therapy-specific experience? Any healthcare experience is beneficial and there's not much difference, but you're telling us it’s not that different. 

The CPT codes vary, but the rules of the game stayed the same. If you billed for any healthcare facility before you can build physical therapy.

I liked how you talked about the typical storyline that physical therapy owners go through in the article. You talked about a story that I'm very familiar with and a lot of other physical therapy owners are familiar with. Did you start with maybe a dedicated staff member or someone like that who is a rockstar? Maybe they want to do things on their own or maybe they start with an outsource billing company. What's the path that you typically see that you mentioned in the article?

Typically, what I usually see is when someone with a physical therapy clinic is starting out, they will hire somebody they think is a rockstar or even a family member or something, thinking, “Our patient load isn't that crazy right now. This person can handle this.” What ends up happening is they end up growing. Once they grow, they realize either they’re not so much of a rock star or this person was great when we were seeing twenty patients a week, but now that we're seeing 100 patients a week, it's too much for them. They'll end up either outsourcing to a billing company or trying to hire someone they think is better equipped for the job.

That usually goes a long way and based on your experience, I can share my experience as well, but outsourcing to a billing company, what are some of the pitfalls with that?

Some of the pitfalls with that is if it's a larger billing company, I don't think they can devote as much time as they should basically to your AR and your claims and stuff like that. If I have 200 other customers, they don't devote that amount of time and they're trying to get to that basic level, "We said we would get you 80%. That's where you're at." We're not going to go for the extra, even though it would be easy to. This is the same thing for in-house. You're at the mercy of who you hire in a way. People can look great on paper. They can interview like a rock star. When you get them actually to put their money where their mouth is, so to speak, they don't know half of what you thought they did.

You see that no matter whether you're doing it in-house or outsourcing your billing, you're never quite sure who you're playing with. When it's in-house, you do have some control there or more control at least because you can hire according to your values and hire someone that's aligned with you. You also can hone in on the customer service aspect of it that you don't have a lot of control over when you're outsourcing. One of the issues we had with outsourcing was that we had someone who was a jerk on the phone to these people and they were like, “That's not us. That's not our values. We could control that a little bit more when it was in-house.

I was going to say too because the person's right there, you can see how they spend their day. If you wanted to check in on them, you can hear how they talk to your customers, how they talk to insurance companies. That way you have more control of, “Is this what kind of person we want doing this for us? Are they giving us a bad reputation and we don't even know about it?”

PTO 72 | Billing In-House Or Outsourcing
Billing In-House Or Outsourcing: One of the pitfalls of a larger billing company is that they can’t devote as much time as they should to your AR and your claims because they have 250 other clients.

 

Unfortunately, that can be the last impression that they have of your clinic. They're no longer being seen in physical therapy and you don't have any contact with them. If they're doing something 3, 4, 6 months later that could be negative, that impacts you in a bad way.

Absolutely, it does. I always say the clinician and the billing department are basically in a relationship of a good cop, bad cop. The clinicians are the good cop, the people in billing are the bad cops always. We're good with that. We're fine with that. We're the ones who are going to take the bullets from your patients and stuff like that as far as getting of claims paid and such. We got that going on, but at the same time you have to keep a level of professionalism. You have to be mindful of what the owners want and what their values are. You can't overstep that and can go rogue with that as far as dealing with patients because you get problems with that. With in-house, you have more control over that because you get to see that more on a day to day plus you're right there. Your patients are right there. If they had a bad experience, trust me, the clinicians are going to be the first one to know about it.

It's also important to note that as you're managing the billing department from an owner's perspective, it's so important to manage the reports. When you have someone in-house, you can generate those reports and create them in a way that you want to see those important numbers, the KPIs and whatnot, getting them from an outsource billing company. Sometimes I've had a difficult time getting those reports. I have a hard time meeting up with them to talk to them about the reports or individual cases.

We're leading down the road towards the benefits of an in-house billing department. Some of the cons for an outsource billing department and we'll get to that because there are some benefits to an outsource billing department and not everyone's ready for an in-house billing department. As you manage your cashflow and as you manage your money when it is in-house, you have greater control. You can manage it appropriately. You can dig down on individual cases very readily. You can set up meeting times at appropriate times for both parties to work it out well. There is a huge benefit to that. That is difficult when you're outsourcing.

You don't have the freedom of meeting convenient times for you. You're at their mercy. If you have questions, you might be waiting a minute to get your answers because you don't have the person right there readily available to answer the questions for you. It depends. If you're starting out and you want to focus on growing your business and if you have the patient traffic coming through your doors already then maybe you do want it in-house because you want to focus on this. There are pros and cons to both. It depends on really where you're at. Honestly, the patient flow has a lot to do with it as well. If you have the patient numbers and where you're at in your business and what you're looking for. It depends.

It's almost like a seesaw. I like how you explained the cycle that some clinics go through, they'll outsource and they're not happy with the collections rate or how they're being representative of patients so they bring it in-house thinking they have a solid person who can do that and "save them money." Maybe the billing isn't as good as it should be because they don't have the experience and the knowhow. Maybe they have to consider, “We need to find another EMR as better billing software.” It's the seesaw battle. What I liked about how you broke it down is how to determine if you're ready for in house billing to ask the questions. If it's truly right for me at this time to have an in-house billing department, these are the questions I need to ask and answer. Let's go over those a little bit.

If you're considering doing in-house billing, we definitely want to have dedicated staff members who have a good work ethic, who know how billing works, who understand coding, who basically looks at your denials and say, "I need to fix this.” Also, they have the ability to find the right people to staff your billing department as well because that is a huge area. Hire somebody and you might think they're great and might take you 3 to 6 months to realize that this person's not great at all. The good thing about the billing is probably the only job that will always tell on you.

The numbers don't lie. 

The numbers don't lie and you can't hide that you don't know what you're doing or you're not doing your job in billing. You might be able to pull it off for a month or so, but eventually it's going to tell on you.

People can look great on paper. They can interview like a rockstar. When you get them to put their money where their mouth is, they don't know half of what you thought they did. Click To Tweet

You're saying you have to have someone who's not only educated but dedicated to billing. Maybe they're not full-time if your numbers don't match up. They need to have separated segregated time to do billing, only billing, focus on that and then also be capable of being a manager. As you grow, that billing department is also going to grow. That person is going to move from being the biller to the billing manager and maybe not touching everything but having to oversee somebody else.

As you grow, as a building manager, you have to know how to delegate. If you don't delegate, you will live swamped, constantly feeling like you can't your head above water. You have to find people around you that you can trust. That you can tell to do something. They're going to do it how you want it done and let you know when it's done, that you can rely on. To me a very strong work ethic is as important as the knowledge you bring.

It's a certain personality type that succeeds in billing. I'm sure you've seen this and what I've seen is the people that are successful, they are going to get every penny and it's almost a personal assault. They take it personally when people don't pay. They have to be able to confront. If you're very passive and laid back and trying to be a nice guy, you're not going to do well in the billing department. You have to find someone who is able to confront these patients who have a balance and talk about money because it can be a sensitive subject. 

 I've always told clinicians even though it's one patient, we are dealing with two completely different personalities because you're getting the nice, "Help me please," and very friendly. I'm getting a different person because I'm trying to get money out of them. He might be the sweetest person in the world in clinic, we'll get him over here and they'll start yelling. It's the nature of the beast. You definitely have to have a person who is thick-skinned, someone who doesn't take things personally. We need somebody who has a great attention to detail. A lot of times you'll find things are denied because one digit is off. I need you to find that or somebody has to have a very strong attention to detail. When you're talking to a rep on the phone and insurance rep particularly when they try to tell your reason for denial, I'd say a good 50% of the time, that's not what it is. You're looking at it like, "No, that's how it is." "What you're telling me is wrong, I see that I've done that part." “I see this down here is not right.” If I could look at that and say, "Look at coding," and say, "This needs to be modified or this code needs to be changed." things like that. They have to have very good attention to detail, definitely.

Tell us a little bit about the reports system, the ability to meet, review reports and where your clinic is in that regard. How important that is to determine if you can do in-house billing? 

For example, I meet with the owner once a week and then we meet again at the end of the month after we close out that month. What he will do for example, is he'll do an analysis. He'll randomly pull ten patients and check to make sure that the follow-up on them is done according to our procedures. That pretty much everything he pulls randomly has been touched. It goes to figure if he's pulling ten patients and I see that three of them have not been touched in several months, then it's safe to say that you probably have a pattern there going throughout your clinic. We'll meet on that. We make sure everything balances out, paychecks, denials, adjustments and refunds. We go over all these reports at the end of the month to verify that nothing was written off.

It shouldn't have been that insurance reversed the payment, but it was a legitimate reversal. It wasn't, "We want to take our money back on this," things like that. It's like the check and balances system. Meanwhile, throughout the month I'll randomly pull an AR report, go through it and spot check it basically to see. I’ll make sure everything looks good, the girls are following up working denials and things like that as they should be. He spot-checks me. It's a system of checks and balances that we have in place. We will meet once a week. We email, "Can you meet at this time?" We set up a time. It's very convenient because like I said, I'm here in-house.

Especially if you're going to do the in-house billing, then it's necessary to recognize that you need to set aside the time to meet weekly and monthly to review weekly and monthly reports. You know what you're looking at as the owner. There are certain statistics that I'm sure he's going to review or certain categories that he wants to check out. Also, take the time to do some spot checking and follow up on it themselves. I think that's a great word of advice, but tell us a little bit about some of the key statistics that you're looking at maybe that you and your owner are looking at as you review some of the weekly or monthly reports. What are some of the top 3 or 4 statistics that you guys are reviewing?

One thing we look at is called the Accounts Receivable Conversion ratio. It’s called an ARC ratio. It's basically our total AR divided by the number of average number that we have built out per month. We'll take an average of the last three months, not including things like auto, attorney or people who are in collections obviously. We basically divide the AR by the average bill. We'd like that number to be less than 1.3. Basically saying that it takes us 1.3 months or less than 1.3 months to collect. That's basically what that tells us. We are much less than that actually. That's always a good thing as long as we stay below that number.

PTO 72 | Billing In-House Or Outsourcing
Billing In-House Or Outsourcing: If you're considering doing in-house billing, you need dedicated staff members who have good work ethic, know how billing works, understand coding, and have the ability to find the right people to staff your billing department.

 

It's great because we all know that the longer you let that money sit out there, the less likely you're going to receive it. You get pennies on the dollar the longer it stays out there. To keep that average within or 45 days is huge.

It also helps you as far as if there's a problem somewhere. For example, we monitor it every single month. If that number were to skyrocket from one month, the next we'd be like, "We have a problem here somewhere." Either an insurance began processing our claims wrong or we're not receiving payments somewhere or something's not right. It's also great with a monitor that everything should be steadily going down with that number. It's a good way to monitor and make sure I catch it early if there are any issues happening that maybe you're not aware of.

That's a monthly statistic that you follow and that's huge. What are some of the others that you follow?

Another one we follow, we call it the 90-plus. Basically what we do with that is we will take the AR 90-plus.

The AR aging report and whatever's in the 90 plus day range and above.

We'll divide that by the total AR and that gives this a percentage of basically AR that is over 90 days old. You want that to be less than 10% of your total AR.

When you come into a clinic that's bad or a clinic that’s in a bad situation, when it comes to collections, you'll see that statistic specifically be bad. To take it from there to under 10%, in my experience can take anywhere probably about six months at least to get down to a good range. That's where you're going to find some extra cash, but you're also going to lose a lot of money as that number gets larger. We used to actually bonus our biller based on her ability to keep that under 10%. Once she did that, then she essentially got a raise to continue to keep that under 10%.

Once you get it down there, it should be very easy to maintain, but I'm glad you brought that up because I think a lot of clinic owners, whether it be in PT or other areas of healthcare don't realize that if your AR looks bad, it's not going to get fixed overnight. It is going to take time for it to come down because it takes an insurance 30 days to process a claim and that's if it looks good. You have to keep in mind that it's not going to be an overnight thing. It will take a couple of months to get it down. Six months is probably very good timeline think about. If you're not seeing anything drastically improving in a month, don't freak out. It will be a slow and steady drop it took and you didn't get this bad AR overnight it's going to take at a time to come down. It's going to be a lot of fighting with the insurance because that is definitely something that has changed since I've started back in the day. It used to be a lot easier. You file a claim, the member ID is right and the birthday is right, they’ll get paid. Now, no.

Not so much.

The clinician and the billing department is a relationship of a good cop, bad cop. The clinicians are the good cops and the people in billing are the bad cops. Click To Tweet

There are two players I'm thinking of in particular that are good at the game. You've probably seen this yourself. For example, therapeutic activities. You build therapeutic activities with any other therapy exercises. There are two payers in particular that they will automatically always deny therapeutic activities even though it was built correctly. They'll deny it and that they want you to send in all this documentation and medical records. If they find your documentation is sufficient, then they'll pay it things like that, which is very time-consuming. You're left with this $50, $60 balance on your claim. They'll sit there for a few months because they will take their time with that. The frustrating part is that there was never anything wrong with it. We could have paid it from the get-go. It ends up on your AR longer than it should.

They know that if they simply deny it, then they'll save money. Most people won't take the time to appeal it. Especially in some of those cases where the outsource billing won't go after the extra $50. 

They'll say, “We're going to write this off,” and it can be a problem like that because those charges do add up. They don't want to devote the time. I can tell you from our standpoint, we've gotten to the point with that where we've had to basically create a letter of medical necessity template. We tailor that for each patient and it seems to be working. Prior to that, you'd go through sending in flow sheets, sending in medical records and waiting for those to tell you, "No, that's not enough." That is a team effort because we have to get the clinicians on-board like, “I need you to tell me exactly what you did every single minute.”

That can be difficult.

They're not crazy about it either obviously, because they know what they're doing.

What are some of the things people should look for if they are considering a billing company? What guidelines do you recommend? 

If you are looking for a billing company, you should look first at all your costs. I would say you should not pay any more than 6% to 9% of your collections. Also they should provide you with consistent reports to show you their performance like, "Here, look what we've done." They should also provide you with their policies regarding their workflow because like you said earlier, their policies, their way of doing things might not match up with your values. You need to have a clear idea of what their policies are regarding their workflow, how they handle things.

They should also be very transparent regarding how much time do I actually put into a claim as you ask. If I have one code that denies from $50, are you even going to try and fight for it? Are you going to suggest that we write it off and move on? That will give you an idea of how much time they're going to put into chasing, not just that claim but all of your claims. The insurance is hoping that you're going to give up. They think that if they hold you out for six months, you’ll be like, “I'm tired of this. Let's go. I'm going to write it off.”

One thing that also always brings up the red flag for me when it comes to dealing not just with billing companies but with any vendors is their willingness and ability to communicate. If I have to constantly search and ask for reports or feedback, that's a lot of wasted time and energy. I would like for them to take the initiative to provide those reports on a monthly basis. I've had to do that with billing companies in the past. I said, "At the beginning of each month, I want to see these reports come to me without me asking for them. Can you do that for me? If you're going to ever write off a balance, that needs to be cleared through me first.”

I don't even write off balances without getting the owner's approval first. I do think this is true for anybody, your support staff starts at the very front, your receptionist. I know a lot of people think that, "She just answers phones, schedules and appointments, whatever." She needs to have a great attention to detail because she's doing the data entry of this patient's information usually and not to mention she's your first point of contact for your patients. She's basically the face of your company when they walk in the door. It's important to understand that one wrong digit on a birthday or a member ID number will delay your claims payment for at least another 30 days. You have to have a strong person at the front. At least double-check what she put in, make sure the numbers are right. You need to have somebody very strong upfront as well. It's a whole group effort between the receptionist, the billing department and the clinicians.

PTO 72 | Billing In-House Or Outsourcing
Billing In-House Or Outsourcing: A lot of clinic owners, whether it be in PT or other areas of healthcare, don't realize that if your AR looks bad, it's not going to get fixed overnight.

 

One thing also to figure out with when you're considering outsourcing is how closely are they going to work with you on improving collection or billing performance. One benefit of having in-house billing is to say, "We're constantly getting denied for such and such code," like you're talking about, "We're constantly getting denied for therapeutic activities. Should we consider modifying our documentation so it’s built under therapeutic exercise and we don't have to go through all of this?" Of course you don't want to tell them how to treat, but you need to raise the awareness like, "We're spending a lot of time and effort on a code that's getting denied." If you have someone in-house, you can have that conversation. If you're going to outsource this, you need to make sure that you're having those same conversations and you need to make sure you're setting up time and the awareness that's expected. 

I agree and something you had mentioned was saying how you've had to chase down some of them out when you outsource to get your reports and stuff. An important thing to remember is not to sell yourself short with that because if that was happening in-house, you wouldn't tolerate that. You wouldn't tolerate having to chase down an employee to get a report. You would expect them to bring it to you. It’s the same thing with the outsourcing. You have what you expect and you shouldn't settle. If you're not getting what you need from this outsource billing company, I would say definitely you need to make a change, but you really shouldn't have to chase people down because you're paying them. They're not paying you. They work for you, so they're like any other employee.

If I have a question, I need you to answer it in a timely manner and you need to expect constant communication. There are many times that they need information from you or they're expecting information from you and you need either back to them. Because of that, sometimes I think we feel like we're working for them instead of the other way around. You need to remember that you're the owner, you can always change this person out. You can always fire your outsource billing companies. If they're not doing what you need them to do in terms of reports, meetings, communications, customer service on your behalf, you can always fire them and you need to find someone better.

There are too many companies out there. There are too many people out there with billing experience. There are companies that do outdoors that you shouldn't have to settle, if you're not getting what you want.

To give some of the owners a heads up, what is your experience when you do switch out of an outsource billing company to in-house? If you're moving from an in-house biller to another in-house biller because one got let go or whatnot. I'd say that to preface this is to say that when I've seen billers change whether going from outsourced to in-house, there can be a real blow to cashflow for about six months or so before you get back on your feet again. I think PT owners need to understand that they expect the transition like that might be good, but you're not going to see the benefits of it for 6 to 12 months and they have to be patient and stay on top of the metrics in the meantime. 

I know it's human nature. You want it now, but you have to keep in mind that the fact that your reason you're changing is that if it wasn't working the way it was going. More or less, you've gotten yourself or billing company has gotten you into a hole, if you will. You're not replacing them because they were doing a great job when your AR is low. You're replacing because they weren't doing what you needed or your AR, your cashflow is going down. It's a mess. Like any mess, it’s going to take time to clean up. As I said, you didn't get in this hole overnight. This took months to happen. It's going to take months to fix it. I know it's very frustrating for owners because they expect to see an improvement within the following month. It doesn't happen that way because keep in mind that insurances on average take 30 days to process a claim in itself. When they're going through cleaning up your AR, they're refiling all these claims, correcting them, refund insurance.

At best, you're looking at 30 days and that's not going to be for everything because at least half of that you're probably going to end up fighting for because the insurance doesn't want to pay. The worker's comp company doesn't want to pay it. They'll deny it for crazy things. Probably one is not timely, even when you send in proof of timely file. For example, you know how it prints on a HIPAA? If today's date would be 10, 18, and 19. I've had a particular insurance company deny saying that date of service was prior to the patient's date of birth. I realized that the patient was born in 54, they are reading the date of service as 1918 or 1919, not 2019. I'm like, "Are you kidding me? My health insurance is in 1919. My health insurance’s dead. What are you talking about?" I couldn't believe it. It blew my mind. This is hands down the worst denial I've ever seen in my life.

I want to talk to you a couple more questions simply because you are a billing manager now. You are working with billing people who work underneath and you oversee them. What are some of the recommendations that you can give the PT owners as they're working with a billing department, not a single person? If they're large enough to where they have two, maybe three people doing billing for them, what are some of the things you are looking for as a billing manager in your management of others? The separate duties, how do you organize your staff? 

I separate my staff. We have a person who bills out claims every day so she'll bill those up. She's also the person I have that works my insurance AR because she knows how to code. She's billing the claims out. She knows what to look for. She's very strong in that. Also, I call her my pit bull because she does not have any issue getting on the phone and fighting. I swear she fights like it is her own money and that's what I look for. That's what I love in a billing person. It's like, "I'm sorry I got mad." "No, don't be sorry, you got mad. I appreciate the fact that you act like that is coming out of your personal pocket, like this is your money."

I love that. I look for that. I look for a good work ethic. You don't want somebody that's constantly calling out because this, that or the other. Somebody who doesn't mind being on the phone, doesn't mind getting into the trenches as far as that goes to the insurance company and sitting there on the phone with them for 30 minutes fighting. Also on the flip side, I have another person, she does all of my patient payments, my attorney's cases and my patient AR. I have her do the patient payments because she's the one calling the patients to about bills. That's how I break it down. As I said, I oversee them, I spot check them and that's my checks and balances for them.

As you grow your business, you’re going to have a billing manager. You have to know how to delegate. If you don't delegate, you will live swamped 24/7. Click To Tweet

I have somebody who does the same thing for me. You need to have systems in place with reports. Checks and balances is a great thing. I do it to them and somebody does it to me. That's how we make sure that we're running officially, policies are being followed, procedures are being followed, everything's being done, how it should be. We have a system in place as far as patient collecting, “You do this and this,” and then you send them to collections if you've got nowhere. We made sure all the steps are being followed and things like that. It works. Prior, I've seen it done other ways. I didn't like it.

I've seen where they would say, "This person is going to handle these five insurances and then this person is going to handle these five insurances." Basically everybody’s got their hands in everything. I prefer to keep it separate. It flows better that way. You only have the same two people accountable for patients. You have the same two people accountable for insurance and that will never cross so there can never be, “He said, she said,” kind of a thing. All communication between the billing department and the receptionist needs to be via email because we have a paper trail that way again, “I told her this." “No one ever told me that.” It cuts out all the, “He said, she said.”

That's a great policy to have because the insurance or the billing department is all about paper documentation of everything they do. You might as well keep that as it pertains to communication with the front desk as well.

Also we have over 100 employees here, otherwise a lot of people are always emailing billing, which is fine. I prefer email because like I said, you have a paper trail and also you're not constantly getting that distraction on the phone. You take this phone call and by the time you're done with that, "What was I doing?" That kind of a thing. This way it's all in writing. You're not getting constantly distracted twenty times an hour or pulled away from what you're doing twenty times an hour to answer phone calls about, what about this? What about that?

We talked a little bit about when you consider an outsource billing company, their charges are typically somewhere between 6% to 9% of your revenues. What is your company's expectation as far as what the cost of your billing department is to the revenues of your company? 

We'd like to keep it between 3% to 5% maybe and it's toward the 3% honestly.

It gets like that when you're a larger company. For a guy that's smaller, if they're thinking that, “Maybe I can save some money, if I bring it in-house, they'd probably need to expect it's going to be closer to the 5%.” Maybe a little bit more and recognize maybe some of the benefits that go with it if it's running well. If it's not running well, then that billing department's going to cost you more. When a billing department is running well, you can expect it to be in a smaller clinic somewhere between 5% to 7% compared to the 6% to 9% that you would pay otherwise. You'd have to consider the benefits and the pros and cons of both.

We've had Star open eighteen years. We've had quite a significant amount of time to grow and expand and work out all the kinks. We're about 3%, but as I said, we're larger though. We've been around for a while, so I could definitely see where to expect that number to go up whether you're smaller or a newer clinic even.

You guys have been around a long time. You've got a ton of experience. If people wanted to reach out to you and maybe ask you questions or get your advice, are you open to that?

Absolutely, we actually love to mentor and advise new PTs, new clinic owners. I actually spoke to someone. I didn't know her but it was through the article and she was a clinician and she was just asking me questions about different things we thought she should do. One of the things I definitely want to preface to her was that as the clinician, you don't want to be involved as far as try to collect patient balances. You're the good guy. You're the helper. You need somebody to keep it that way. You need somebody to bigger fall guy basically and that's what we are. As I said, we're good with that but you definitely don't want to be both because you're on their side.

PTO 72 | Billing In-House Or Outsourcing
Billing In-House Or Outsourcing: If you’re looking for a billing company, you should not pay any more than 6%-9% of all your collections. They should also provide you with consistent reports to show you their performance and policies regarding their workflow.

 

You don't want to taint that in any way by bringing money into it basically. You definitely want to keep those two separate. As a clinician, you want to stay as far away from that as possible. You definitely need people for that. I was going to say that while you're starting out and it's new and you don't think you need this, that or the other because "We're new, we're starting out." That is one thing you would definitely need as a new clinician. You need somebody to handle that for you. Whether it be outsourced or whether it be in-house as a clinician, no matter how small you are you don't want to be that person.

If people had questions like that, how would they get in touch with you? 

They can email me. My email is Amy@StarPTClinics.com. Our owner for example, he's been practicing since ‘93 and he's a member of the editorial APTA board member. He loves to talk to other PTs and business owners like that. He loves to advise them. He loves to help them with any questions they may have or anything they might possibly need. He likes to help other PT clinicians grow and expand their business. That's what he's really trying to get into now. As part of that, something we would also like to do is possibly start billing for other PT clinics. You could go with an outsource you might not know too well or you have solid companies you can go for. You can go for that as my reputation and word of mouth.

You guys obviously have the systems in place, you know how to get things done. You've got a ton of experience behind you. It's one thing to go with an outsource billing company that might do a billing for all kinds of medical professions. Whereas you guys are PT-focused, PT-specific, you've got a couple of decades in the business based on your owner and the experience that you bring with it. You guys can bring a lot of value to those PT clinics that are looking to get things started to maybe outsource until they're ready to bring it in-house. 

We have all the systems in place, the reports, policies, checks and balances, you name it. Obviously it's been successful because Star itself has been open for eighteen years but we're still growing. We opened up our eight clinic and we still have plans to open more. It’s obviously successful. Our owner's been practicing PT since 1993. He loves helping, marketing and helping people grow and expand, showing new owners what to do. He's been through the trenches, he's been through the trial and errors of it all. He has seen it all because he's basically was his own test patient more or less.

What was his name?

His name is Matt Slimming.

We'll have to remember him.

If anybody wants to reach him, you can email me and we'll both be in touch with you.

Thanks again for your time, Amy. I really appreciate you sharing your wisdom.

No problem. If you need anything, give me an email.

Thank you very much.

Important Links:

About Amy Sparks

PTO 72 | Billing In-House Or OutsourcingAmy B. Sparks is the Billing Manager for Star Physical Therapy, the largest independent Physical Therapy group in the greater New Orleans area, with eight clinics and growing. Amy was born and raised in New Orleans. She began working in health insurance billing twenty years ago.

She has experience billing for several different types of healthcare providers and has also worked for Aetna Health Insurance, giving her experience on both sides of the industry.

 

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PTO 64 | Developing A Winning Team

 

Developing a winning team is crucial for an organization or company to reach its goals. Craig Phifer, PT, the CEO of Rehabilitation and Performance Institute of Evansville, IN has put systems, rubrics, and filters in place to REALLY hone in on the successful characteristics and traits of the top performers in his company. Plus, his company's focus has been on providing his team the autonomy and support to pursue their individual dreams. Putting these two focuses together has allowed RPI to create a culture of aligned individuals looking to significantly affect their community - and they've done that! They've grown to five clinics in three years and will continue to grow, considering the incredible team members they are developing to take more responsibilities. Plenty of insight in this episode! Get your pen and paper handy.

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Listen to the podcast here:

Keys To Developing A Winning Team with Craig Phifer, PT

I've got Craig Phifer out of Evansville, Indiana, CEO of Rehabilitation & Performance Institute. I was going to talk to Craig about an article that he wrote in Impact Magazine entitled Assembling Your Winning Team. My initial thoughts, and I was mistaken, that he was developing a leadership team, but he was talking about assembling a winning team and a culture throughout the company. The reason why I'm excited to bring him onto the show is because the things that they've done to filter, hire and train have developed and refined their culture to create one autonomy for their providers, of stability and purpose for every hire that's in their practice. They've grown to five clinics over the last few years. I’m excited to bring in some of his successful actions and share those things with you. Craig does an awesome job in explaining things. There's a lot of stuff that was like, “That would have been great if we did that. I hope everyone's reading to this.” There are plenty of things that you can do within your own clinics to take advantage of what Craig shares with us.

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I've got Craig Phifer, Owner and CEO of Rehabilitation & Performance Institute out of Evansville, Indiana. Thanks for coming on, Craig. I appreciate it.

Thanks for having me, Nathan. I appreciate it.

I recognize Craig's article in Impact Magazine about assessing a winning team and I think that's such a vital part of the growth of any clinic, especially if you're looking into multiple clinics, if you're looking to free yourself from some of the day-to-day tasks as an owner, so you can become that leader. It helps to start creating a culture and an environment that's not solely dependent upon you. First of all, I want to get into your story, Craig. Why don't you tell us a little bit about your professional path and what got you to where you are?

Years ago, we started RPI. Prior to that, I had been running an office for a large orthopedic practice, transitioned into doing it on our own and started with the idea of things weren't heading down a great path for PTs and clinicians. We were starting to sense a lot of those classmates you would talk to who’s the smartest people in the room. They're great and you think, “That person’s going to go out and they're going to be awesome. They're going to crush it.” You talk to them about two years in and they're starting to talk about like, “I'm not sure I want to be a PT anymore. I want to get out of this. I'm trying to find something else. I'm trying to do something different or something nonclinical.” It’s like, “You're so much smarter than I am. You are the person at PT school who I thought was going to be out there doing amazing things. I'd be reading all about you now. Here we are and the profession is beating you down two years in.”

When we started RPI, the idea was how do we put clinicians in the best possible position to succeed? How do we strip away all the things that don't matter, that we spend time and money and attention on? Can we take those away and focus on the stuff that matters, that puts clinicians in a great position to deliver great results for their patients? We're still searching for that every day. We're still trying to make changes and tweaks. I think we've done a lot right. We've also found out we've done a lot wrong, but a few years in and we have five offices in the region and it's going well.

Congratulations, that’s awesome. It sounds like you've developed a model where you're the owner and CEO, but you also have some partners in some of the other practices.

It's hard to change a community in a meaningful way when you're not living in it and when you're not involved. Click To Tweet

Our company has nine owners in total. What we've done is you have all these people who made a personal investment in the company without making a financial investment in it. We got to a point where we thought you can't expect as an owner for somebody to put the same amount of blood, sweat and tears into it as you have. When you have these people who do, you need to reward them with something like that. I don't think it necessarily has to be ownership, but we thought that was the right choice in our company was to say, “You can buy into ownership. You're doing such amazing things. This company is successful because of you. We're better when you're a part of the decision-making process.”

Do these people tend to then be the clinic directors at the individual clinics or have some management responsibilities on top of their physical therapy work?

Almost everybody in our company has some management responsibility outside of physical therapy work. Some of those owners do manage an office. Some of them don't. Some of them help refine our clinical processes and they play a role in that. We say we need 30 hours of clinical care to make the company go. That's what pays our salaries and the bills. What we want to do is condense that 30 hours to where you have some other chunks of time you can use to do what it is that want to do, what you've told us you love outside of just treating patients. We have somebody, she’s wonderful and she gets our company mission well. She gets our vision and we got big enough to where it's like, “I can't manage the HR stuff on my own. We need somebody who's doing that.” She took that role and has done awesome in it, much better than I was doing.

After you get to where you're excelling and succeeding in your relationships and the care you're providing patients, we think that takes about two years for most. We've had people who got to that point. One of them was less than a year and we were able to say, “You're doing great. You're doing phenomenally well. When you're ready to take on something else, we've got things that we think you'd be great at. We need you to think about what you'd want to do outside of treating patients. We can start to make some of that happen.”

How do you assess when they've come to connect with patients, they've been able to develop relationships and see great results personally between them and the patients and professionally with their results that they're providing?

We have two main things that we measure for every clinician in the company. We measure for every office and for the company as a whole. Definitively, I can tell you our most successful offices on every measure, and this includes financially, boil down to these two pieces. The first one is therapeutic alliance with patients because that's such a great predictor of people dropping off or not. People dropping off in physical therapy is such a massive problem that doesn't get nearly the attention it deserves.

When you say dropping off, are you talking about the 10% that complete their plan of care in our industry?

PTO 64 | Developing A Winning Team
Developing A Winning Team: Think about what you want to do outside of treating patients and start to make some of that happen.

 

Yes, that is a pretty big number. That's our primary measurement. Our second one is we have offices that are about 80% direct access. How many of your patients said, “I don't just want to get physical therapy. I want Eric to be my physical therapist. That's the person who's going to help me. I trust them before they come in.” When you have created relationships to a point where your patients trust you before they ever come in the door, that’s powerful for being able to help them completing care. It helps us from a cycle of we don't need that many new patients because they're not dropping off as much. We don't have to spend very much on marketing. We don’t have to spend very much in a lot of areas because our patients are staying. If somebody is successful and a lot of their patients, request them not just coming in for physical therapy, but request you and then our measurements of therapeutic alliance, if you're succeeding in those two areas, I can tell you everything else was going to be good.

This isn't the topic, but I love how you guys are doing things. I want to learn a little bit more. The situation in which maybe they ask for Eric before even coming into therapy, is this because a prior patient of Eric's has referred a friend or family member to Eric?

Yes, that's one of the big ones. The other one is community involvement on an individual level. We want to put people in a position where they're living, working, playing in the community they're in or from. If somebody has to commute an hour to work, it's hard for them to be actively involved in that community. Not that they can't do a great job, but it's hard to change that community in a meaningful way when you're also not living in it and when you're not involved. I would say about half of that comes from community involvement. It's got to be something you genuinely enjoy being involved in. We don't want anybody to go out and say, “I'm going to join this running group even though I hate running because I know a lot of runners get hurt and need PT.” That's the wrong reason to be there and it doesn't work. It needs to be something you love doing anyway. A lot of people are being part of their church. For some people, it’s being active in running groups. For some people, it's helping coach youth sports.

Your therapists seemingly from the get-go, as soon as they come on, there’s an expectation that they're going to do some outside involvement or promotion. I wouldn't call it marketing, but they're going to be involved in the community such that they can find ways in which they can help.

Part of our hiring process is that we are looking for people who have already shown and have already demonstrated that they like being active in the community and they like doing things like that. It doesn't feel like work to them. It's something they would do no matter what they were doing for our profession. We think that those are the people who change the health of communities, people who are out there working in it and interacting in that community.

That's part of your interview process. It’s like, “What kind of community activity are you in? What kind of groups are you involved with?” That's one of your main criteria for joining you.

When we talk about defining who is successful in your organization, the people who are the most successful for us, to a person or all people who enjoy being out there in the community. They don't even have to be extroverts necessarily. We have a lot of introverted people who have things they like to do in the community or in their particular group. There's no right or wrong way to do it. It’s like, “We don't have anybody involved in soccer in this community. I need you to like soccer and go out there and get involved.” It only works if it's something people want to do anyway.

We're all pretty overstimulated and it's created this need for flexibility. Click To Tweet

Those introverted people, they're not necessarily introverted when they're in a comfortable environment. When they're part of that group, maybe they're introverted but they like CrossFit. There's their tie to a community. There's a group that they can be a part of and benefit from. I had an interview with Sturdy McKee out of San Francisco. One of their criteria for bringing people on was they would ask people if they participated in team sports anytime during their lifetime. If you said no to that, they wouldn't hire you on. I bring that up because there are some things that are outside of the box and you alluded to this in your article in Impact Magazine about assembling a winning team. There are some things that you're looking for. There are traits, characteristics, even personality types that you want to bring on and create a winning team and sustain the proper culture in your company. You get down to, “We're hiring for this person, a physical therapist. They're going to be actively involved in their community. If they're not actively involved in their community, that might be a red flag. We might not necessarily hire them.” Would you go that far?

Yes. Some of the mistakes we've made through the process is one, initially, we asked people about their desire be involved. Everybody can give you a good answer in an interview. PTs are smart people who are great test-takers. They've exhibited that throughout the doctoral training they have. People can give you a good answer to a question. We've had to start to look at less about the answers to the questions that we ask but more, “What have you done? What are you currently doing? What are the questions you're asking us?” That tells us more about what you're interested in and what you're trying to achieve, then your answers to the questions we ask you.

Say the community involvement, do you take that down to even some of your administrative personnel whether the front desk person or an aid? Do you take it that far?

Everybody, yes. It's an important part for every role. There are certain things that we look at are traits where somebody might be successful as a PT, versus what they'd be successful as a clinic director or clinic manager are different. The same thing for somebody who is working in a front-office role. Some of those traits are different, but there's a lot of overlap and community involvement is some of the overlap.

I can see where community involvement in your situation has bred a culture and an environment within your companies from what it seems. When you get down to job descriptions, then there are different traits that you're looking for. In your article, you talked about rubric development. There are certain things are looking for, but there are also certain things that might come up as red flags. You mentioned yellow flag as well that you want to make sure you steer away from. Is that something that you've developed over time or did you sit down ahead of time and say, “These are the people that are super successful. What do they have that makes them successful?” How did you develop a rubric like that for the different positions in the company?

One of my favorite books that I stole this from is Work Rules! by Laszlo Bock. He used to be the head of people development at Google. It’s a fantastic book where he says, “You've got to put your top people under a microscope.” Your culture is almost like a living, breathing thing and it's changing as the people in your organization grow and develop. If your culture stays stagnant, that's probably not great. Your culture is changing, developing a little bit. Who was succeeding a year ago are the same people still succeeding now. Study those people. What we did is we put people through five whys, “Why is Eric so successful? Eric's patients seem to like him, but why do Eric's patients seem to like him?” You keep going down the road until you find the traits of that person and compare that to three, four or five other people who are doing a phenomenal job for you. You've got a pretty good handle on those. These are the things that make somebody successful in our culture and also change with us as we grow and develop. They're the ones who have kept up through the process.

Are these typically people that have been with you a long time or are you seeing some of these most predictive people even in your recent hires?

PTO 64 | Developing A Winning Team
Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead

We had some in very recent hires that have come on and picked it up better than I ever could have imagined.

Do you attribute that to your interview process? Do you attribute it to looking for those certain traits?

I think it helps. I'd be lying if I didn't say that we nail it every time and that luck wasn't a part of it too. We've built a culture where in our area we've become well-known of if you can get a job there, that's where you want to be. It's going to work outpatient or orthopedics. We put ourselves in a good position of having a lot of people to choose from. That's been incredibly helpful.

I'm sure the people you've brought on that have been successful and enjoy being there will attract people. They've got friends either from PT school or in the area and they're like, “I can get you on.” These are like people and they're going to have similar traits. There's a huge advantage to that.

Some of our best hires have come from somebody saying like, “I know we don't have an opening right now and we're not exactly trying to hire somebody. I've got somebody who I think is going to be phenomenal.” Everybody at our team is cognizant of what we're looking for and what somebody needs to be successful through us. There are people that said, “That's a good friend of mine. However, I don't think they're a great fit here.” Somebody who said, “We weren't that close in PT school, but I know them and I think they're going to do awesome here. They're going to be great. I think we're going to be great friends even though I don't know them that well now.”

Having your employees be part of that filtered process is amazing and powerful.

It made the recruiting so much better. From the first time we were trying to hire somebody, we had to go through five, six, seven different channels to get one or two applicants. It was hard. We got to thinking like, “If it's going to be this hard to hire a PT every time, what are we doing here?” As we started to get our name out a little bit more and our own people started to feel like, “We’re onto something here. This is going great.” I don't want my friends to work here. You should leave where you're at and move here and come work. That's been phenomenal for us.

20% of your time should be spent on something that you love. Click To Tweet

That's a great position to be in. Are you doing any recruiting work in some of those surrounding PT schools as well?

We have people who are quite involved in local PT schools, a lot of lectures and a lot of students. We value the clinical learning process. Anytime some of the local PT schools want to send us somebody, the answer is yes. We just got to figure out where to best put them so that everybody is successful.

Have you ever hired a PT without necessarily having an opening because you knew they were the right fit?

I've got a few people who crushed it for us. We knew them beforehand. They did great in the interview. We knew they were somebody who are going to be able to drive some of their own patient care volume. That came from us saying, “We know that fewer than 10% of people who need PT get it.” There’s a market out there that if we're able to reach the people that we can help, our PTs have the ability to drive their own schedule. When we find somebody who we think can do that, we'll hire them no matter what.

A lot of people will consider that a leap of faith. You talk about this in your article about giving them some autonomy. I like how you used the word autonomy and not necessarily responsibility. You haven't said that they have a responsibility to generate their own patients. You more talked about how they're in control of their own schedule. I'm sure you have some expectations, but it doesn't seem like it's coming from top-down. It seems like somehow you developed the culture that allows them to be internally driven.

That was the exact thought process when we started. The big things that make something go are autonomy, mastery and purpose. If we can drive those things and put people in a system where we have autonomy, I think part of autonomy is flexibility. Can we give people some flexibility and schedules and how we get things done? If we just tell them, “This is what we're going for, this is what we need,” PTs are hardworking people. It's hard to get into PT school in the first place. It's hard to finish PT school. Once you've finished PT school, it's hard to pass your board exam. We're picking from a group of people who are smart, driven and motivated. We need to give them the platform to let all those qualities shine. That's what we're attempting to do.

From an owner's perspective, from my past experience, when you talk about a scenario like you're in where a lot of your PTs drive their own patients and patient load, a lot of PTs that I come across almost seems like that's the company's responsibility to market the doctors, talk to the people and get out in the community. If you want me to treat patients, I'll do that all day long. What I'm finding out is that you've filtered those types of people out.

That type of person no doubt exists. We've hired that person before and it's not that they haven't been okay. They haven't excelled in our system. I understand anybody who wants their career to go like that. Not everybody wants to work in our system where you're probably only going to be successful unless you want to do some of those things. Filtering some of those people out through the interview process, but also as we bring somebody on, we want to help them find the reason they got into this in the first place. PT is a profession. We're incredibly autonomous people probably to a fault. Most people want to help others when you show them that this is your best route. If you want to help people, this is absolutely the best way to do it. You can’t only have them in your life for 45 minutes twice a week or whatever it may be, depending on where you work and never see them again or never see anybody around them that you're going to make a change. You might be the best clinician ever, but you're still not going to make a change on bigger level.

You're promoting your physical therapists to make a difference outside of the clinic. It extends beyond the clinic, extends out into the community. I love that you brought up the fact that we only address 10% of the people that actually need us that have musculoskeletal injuries because a lot of times we think there's so much competition, but when we're talking about competition, it's for the 10%, it’s 90% out there. We could be such smaller fish in a bigger pond if we could reach that other 90%. That's a huge difference. You talked about getting rid of some of the things that lead to the two-year-old PT to be frustrated and looking for something else. Maybe I'm putting words in your mouth but it leads to burnout essentially. What are some of those things that you've pulled away from your therapist to help them be more engaged, involved and minimize possible burnout?

PTO 64 | Developing A Winning Team
Developing A Winning Team: PT is a profession. They’re incredibly autonomous people probably to a fault.

 

The first thing we wanted to address with our therapist is to put them in a situation where they were only having to treat with one person at a time. PT is realized when you're seeing two, three, four people at once, no one is getting the best of you. We're such a caring, altruistic profession people by nature that I don't think anybody can internally deal with that very well. They either need to shut their own professional life off from everything else if they're doing that because they have this internal feeling of like, “I know I could be doing better for them. My system doesn't allow me to.” Our first part was if we don't spend money on stuff that doesn't matter. We spend money on your relationship with that person and the things that allow you to develop a relationship with that person. We want to get people to where they feel like they're making a difference because they are. We give them that element of purpose.

The second thing is I think we're all pretty overstimulated and it's created this need for flexibility where there are times where we want to work, there are times where we want to get away from work. I will always say that if we have a job at our company that a working mother can't do, then we don't have a job that's two jobs. My wife's a PT. She's a professor in the local PT school. If she can't do a job within our company, I haven't provided the flexibility of somebody who's going to be great. That was our next focus of saying we need this many visits a week. We need 30 hours of patient care. You tell us how that works for your schedule. You tell us how to make that happen and you have a couple of patients in the morning cancel. That's okay. Your schedule is your schedule. I'm not treating those people. You are. If they can't make it in and you're going to come in an hour-and-a-half late because your first two patients scheduled and now you've got something else you needed to get an oil change, that's perfectly fine. We'll see you when you come in.

As a past owner, I can think about some of the issues with that because there has to be an expectation as far as productivity. You talked about that in your article about how you create measurements or statistics with your employees. Tell me a little bit about that and how you maintain productivity in your situation.

For us, we tell everybody before they ever start. It's the best question somebody who's interviewing for a job in PT should ask an employer is, “How do you measure if I’m successful?” Because oftentimes the answer just ends up being more when you don't know if you go into a place, “Am I doing well? Just see a few more patients, build a few more units and you'll be good.” We tell everybody before they come on, this is exactly what we're looking for from a productivity standpoint. We put that piece aside, “Here's how we find it best to get those things without running yourself into the ground because nobody needs that. That's not good for you, for us, for your patients. Here's how you get it that without reaching those burnout levels.” Once people figure out, “Here’s how I get those things. Here's how I do a good job. I find out I've got a lot more energy. I've got something else I want to take on.” Let's talk about your other goals. We have a professional development period, our pyramid for people where they're able to say, “Here's the ultimate goal that I want and here's a couple that are leading up to that.” We'll talk with everybody monthly about, “What are you doing to get toward that? What can we help you with? What kind of obstacles can we help you remove to make that happen?”

What are some of the statistics that you measure your providers by? Is it visits per week or some other statistic? You don't have to share numbers, but what are the KPIs you use?

We talked about the big two and if those are going, then I know pretty well everything else is probably going to be good. From a pure productivity measurement, it’s visits per month. It is the timeframe we look at. From that, we have a unit per visit. We have a range. It's going to be slightly different depending on your particular office. Those are the two things that are pure productivity. I think it's good for everybody to understand before they're going in that if you were working on a line and you needed to put out ten widgets in your shift to make ends meet, then you know, “I need to make ten widgets to make the ends meet.” For us, that's how we make money. That's how we continue this. That's how we help people, “Here's what we need financially to make it everything else go so we continue to help people.”

Where did you come up with the 30 hours per week of treating? Did you work backwards from what you need as far as revenues? How did you come up with that number?

Everybody tends to gravitate toward the person teaching them and leading them. Click To Tweet

We pulled it out of the 80/20 rule. We want 20% of your time to be spent on something that you love. We started saying, “Can we make that happen? What do we do to it to drive that?” Then we worked backwards, “If that's what we need, here's about how much we're going to make per visit in our area.” We knew that. “If we can generate that much revenue, here's the bucket we have to spend on.” Anything that goes outside of that, then we've got to start saying, “Here's what we don't need. Let's pull that out.” We're more of a destination place. We don't need to spend astronomical amounts on storefront and being the most visible location. Most of our patients drive past somewhere else that offers physical therapy to get to us. We’re very comfortable with that because it means we don't spend a lot of money on square footage. We spend a lot of money on the relationship with our patients.

I love how you guys have set up. This is something that you've probably developed over time is your interview process. You seem to have nailed down. It's pretty close to a solid, finished product. I've talked about this with other guests and consultants. Bringing up the productivity expectations at the very forefront is huge. Leaving that as something that's part of their training is wrong. They need to know exactly what they're getting into and you need to be upfront about what the expectations are. I think that goes a long way. I love how you talk about what is their professional path. Some of them might want to be lifelong clinicians and that's okay. You might have a position for that. There are some people who are like, “If I'm doing these ten years from now, I'm going to shoot myself.” You've offered an opportunity to show them that there is a path for development. I think that's huge as well because you then are aligning what they want with what you can provide and show them a path to do that. That gets a lot of buy-in into the culture.

We've developed a couple of people right out of our organization. Somebody might say like, “That stung you. They developed as an individual faster than you are as a company that they got this great opportunity somewhere else that you can provide them.” It's like, “I think that's awesome.” We're able to provide the kind of place where people can grow and develop. If you're developing yourself so fast, because we as a company, we have everybody. We're growing as a company. We're doing lots of new things and lots of exciting ventures coming up. If you're even outpacing us to where we can't provide you the opportunity, good for you. That's phenomenal. I'm glad that happened and I'd be happy to help you do whatever you want to do.

I loved reading your article about assessing a winning team. You developed a team, not just the leadership team. That's how I went into this, helping people recognize what it takes to develop a leadership team. You’re talking about a team from the bottom up. You're talking about developing a team and growing than you're leaders from the get-go, and you've provided a professional track for them to do that. There's some development in place. There are certain levels that you address on a month-to-month basis, which is very cool as well. You're having one-on-one meetings with them to do that. That's all amazing. When it gets to leadership, what are some of the things that you might have them do? Are there some tests that you take them through? What do they need to do in order to become a leader in your company?

We have been developing that path to different leadership. The qualities that we found internally people who become most successful in that role, one of the big ones is vulnerability. That person is able to share, “This is where I've failed doing that or this is something that I have trouble with.” It puts everybody at ease when you realize that this person I look up to and that I'm following are not perfect either. As far as qualities go, that's the quality that we've tried to develop culturally within our organization. We see our leaders have high levels of that.

You're that from an observational point of view, I'm assuming.

We’ve noticed that those are the people that almost attract others. They might be a staff physical therapist in their role and we might have three other staff physical therapist there. Everybody tends to gravitate toward that person teaching them and leading them. A lot of times it's the person who will sit there and they're talking after work about a patient they're struggling with and the person's like, “That's tough. I don't even know what's going on. There are so many directions you can go in. I'm stumped.” That person is the one we're finding that other people naturally start to follow.

PTO 64 | Developing A Winning Team
Developing A Winning Team: Don't spend a lot of money on square footage. Spend a lot of money on the relationship with your patients.

 

If they’re interested in leadership, do you tell them, “There are books that you should read,” or do you give them small tasks to see how well they handle management?

Both of those things. We have almost a progressive reading list of things. The first part of it is leading yourself. If you don't know you, you could argue that very few people actually know what they want, why they want it, how those things developed in their own life. If you can know you, that's where we want you to start. The book I love for that, that we recommend is The Subtle Art of Not Giving a F*ck by Mark Manson. I think it's a phenomenal book. The title scares people off because you're like, “I do want to care. I don't want to learn how not to care.” It's more about teaching you how not to care about things that don't matter and finding out what does. That’s our initial reading list book. We find that once people understand themselves well, it becomes so much easier to lead others.

You said a lot of people in your organization have some responsibility. Are you talking even down to the physical therapy aids if you have them or even the newest physical therapist? Did they have some responsibility?

For the most part, we don't put other things onto people for the first six months to a year. We have had people who jump into things right away and show a natural proclivity too like, “I enjoy doing that. I want to do it.” We're like, “You do your thing.” We want people their first couple of years to be about honing in clinical skills and working with their mentor through that process. Developing a system and developing their own pieces of it where they know when they're successful with a patient, when they're not successful with the patient, where they went wrong, what went right and focus on that element of expertise. As you get that, we want you to start taking on some other things.

It sounds like that you've systematized things that there's not a lot of subjective recognition of how well these people are progressing. You've got a system in place for the training and also for their assessment.

We've got it up about as objective as it can be. There are certain things that I don't feel can be fully objective measurements. It’s about as much though as it can be.

You can only go so far, but if you can define those traits of the successful people, what they're doing and how they're acting and list those things out, then it gives you a blueprint for how the next person's going to be. It can change. There can be some modifications here and there and not everybody's the same, but you have a general idea of what makes them successful and people can follow that. That makes things a lot easier, especially on the owners when it comes to training up the next person.

Once people understand themselves well, it becomes so much easier to lead others. Click To Tweet

We can say we've got a system around you that you don't have to think about all these little energy-draining elements throughout the day. Our job is to make sure that all that's done for you and that you can focus your attention on the task at hand, which for a lot of people is going to be that patient in front of you. If we can do that, we built a good system.

What's your meeting schedule like? Whether it's in the individual clinics, with your leadership team and with you and the owners. What is your meeting rhythm like?

We have quarterly ownership meetings and monthly leadership team meetings. Every clinic director meets with every person on his or her team once a month as well. We find that when it's too much more frequently than that, people get by meeting. If it goes too much longer than that, we have a lot of people who feel like they're being left out of the loop on what's going on because we have so many things that we're trying to develop and move forward.

The clinics themselves outside of the director and their team members, do they have typical staff meetings once a month as well?

Yes, we try to provide opportunities where we can get together as a group. Our clinics, their farthest apart are about two hours. We try to provide something at least quarterly, we’re doing something fun getting together, nothing to do with work where we can do something fun as a group and everybody can bring their kids. We found that's a helpful element for us too.

We found that same thing. They call them quarterly town halls. They got it out of Verne Harnish's book, Scaling Up. When they can get together, they'll talk a little bit about values or maybe focus on one value, have some activities and get-to-know-you games. It’s huge for the culture and maintaining that and even creating it. People get a lot of buy-in from situations like that.

It has been big. It's probably the thing that I would say we need to continue to get even better at is creating more of those opportunities, more different things that everybody wants to be a part of involved with. We don't want anybody to feel like, “Here's this Saturday morning where I have to go hang out with these people.” That's something that we provide for everybody generally who wants to be involved with.

PTO 64 | Developing A Winning Team
Developing A Winning Team: When meetings are too much more frequently than once a month, people get deaf by it. If it goes too much longer than that, a lot of people feel left out of the loop.

 

You want to invest in that because I'm sure you're seeing the impact of it, the ROI on that, culturally speaking is huge. Craig, thanks for your time. I appreciate you expanding a little bit on the article that you wrote in Impact Magazine, Assembling Your Winning Team. You are doing a lot of things great and it shows in your growth. It's impressive. Thanks for coming on.

Thank you for having me.

If people wanted to reach out to you, are you available on email or social media?

It’s @CraigPhifer on Twitter. That's a great place to reach me or CraigPhifer@Gmail.com.

Thanks for coming on. I appreciate it.

Thank you.

Important Links:

About Craig Phifer, PT

PTO 64 | Developing A Winning TeamCraig Phifer, PT, MHA is the owner/CEO of Rehabilitation & Performance Institute.

He is on the Editorial Board for Impact Magazine, and helps PTs start their own practice through craigphifer.com.

He can be reached at craigphifer@gmail.com and on Twitter @craigphifer.

 

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PTO 62 | Selling Your PT Business

 

Paul Martin has been dealing with mergers and acquisitions in physical therapy since the turn of the century, so he knows the market. However, things are different now than they were even five to eight years ago. Today, Paul shares what you need to know if you're looking to sell in this environment, and what you should know about the current industry even if you're not thinking of selling. As an independent owner, you should recognize what's going on in your local PT space - who is getting acquired, what acquiring companies are looking for, and where they might be going next. These are things that will keep you abreast of the industry and where you fit so you can make sound decisions. Even if you’re not looking to sell, consider some of the things discussed here so you are maximizing the value of your practice and be ready to sell at any given time. You're going to exit someday, so be prepared.

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Listen to the podcast here:

Looking To Sell? Five Things To Know About The Current M&A Market with Paul Martin, PT

On this episode, I get to talk to industry veteran, Paul Martin of Martin Healthcare Advisors. He has been around since the early ‘90s. He has been advising physical therapy companies since 2000 with Martin Healthcare Advisors. He's helped over thousands of clinics both grow and merge and be acquired or acquire in the physical therapy space. He's been around the block a number of times and now, he has five things he wants us to know about the current M&A market. Those five things are important to know because things are different now than they were several years ago. There are significantly more players, more acquirers in the market space and some of them coming in within 2018number of private equity groups on top of the ones that are privately held and large, but also those are their publicly held. 

Things are different. It's not all about EBITDA anymore. There's a lot to do with what's your growth strategy? What are your cultures like? How do you fit in their footprints because some of these are regional players and not national players? Do you add something to the space that they're trying to get into or increase a footprint or provide a niche service? Are you on a growth trajectory? All of these things are what they're looking for and provide greater value to them. There are things that you need to know in order to provide more value for them as well as provide more value for yourself. I'll continually beat the drum ever since I did the interview with John Dearing last year as part of the podcast about how to set yourself up to sell. Doing some of those things to improve the value of your clinic to sell are the same things that improve the value, the profitability and the power to improve your clinic currently. Doing some of those things improves the stability and freedom that you get to enjoy. 

These are things that are somewhat simple, fundamental, but also take some effort and if focused on increases the value of your clinic. Things such as making sure your legal paperwork is in order to make sure your financials are in order and easily accessible and easily readable. Know your statistics, especially your cardinal’s statistics. Make sure you're on a growth trajectory year over year. Do you have a leadership team in place so that you're not the sole decision-maker and not the sole influencer in the company so that if and when you do leave, things will continue to run well and continue to grow? 

What is your culture like? Do you have mission statement and values? Those things are important because if you're looking to sell, you want to make sure you sell to someone who has that same value system in place. It makes things so much easier when you do and it allows for greater growth even after the acquisition. There are a number of things to consider. Paul goes over the five most important things to understand in the current market. I’ll continually beat the drum on making sure that you have your company set up for sale at any time. It increases the value of your company and increases the power that you have independently. Let’s get to the interview and see what Paul has to share. 

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I’ve got Paul Martin of Martin Healthcare Advisors on with me for the interview. Paul has been around the block a number of times and is doing some great work now for the profession. First of all, Paul thanks for coming on. 

Thanks for having me, Nathan. 

If you don't mind, you've got a wealth of experience based on your time in the profession. Would you mind going back and sharing your story first of all and tell us about your professional path and what got you to where you are now? 

I am a physical therapist by background and I started a company a few months out of school back in 1989 that was called Physical Therapy and Sports Services. I and two partners grew that company. It started driving growth in 1993 when we had three clinics and from 93 to 96. We really accelerated that growth and we grew to 21 clinic locations. Subsequently, we sold that company to NovaCare in 1996. I spent three years with NovaCare and it was a great experience. I felt I got somewhat of a degree in corporate rehab. I learned a lot from the folks at NovaCare. I left NovaCare in 1999 and started this company, which is a company that provides growth and development consulting in the industry as well as merger and acquisition representation of companies that want to go into the market. 

PTO 62 | Selling Your PT Business
Selling Your PT Business: Remaining independent means you have to be consistently looking at good, solid growth opportunities within the market.

 

Who's your ideal client at this time? Who are you targeting? You might be helping those guys toward the end of their ownership phase. When you talked about growth and consulting, who are you targeting there? 

We work with companies of all sizesanywhere from a single location company. As we look at our client base, there seems to be a look in the eye of our customers of wanting to learn more about the business of physical therapy, wanting to grow their practices and seeing that in their markets that in order to remain independent, it's necessary for them to continue their growth. 

What are you seeing there when you say in order for it to be necessary to be independent? You’re recognizing that in order to stay independent, you need to have a larger footprint or you need to be at a certain size compared to the hospital networks or the physician-known physical therapy clinics and whatnot. 

Most markets, the large national companies in just about every market in the United States are coming into those markets, acquiring the larger practices are putting a lot of capital into growth with new clinics, new startup clinics. We really advocate if you want to remain independent, you need to be consistently looking at good solid growth opportunities within those markets. 

You’re not only helping people who are growing in that respect and trying to either open de novo or acquire other clinics, but you're also focused on helping those who are trying to exit their practices as well. That’s a little bit about what we're going to get into now, right? 

Absolutely. We have a whole division of our company that takes some advantage of this current market or have looked at it as a strategy to transition their company to a larger business in many different shapes and sizes. 

What are you seeing as far as the market? It seems like there was a pretty hot run there for the last five years. Do you see us on the downhill side of that or do you see it continuing in the expansion of mergers and acquisitions? 

Based on the capital markets, based on the continued ability for private equity to be able to borrow at very low interest rates, but as you look at our economy, etc., we do believe that this market may have hit its peak and every time we get there, we're seeing new private equity groups coming into the market. This is a very long haul for a market to stay as aggressive as fertile as this market has been in the rehab industry. How long will it continue? It’s very difficult to say, but for right now, there are great opportunities. 

Definitely and I think I learned that from one of my episodes last year from John DearingMaybe I'm going out on a limb, but some of it might depend on simply those interest rates as long as money is easy to borrow. Mergers and acquisitions might be prettyI wouldn't say hot thing, but it's been active. 

While the interest rates are definitely a driver, the other driver is private equity seeing this business as the rehab business as a good business that they see it as a fairly simple business. They look at it. They don't see that our reimbursement over the last ten years or so has seen that much change. I'm not saying it hasn't seen any change, but that much change. There haven't been any major changes to our market with any type of regulatory issues that have come up. The public companies, US PT, as well as Select Medical have fared very well in the public eyesIt brings attention to our industry and the private equity sector seems to be very much of a copycat industry. When one private equity group has success, it's not long after that another private equity group is going to follow that group trying to do the same strategy. We've seen that happen over and over again to the point where there are literally eighteen bonafide private equity groups backing fairly large rehabilitation companies in our current market. It's up from six or eight along with the public companies. It’s really moving fast. 

The private equity sector is a copycat industry. Click To Tweet

With so much private equity coming into the marketplace, how are things different? Maybe that leads into a little bit more of our topic. How is the market different for the physical therapists who are looking to sell now compared to several years ago? 

It leads exactly into what we wanted to talk about which you’re exactly right. It’s what we've come up with which are the five things you’ve got to know about the new rehab M&A market. It seems like we have a new market really on an annual basis. There are so many changes that the market continues to go through this evolution. The first thing you’ve got to know is that we're no longer in a market where you can simply sell when you and your business are ready. Historicallyit was back in the days of three or four acquires in the country, business owners would get their business in good shape. They would be ready personally and they would go out to one, maybe two or three of those companies and you could get a decent deal. You could sell your company on your terms at your timeframe. It’s no longer like that. With 25 plus companies, you’ve got eighteen private equity-backed companies. You have two publicly traded companies and at least five other fairly large scale private companies that are all vying for market share within these markets. They're all at such different stages that the market will dictate when you're able to get a good deal for your company, not simply your evolution. That's one of the things that has changed about this current market. 

Are you saying that if you're an independent clinic owner at this day and age, should you be ready to sell at any time? What would you recommend my readers do if their practice owners, especially if they're later on in their ownership and they're looking to phase out maybe in the next five to ten years? What would your recommendations be? 

It’s really important to, on a very routine basis, every few months or so to pop your head up and survey the market around you to seewho are the companies that have made acquisitions in your market? The companies that already made those acquisitions, what is their activity? Who is around your market that may be looking and would be the next likely kind of suspect to be coming into your market? To understand based on those companies and their evolution within the private equity investment of those companies the best time when you have what they need? You're going to get the best deal when you match what they need with something that you can bring. 

How does an independent practitioner, working in quite a bit treating patients or working on their business, where would they go to find those kinds of resources that would tell them who are the active players in my market and who's coming into the market? Because they'll acquire businesses but not necessarily change the names at times so it might hard for them to find that out? 

It’s important that you find someone that lives in this industry and understands, especially the larger companies they believe and somebody has told them that you need to use and find a large investment banking firm, may be out of New York City in order to properly sell your company. The problem is that those companies don't know who the buyers are in this market. These are all privately held companies. Even those backed by private equity are still privately held companies. They're not making public announcements, they're not being vocal as to where they're going next and what they're going to be doing next. You’ve got to find somebody who lives and breathes in this market and understands who they are. 

PTO 62 | Selling Your PT Business
Selling Your PT Business: It’s vital that you find someone to guide you who deeply understands the industry.

 

It's someone like you or maybe a local broker that's in this industry or people like that. It'd be hard I'd imagine as an independent guy to find out all that information. I can see where it's important. In my experience, my partner and I, had three or four offers over the course of a number of years that came to us from different directions. There are plenty of friends that I have that have clinics that have never been approached whatsoever. It seems like it's hit and miss as to who you know or not, what you know and that kind of stuff. It's important to be connected with guys like you that can guide you a little bit. 

We believe it's a big value. 

How should an owner establish or set up their practice to get maximum value? Maybe that leads into the next part a lot of times they'll talk about EBITDA and whatnot and how that drives the value of a clinic, profits, gross revenues or growth in general. What are some of the things that we should be looking out for to maximize our value? 

As we've outlined, I think the second thing that you need to know about this market is that the deal value drivers have changed. What I mean by that is in the past it was, everybody used and get five multiple. That's what everybody should be able to get and everything was about EBITDA. I'm not downplaying that EBITDA is not important. It still is important, but the biggest driver that we're seeing in this market is the competition for your business. Wcoined your EBITDA plus who wants to be in your market now? Who needs to grow in your market, who needs a platform in your market now, who's out there that would be the best fit? That's where you get what we would describe as the best deal. 

You're talking about maybe being aware of where the companies have a footprint in your geographical area and see if maybe you fit well into that footprint or you provide a niche service that could benefit a player in the area. 

Awell as being able to provide that potentially in some very unique ways to a number of those companies where you have a number of companies looking to get into your market for different reasons. You have attributes that may look solid and may look attractive to a number of companies then it's the competition for your company all in what we would call a synchronized competition all done confidentially. That's the process that gets and drives what we see as the best deals in the market.  

If you don’t mind, I'm going to use a personal example. When we sold our clinics and formed Empower PT, it provided a nice footprint for the private equity firm in the Phoenix Metropolitan Area. If you were a business looking to possibly sell in maybe Tucson or Northern Arizona or maybe even Southern California, that's where you might be a value add to a company that's looking to acquire businesses. 

Maybe an in-state business that's looking to go to a market that you serve in-state or potentially if you're large enoughother companies looking to come into a state and compete, you may be able to provide something unique to each of those companies based on their needs. 

A lot of people talk about establishing yourself and with your experience working with growth and consulting in M&A, how long does it take for them to get their business into a good position to get the maximum value out of their clinics? I'm of the opinion that it takes almost a year, maybe two years to ship things up to put yourself out in the market. What's your experience in that? 

The biggest driver that we're seeing in today's market is the competition for your business. Click To Tweet

Our experiences that depending upon where the business is in terms of its metricsin terms of whether it has a compliance program, in terms of where the EBITDA is and in terms of its ability to grow. As long as all of the things within the company are ready in this current market to do it right and to go out to multiple companies, the process that seems to be most effective is put everyone on the same starting line at the same time and drive a process that requires them to stay within a timeframe. You're going to quickly eliminate those who aren't interested or may have their focus on something else at that point in time and then driving that. We've seen it in a range of four to six months, which is much better for the business for much better, for the business owner than going through a process of working with this company for a couple of months, seeing what you can get then walking away from them possibly and go into another one. We see a lot of this franticness of, I’ve got to talk to everybody,” and by the time you go through all that, it's a year later and what have you accomplished? When the business is ready, what seems to be most effective is to put everybody in the same starting line at the same time. 

If I have a friend who has two and going on to three clinics and he's looking to sell in about five to seven years but he doesn't have policies and procedures in place. He doesn't have an employee handbook. He's been working full-time most of the time and now starting to pull out of treating full-time. How long would it take a guy like that to get ready to even go on the market? 

We see a lot of companies like that, as being a practice owner. When you get to that, it's no man's land. That two to three clinics to maybe five to seven clinics and have you set up the management structure, have you set up the systems and the processes for the company to continue on profitably? To do all of that and to set all of that up again, depending upon the stage of the business owner. A lot of motivation to want to focus on and work on their businessthat could be a one to two-year process to get all the things in order to be a business that has the strong ability to grow. 

What are acquiring companies looking for? You talked about something that maybe adds to the value of the company, whether it's in the geographical space or whatnot trying to enter a certain market. What are some other things they're looking for when they're looking to acquire companies? 

Different from our previous timeframes and previous markets, the third thing you must know about the new M&A rehab market is that right now it's very attractive to a buyer if you are what we term as growing through the deal. What we mean by that is historically it was all right, I'm going to pull back and try to do everything I can to maximize my EBITDA. Maybe pare down a little bit and certainly not do any new startup clinics and not start anything that would require any investment. Don't make any changes and just pull back. 

In this current market that will not make you attractive to the acquirers in this market because they want companies that can grow. They want companies that have shown the ability to grow. There are a number of different ways in order to look at some of those attributes and look at some of the expense you may have incurred to start a new clinic or an investment that you've made. Ways to structure that within deal companies that have shown the ability to grow and appear to an acquirer as we are growing our company and we are managing our company as though we're never going to sell it. That's attractive in this market. 

That can be tough because when you're growing like that, it can take a significant amount of cash to open up a new clinic or to acquire a clinic and then that's going to negatively impact your financials, which the acquiring companies are going to be looking at. At least through my experience, they can understand that cash is currently going towards opening a new clinic, but it should look at as a positive when it comes to the acquisition. 

It needs to be a balance and that balance needs to make good business and strategy sense. If you're throwing every bit of capital you have and at a new startup clinic and the startup clinic takes twelve months to go positive cashflow, those are not good business decisions. You need to continue to have balance between growth and margins and you're correct, the acquirers understand that growth takes the capitalThere's going to be added expense on your P&L because of that. There are usually many ways to adjust that as well as look at the structure to reward someone for the fact that they're growing. We say this all the time, we need to be the train that's leaving the station and who's going to jump on. 

PTO 62 | Selling Your PT Business
Selling Your PT Business: It's important to identify your culture for your company to continue to thrive.

 

They’re going to look at your EBITDA still, but they're also looking for growth. They're looking for what kind of value you can add to their marketplace. Are there are some other things that they're looking for when they're assessing your companies? 

Companies that are able to drive for their markets at or above the benchmark level of cash per visit are very attractive to a buyer because it means that you're managing efficiently and your staff is productive. That's real attractive versus them looking at this and saying, “We're going to have to teach that staff how to bill correctly and how to charge for everything they're doing.” These companies are moving at such a rapid pace that they're not looking for turnarounds. Many times a business owner will say, “Won’t the acquirer see that has great upside opportunity for them?” They will, but you may never get to the finish line of the deal. They’re in a neighborhood and you’re a broken-down house that needs all the fixes and there are three shiny new houses in your same neighborhood and you don't want to be left behind. 

They’re not necessarily at this stage looking for something that they can fix up and they're going to have to take some time and invest money and effort into. They want to acquire something that adds to the bottom line and move on to get the next acquisition. 

We’ve coined it as speed dating. They are moving quickly and they aren't going to spend a lot of time on a deal that looks like a turnaround they’re going to focus their efforts on, because there are a lot of companies that have put their hands up that are in the pipelines of these acquires. 

Where do other things come into play, especially as a clinic owner? How important is it for the independent clinic owner to have a mission, purpose and values all established and maybe having a particular culture of some kind? Do acquiring companies look at that? 

It’s important and we see it as even more important for the seller. In the current market, many of the companies are offering a structure of a partnership. If I'm going to go out and find the right partner as you just described, culture is important. It's important to identify with what is your culture and what's the culture then that you're looking for your company to continue to thrive and not every acquirer brings that. They don't all have the same cultures. They all have different and unique cultures. When we look at and talk to companies that are looking to potentially sell their business, we say, “You may not want to hear this, but it's not all about the price. Culture is first and foremost as what we see in this market that becomes most important to a seller. They're going to be in there for a long time and they're going to be working along with the acquiring company for a number of years. It’s important, especially if they're going to be in a partnership and they have equity and they can benefit from growing that business. 

From personal experience, there was an opportunity for us to interview seven to eight different acquiring companies as we were on the market. I'm talking about this second hand because my partner was on a lot of these interviews while I was up here in Alaska. He said it was obvious as they sat at the table that things just didn't align. It didn't feel right. It seemed their focus was someplace else, whereas our focus was over here. I think the initial take is that they're all the same. These are all the same companies that are trying to get into the physical therapy market. They probably have the same values, where that's not the case at all. They have completely different values, different objectives and different mission statements so as the seller, it's highly important that you have all that established and that you know what your ideal acquirer looks like. You should probably have a good idea of who you're going to marry before you marry them that leads to a happier relationship down the road. 

There is no question, your perception of that as you were going through this is dead on. We do this a lot so we see it over and over again. When you can sit for three days, the owners of the business and we together met with seven different companies all within a matter of three days and asking a lot of the very same questions to each of them. You're exactly right. They came out with at least four of those companies. There's no way they said that those companies would meet what they were looking for in terms of culture. The other three have different attributes and that's where we start looking at what we see ithe next element that drives the best deal, which is structure. This is number four things that you got to know about this market, which is there are so many different structures in the market now. There have been five private equity groups that have gotten into this market within the last nine months. They all can come in and keep doing the same thing as their competitors. They have to bring something different and unique. 

What we're seeing is they're bringing some unique structures on how the equity in the future will be paid to the seller and where that equity is placed. Structure is right behind culture we say this, “You name the price, I'll name the structure and I'm going to win every time.” In this market, that's true. We line it up in a matrix and look at simply price. Many times when you look at the real value of everything that's going into the deal, it flip-flops in terms of where you're getting the greatest value based on the structure. 

The people who are selling need to know that there are different ways that they can get paid out. Is that what you're saying? That the structure of the deal could be no cash? It could be a percentage now and a percentage later? What are the expectations of your job after the fact? Is that what you're talking about when you talk about structure? 

Yes. There was partnership structureUS PT was on the forefront of the partnership structure and they've utilized a partnership structure certainly with their acquisitions as well. That partnership structure has been sliced and diced in multiple different ways from newer companies, the new private equity that has come in, in order for those companies to try and stand out. A big piece of it is not that you're not getting a good portion of what you're receiving for your business upfront, but how can we structure that back end to make it attractive and to make it secure? That’s where it can be fortunately and unfortunately. Fortunately for folks like us and unfortunately for sellers in the industry, it has become very complicated. What’s always a good structure for the acquirer may not be the best structure for the seller and it's that work on the backside of thatTypically, it's with the equity and where the equity is and how you get it out. That is important in this market. 

What’s the fifth thing we must know? 

We call the fifth thing of market separation. What we mean by that is in this current marketyou have multiple acquires and they're all at different stages of their growth. They're all seeking markets regionally based on the evolution of their growth. For example, a company that has been backed by either new private equity or our first round of private equity. Once they get their structure in place, they're going to be looking to grow. At year three, four, they may be looking to wind down somewhat in order to prepare for the next private equity investment. Companies that become what we call recapped, a new private equity group comes in and takes out a smaller private equity group. All of a sudden, you have a geographical need in which as opposed to staying somewhat regionally, we see those companies and we call it leapfrogging. 

A company that's primarily New Jersey, New York, all of a sudden they're doing an acquisition in Illinois, Michigan and Louisiana. This is what we call market separation which we no longer have one big market with just a couple acquirers. There are segments of markets across the United States and they're all different based on who the acquirers that are looking to get in and what stage in their evolution are they in and it changes. With these new private equity groups, a lot of them are West Coast-based. I think you're going to see a lot of platform acquisitions on the West Coast. We were a part of one of those. We’re seeing some East Coast acquirers and it's slowed down now gearing back up with some higher-level management, etc. They're going to look to jump back into the acquisition game. It causes what we call this market separation which is, it's so interesting and cool when you can look at it from the United States view. If you're in a market, you're in Pennsylvania, to see all of that, it is difficult. It has made it somewhat complicated. 

There must be balance between growth and margins to make good business. Click To Tweet

As a seller, the important takeaway is to recognize where these acquirers are coming from. Do they have a national footprint or are they a more regional player? At what stage are they in? Are they three years into this acquiring phase or are they brand new? Is that what you're saying? 

Exactly, and are they looking for platforms? Are they looking for add-on acquisitions? Are they looking for niche practices within certain markets? You coined it pretty much dead on. 

There are lot of takeaways. Those are valuable information especially if they're considering to sell anytime soon. If they want to get an idea of what the market looks like, it's important to have all these factors in mind. Are there any recommendations that you make to a guy whos like, “I'm not in the market to sell. I'm relatively new in my practice and I could be here for another twenty years and maybe grow with a couple of clinics? 

You want to make sure that as you grow your business and if you're on the very frontend of your career, the reason private equity is investing in this business is that it's a good business to be in. We work with companies across the country that are looking to remain independent in their markets. The keys to that are knowing and understanding what's going on around you, but looking to find and to capitalize on market niches that are focused on things that you serve those people better. You double down on those specific market niches that you can serve because you will typically be able to serve them better than the large companies. Being and living in your own market and in many cases, having grown up in that market. Going out and finding those market segments that you can serve better is I think one of the first things that we talk to companies about as they're looking to evolve within a market looking to grow. 

It comes down to solid blocking and tackling. You are making sure that you're establishing operations and financial budgets. You are making sure that you're looking to grow your staff in a way. You're looking to evolve leaders in your company and continuing to provide the best service of any company in your market or state and active in your community. Don’t let anybody out there tell you that just because such and such company did an acquisition in your market that you're not going to be able to survive anymore and you have to sell to one of these companies. No, that is not the case at all. 

I had guy John Dearing on and wtalked about what to do to prepare to sell. The big takeaway for me was that even if you're not looking to sell, being ready at any time, having your house in order per se, to be ready to sell at any time typically means you're profiting the most. You're running at peak performance anyways. Acting as if you were on the market can definitely lead to benefits as you said, having a leadership team where you're not the sole focus of management and leadership for your company. Having set policies and procedures, having clean books have an operating budget. Have your compliance manuals together and your policy and procedure manuals together because they're going to look at all those things. Even if you weren't selling, having all of those things in place makes you a more profitable company and it improves performance. 

We've seen companies have great success who early in the game have said, “I wonder what the value of my company is now in this market.” What that does is it makes it very clear internally what some of those value drivers are and can help guide decision making in the future. If you're looking to provide value so that you can pass this along to your children that may go into physical therapy or you're looking at some point in time to transition out of your company. We’re all going to leave our companies at some point in time. Understanding what that value is and what the internal value drivers are I think is also a good step to take early on because it will also uncover some of the things that you just said. 

Do you have that compliance program in place? Are your financials in a structure that's going to be easily assessed by acquirer? Are your leases in a structure? Do you own buildings and how are you dealing with your building ownership? Is that ownership in your company or did you put that separate? Are you running fitness programs and other programs that also under a structure, should be looked at and done differently? I think it's important early on to prepare your company for that value look later on and whether that's passed down to your staff, your children or going out to a third party. It is important. 

PTO 62 | Selling Your PT Business
Selling Your PT Business: Even if you're not looking to sell, being ready at any time means you're profiting the most.

 

I love that you tied it back to value. If we use them what increases our company's value as a decision filter, then that would lead our decisions to improve our value and improve our profitability. 

Profitability is important, but as you look across the company, it comes down to profitability and risks. What you want to do is to look to minimize risk by having a very diverse referral base, by having a payer base that's fairly diverse versus one singular payer base, a payer that may be federally funded, that could be changed overnight. As we look at our staff and the arrangements that we make with our staff, as we look at our management structure, everything we do, you want to look to build solidly which reduces risk. 

Is there anything else you want to share with us, Paul? 

This has been great and I appreciate you having me on. I hope this has been valuable to your audience. As I said before we got started, you're doing a great thing for our industry and I appreciate that. I'm glad I found you and I'm glad I was able to get on and talk to everybody. 

Thanks for your time. If people wanted to reach out to you, how would they do that? 

You can send me an email. That’s a pretty long one, but it goes right to our name. It's PMartin@MartinHealthcareAdvisors.com and certainly jump on our website to see what we do and how we do it, which is www.MartinHealthcareAdvisors.com. 

You're going to be presenting some of this information in the future whether that's at PPS or other conferences. 

We are. We did mergers and acquisitions conference that is called Better Strategies for Higher Valuations. We did that in Chicago back in early June and we're looking to do another one right before the Private Practice Section Conference on October 29th in Orlando. We'll be sending out invites for that and it's a nice way to start the conference. We'll do a five-hour teaching a training session and then that would be followed by dinner and it's a great time to network with other business owners across the country. 

If people were looking to go to that meeting the day before PPS, do they go to your website or do they reach out to you individually? How do they do that? 

We’re going to be sending invites out. Certainly send me an email, tell me you're interested and we will make 100% sure you get an invite and you're able to attend. 

Thanks for offering that and being a resource in that regard againThanks for your time. It's been great getting to know a little bit more about the M&A market. 

Nathan, it’s great talking to you. 

Thank you. 

 

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About Paul Martin, PT

PTO 62 | Selling Your PT BusinessPaul Martin’s personal experience makes him an expert on growing a PT company and selling it to a larger corporation. Early in his career, he grew his three-clinic rehab company in Moorestown, NJ to 21 clinics in only three years before personally negotiating the sale of the company to NovaCare in 1996.In 2000 he founded Martin Healthcare Advisors, a consulting and M&A Advisory firm dedicated to the outpatient Physical Therapy industry. Over the years, MHA has helped more than 500 business owners grow and prosper with their proprietary approach to strategic growth and succession planning.

As CEO of MHA, Paul has advised many of the most successful owners in our industry and his M&A team has led more outpatient rehab transactions during the last four years than any company in the country. He is a nationally recognized expert on the state of our industry and where it’s headed.

No one is better qualified to speak about what it’s like to sell to and work as a partner with private equity-backed companies than Paul Martin.

Paul holds a master's degree in Physical Therapy from Hahnemann University, as well as the prestigious “Certified Business Intermediary” (CBI) and “M&A Master Intermediary” (M&AMI) designations from the International Business Brokers Association (IBBA).

 

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PTO 56 | Elevating Relationships With Physicians

 

As important as it is to have a good relationship with your patients, it is also very necessary to put attention to elevating relationships with physicians. Clinic Director at Therapeutic Associates Physical Therapy, Matt Booth, PT, DPT has created an ideal model for collaboration with local physicians by establishing a peer-to-peer relationship through the FDM (Fascial Distortion Model) techniques. Also the Cofounder of the Fascial Distortion Model Academy, Matt teaches this technique to physicians across the world and locally. Since then, the FDM approach has changed his marketing strategy from a “here’s what we provide mentality” to a “how can I help you and your patients” mentality. In this episode, discover what FDM is, why this model can enhance your relationship with local physicians, and how it has become a very successful marketing strategy.

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Listen to the podcast here:

Elevating Relationships With Physicians with Matt Booth, PT, DPT

I’ve got Matt Booth, a physical therapist out of Boise, Idaho on the show. I don’t typically talk a lot about treatment protocols and programs on the show. I've had Tom Dalonzo-Baker and Michele Kehrer. They are experts in what they do but we didn’t really focus on the treatment they provided and that’s the same thing with Matt. He is doing a specific treatment in Idaho and he teaches it across the world called the Fascial Distortion Model, FDM. The interesting thing about his story and how he uses FDM is from a relationship that he has created with his local physicians. The mentality that he uses now as he markets physicians or has marketed with them for the past few years and that is on the peer-to-peer relationship. I typically find for myself as a young owner and many therapists who I talk with that their approach to physician interactions is this is what we do. This is what sets us apart. This is how we treat your patients. We care more. We provide more hands-on therapy. While all of us have been known to share that same message without really standing alone and standing apart.

What Matt brings to the table is a different mentality in what are some of your problem patients or who are some of your most frequent patients and how can we help you treat them? Over time, Matt has become not only a therapist who can collaborate with these physicians but also a teacher of some of the methods that he uses. He has become more popular and gained a lot of notoriety and he became very busy in the Boise area. It’s that mentality that I like in our discussion. We also talked about how he has become free to treat as much or as little as he wants and allows him to instruct in this methodology. Let’s get into the episode. I think you will learn a lot simply from the mentality that he uses in his marketing and how he duplicates himself in the clinic to set himself free.

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On this episode, I have Matt Booth, out of Southeast Boise. He’s the Clinic Director at Therapeutic Associates Physical Therapy and also the Cofounder of the Fascial Distortion Model Academy, the FDM Academy. He's been an instructor across the world. He's doing some great things within his clinic, both treatment-wise and for the physical therapy profession. First of all, thanks for coming on, Matt. I appreciate it.

Thank you, Nathan.

Let's get into your story. You've got some interesting stuff. When you first reached out to me, you said you were doing some intriguing things in the physical therapy space. I'm intrigued by not only the treatments that you're providing but more so how that's correlated to the success of your practice and the growth of your practice. Do you mind sharing your story about how you got into things and where you're at?

A number of years ago, a physician, an osteopath talked to me about this new treatment and got me into this course. Little did I know, he was pulling strings. I was the third PT in the US to be taking this class called the Fascial Distortion Model. I took the class and I loved it. I saw greater results fast and things took off from there.

This was many years ago. Was this a local doctor that you were working with?

He was local to Boise. He got me into it. I started doing it more. The patients were raving about it and it helped boost the clinics. We outgrew our previous space and we had to move the clinic for the second time.

That’s simply based on not only your relationship with this physician but the therapy that you're providing. Go ahead and get into that a little bit.

The treatment, Fascial Distortion Model, it's actually assessment and treatment. One of the main differences with it is the physician that came up with it recognizes patients. They tell the story of their symptoms with their hands or their gestures. If they draw a line, it's different than if they point the finger. It's different if they point with multiple fingers or a thumb into a soft tissue spot. It’s different than if they're moving across the joint line. It’s different if they are moving their hand around that can't quite put their finger on it. He identified six different sets of gestures. Those correlated with treatments he had done in the past or new treatments that can be made up on the spot that was likely to get quick results. He developed this model. It was among the osteopathic physicians and then started to get spread more. I got into it like, “This is great in a physical therapist's hands.” We do hands-on work. We can do something fast. The patient loves it because if they'd had any previous treatment, they usually notice, “This is a lot faster than this stuff I had before.” They're getting results quicker and they're out telling their friends about it.

It's all based on the hand motions and their description of their pain and how they're reacting or telling their story.

Telling their story in words, but mostly with their hands. When we teach this, we tell people, “You need to get out of your laptop. You need to be looking at your patient because they're telling me something with their hands. That can tell you which treatment you want to use.” It overlaps well with orthopedics. You might think of it as a soft tissue mobilization, a trans prescription to joint mobilization and joint manipulation. Any variety of different techniques with ASTYM, Gua Sha, Graston and ART. A lot of these things fit into this puzzle, but which techniques are we going to use? There are a lot of different things out there.

When we talk to physicians we ask, 'Who are your most difficult (musculoskeletal) patients?' This allows us to talk with them about how we can help and what they can do in the meantime. Click To Tweet

You said it's both an assessment and a treatment model. It sounds like you can assess using this model but treat with any number of different things.

You could call it anything. One of the things I remember doing very early was like, “This is one of the things I learned as an intern.” Many years ago, this was a treatment we were thinking that we were releasing the muscle and there's a different theory for it with the Fascial Distortion Model. The treatment was exactly the same, but the reason I went to do that treatment was that the patient had shown me with their fingertips. They're digging into their upper trap and we're suspecting that there's a certain issue there and there's a set of treatments that we can use for it.

In the DO world, is this fairly common? Do most DOs know about it?

There are more and more DOs that are learning about it. It's been around for many years, so it's relatively new. It's one of those funny things where it's been around, but it hasn't been mainstream enough to be everywhere. It's being taught at more DO schools. I've been helping to teach it at some new medical school here in the Boise area. I went up in Washington, but it's going to more and more of them.

I don't typically have therapists who come on and discuss treatments they're providing and whatnot because we're focused more on business-related topics. The intrigue that I had with you as we talked on the phone prior to this is you've taken that and you've used this model in your relationship with local physicians, especially those who don't know the FDM. I think that's important to highlight and share that even if you're not using the FDM of treatment per se. What you've done is become someone who's talking on a peer-to-peer level with the local physicians. Tell me how do you promote this? How do you talk about this with the local physicians that you might not have done prior to?

It was helping a lot of the family practice physicians. We'd tell them, “There's a class coming to town.” I can't go and say, “There's this physical therapy class.” They're not going to want to go to that. If I say, “There's this class taught by osteopathic physicians, mainly taught to osteopathic physicians,” that spoke to them. I’d say, “It can help you assess and treat your patients faster. Even if you don't do the treatments, at least your differential diagnosis may go faster. Maybe you're not going to need to use as much image in your labs. Maybe those challenging patients that you're not sure like, ‘Is this personable anger? Are they symptom magnifier?’ You may be able to figure that out a lot faster.” I was going to them as a problem solver like, “This could help you with your tough patients. This could help you get through things faster.” Those that are concerned about the cost of care like, “This could reduce some of those costs.” You can use this first line that doesn't work, then you can back up to the medical model. A lot of the musculoskeletal conditions stuff fits into this. You learn this, use it first and then if you want to do some hands-on, great. If not, refer to us and we'd be happy to do it.

Do you recognize that this translates better or that the DOs gravitate to this more than MDs or some of the mid-level practitioners?

It depends. It's a personality. It's like they're Rorschach Test. Some DOs love it and some DOs lost their hands-on skills and they don't care to do that. They might still be interested in the assessment part of it. I have some MD friends that love it and they do it as well, even better than some of the DOs do. Nurse practitioners are doing it. PAs are doing it. It's open to chiropractors and athletic trainers.

As you're inviting them to these courses, did you have a tough time going to the courses initially or did you have an open door because the DO invited you?

I had an open door because a DO invited me. It was almost like the door opened for me and then closed behind me. For a lot of reasons, they had to have more DOs doing it, partly for their certification to get the continuing medical education credits for it. It took a few years before it was opened to other physical therapists. I had to keep beating on the door saying, “This would be great to let PTs in for a number of reasons,” and eventually that happened.

Have you had experience with PTs going to physician-focused courses in the past or what's your experience with that?

I've never heard of PTs and physicians going to the same courses before. There's a little bit in the North American Institute of Orthopedic Manual Therapy. I saw a couple of physicians go to classes there. They’re very cool doctors that they were doing some of this learning about manual therapy, but it’s extremely rare to see that.

PTO 56 | Elevating Relationships With Physicians
Elevating Relationships With Physicians: More than the “we care more” approach is the “how can I help you solve your problems” approach.

 

Tell me a little bit about your relationship or how do you approach doctors with this technique or maybe even do have a relationship with them. Could someone who's maybe not FDM trained or certified go with the particular techniques that they follow or trust? Maybe learn from you on how to approach physicians regarding that technique. How do they weed out those patients that would do well with the treatment that they focus on and provide?

Do you mean without the FDM?

Yeah, maybe the way you approach it translates well to other techniques that they might be using.

I would say from the assessment part of it, it makes it easier with the FDM of like it's something that can learn. What's nice is having this relationship of being able to talk about, “We can assess and treat things at a higher level.” Maybe it has even given me more confidence of going and talking to the physicians about what we can do as PTs regardless of FDM like, “We're experts in musculoskeletal care. This is our wheelhouse. Tell me about your problem patients. What do you have? Who are your difficult patients to treat in your clinic?” We start talking about, “Those are plantar fasciitis people. Those are sacroiliac joint dysfunction people.” I can talk to you like, “Here are the things that I would look for. Here are the types of things that I like to do. I like those problem patients.” It's still going into them and being a problem solver of like, “Let's figure out what difficulties are in your practice and how can I help.” Instead of going in and asking for, “Can you send me some more patients? I need to see more patients.” Turn it around of like, “What are your problems? Can I help you solve them? I'll make your life easier because I love to treat these types of people.”

I love that message more than the, “We care more,” or “We have a hands-on approach.” All of us have used that in the past, but the issue is we all say the same thing because we all care more than the other guy down the street. We all use our hands more than the other guy down the street. That leads to the commoditization of our services. I love how you go and talk to them, specifically about their patients. Are there certain practices that gravitate more towards this, whether it's a family practitioner versus podiatrists versus a chiropractor versus an orthopedic physician or a neurosurgeon?

I've had referrals from all of those people that like the level of interest or their time attention span. You get up to the orthopedic surgeons and the neurosurgeons, they don't have the time to concentrate on you as a PT so much. I have one ortho-surgeon and he knows that we do something different. I told him about Fascial Distortion Model and he will write on the prescription pad, “Do that thing that you do,” like until we had it on the prescription pad, they don’t even remember what it was. “If it was something different, do that thing that you do.”

Among those other practitioners, the family practice doctors, anyone in family practice, urgent care places, they tend to like this. We can say, “For your work comp patients, if you've got somebody with a sprain or strain, this stuff works best. If you want them back on the job quickly like this week, let's use this.” I had a patient sent from Urgent Care with Achilles tendon issues and he was like, “I'm not sure if I'll be able to get back to this baseball game. It's two days from now.” We saw him for the second time and he's definitely playing. The Urgent Care loves those ankle sprains and knee sprains. The thing they don't like is that often we're so fast that the crutches and boots that they might issue to them, it’s not likely they’ll need them for very long. They're getting out of it often at the first visit.

I would assume that you'd have a lot of success with nurse practitioners and physician assistants. Simply knowing the lack of depth of their schooling, that something like this would be beneficial for them.

My number one referral source is a nurse practitioner and she will bring a lot of force with her hands-on techniques. She does a ton of it. If it works, then she sends the patients over to us. If it doesn't work, then she tells them, “You need more expertise,” and then she still sends them over to us. She doesn't have the time to do the follow-ups, but she loves to use it as part of that assessment.

Do you also teach that to local physical therapists in town?

Since it opened to PTs about a few years ago, it’s slowly catching on. Business-wise for myself, I'm interested in teaching other referral sources about it. I've been out to the physician community, PAs and nurse practitioners. We've had in the past maybe eight classes in the Boise area. There are 60 to 80 practitioners in the area that are doing this. That's for referrals. On top of that, we also work with the family medicine residency program. Every two weeks, we go over to their clinic and we treat their patients at their clinic with one of the residents and a faculty member who's been FDM trained. We're teaching the residents quickly like, “Let's get this going.” The patients are screened. This is a musculoskeletal case that’s likely to succeed with FDM, but then they're learning, “We can do things fast. Maybe we don't need to do injections. Maybe we don't need to do medication. Beyond that, we can also teach them about the other things in physical therapy we do outside of FDM.

The value I want to bring to the audience is finding something, whatever it might be, whatever your techniques are to bring that information to the physician's office and not keeping it to yourself. Training them and teaching them exactly on what you're doing so that they can recognize who is going to be a great candidate for physical therapy and who might not be. Maybe even help them do some treatments on their own. That ends up being maybe beneficial to them in cutting down their episode of care. It can also strengthen that relationship with physicians. You’re many years into FDM, but initially, as you got started, was it hard to get in with those doctors and have those talks about what you're providing and what you're doing or was it pretty smooth getting into it?

Your leadership comes from how you're able to provide a platform for other people to provide solutions. Click To Tweet

It depends on the relationship and some of their interest level. Some physicians are wide open and ready to learn new things and others are set of how PTs are. Some of them were easy to talk to and they loved it. Others, it was a learning process. For me, I still need to go in as a problem solver to that conversation of what is it they want to figure out. Even though I'm excited and I think it would help them, that isn't necessarily where they're at that moment. I have to figure out how do I help them figure out that this would be beneficial for them. I have to find their problem first and then show them how they could solve it. If the FDM is helpful for them, that's great. Probably only 5% or 10% of the people I've talked to about it goes to a class, but they know there's something different about that.

I like your mindset because anyone can take the mindset that you talked about, “How can I help them?” Not everyone's going to be open to it. Maybe for another guy out in Kentucky who's looking to grow his practice, not every physician out there is going to be looking for the next physical therapy to send his patients to. What makes you different is you can go to that physician and say, “How can I help you? What kind of patients are you seeing? This is what I would do with them and this is how I can help you.” Coming from that mindset and from that perspective instead of, “How am I going to soak in more patients out of this guy,” it puts you in a different position and helps you show that you care and that you are a peer. You can show that you have some knowledge. I think doctors would appreciate that.

That has carried over and helped us in some of our other programs like men's health and women's health. They don't know what some of the things we can do. They never knew there was an option besides the medication or surgery for incontinence, pain problems in the pelvic area. It carries over for sure.

What do you see in the future? What are you going to be working on in the next few years?

Things are going a few different ways. We're starting to teach into physical therapy schools. We’ve gone down to Rocky Mountain University in Provo, Utah. We get a lot of interns from there. We’re looking at getting into more PT schools. We’re definitely working with more medical schools and those classes where we have combined. Sometimes we've had seven or eight different types of professionals in a class like MD, DO, PT, PTA, chiropractor or athletic trainer. It's cool seeing like, “We're all going to work with this one model, but we all have a different way of looking at the patient.” The class has become a networking opportunity so that people there are like, “I need to get your number. I didn't know where you're at. We might be even 100 to 500 miles away. I didn't know where you are, so I can send patients.”

You're the Cofounder of the FDM Academy. For someone who might have a treatment idea or interested in getting into continuing education as a presenter or speaker, maybe they’ve got some good treatments that they're providing and they want to spread the knowledge. What would you recommend to them to break into that field and get known?

This fell into my lap so easily. I don't know if I'm the best person to answer that one.

Did you have some hurdles along the way? Even at the very beginning to spread the message, whether it's the doctors or physical therapists that you could say, “If I were to do it again, I might recommend someone to do it this way.”

I'd love it if we had more research. That would be great, but it is interesting how long it takes to get research going. There is some research out about FDM. We took it to the Cleveland Clinic and PT there, they're big on it. After the first day, he's like, “This is great.” He had ideas for seven different studies. It's been a couple of years and he hasn't finished the first one yet. It takes on to get these going and then publish. A time machine could go back 40 years, dropped us off of somebody and then catch up with them now.

We’ll be ahead of the curve at that point. You find that if you can get published, then that's a huge boom to whatever you're proposing.

Getting research out there, that's wonderful. It's not my cup of tea. I'm not great at it. Being an instructor for this, I have a conflict of interest. It’s not my baby. If I was on the title for a research thing, I have a conflict of interest. That's going to taint the article. I'll throw up my hands and say, “I'm not the guy, but there are smart researchers out there that are starting to work on this.”

You're the Cofounder of FDM Academy, you're the Clinic Director at your own clinic and then you're traveling across the world presenting and doing these seminars. Are you treating full-time? I'm wondering about your schedule and how you manage your time.

PTO 56 | Elevating Relationships With Physicians
Elevating Relationships With Physicians: Part of being the director is about helping others to lead.

 

I'm wondering about my schedule too. I wonder how I manage my time. My wife says that when retirement comes, I won't know what to do with myself and not reinventing something else. I like to stay busy. On top of all that, I'm usually training for a Half-Ironman Triathlon or a Full-Ironman Triathlon like every six months, Half-Ironman, a few years ago it was a Full-Ironman. I like to stay busy.

How often are you treating? How much time are you treating per week?

I would see probably 50 patients in a week. I'm there the whole week. That's returning visits, 30 minutes and clinical evaluation, 60 minutes.

You're a super busy guy. My recommendation is always that PTs, especially owners or directors of their clinics have two days a week where they were focusing on admin stuff. It's impressive that you're able to keep that schedule and that patient load.

I have a good team around me at my clinic. They help out and people have stepped up and do other leadership roles. Part of my lead as being the director has been helping others to lead. As among the aides, staff PTs and my front office, they all get their own thing to do and they get incentivized in different ways. That makes my life easier and then allows me to go on these teaching trips.

There you go because it seems like you've obtained that capability of having the freedom that you want in your practice. It's simply because of that. I want to highlight that to the audiences is that you've developed a leadership team to do the things that you need them to do to keep the clinic running and successful. You have admin, systems and procedures in place because Therapeutic Associates has been around for decades. You've got a lot of policies and procedures already out there that provides you with the freedom then to treat as much as you want. I'm sure you could treat less than 50 patients a week if you wanted to, but also train for Ironman and cofound an academy. That's impressive.

It is fulfilling to be able to do all this. It keeps you from getting bored and doing one thing too much. This balance keeps the juices flowing. When I go out and teach, it's a lot of stress to go out and do those things. Sometimes I'm presenting mostly to physicians or one time it was to the only physician. I was at the A.T. Still University, the first osteopathic medical school in the world. The stage fright there was like, “I'm at the Mecca of where osteopathic medicine developed and I'm lecturing them as a PT.” I have to think this is osteopathic techniques. It's an assessment and I have tons of quotes from A.T. Still in my lecture. It's okay. It's good.

That’s impressive because it's important as we get older into the physical therapy profession that if you were treating simply full-time all day every day, that could be difficult. It's important to grow, whether that's in terms of leadership and doing other things to keep the energy level up.

I have to credit my team. There are multiple people in my clinic that have helped me get to where I am. Even in the growth phase of when we started doing more FDM and we're getting busier, it was my clinic staff that came to me and said, “Here's all the data on why we can no longer stay in this clinic and we need to expand. We need to move.” They told that to me. The more I learned about leadership, the simplified way I tell them at the staff meeting is, “If I get out of the way, you guys do a great job.”

Out of entry, are there certain leadership books that you read, follow, techniques or whatnot?

Therapeutic Associates has a leadership training program called Hot House. We do a ton of stuff with that. We do a Myers-Briggs type of personality thing. You take that information and then that is put into this training program. The leaders of our program are improv actors. I've got us out of our comfort zone of doing some improv type of acting in some of our work with different tools. Trying to get us out of our comfort zone but let us help the other people in our team lead. The leadership was so much about us leading in a more top-down approach. It was a bottom-up of like, everyone's in this and we listen to them. Our aides have wonderful ideas. We have to give them an outlet for it and make them feel that they're heard, it's worth it and we need that.

That's impressive because no matter where you're at across the country, but if you're the owner and director, your leadership comes from what you're able to provide a platform and outlet for other people to provide solutions and help them understand that you're not the answer man for everything. They can provide solutions and create an environment that they want to work in. That's impressive that you'd done that. You've also seemed to probably duplicate yourself because you've trained these people in FDM and what you expect out of your treatments and protocols and how things should be done. You've been able to essentially duplicate Matt Booth a few times over within the clinic.

There are plenty of people that can do a lot of things better than you can. Click To Tweet

We take as much as it's helpful the duplication process. We don't want complete duplicates of me, but that's what's great about when people are coming to me. The clinic has been around for seventeen years. I have a lot of people asking for me, but I can say, “Go to my other PT. They'd been trained in this and they can do these other things too.” I can offload in my schedule. I don't need to be there for everybody, but I can train to be there for everybody.

That's where you've probably started gaining your freedom is you've been able to, I say duplicate yourself, but where you're not carbon copies. Duplicate what you do in the treatments that you provide so that you have not only faith in the practitioners, but you can then express that faith to the patients who are asking for you and move them along to the practitioners. Also, seeing that things get done the way you want them to get done with your admin staff, your techs, support staff and whatnot. That's where you've found a lot of freedom is what I can tell.

Patients that come to me that think that I can do everything, it's great than to say sometimes like they want me to schedule them or do something else. I'm like, “No, we have policies and procedures here and one of those is we make it director-proof. If I can't do it, it's director-proof. That means I can't screw it up. Someone else is going to do that task for you because they can do it much better than I can.”

An important lesson to learn is that there are plenty of people that can do a lot of things better than you can and give them the ability to do so. Is there anything else you want to share with us, Matt?

You ask where FDM is going, one of the things that we're doing, we’re doing some global outreach. They took FDM down to Belize and we taught six Belizean doctors how to do FDM. We had a great experience there. They're considered third-world country bordering on into the second-world country, but there are not a lot of resources there. I heard of this before I’ve gone to Africa for a teaching trip as well. In that situation, it is so cool to see something that has no cost to it. There are no real tools involved. You use your eyes, your brains and your hands and you can help people quickly. To see it put in action, we did a couple of clinic days. We had about 100 patients that we treated in two days after we did the training, and 95 out of 100 were better.

The doctors were blown away like, “If we had known how to do this before, we would have given them NSAIDs. We would have told them to go to the hospital and maybe surgery. We couldn't have worked on all these people and gotten them better so quickly. We're going to go back there year after year and do more training with the doctors. It was even cool for our American friends going down to help with the training. They were getting so much experience on these people that need your help. Think of first-world problems like some of my patients back home are like, “This was pretty minor for you.” This person in Belize, this is the difference between their food getting on the table or not. The pressure is on when we go out and treat. It’s like you need to get this person better right now. All the people were going and said it helped enhance their hands-on skills. They have the thinking cap on of, “I have to do my best to get this person as good as possible now before they leave.” That was a great experience.

Do you have other service projects plan like that in the future?

We have another one to Belize in February. We're probably going to go there for a few years. One of the physicians looks like she is interested in becoming an instructor. She needs to be able to help out with Central America and then they go on to other countries that are needy. Everyone I've talked to loves this thing because it's cheap. It doesn't cost anything. You just learn it and then you go do it.

Thank you for your work. That's a great story. It's impressive. If people wanted to reach out to you or find out more about FDM or Therapeutic Associates, how would they get in touch with you?

Email works well for me. Email at mbooth@taipt.com, that stands for Therapeutic Associates Incorporated PT. Email is the best.

Thanks again for your time. I appreciate it.

Thank you, Nathan.

Important Links:

About Matt Booth PT, DPT

PTO 56 | Elevating Relationships With PhysiciansDr. Matt Booth is a graduate of the University of Southern California, earning both a Bachelor’s in Exercise Science and his Doctor of Physical Therapy degree. He has been the director of Therapeutic Associates Physical Therapy – Southeast Boise since 2002.

In 2010 he was introduced to Fascial Distortion Model (FDM), finding better results for his patients, and an opportunity for the entire physical therapy profession to provide better care. Since that time he has immersed himself in FDM, as well as paving the way for physical therapists to also be trained in FDM.

In addition to being an Instructor of FDM through the American FDM Association, he also teaches FDM to physician Residents in the Family Medicine Residency of Idaho. Dr. Booth has taught and presented on FDM nationally and internationally, including classes at the Cleveland Clinic, the Mayo Clinic, in Burkina Faso, Africa, Canada, a global service trip to Belize, and at the FDM World Congress in Cologne, Germany.

He is Clinical Faculty for the University of Washington Medical School – Family Medicine, and the Idaho College of Osteopathic Medicine. When not in the clinic or teaching, he can be found with his family training for his next Ironman Triathlon.

 

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PTO 53 | Provider Production

 

Shaun Kirk, PT is back! Our last interview with Shaun has been the most listened-to episode of the podcast over the first year, and he's got more to share! He discussed the six areas of practice that all owners need to be aware of in our first episode. In this episode, Shaun shares with us the three areas of provider production that need to be addressed. It's easy to see when a PT in your practice is doing well with patients – the patients are getting better, they're creating good bonds with patients, and their patients are happy. However, that's not all they need to do. Their relationship with the patient means nothing if they're not documenting and coding appropriately, two areas that will hurt you more than it hurts them if they fall short. Be sure to track all three of these areas as they could disrupt the integrity of your clinic and leave "holes in your bucket."

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The Three Areas Of Provider Production with Shaun Kirk, PT

I have Shaun Kirk returning as a guest on the show. Shaun's episode that I did has been one of my more popular episodes. I'm excited to bring him back so we can learn a little bit about what Shaun has been doing over the past year. He has met with a number of clinic directors and clinic owners across the country. He has been able to build off of the Six Key Areas that Physical Therapists Need to Address, which is what we talked about in our previous episode. He, however, also talks about how to improve productivity with your physical therapists. This is valuable information that we can get into. He brings us up to speed on what he's been doing, why he's doing it and also we addressed those six key areas and productivity in physical therapists. You'll enjoy the show because he's got a lot of wisdom to share.

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I'm excited to bring Shaun Kirk back onto the episode. Shaun was one of the most listened to episodes that I have. It’s great results because he shares a lot of wisdom. Thanks again, Shaun, for coming on to the episode. I appreciate it.

Thanks for having me, Nathan.

What have you been doing? What are you up to nowadays? We'll get into a little bit about some wisdom that you can share for us.

If you haven't heard that episode I've done in the past, check it out. I get into a lot of color about where my life started and how I ended up where I am. What I had been doing for the past several years is prior to these last several years, I've had a consulting company, Measurable Solutions for about twenty years. We’re working to help practices grow and expand. I enjoyed that a lot. What I liked about it was working knee-to-knee with the practice owners and helping build their team, strengthen their goals and helping them achieve them. As the company began to expand and grow, we grew into three locations. My role changed to where I was much more administrative and a little more distant from all of my clients. There are some few I stayed close to but got distance because it's a bigger organization to run. I had an opportunity years ago to take another look at what I wanted to be when I grew up. I thought, “Maybe there's a different game where I can work closely with the practices.”

This opportunity came along with a private equity group in the mergers and acquisition area of physical therapy businesses. It was a brand-new startup. They liked me and they liked what I brought to the table. I ended up being their first employee. Now I believe they have about 1,100 employees. We have about 180-plus locations in about 26 states. It's been a hustle. I have been busy working with these practices and traveling quite a bit. Although I enjoy it, it's not quite the same. One of the things is as I've learned a tremendous amount of data I didn't know before, even though for twenty years, I've been working with practice owners.

Before that, you were a practice owner yourself.

I was a practice owner before I went out and started helping other people how to practice. For me, as a consultant in the years past, one of the things that I never get a chance to see, Nathan, is your EMR. I don't see how you're coding things, your staff or billing in general, what their documentation looks like. None of those kinds of things do I get a chance to see. When I have this new opportunity, we own our own EMR software. I have the ability to see a lot of things and dive a lot deeper into practices from an operations point of view. Over the last years, I've been working with these practices on making a couple of internal adjustments. The best way you can look at it is if you have a bucket and the bucket has holes in it, you can pour a whole bunch of new patients into the bucket, but you still have holes. You're going to have a lot of leaks. If you pour enough water in, so to speak, your bucket will fill. How economical is that?

What I've learned more is a lot more things I didn't have in my toolkit but how to close the holes in the bucket. I truly have enjoyed that. What I miss is that relationship, working with private practice owners. What I've been doing for the last several years, I thought I wanted to help clinicians and prior practice owners reach a whole new level of the game, open up other clinics underneath them and build something great. What I truly found is that I can't knock anyone interested in doing a move such as a sale or whatever. What I can say is that I liked helping private practice owners reach their goals versus helping investors reach theirs. From that, I decided I'm stepping out of that world and back into the consulting arena again.

There could be so much more joy for you. I don't want to put words in your mouth, but you're going to help this guy grow his practice, whether it's stabilizing his practice. When we say grow, we're thinking that everything is going to get better. I love your analogy about the holes in the bucket because there are so many guys that have these ideas that they're going to get three to five clinics. I'm like, "Your one clinic is barely getting by 10% profit margin and you're burning yourself out. How do you think you're going to get the three to five? You've got to fill the holes in the bucket." There's so much more joy to see that guy succeed, grow his practice and become an independent owner of something larger instead of seeing that happen for the benefit of a corporation. Is that where you're going with it and get excited about?

It is something that gets me excited. You've known me for a while and to me, it's always about relationships. You build those relationships when you have clients who genuinely know you care for them, and you're interested in them and their life. If you happen to have the worst practice in the area, but you work 90 hours a week, is that something to be proud of? Not really. It’s making something grow, expand but that quality of life hopefully it can give you. People always think that their practice will give them freedom. They'll go out on their own. They can call their own shots and work their own efforts. It can happen and there are ways to make that work. That to me is the key thing. I have a client in Florida I loved dearly and a good friend. I remember when he sat down in front of me and I said, "What would you like to achieve in your practice?" He said, "A lot of people talk about money. I don't need to make a lot of money, but I would like to be comfortable. You don't have to make a lot. I would like to be able to achieve that without having to be in the office. I'd like to live on a boat." That was the weirdest thing.

His practice grew from maybe 120 to 250 visits. He was able to do that with not having to physically be in the clinic. He lived on the boat for about a year. He went on a long sales trip and he came back and said, "I'm done with that." He sold his boat. He's got a second clinic. He has a whole new set of goals. If one's goals don't include more than how big their wallet is or how many visits they are seeing or whatever, what's the reason why? What's the reason that you're doing it? For me, when you work in this somewhat cutthroat environment, it's never good enough. The world I'd been in the last several years has not been about you as the clinic director or prior practice owner. Create something and have some free time, some great things with your family and all that stuff. You are having these terrible conversations and it's not about the quality of your life. That's what I missed because that's the relationship part of what glues me to this profession.

Tell us a little bit about what you're going to do next. What's your next game?

You don't need more patients if you have holes in your bucket Click To Tweet

If you ever have a chance to have a mulligan, you think about yourself and your practice. If you wanted to do it all over again, there's probably a laundry list of things you would probably want to do differently. I don't know exactly what those would be, but if you think it through there probably a few things you would have done differently. For me, this mulligan moment gave me an opportunity to take a business that I've built over a twenty-year period and look at the things that I loved about it and things that were not so great about it. Unfortunately, because that's the way your machine runs, it's not easy to go, "Let's quit doing that. Let's do something different." Starting something new is different.

One of the things that we would do within the company is we had an introductory course called the New Patient Course. I know that you've been to it before. It's a two-day course. It's hopping on a plane and coming to one of our offices. You're missing at least three days of work. It's a great course. It's helped a lot of people expand and grow their practice. It's a big commitment. You're losing quite a bit of time and money for something that you're not sure if it's going to work. Over these many years of working with practices, I have gobs and gobs of do this and don't do that. Try this, it works 97 times more often than not, I was going to help you. What I decided to do in this new endeavor is to build things around a mastermind group.

Tell us a little bit about your ideas with the mastermind group. It's a concept that I pulled from Think and Grow Rich by Napoleon Hill. There are plenty of accountability groups out there that are another word for mastermind where you get a group of people in the room and you discuss the blank topic. Sometimes it's similar industries, sometimes it's not. Yours will be PT-specific. Tell us a little bit about your mastermind concept.

Several years ago, while at Measurable Solutions, I put together a group called The Master's Club. In that Master's Club were many of our top clients. What it became was a bit of a mastermind. Mostly I would present a topic, we would talk about it, how to apply that, issues related to that and those types of things. It started out with a couple of guys and then it began to grow and grow. It was something I liked about it because it was like getting down to the nitty-gritty. These guys have done a lot of training and in their own right very successful. It's having a point of view that's not in your practice, somewhat exterior to your practice, who's seen a lot of clinics and can go, "Over here in Rhode Island, these guys are doing well.” I've seen it work and I’m like, "A light bulb goes off." We're very close to that. We didn't have that one little special sauce you mentioned and we'll put that into the practice. That was a cool thing. I know it's buzzy and popular. Everybody's doing it. I get all of that. There's accountability all the way around. That's what I wanted to build with this.

That definitely happens when you’ve got multiple guys in a room. If it's one-on-one, sometimes you can be as that person, but when you’ve got two or three other perspectives and they're like, "Why are you saying that? Why are you telling us this story? That's not necessarily how it works where I'm at because I see something different." Getting the different perspectives and the different mindsets together can be helpful and coming to the truth or even brainstorming can be beneficial.

I've delivered hundreds and hundreds of seminars and workshops. Every now and again, you'll be delivering a workshop and someone will raise their hand from the audience. He'll go on and spout on about how he does things in his practice and it works amazing. They get tons of referrals. Doctors love them and all this stuff. The rest of the audience doesn't know that I know that practice isn't winning. I know that practice is barely profitable. Others are writing it down like it's the gospel. How does that work? Five morons don't make a genius. You want to be able to earn the right to the table.

In the mastermind, you might have people with small practices. You might have people with big practices, but what we have to be able to do in this mastermind is you need to back up what you're saying with some statistics and actual objective data. All of my mastermind members are in a statistical management program. We have a two-hour call every month and a follow-up call every month with individual practices. Let's say we're taking how to set up the standards of care or we're taking up how to get internal referrals. We take that subject up. That would happen to be a tremendous amount of content in that area and there will be an implementation program with the intention that it will take a part-time basis under 30 days to get put into your practice.

Nobody wants something that's going to take a year and a half to get into your practice. It's bite-sized chunks, “Get the numbers up. I want to see the stats rise.” It's all about driving the practice growth. For a couple of reasons. Who doesn't want instant gratification? I'm afraid all of us do. If something takes a long time, it's easier to give up on. It’s like, "In two years, you're going to triple your practice," forget that. How about two weeks? It's dissecting down to a key couple of things. When you're on their one-on-one, if you're a big practice, you can take a bigger bite out of things so that program could get deeper. For a smaller practice, you might take a small bite. If anyone listened to my first presentation, there are only six key areas of practice, whether you're big or you're small. Each one of the masterminds deals with one aspect of that experience.

PTO 53 | Provider Production
Provider Production: If one's goals don't include more than how big their wallet is or how many visits they are seeing, it's never good enough.

 

My little mantra is, “Reach out, step out and network.” Reaching out means to find some consultants or coaches. Stepping out means get out of full-time practicing so you can work on your business. Number three is to network and there are different ways that you can network. Entrepreneur's Organization has an accelerator program that my partner, Will Humphreys and I used. We also are part of the Master's Club that you talked about. Networking with other PTs, even other industries can be beneficial to get some mindset, some mind melding, brainstorming and different perspectives. This is all hugely beneficial. Can you share with us a little bit about what some of the content might be in a mastermind situation?

One of the things when we take on a new client and we start working with a new client is you can't keep doing the same thing and expect a different result. If you have a practice that has holes in their bucket, the most common thing people think is, “I need more new patients.” If you close the holes, you'll get more patients. You could get a better outcome or word of mouth. A lot of things will happen. You'll be more profitable. Also, your marketing dollar goes a lot further. Closing the holes is key but to do that, you have to change behaviors. It's not always the owner. Sometimes you can get the owner to change his point of view, but he can't change the rest of the team's point of view.

I don't know the ladies in this audience, but I do believe that I have a good understanding of the men in the audience. Whenever there's something that we can't quite face at work, some person we have to talk to and we think it's going to go bad or ugly. When we lay in bed at night, we become Chuck Norris, Walker, Texas Ranger, you all know, hopefully you've heard that name before. You're lying in bed and you've got this staff member who comes in late, cuts out early and doesn't get his notes done. You're mentally clicking off tally marks like, "Six times he's done this. Seven times he's done this." Finally, you get to the point where you're tired of not sleeping and you need to say something to him. You're like, "Joe, it’s not okay that you're coming in late." This is what you're having a conversation mentally. You're lying in bed and you're going, "Joe, it’s not okay that you're coming in late." He goes, "You can't talk to me that way.” “As a matter of fact, I can." He says, "You're not the boss of me.” “Yes, I am. I am the boss of you." He takes a swing at me. I docked and threw him on the floor, cuffed him and tossed him out the window. While we go through all this mental pain all night long, Joe is sleeping like a baby. He's out cold. He doesn't have any awareness that he's this type of staff member.

You finally muster up the courage to go into work the next day and you go, "Joe, it's not okay that you're coming in late." The next thing you know he's apologizing. He says, "Ever since Mary had the baby, I'm not getting a lot of sleep. I'm so sorry." He gives you a hug. You're wondering how you get your karate chop. What I'm saying is you have to set the stage. In this mastermind, we talked about what are the standards of care? A staff PT has to do three things. He needs to treat people well and get great results, that's a given. You can usually see that if you're in the clinic. You look and you go, “Happy patient, range of motion improved. Now they can walk on their hands, all things are good.”

The next thing is they’ve got to code appropriately. It's not lazy, not pick two codes and whatever number. They have to code correctly for what they're doing. The third is they have to document it impeccably. They have to document it and back it up because number one if you guys are good therapists, it gets great results, he has happy patients who love him or her. They're referring people in. It's all good. If he doesn't code well, the owner takes it in the shorts because they're not getting paid as well as they could be. If he doesn't document well, there won't be any blowback on that therapist. It will only go back on the practice. What you see is a great therapist, what you may not see is what goes on in the EMR. That was one of the things that were significant to me that I learned when I was with this PE group is looking in under the hood and seeing there's a lot of room for improvement in this game. In that particular mastermind about setting up the standards of care, it would be everything from how to code to how many visits, the discharge, different things that are expected on every patient and gaining agreement and cooperation from your clinical team. Once they embrace that, on other mastermind groups where you get together, there are the mechanics of the actions to take to achieve all of that.

An effective promotion will lead to new patients. Click To Tweet

Like you shared with me, you collect a lot of those statistics beforehand so you knew what they were doing and this is what you've been doing for the last few years. You'd look into EMRs and find those statistics. You shared with me also that a lot of these owners that you're talking to think they know where their stats are, but they don't know the true data. They might say, "We're coding and fine. We're doing great." You look at it and they're billing two skilled units of visit for a one-hour treatment." You're like, "You're giving away 30 minutes of free therapy. That's not right. That's not ethical." You're also losing me money at the same time. I love that you get into the nitty-gritty about, "We need to code appropriately. We need to back it up with appropriate documentation because our license might be on the line, but I also get dinged because an insurance company could find out about it and pull the contract.”

That happened to us by experience. It's not all about the therapists. If they can treat, great. You can develop great relationships. If they're not doing their part as a team member, it brings the whole boat down. That's where the holes are that you're talking about the buckets leaking like crazy. You're not in a position to be stable and get the freedom that you want, that you're talking about beforehand. Especially if you want to expand, you've got to shore up those procedures in that regard if you're going to expand and make this more than a two, three-person clinic.

It is about building a team. Sometimes you have an owner with a big viewpoint, big goals and big dreams and you have a staff who doesn't know and agree with those big goals and those big dreams, you have a disconnect that takes place. I see this a lot where clients would get the two owners in a room, there are the key execs in a room and they'd talk about world domination and all these things they’re going to do. They never talk to the staff. Those are the guys who make it happen. They are like, "How did it go with the staff meeting?” Sometimes we take too big of a bite when we're not ready. Sometimes when we're ready, we can take massive heights and we open a clinic. There are people who open clinics and don't show up until it's open. They're not even a part of it because they have such a great leadership team. Those are good and you're fortunate to create that, but not everybody is like that.

You bring that up, I remember I was probably five to six years into my ownership. I knew that I needed to hit about 180 visits per week for my one practice to break even and make some profit. It was in a slow season, we got down to 150. I told my main therapist, “We only got 150 visits this week.” She looked at me like, "What does that mean? Is that good or bad?" She was still going and checking log. That cued me into finally recognize that not only should I know my stats, but my staff needs to know the company stats and their individual stats if they're going to get in on this together.

There are a lot of assumptions that are made. Some of the times we don't do a deep dive very often and looking at how our numbers are shaking out. You talk to almost any private practice PT and you go, "How often do you see your patients?” “I see them about two to three times a week." Do you know what I'm finding with all of these guys that I've been dealing with when I first started working with them? It's about 1.5 visits per week. When you have this data and you go over this, what's funny is that they don't believe it. 100% of all the partners that I've been working with, when I go, "You're 1.52 patient visits per patient per week,” “That's impossible. The data is all wrong."

It's not wrong. It's like, "There's got to be a miscalculation in the system." I go, "Why don't you manually do it for the last week?” How can that be? It can be for any number of reasons. We can sort those out. It could be as easy as the therapist being a softie. It could be the patient has a high copay and whines about it. The receptionist is a softie. It could be the therapist wants to see you three times next week and the patient says, "I can only come once." The receptionist says, "Okay." It could be a million reasons. You don't know why, but the number is not very good. The lower the frequency that you see a patient, the more attrition that you'll have with that patient where they'll discharge themselves.

I've always said if you have more pain in your wallet than pain in your back, you're going to quit therapy. If you give a long pregnant period between treatments, it's very easy for a patient to discharge themselves. Within the mastermind, you have to start with data. Everybody is filled with opinions, "You know what I think I should do?" It's like, "Why are you having a conversation with me? Why haven't you already done it if that was the solution?" We have to start with raw data. We gather some raw data and the data will point us to something. That's what we'll do in each of the masterminds. That's what we'll do with a one-on-one. We look at your data. We see where it points. What are the action steps that can be taken in a short period of time to influence things in a more positive direction?

PTO 53 | Provider Production
Provider Production: If you have more pain in your wallet than pain in your back, you're going to quit therapy.

 

What do you tell those guys who might say, "I don't have three hours a month, I'm treating a full patient load 50 hours a week and doing my business stuff on nights and weekends?" You've heard that for the last 30 years. What do you tell them?

I tell them that it's probably always going to be that way. As long as you're okay with it, I'm okay with it.

What if they don't do something different?

It's okay. If you work 50, 60 hours a week and you manage on the weekends, you don't have a life and you keep doing that, then you're going to work 50, 60 hours a week and not have a life. If you're okay with not having a life, it's not my problem either. If you want to change that, some things have to change. That's the key. Some things simply have to change.

As you go through the masterminds, do you stick to the six areas that we talked about in the first episode that I did with you? Do you focus on those areas specifically and highlight some of those each time you visit each month?

Let me run off the six areas so that I put out lots of details, but to give you an idea. The six key areas of practice success as I see them is an effective promotion that will lead to new patients. That mastermind could be almost anything marketing. It could be several different masterminds on that subject. Whether that's social media, whether that's remarketing, whether that's direct mail, whether that's how to survey your public to find the right message to deliver. It could be on a variety of different things on a high gradient, a low gradient and a medium gradient. That would be a subject. Another is your schedule work control. Getting people to keep appointments, scheduling out into the future. It gives you many predictions of expansion and it creates growth. Schedule work control would be number two. The next is mastering patient compliance. WebPT did a study where 70% of patients discharged themselves from PT.

I did an interview with Heidi Jannenga and they did their state of therapy report. I want to say the average clinic lost $150,000 a year because patients didn't complete their plans of care.

Don’t work with people who aren't willing to put their shoulder to the wheel. Click To Tweet

That's a good number. If you have a patient that finishes therapy not well because you didn't have the spine to have the conversation, they go somewhere else. You don't lay around like, "My back is killing me." You're going to go find someone else whether it's another physical therapist, whether it's a chiropractor, a massage therapist, an acupuncturist, a crystal hooker, whatever it is, you're going to go search out some care because the person didn't get it done. When we look at case acceptance or patient compliance, looking at closing the patient on the value of the service and receiving it and it's sales. A therapist who is a softie on sales never built a profound reputation in their community because most of their patients are half-baked, a little doughy in the middle.

They're not completely crisp. You can't build a reputation when you don't push it through. That's the third area. The next one is your competence in management, billing and collections. Certainly, that's the actual process of billing and collections. Certainly, it's those types of things. It's also coding correctly. That would be in the category, whether we're doing a visit-based coding such as Medicare or whether we're doing procedure-based coding such as AMA. How are we coding our care? Our EMR will do the calculations all for you. If you are sloppy in this area, you're losing buckets of money in practice. That's the fourth area. The fifth area is getting referrals from your existing patients and to me, that’s the gold mine of PT. Most practices, about 50% or more of what they see are old patients or friends with patients, which is fantastic. Who doesn't like a referral? They come in and they think you're a god before you've even said anything to them because their friend, Sally, said you're amazing. Yet, we do very little. Some therapists do this crazy thing where they say to the patient as they're discharging and leaving the clinic, "I hope I don't have to see you again." If you do that and you're reading this, stop it.

I had an interview with David Self of Keet Health. He swears that if you improve that customer experience and that includes the referral basis and developing that internal marketing, you would triple your ROI on your marketing dollar. If you focused on that, you don't need new patients. You need to improve the customer experience, focus on internal marketing and your marketing dollar will triple.

One thing I find too in this one particular area is when you treat people in a closed environment, they become patients in more than a physical sense. You become their counselor, their priest and all these different things that go along with that. One of the things they don't get involved in is the community of physical therapy. They are not involved in like, "Seeing this guy, he was limping before and now he's walking better." They're not part of that dynamic energy that goes on generally in your gym. You look at that and you start evaluating against us, it's normally not hard to do. I've definitely done some looking. When you start evaluating, not like this group therapy delivery but within reason, you don't want unclothe people walking around and are like, “You don't need pants here.” In more of a dynamic environment like that, it's hard to be the depressed whiner in an environment like that. It brings you up. Whereas if you haven't been a room, they think they're the only patient that you ever have. They hang on to your time and you never know what's going on. That makes a difference in terms of building internal referrals.

Generally, the sixth key area of practice success is improving the productivity and efficiency of each staff member. In this area, it's broad. How many visits do you need to see before you hire a tech or a PT? Where do you need to hit numbers-wise to justify the next hire? How do you evaluate the performance of every individual in the practice so that you can see that they're pushing the rock up the hill and you can see by how much? You know when you don't need somebody is when they go on a two-week vacation and nobody had to pick up anything while they were gone. When they come back, they don't come back. How do we improve the efficiency and productivity of every staff member?

One of the things, Nathan, is we look at an efficiency statistic. We talk to every practice and you say, "How many visits would have a full-time PT in a week?” It's a full-time schedule. They start doing the math. They’re like, “They get a double appointment for a new patient,” and they start doing all this math. Let's say they come up with a number of 60, even number and they say it's 60. You look and go, "Where are you?" They go, "Let's see." You do the math. You go, "How many PTs do you have?” “I have three PTs." I go, "How many visits are you seeing?" They'll say, "We see about 90." That gives you a 50% efficiency, which means 50% of the time, they aren't doing anything productive. If that therapist goes back from a workshop, seminar or mastermind and says, "Guys, 50% of the time we're not doing anything," that percentage is going to improve because someone is going to quit because they're mad at you. That's a management strategy, but people will not consider that they're inefficient.

They'll fill the time. They're not sitting around twiddling their thumbs. They're going to say, "I was documenting. Remember that, for our staff meeting, you wanted me to present. I was doing that and I called some patients." They'll fill the time that's available to them. It just won't be productive.

PTO 53 | Provider Production
Provider Production: Make sure you don't over-hire unless the stats supports that you bring on a new person.

 

They won't like to start playing Euchre or something like that. Maybe they do. They don't and no engine can run at 100% either. You can't be flat out all the time. There's somewhere in between. I remember being in Maryland visiting a client about fifteen years ago and 86% of his revenue went to salary. He was paid lower than the lowest-paid PT. While I was there, three staff members reached out to the owner and said, "We need help in billing. We need another therapist for such and such." He goes, "Let's get an ad out." I looked at the staff member and go, “No, don't do that." The staff member looked at me, looked at the owner. He goes on, "I'll get back to you." I go, "What are you doing?" It’s like being big, powerful and lots of staff that are inefficient is ridiculous. You can't take care of your staff. The staff who's working hard, you might have one working hard, you can't take care of them because you've got seven of them that are doing 50%.

You'll eventually lose that one because they'll get burned out. For people who are wondering, we try to keep our salary as a proportion of our income. It’s less than 50% if we could. If you can do that, you're doing well. If you're at 45%, you're killing it. Try to keep it around 50% on an annual basis, then you're doing pretty good. 86% is horrific. That guy has got a lot of holes in the bucket.

In some areas of the country, if you're upstate New York, it's more challenge. When you reimburse at $46, $48 a visit, you’ve got to hustle. When you're in that environment, you figure it out. If you're in different environments in Chicago land area, Maine or whatever where you might be pulling down over $100 a visit, you can have a lot more sloppiness in your game and still survive. It is a changing environment. Rules change and people won't be making more money if they're funny that way. How do you do that? You can do it in a controlled and agreed upon fashion or you can cut back to where you're not even delivering great care anymore. When we look at improving productivity and efficiency of each staff member, we're looking at the other five things running well, good promotion, good schedule control, good patient compliance, coding appropriately, billing appropriately and getting internal referrals. If the team pulls that off, they're generally very efficient and productive. You want to make sure we don't over hire unless the stats support we bring on a new person.

I love that you brought up stat simply because the key to all of these things is typically statistics 90% of the time. To know if you're doing well in any one of these key areas is to know the stat related to it. In that way, you're not objectively saying, "We're doing great. I'm seeing two to three times a week," when they're 1.5 simply because you're going off your feeling or, “So and so is my best physical therapist and his patients love him. Meanwhile, he's only producing two times a salary when he should be producing three and a half to four times.” You have to have the stat in order to recognize what is happening in the business and drill down on those.

I got this line from one of the gentlemen that I work with the PE group and I love it. I have to give him some ownership to it. When you're keeping statistics, it’s like reporting the news or are you creating the news? If I'm talking to you and I'm like, "Keep the statistics on. That doesn't do me or whatever.” Are you just reporting the statistics? Are you reporting the news or are you creating the news? Creating the news takes skill as easy to spit out a bunch of numbers or software and give it to you. It’s like, “How do we create the news?” and each staff member creates the news for his respective or her respective area. It's not, “I just turned in the numbers for the week. There are my numbers and they stink bad but those are my numbers. I got turn them in. I got them in on time.” It’s like no. You have to be accountable to create the news. That's what we make a shift for. A lot of practice owners and myself included at one time, you spend a lot of time when you're trying to implement something into your practice. You don't even realize you're doing it, but you spend this time with them mentally or with your partner hashing it out. It's basically, “How do I close my staff to do this? What are we going to say in a staff meeting that's going to get people excited about this?” Did you really go through that, Nathan?

All the time. We know these stats, we know these things and we have these programs. How are we going to get the practitioners or the front office staff to buy in? It's getting the water down to the end of the row if you're a farmer.

If it's not for you, it's not for you. Click To Tweet

You had an owner who wants to take big bites and big bites fast but the staff doesn't want to take any bite at all. That's part of where the mastermind comes into play. We take a bite that's easily digestible across the hole. We get that in place operational consistently there versus, “Do this,” and it's huge. The guy who gets all excited. He hangs up the phone and goes, "How in the world am I going to get this motley crew to do that?" What one or two or three little things can be taken at a time where we’re beating the elephant one bite at a time and we're growing something that you can look back and be proud of?

In the mastermind, the way I have my mastermind is you can quit at any time. I'm not locking you down to pay all up front, all of this kind of weird stuff. I'm not doing any of that because if it's not for you, it's not for you. On the other side of that coin, I don't want to work with people who aren't willing to put their shoulder to the wheel. There are always those guys who will sign up for something because they got more money to burn incense and they get involved in it. They say, "That's some good information," yet when it comes to application, they don't apply it. It's like those bizarre patients who never missed an appointment. They never get better and never do their exercise program. They won't run it with a gun in your hand. They keep coming in. They suck the life out of you.

Unfortunately, you can occasionally have clients like that. Within the mastermind that we have, you come in and we interview you. If it's going to fit and you want to do it, we sign you up. If we don't think we can help you, we're not going do it because this is already capturing attention and growing. What I loved about what I did before was I love working with people who wanted to change things. It was exhausting to work with people who were mostly unable to face their staff, situations at the office and they’re mostly whiners. I don't want any whiners, I don't want any spectators. Instead of locking them down like, "I paid for a whole year so I better show up to this thing," they’re coming in like Eeyore in Winnie the Pooh. It's like “It's not working out. I'll fill your seat with somebody else who wants to play ball." I'm interested in creating 5,000 award-winning clients. You don't get there when you got a lot of hangers-on.

Shaun, thanks so much for your time. I appreciate it. If people want to get a hold of you, find out more about the mastermind that you’re doing or just asking more questions regarding what you’re up to nowadays, how can they get in touch with you?

Probably the easiest way would be email. Just email me at ShaunK@PTPracticeSuccess.com. You can also give us a call at 866-220-0386.

I hope a lot of people will reach out to find out exactly what you’re doing and also find out more about the programs that you’re offering nowadays. That’s going to be a huge value to anyone who reaches out.

I think it’s going to be great. It’s going great already. It’s nice particularly in this web world where you can actually look at somebody and say something and the light bulb goes off and you get to see it. You can’t see that over the telephone but you sure can see it in a web environment on a Zoom meeting or whatever.

That’s the beauty of technology. Thanks again for your time. I really appreciate it.

You’re welcome. Thank you.

Important Links:

About Shaun Kirk, PT

PTO 53 | Provider ProductionAlliance Physical Therapy Partners is supported by a very successful private equity group. Our strategy is to partner with private practice physical therapists by making a sizable investment in their practice and help them to build their brand.

We do not change the company name, owners or corporate entity. If you are curious, I would suggest that I connect you to our Director of Business Development who can assist you.

My role with Alliance Physical Therapy Partners as the VP Operations is to work directly with our partners to assist them in expanding their practices, identifying other practices in their area that could be "tucked-into" their practice in order to build their brand. In short - help our partners reach their goals, create growth in their practice while creating a best in class experience for all their patients.

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PTO 49 | Cash-Based Physical Therapy

 

Have you ever dreamed of what life would be like if you didn't have to deal with insurance companies? The vision is beautiful, isn't it? Thankfully for pioneers like Dr. Aaron LeBauer, PT, DPT, we know that it's not just a far-off dream but is an obtainable reality. Aaron has never worked in anything besides a cash-based practice outside of his internships, and thus knows the details that guarantee success in that setting. It's a different mindset and takes some work, but it is doable. Aaron was kind enough to be interviewed on my podcast but also has his own, The CashPT Lunch Hour, where he shares more details about his experience. Check it out!

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Listen to the podcast here:

The Ins And Outs Of Building An Out-Of-Network Practice with Dr. Aaron LeBauer, Host of The CashPT Lunch Hour Podcast

I am lucky enough to have a fellow podcaster, Aaron LeBauer, physical therapist and host of The CashPT Lunch Hour Podcast and the Founder of the CashPT Nation Facebook Group. Aaron has been not only successful in developing cash based out of network clinic in Greensboro, North Carolina but has also helped thousands of other passionate physical therapists build successful businesses, without relying on insurance. Aaron is one of my first out of network/cash-based physical therapy owners that I've had the opportunity to interview on the show. I also interviewed Kim Rondina. She is also running, owning, practicing in an out of network practice in Arizona after spending years as a physical therapist administrator in a large in-network facility. She's struck out on her own and we talked in her show about something else.

I've got Aaron and he's going to talk to us a little bit about the ins and outs of being out of network. Aaron went straight from school into an out of network clinic that he owned and operated. He's got a ton of experience doing that over the past ten years. This goes in line with Aaron's mission, all that he's done and the practice itself. That is to save 100 million people worldwide from unnecessary surgery by inspiring other healthcare providers, to start their own businesses and then learn how to market directly to patients and not physicians. Aaron has an influence as cash-based out of network expert. I'm excited to bring that to you so that he can inspire you with the different aspects, the ways that he had to build his business and be successful without going the traditional route. Hopefully, whether you're going into an out of network practice or thinking about that or not, he can inspire you with some of the wisdom that he shares.

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I've got Aaron LeBauer of Greensboro, North Carolina and he is also a podcast host. He hosts The CashPT Lunch Hour. I'm excited I have him on because I never had another podcast host on with me. I'm excited because Aaron is all about cash-based PT practices and he’s been successful in his own. First of all, thanks for coming on, Aaron. I appreciate it.

Nathan, thanks for having me. It's an honor to be here.

Tell us a little bit about you. I don't have a lot of exposure to cash-based practice. I know it's intriguing, it's out there and it's gaining momentum. Tell us a little bit about your professional path and where you're at.

My father is a cardiologist. My uncle was a pulmonary specialist and another uncle was a gastroenterologist. My grandfather was a family practice physician and his brother was a general surgeon. I come from not only just a line of healers but medical providers. I was supposed to be a physician or a doctor. I use the term doctor in a very specific way because physical therapists were also a doctoring profession. I was supposed to be a physician. At the first night of organic chemistry, I was like, “I’ve got an A in regular chemistry and this going to take me four hours to do the first night of review. I sat there for about two hours. I’m not going to do it. It's not worth it.” It's not worth doing four to six hours of homework a day, to do something I don't have a passion for, which is working 100 hours a week. I'm not seeing my kids and not be wanting to do all these other things that I saw that my dad wasn't doing. I was like, “I'll find another way.”

I graduated college from Duke University and I went out to California. I was like, “I'm going to get a “real job.”” I landed in California so I'm looking for jobs at places like PowerBar, The North Face and Sierra Designs. I got an interview at Sports Street Marketing, which they make the goo product. I show up and I'm wearing my suit and they're like, “We don't dress that formally here.” I was like, “You wear a suit at interviews.” The next company I got an interview at, I wore a sweater and I got called back and figured that was a good sign. That was in Sierra Designs and they couldn't hire me to answer the phones. From college grad, what about it was I couldn't get hired to answer the phones. I became a temp, then after doing that for a while and being treated like I was illiterate, I became a bike messenger.

One of my passions in life was racing bicycles. I couldn't figure out how to race bikes so working on the bike is the next best thing. At my first full paycheck, I made $1,200, which was more than my dispatcher made in his first full years of bike messenger. I already knew how to ride I just didn't know where I was going. I was doing that and I want to sustain. It wanted a long-term sustainable thing. In the back of my mind, I was trying to figure out how do I race bikes and earn a living. I had been exposed through a yoga class in college just massage and through my mom. Getting me a massage when my legs were hurting one summer. I didn’t race bikes in high school and college. My legs hurt and that helped. She was like, “You should go do something with your hands. Do massage therapy. Look into it at least for us.” I was heading one of these epiphanies after a long day of riding a bike. I was like, “I can go do massage, where I see four people a day and make $40 an hour or if I'm my own practice, I can charge $75 an hour. I can race my bike.”

I went to massage school and that's what I did. I raced my bike and I became a category one amateur cyclists, which is the top level on amateur program cycling in the United States. I did that for a while. My wife, my girlfriend at the time encouraged me to go to PT school. I was doing the type of massage. I was specializing in a myofascial release and some other therapies, where I ended up seeing a lot of chronic pain patients because I was touching them where they hurt. They had been to PT, chiropractic, acupuncture, massage, medications, injection, surgery, etc. They're like, “Aaron, you're the first person to ever touched me where I hurt.” That was so simple to me. It's like, “Okay, great.” After doing that for six years, my wife was like, “You should go to PT school.” PT was never on my radar. She encouraged me to do it. It wasn't going to happen in California because of all the prerequisites required to get to the end of the schools near the Bay Area.

It was going to take me two years of prerequisite. We moved back to North Carolina for a lot of other reasons. We hit our limit in California. Instead of throwing a dart at the map, we tried near where her family lives on the Central Coast and we're like, “No, that was a nice vacation, but we got to go somewhere else.” Instead of landing in Kansas or Iowa, we decided to go to Greensboro where I grew up and see how that worked out. Within six months of moving back here, we were both reenrolled in school. We owned a home and we each had a business. I opened my massage therapy business again, I was enrolled in PT school at Elon and then I graduated school.

You can't charge little and expect to invest in your own business and grow if you're not charging a real amount. Click To Tweet

Here's what happened. Here's what I got into cash-based practice. In school at my very first clinical rotation, it was busy. I had to be there for 50 hours a week. I was like, “Who's going to complain? My dad had to do 150 hours a week.” He’d fall asleep right at signing his name. I was like, “I knew this.” I was like, “This is easy. Fifty hours is no big deal.” I was there from 8:00 to 9:00. One day, it was 9:15 at night. I'm sitting there with sixteen more treatment notes and I'm like, “This is crazy. How many people I've seen today?” Forty-three patients, it was my third week as a student. I had 43 patients in one day. I was like, “This is crazy. This is great and all but I can't do this in my career. I can't see this many people.”

I don't know what I'm going to do, but I can't do it like that. I'm coming from a massage background. We spend an hour and a half with people. Ten minutes of hands-on with one person, while I'm directing someone else's exercises across the room wasn't satisfying to me. It wasn't why I got into PT. That's the big thing that started LeBauer. The rest is history. I started my clinic right after I graduated PT school. I've never worked for another physical therapist for a paycheck.

What's cool about your story is you come from the massage therapy background, where you're working with patients for an hour at a time. I'm very comfortable with that. You knew how to work out and had some entrepreneurial experience going into it as well. Graduating, I'm sure you felt very confident that you could do this and be successful.

Yes and no. In massage therapy school, it was yearlong. We had two kinds of semesters. It was Western massage and Eastern massage. Each one had its own business component. I did more business in massage school than I did in PT. They were encouraging you to like, “You’re going to go out and start your own business.” Maybe you could work for a chiropractor or work in a spa, but that's not how to make a living and being a massage therapist. You need to do this. I get to PT school and there wasn't any of that. It was to get a loan for a quarter million dollars or have 5,000 square foot facility. When it came to my group's project, we're like, “Yeah, but we don't want to do that. Can we do this?” Then the professors were like, “Nope, you’ve got to do this.” We designed our facility and rented out 80% of it. Target can have the other 80% and they didn't like that. They didn't like the creativity too much.

When I was telling everyone that this is one we're doing, you would think I felt confident doing it. Everyone said, “No, it's not possible.” My clinical instructor on my first affiliation even told me, “No, one's going to pay more than they pay for a PT. It's unethical to charge cash for physical therapy. You can't do it. It's not possible. People won't pay.” Some people said it. I was sitting there going, “I'm Dr. LeBauer, I can charge $10 more an hour. People will pay $10 more an hour now that I’m Dr. LeBauer.” Most people were like, “No, you're crazy. It's not going to work.” I was like, “It's got to work. People were paying me $85 and I was Aaron the massage therapist. Now I'm Dr. LeBauer the physical therapist.” They did but I wasn't very confident going into it because there weren't people saying, “Yeah, you can do that.”

Kudos to you because you heard all the naysayers. I'm sure that you took a little hit to your goals that you might have had like, “I can do this,” and everyone kept telling you, “No, you can't do that.” I hate to hear that they say it was unethical. That just gets me in the crawl. Tell me how did it go. You open up your doors. Tell me about the first year or first two years.

It went good. At the first week, I had six or seven patients and people say, “You were doing massage before.” I was out of state on the other side of the country for six months. I had a month of school and then a month of taking the licensure exams. For eight months, I was gone. My business has ended and I did have a list of people to call. It still took me two years to consistently see fifteen to eighteen people a week. It took me two years. It was a lot of work. It took a lot of trial and error.

What was your marketing? Are you marketing to physicians and whatnot during this time? How does that go?

PTO 49 | Cash-Based Physical Therapy
Cash-Based Physical Therapy: I did more business in massage school than I did in PT. They were encouraging you to go out and start your own business.

 

That was what everyone told me I needed to do. I tried it but it didn't work out too well. People say, “What's the number one mistake?” I would say, “Marketing physicians.” “You can't talk bad about physicians.” I was like, “Physicians aren't my customer. Patients are my customer. Physicians don't understand.” Anyone they send to me is expecting like, “I just went to see God of the universe. Why am I going to pay the technician three times as much?” When patients come to see me, the physicians are the decision maker. They come to see me for the technical work. They didn't come to see me for the decision-making process. That didn't work out well. It took me a long time to tell the story on my webinars, but I’m pretty connected here in Greensboro with a bunch of physicians.

My dad is like, “Go and meet so and so and they'll help send your patients.” I'm like, “I don't know, dad.” He's like, “They will do it.” I'm like, “Okay.” This one primary care physician meets with me on a Saturday for two hours and he's the kind of guy who comes to your house when you have pneumonia. He’s also the guy that his partners had to wait until he was out of town before they voted not to accept any more new Medicare patients. He was gone because he knew that they would vote against it. He was like, “Call Jane. She'll set up a time to meet with the other partners.” I called her, she said other time, six weeks from now. Two days before she's like, “I'm just calling to make sure that you're bringing in lunch for 65 people.” I was like, “No, that wasn't part of our agreement.” She's like, “That's how we do it here.” I said, “I don't know that it would be that ethical for me to come and buy everyone lunch to meet just for the opportunity to meet with some colleagues.”

She's like, “Then we're going to have to reschedule.” This is the building with my grandfather's name on it. I can pay to play but I don't feel that it's not a good return on my investment too. I don't feel like I should have to because I shouldn't have to. Maybe I'm isolated in that case. I grew up with the mentality of I'm a primary care provider because that's all I got downloaded from my dad and my uncles. I shouldn't have to pay to go meet them and talk about our mutual patients. I don’t want to say unethical. That’s little strong balance but that's unnecessary. The goal is to help people. I shouldn't have to buy lunch. I wouldn’t pay $1,000 in lunch when I don't have a marketing budget. I'm not Merck and Pfizer, the money that is dumped off and the waste money is more money than I have.

What did you learn from that then? How do you market? I love your fresh perspective because I think a lot of us get into these ruts like, “This is how it's been done and this is what we need to do in order to be successful.” There are plenty of people who I've talked to on my show who say, “You need to have relationships with the doctors.” When you talk about relationships with physicians, you're thinking, “I've got to get lunch if I'm going to meet with this guy.” I love how you say, “Why would I have to buy lunch if we're talking about a mutual patient? You're my colleague, not my parent.” What did you do then? You took your marketing to a different area. I assume you’re maybe direct to consumer more.

When I step back and realize, I was like, “Who am I marketing to? Who do I want to come and see me?” If people have been referred by physicians even because of convenience, they're not the right people. I had to go back old school like Dan Kennedy's style. I’ve got to create this message that resonates with the people I want to be seen in my practice. I've been doing some of this doing massage, but it was a very different message. Massage is an elective bonus type of service and physical therapy is something that people need. It's a medical service. I got to get directly in front of them. I started doing it using my website. I was getting, “I heard about you from.” It’s a word of mouth. I can't let word of mouth build on. I have to cultivate it. I cultivate it using email marketing, my website, and Google was helpful for me. Google is my number one referral source. Larry and Sergey are my biggest fans and they don't even know it.

How long ago was this?

A few years ago.

You've been at it for a while. You leveraged Google at the time and your website to drive patients to you. Is that the same thing you're doing or is your marketing similar to what you were doing a few years ago?

It doesn't matter what you charge as long as it's a reasonable value. Click To Tweet

Yes, it's similar and it's more refined. At the time, search engine optimization was a big thing being directory listening. I'd spend nights with my first baby in one arm, my right hand on the mouse finding all the directory listings online that I could find and putting in our clinic location. That's not something that will work but at the time, the more places you are found online with your website in your location, the better. Our website was one that wasn't within a brochure. It was more speaking to patients and I have a little place on there where you can get my book on back pain and download it. I could just send emails after. I was using email marketing and websites as well as getting in front of people I knew, doing some talks in groups and some workshops. We've refined it so the system works better and faster. One of my students, Derek, moved to a brand-new town that he had no connections there. Within six months of seeing fifteen people a week, it took him six months to do what it took me two years.

Tell me a little bit about the talking, the speaking that you're doing and how that helped out the workshops. How did you advertise? Did you focus on certain topics? Where did you hold them and whatnot?

Everyone has got back pain. I just focused on back pain. I like doing yoga. I raced bikes so I got a speaking gig in the triathlon group with the cycling group and at one of the yoga studios, between the combination of doing those things. Over the years, I’m getting better and better. What we do is we'll go, talk and teach people what the problem is. Why they need to do something about it and how to identify if they have a problem. Maybe one or two things they can do at home. It’s a way of, “You’ve got to try this at home. If it feels better, that’s great, then we know where your problem is. If it doesn't change anything, then you also need to be seen because it's not your back that’s the problem. It’s somewhere else,” versus, “It didn't work. Physical therapy didn't work. I tried these exercises I found on YouTube and it just doesn't work.”

It's not that the physical therapy didn't work. It's like, “We're not putting it in the right place.” You need a prescription. Physical therapy is not a modality. It's a decision-making process. Anyone can learn exercises. It takes you or me to be able to look at someone and say, “This is where we need to put the exercise and this is how much for this. You need to put a ball, a cane or a roller and how much. This is where you put your hands, how much and how long.” We educate people about that and what I'll do is say, “If you want the handouts and a special video I made for you, be sure you sign into the workshop and give me your name, phone number, and email. I'll send it out to you later tonight.” I've got them on my email list and follow up them on the phone, emails, etc.

How do you transition them? I'm sure a lot of them may have been through a traditional physical therapy where they didn't have to pay cash out of pocket. How do you transition? What's your conversation like to tell them, “I don't take insurance?”

We try to make the whole thing about their why, rather than their logical questions because people make additional decisions. We're trying to stay away from the logical part. Most people when they call a medical provider, what do you think are the first two or the first three questions are asked?

“What's your insurance? Who's your doctor?”

“Who's your doctor? What's your insurance and date of birth?” They never ask your name and how you're doing. I always even asked, “What doctor you’re here for?” I said, “I'm not here for my doctor. I'm here for myself.” She looked at me like I was the biggest jerk and I was just like, “You asked me what doctor am I here for. I'm not here for the doctor. I'm here for me. My name is Aaron.” That's one of my biggest pet peeves these days. They don't introduce themselves by name. They don't call me by name. Even if they know my name, they're not even like, “Mr. LeBauer.” I don't even get the chance to correct my name, “It’s Dr. LeBauer.” With my kids, it's like, “Daddy.” I'm like, “I'm not Daddy.” My kid's last name is LeBauer just to say Mr. LeBauer or ask if you are unsure. That's number one. We don't talk to people about insurance and date of birth. We’re talking about, “I'm a real human. I'm going to ask your name if they didn't tell us. My name is this. What's going on that you're calling us for physical therapy? Why is this a problem in your life? Why is it so important that you do something about this now versus six weeks ago? What would you like to have happened as a result of working together with us?”

PTO 49 | Cash-Based Physical Therapy
Cash-Based Physical Therapy: What makes the business owner successful is being unwilling to take no for an answer to get what they want.

 

Is this something that the physical therapist is doing on the phone? Do you have some team members that are doing this on your behalf at the initial call?

We do a couple of different things, where we'll have people fill out a form on our website to apply to speak to a PT first. They'll fill out a similar application to get some information about pricing and availability or come in for a free total body diagnostic. We'll get some of those questions online and then we'll ask them on the phone. Sometimes when it was just me, I was asking these questions on the phone. Amber, our customer care specialist will be the first person to call people back, but people can apply for a call with Dr. Shelton and they’ll call and ask.

The physical therapist will always ask similar or the same questions during our evaluation or one of our free sessions. It’s the same questions. There are five different ways to solve your pain. You can get it out of a bottle. You can get off a brace, tape, crane, injection, opioid, and surgery or whatever else. You can get a foot insert for your neck problem. Why here, why us, why now? What's your motivation? When we find out that information, which number one, no one else is asking it and number two, get people's buy-in because they start to understand why it's important to them.

I know you do some coaching and consulting. What we're talking about here, the questions that you ask on the patients at the very beginning, that would seem to me like an integral part about your success altogether. Do you find that? What's the secret to your success as a CashPT practice?

This is important and the secret is being willing to not stop when you encounter some difficulty.

Tell me about that. What do you mean by difficulty?

I want to start a practice because it allows me to see patients for an hour without insurance telling me that they won't pay. Then everyone comes to this, “No, you can't do it. It's unethical.” I'm like, “I’ve got to figure out a way to do it.” Then someone says, “You cannot see Medicare patients.” I'm like, “What do you mean I can't see Medicare patients?” I’ve got to go figure out how do I do this. If physicians are going to send me patients, let me go figure out a creative way to market directly to patients. People are objecting to the price. I'm like, “Let me figure out why are they objecting.” What makes people successful? What makes the business owner successful is being unwilling to take no for an answer to get what they want. If you're someone who is going to roll over at the first sign of difficulty, then owning a business is not for you.

It’s a huge insight for everybody because your perspectives are just off of the traditional mindset of physical therapy owner. For you to look at the supposed obstacles and say, “Why not? Why can't I?” is great. I'm sure it's a testament to why you're successful. The questions that you ask the patients, even in a traditional setting, those are valuable questions. They're not limited to a cash-based practice. Getting in that kind of mindset for any physical therapists to be successful at treating a patient through their entire plan of care is important to get to the heart of those questions. Why are you here today? Why now? What is this going to look like if you don't treat it now and what are your real goals? You want your knee to get better, but you need to get better for what reason? You want to play with your grandkids. If you play with your grandkids, you're also going to have to lift, squat, maybe kneel and get down to the ground. There's more to it than just bending your knee a little bit more and leaving some pain. Those questions are huge. As you're coaching consulting, do you also spend some time helping people go through that process asking questions? I look at it as our sales technique. It's not what you would call traditional sales, but it is the sales of a physical therapist.

For one reason or another, people end up doing things because of time and efficiency. Click To Tweet

I do that and I've created a whole brand-new course just for that purpose because I found that there was this big gap for people who are like, “You're only charging $75 a visit.” You can't charge that little, expect to invest in your own business and grow if you're not charging a real amount. That's what I was charging because that's what we charge at the clinic I worked in or that's what people's copays are. That's what Susie down the street has twenty years of experience in PT is charging her people because she doesn't know business doesn't mean you should have all your business off someone who doesn't have a business. I'm like, “There's this gap between people come in and they want to help patients.” In order to help patients, we have to learn how to sell physical therapy. You’ve got to sell your plan of care. You can't help someone if they need eight visits and you come in for three.

If in network clinics, we're taking the time to be as efficient in the sales process as we are, they'd be crushing it. No one would complain about a $50 copay. I have people who don't complain. Our patients pay $250 a visit. Everyone says to me, “I can’t give you or pay a $50 copay.” I'm like, “I don't know if I can help you.” I can, but if you can do what I do to sell $250 and you only have to sell $50, you should be crushing it because the barrier to entry is so low because you take their insurance. Why is that a problem? I feel bad about selling a service that either A) I'm not convinced it's going to work, B) I don't think it's going to work for you, or C) I don't believe in myself. A physical therapist shouldn't have any of those objections. I wouldn't ever tell anyone come here for eight visits when I didn't believe they needed it. It's a disconnect because you get out of PT school and you don't know anything about sales or influencing people to make a decision.

$250 a visit is amazing, first off. I was expecting maybe something over a $100, but $250 blows me out of the water and that's great. There's going to be some concern from the patient when they hear that amount, am I wrong? How do you overcome that?

What we do is with the questions that we ask, it's like the visa commercial. It's like a $50 steak, $250 watch, $500 limousine, date with your wife, priceless. It's like, “If I can get to the priceless thing and/or $2,000 worth of PT, $2,000 is no big deal.” I had a conversation with a woman who was an occupational therapist and a CrossFit coach. I was trying to explain it. I was like, “Why is CrossFit so important to you?” She’s like, “Because I feel strong.” I’m like, “Why is feeling strong important to you?” She’s like, “Because as a woman, I want to feel strong and capable of doing anything that I want.” I’m like, “Why is being strong and capable of doing anything you want so important to you?” She’s like, “So that if I needed to, I could run across the parking lot there and jump over that fence.” I’m like, “Why is that?” She’s like, “Because I want to be in.”

I’m like, “If you are missing that for three to six months, if you are no longer able to feel strong and capable of running away and jumping over the fence and being as strong as possible and I told you in just five to six weeks, I can get you back to being able to do that. Would you pay $2,000 for that?” She said yes. I got to know that thing. I know that it doesn't matter what I charge as long as it's a reasonable value. If value of this is priceless, it’s tens of thousands of dollars, we're just going to go 10% of that value. It’s totally okay with it. Then it's like, “Ms. Jones, we're going to get you started once a week for eight weeks.” She’s like, “I don't know. I don't have that much on my health savings card.” I’m like, “No problem. We can pay as you go or if you want to do a no interest payment plan, we'd be happy to do that. If you want to save $100, you pay in full today and save $100.”

I've got a ton of questions, but we've got limited time and I want you to share all the secrets. How do you then take those patients and convince them that your place is better than going to an in-network facility?

We don't, they just know. 30% to 40% of our patients have been somewhere else and they haven't got a resolution where they're like, “All they did was show me how to do things I could do at the YMCA myself.” That makes sense. For one reason or another, people end up doing things because of time and efficiency. It's not always what we want to do, but it's just what happens and patients were like, “I know it better. I got more training with my personal trainer more attention and yet I still have a problem that they're not solving. I need to find a solution. I thought physical therapy was it, but it wasn't this brand of physical therapy. Maybe it's this other one.” They come to see us, we find out their why, we give them a personalized plan of care. We give them as much attention as they need because we're not limited or constrained by our reimbursement. It just gives a little bit more latitude I think. They see that. There are people that their primary goal is to get insurance to pay for it. They're not our patients.

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That's not your ideal patient.

Our ideal patient wants to do anything possible in their own power to solve their problem.

Have you created an avatar of who your ideal patient is and what they look like?

Yeah.

You’ve got it all figured out. It's important to have that because if you're going to market, you're going to market to that avatar or that person. How many clinics do you have?

We've just got one clinic.

You still got the one clinic, but you've got a number of physical therapists underneath you. Kudos to you. You shared with me before the show that you're not treating anymore, that’s amazing.

I came to the point where I realized that when I'm treating one person, I can only help one person. If I'm not treating that person, I can go and spend time to put more people in through our clinic, help other physical therapists figure this whole thing out and help more people because it's not enough. I get frustrated. It’s a little bit selfish. A couple of times a month or a couple of times a week, I’m treating patients. If someone comes in who I know like, “If you'd come to see me a few weeks ago, I could have solved this problem before it was a problem for you. I’m the first person to touch them where they’re hurt.” It makes me want to bang my head against the wall. In order to stop that pain from happening, I have to go, help other people on how to market directly to patients and put more patients through my clinic. I’ve got to hire other PT so I can spend time marketing and get more people in Greensboro to come to see us, rather than just a couple of hundred people a year.

You're making that transition from success to significance. With the work that you've done, have you helped other clinic owners who are in-network with insurance to transition to an out of network situation like yours?

The ideal patient is someone who wants to do anything possible in their own power to solve their problem. Click To Tweet

Yes, I have. It's not the majority of people, but I almost know them all. People get into it and I know about it. For instance, a woman’s average reimbursement was $58 a visit but her costs to provide the treatment was $62. Everything she's doing is losing money. One of the companies I know is $32 a visit no matter what she does. That's less than half of what it costs for you to provide that treatment. I've helped people do that and pieces of it are switching how we're selling and not just finding a good rate, but it's the fear that if I switch, all these people are going to leave. We don't need to keep all of those people. If you're making $10 a person in profit, you don't need $20 in profit, keep half of your people. We're looking at creating a much larger profit margin, but it's also helping fewer people.

I would say how well can we help the max capacity of people in high volume. There are people that need to get off the couch. There are people that are more complex. Somewhere in between there, we treat more complex people in our clinic because more complex patients with four or five different problems are the ones that the root problem isn't getting solved. All their symptom problems are getting addressed but the root problem isn't. That's for our patients. When we go from in-network out of network, sometimes it's a little bit different type of patient and it's a little bit different type of symptoms. To me these days, in January and February, everyone is cash. I don't know how many months it lasts. My personal in-network deductible is $7,500 and my in-network copay is $150.

It's only getting worse or it seems like it's going that way. Do you then teach the patients how to submit for insurance reimbursement if they want to do so?

If they want to, what we'll do is we'll provide them all the information they need and help them if they want. We don't do it for them. With an in-network clinic that already has those processes and systems set up, doing that on the patient's behalf is almost a no brainer. It makes it less problematic to patients because you still say, “We take your insurance. We're not contracted but we'll file the claim for you and everything.” It's less of a barrier to getting in what we do. We would never say no, we don't take your insurance. If we say no to a potential customer, they're not going to be our customer. We just don't do that service for them. We put it on them. It's easier for them to do it, then for us to do it on their behalf.

A patient come in who had $2,100 worth of charges, but only $400 of it was the allowed amount and it's only $423 went to his out of network deductible. We're not billing three units. We will just put on there three units. Fifteen minutes is one unit, but I know some insurances here in North Carolina will allow you to build up to eight units an hour, per visit or whatever. Maybe we put eight units on there and he would be $800 in. He's still less than half towards his deductible. The whole amount he spent out in the network isn't getting counted. These guys are so crooked. Playing the game is not something that I want to do.

I’m sure people are going to ask, “What about your Medicares and your Medicaids? Can you see them?” There might be a longer answer to it than yes or no. Can you see the Medicares and Medicaids in a cash-based practice?

The long answer is it was a two-hour webinar. The short answer is yes, there's a way. It may look different than what you're doing right now even if it's just group classes. There's always an exception to the rule and there's always a way to help people that you want to help, even if you can't do it the way you thought you could do it. It goes back to what was successful. When I see a door, I knock on it, no one answers, I tried to open it, it’s shut, then maybe give it a little tug and it won't open, I'm not going to come back and try to kick it down. Ram into it, chop it down and do everything I can to get through the door.

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I'm going to say, “Three times. Let’s use another door.” The other door might be two feet away or it could be around the corner and it's wide open. With all these things, I said, “Yes, it's a different issue in cash-based practice with Medicare because we can't opt out of Medicare. We could be non-par, we can have no relationship. There are other things that we can do.” In North Carolina, Medicaid is so bad that Medicaid beneficiaries, patients only get one PT visit unless they've had an amputation or cancer anyways. When it was better a few years ago, we still didn't see Medicaid patients. They're not going to the guys down the street who was in network. Medicaid adults in North Carolina can only be seen through the hospital system. All the private practices here are not seeing Medicaid patients, cash or not cash.

I don't know why I even asked the question because if they're on Medicaid, they can afford the cash rate.

They should be able to afford the $10 copay.

You get some coaching yourself, don't you?

Yes.

Not necessarily a cash-based PT coach, but business coach and some consulting on your own as well. How long have you had a coach?

Since day one. When I was starting my cash practice, there was another guy who had been doing the same type of bodywork I learned as a massage therapist who's a PT. He had a cash practice in New York. His name is Scott. He helped me and five other people just get our businesses up and running with some forms, some coaching. That was about three months’ worth. Over time, I've used a couple of different coaches. My coach is a business coach. Bedros is out in California. Even his blog posts he put up a few years ago helped me figure out some of this marketing that we talked about. I didn't pay him any money for a few years. I was like, “I need to get to the next level.” I found this podcast and I was like, “I need Bedros to be my coach.”

I love asking simply because I want people to know that a lot of times these successful people aren't on their own doing it all by themselves. Many times, they have a coach or consultant behind them that helped them get to where they are. I love the fact that you had one from day one because I haven't met a lot of them. The owners that have a coach or a consultant from day one when they know they're going to do it or even before they even get started, the road to success seems so much easier. I've someone who has always been successful. You're one of them and the guys that I've met. They're successful and they're able to navigate through the heartache, the mistakes and the issues so much easier.

It doesn't mean it's less work. This means the hard work I put in goes into the right grounds and get in the right direction and not repeat the same mistake someone else has done. There are things my coaches recommended and it didn't work. There are other things like, “I got this idea.” That one idea, you want to pay it for the coaching for the whole year. That's all I need. That one idea. Everything else is a bonus.

Do you have any books that have been influential to you business-wise?

The very first one was Guerrilla Marketing by Jay Conrad Levinson. I picked that up in 1999 when I started my massage therapy business. The internet was around but you couldn't find this stuff on the internet. The next one that was influential for me was Russell Brunson's book, DotCom Secrets. If you've got an in-person business, the book I would pick up would be Expert Secrets, which was his follow-up book. DotCom Secrets, for me, was the influential one. Expert Secrets is what I recommend to someone who does not have an online business. Those are the big ones. In Expert Secrets, I've got everything written in the margins, then I keep it and I keep going back to them like, “I need to do that.”

It’s all regarding the online stuff.

Expert Secrets is about building a following, creating your marketing message, how do you tell stories and how do you do it. DotCom Secrets was the online one. It was about how you build online. A clinic owner could use that to create their follow-up email sequence. Those two help each other. Then the third book would be my coach's book, Man Up. It's a leadership book and it's great. Even though its title is Man Up, that was his mantra when he was going through the deep crap. Bedros was like, “It's time to man up.” It’s what he says. It's about business ownership and leadership and it's great.

What's Bedros full name?

Bedros Keuilian. He's a fitness guy. I had to go outside of physical therapy to learn how to market physical therapy. I had to learn how to market directly to patients. Everyone's APT APPS is like, “Here's how you go buy physicians lunches. Here's how you say hello to them and shake their hand. Here's how you put an ad in the newspaper and here's how you put board up and had a radio ad.” All these things cost way more money than I had. That's not effective so I didn’t go to fitness to learn how to market directly to my patient.

The successful owners are going to have to start learning how to do that direct to consumer marketing. Physician referrals are down and it's important to have relationships with physicians in general in your community. People who are going to navigate through the changes that are coming and some of the networks that are being formed with the hospitals, they're going to have to find a way to be successful to work directly to consumers.

I'm not saying the relationship with physicians is what we should have. I'm saying we need to flip the script. I know physical therapists who have physicians calling them up. Asking them to meet because the physical therapists are bringing patients into the system and spreading them out to the places that are like, “I'm going to be a gatekeeper or the dispatcher.” That's a fracture. You need to go over there. It looked like an autoimmune disease over here first. You've got this other problem that's not back pain, that’s something else. If we do that, then we have as much, if not more power because we have more time. We got what we need. That's how it should be. That's not what people are talking about. There are missing pieces. It's like, “How do we be successful if we act and be the person that patients can come and approach on the street and get some real answers?” They can call our clinic and we can help them or we can share them out to the other people that need it.

It's a change of the mindset and shifted the paradigm, where we have to take it upon ourselves, take on the mantle that we are the musculoskeletal injury experts. We've shrugged that off for so long or just coward at maybe taking that away from the physicians or the idea that it might be happening. It's not like that. We are the experts and we need to stand up.

Personal trainers are taking it away from us because we won’t man up and take it ourselves.

Someone else will, that's for sure.

Someone is going to do it. To me, I've told patients like, “Their job is to keep you alive.” At the end of the day, there's not enough of them for as many people that are sick and dying. Their number one priority is to make sure you don't die on their watch. Beyond that, if you've got back pain, you need to be seeing someone else. They may not know who to send you because they don't have time to know everybody so it’s a good thing that you’re here. I'm sorry you had that bad experience, but you're in the right place. If we need to get you back to see them, that's where you need to go. One of those things is they used to have more time. There are more images, testing, then a lot of pressure and they don't have as much time to spend. No one does. That's why I wanted to get myself out of the insurance model because I want to be able to have myself and my therapist spent the time we need with our patients no matter what.

Congratulations on your successes.

I appreciate it.

It's a long time coming too. If people want to reach out to you and learn more about how they can switch out or pick your brain on cash-based practices, how would they do that?

The best way to do that is through my website, AaronLeBauer.com. I'm also on Instagram, Facebook, and Twitter. I'm not really on Twitter, but I'm on Twitter. Whatever your preferred platform, it should be @AaronLeBauer. From there, you can find resources on free webinars, my free Facebook group, blog, podcast and all that other information. If you're on the podcasts like this one, the CashPT Lunch Hour is my podcast.

I invite people to listen to it because you've got some great insight. By all means, if people are considering, “How do I drop out this contract? How do I get rid of this contract and what do I do in this situation?” If they want to strictly go out on their own and do the cash-based stuff, I highly recommend to reach out to an expert like you, for sure.

Thank you, Nathan. I appreciate it.

It was nice having you on the show. Thanks.

I appreciate all your compliments and the questions are amazing. I just love talking about this stuff.

You’ve got a great passion for it. You're killing it so keep it up.

Thanks. I appreciate it.

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About Dr. Aaron LeBauer

PTO 49 | Cash-Based Physical TherapyAaron LeBauer PT, DPT is the host of The CashPT Lunch Hour Podcast, the founder of The CashPT Nation Facebook group and as a business coach has helped 1000’s of passionate physical therapists build successful businesses without relying on insurance. He owns LeBauer Physical Therapy in Greensboro, NC, a multi-therapist 100% cash-based physical therapy practice. Aaron's personal mission is to save 100 million people worldwide from unnecessary surgery by inspiring other healthcare providers to start their own businesses and learn how to market directly to patients, not physicians.

 

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