There is nothing more comforting than knowing that you are financially secure for the future. Bringing in a trusted expert from Econologics Financial Advisors, Eric Miller gets into the mindset, attitude, and strategic plans you need in place to secure your wealth for the future and for your household. Eric and Econologics have been working as financial advisors to hundreds of private practice owners over the past decade. Thus, they know some of the pitfalls that we share when it comes to our finances and what it takes for owners to become financially free. Eric goes beyond the investments and portfolios and sets you up with the right mindset and financial purpose and goals that are in line with your retirement plans. Secure your household and make your clinic the vehicle by which you achieve your financial goals in this episode.
I get to talk about money, one of my favorite topics. One of the reasons why I got into business was to have more freedom and security for my future. I decided to bring on Eric Miller of Econologics. If you remember, we had Christopher Music of Econologics on. I've been working with them for a little over a year. I do have to have full disclosure that I have an interest in their performance. I've also been a happy client. The reason why I like Econologics is not only do I like their perspective on financial planning but also the amount of communication they provide. If you follow my episode with Frank Cawley, we talked about important financial indicators like KPIs, reports and developing a financial team. Those things are all important. What I get into with Eric is more the mindset, attitude and strategic plans that you need to have in place in order to secure your wealth for the future and for your household. Important items to consider, this is all about securing the household and making our clinics the vehicle by which we achieve our financial goals. Let's get to the episode.
I've got Eric Miller, Chief Financial Advisor of Econologics joining me to talk about one of my favorite topics, money. Thanks for coming on, Eric. I appreciate it.
My pleasure, Nate.
Can you share with us a little bit about your experience as a financial advisor and your practice or work with private practice owners? What's got you to this point?
Long story short, I am a financial advisor and I've been in the financial industry for about twenty years. I grew up in Toledo, Ohio. I moved to Columbus, Ohio in 1990. The funny thing is I get so jealous of practice owners because a lot of you knew what you were going to do when you're 8 to 10 years old. I was 29 years old before I knew what I wanted to do. I always had an interest in money. For some reason, it was an area that always attracted me. I didn't study the subject when I went to college. When I got out of college, I worked for a mutual fund company selling 401(k)s and managed accounts.
I started to get introduced to what financial advisors did. By and large, what I found out was although they were benevolent and they wanted to do a good job, it was mostly an accumulation of assets. That's what they did. They didn't focus on, “How do we change someone's financial condition?” It was, “How much money can we manage?” I met a friend that said, “I'm going to start a financial planning company down in Florida. Do you want to join me?” At that point, I had a house, a dog and a girlfriend. I knew that was my purpose at that point in time. Like many people, I was like, “If I'm going to do it, I better do it right now,” and I jumped. I drove down there and got rid of that life. This was in 2008. Do you remember what was happening in 2008?
Bad timing.Your practice is what drives your personal wealth. It is the main money artery that most private practice owners have. Click To Tweet
It was a global meltdown. The stock market was down 50% and banks overlent to everyone. It was chaos. It was the worst time you could think of to start a financial planning company. We were thinking to ourselves, “We have to do something differently. We can't rely upon all these financial institutions for people to get financially independent.” We had to come up with a system where the business owner himself could be put back into control of his financial destiny. That's what we worked on. We started working with private practice physical therapists. It was the first type of clientele that we worked with. We developed our system of showing a business owner how he can be in charge of his financial future as opposed to putting it in somebody else's hands. How does he do that? How does he use the business as the engine to do that? We focused a lot of our efforts on that. We started working with veterinarians and other private practitioners, but our core is working with private practice physical therapists.
It’s cool that you niched down like that. You've had so much experience over the past decade focused mainly on physical therapists, so you'll know some of the ins and outs of our dilemmas, issues and whatnot.
That's the fun part about it. Your practice is what drives your personal wealth, for most of you. You don't always want to be in that financial condition. That's where most of the money comes from. That's the main money artery that most private practice owners have. If you're advising someone, you better know something about their business that you're going to help them with their money. We do spend a lot of time on that.
You've been working for over twenty years. For the past decade of working specifically with physical therapists, what are some of the things that you would recommend they consider as they're trying to establish a better financial picture or financial condition? We have plenty of display vehicles out there whether that's the traditional 401(k)s, IRAs and stuff. What is your advice to some of the physical therapists out there?
The main thing that we try to get across is number one, you have to treat your household like a business. What I mean by that is that a lot of physical therapists get trapped in the practice. They're there to serve the practice as opposed to the practice being there to serve them. The first thing that we try to teach private practice owners is that you are not there to serve this practice. It's there to serve your household. When you start doing financial planning, it starts with the household. What are the goals and purposes of the household? How can the practice benefit that? What we do is to teach them your point of where you're controlling things. If you look like a company like Facebook. Facebook is the parent company. It owns 80 companies underneath it. Those companies are there to serve Facebook, not the other way around. Our households are no different. Your household, the Nathan Shields’ household, all your kids and your beautiful wife, that's the parent company. That's where everything flows to for the benefit of that.
It's a paradigm shift. Many owners need to make it because they get trapped inside of the company. I espouse that all the time. That's why I want people to reach out and step out of the business so they can work on the business. It's the same thing when you're talking about financials. It's a mindset shift instead of, “What do I need to do inside this business to keep it afloat?” No, you're saying step out and look at it from the household perspective and say, “What does my household need to survive, sustain and prepare for the future? What can the company do for me in order to achieve my household goals?”
When you have that mindset shift right there, it's amazing what happens. You start to put the correct systems in the business that allow you to extract out of it so you can operate from the household level as opposed to being stuck in the business. When you have a plan, you start to know your identity. When you're in the business, you have certain roles that you have to play. You have your owner role, executive role and practitioner role. Not a lot of people are wearing that owner role like they should. That's where we teach people how to do that.
They conflate executive or administrative work with ownership work. Those are two different things. They maybe can hire an office manager to take over some of those administrative/executive functions and responsibilities. That doesn't absolve you from still being an owner, setting up your company appropriately, strategizing and making sure that it funds the household. This is on top of funding itself, so it can sustain your household.
You hit it right on the head. You can pick two of those roles. You can be an owner/executive or you can be an owner/practitioner, but you're always going to be an owner. You have to make sure that you have that mindset of what an owner does. What does an owner do? They make sure that the practice is creating maximum value for themselves and the household. They're trying to build the practice to the highest value that it possibly can provide for the household. That's what a good owner does.
When you sit in the ownership seat, you also never lose the Chief Financial Officer seat at our size. You're still the CFO. You can't delegate that and you shouldn't. You need to be on top of your cashflow.
You absolutely do. The biggest mistake that I see a lot of practice owners do is they stop paying attention to their money. For whatever reason, that's the one thing that you can never do. Money loves attention. It's like a two-year-old at the mall. If you take your attention off a two-year-old at the mall, you have no idea where they're going to end up. Things get lost and your money is no different. When you take your attention off of your money lines, even for a split second, it's amazing how the money will disperse everywhere. Being a good CFO doesn't mean that you have to know how to do spreadsheets and all those technical things. It means that you have to be a good controller of money. It means that you have to be responsible with money. You have to know the basics of money. It isn't that complex at all. It takes some training that you didn't get in PT school.
I can say that my financial situation improved when I started holding my CPA responsible for teaching me what a P&L was about, what a balance sheet looks like, and cashflow reports. I said, “I need to meet with you monthly so you can show me all these things.” I got my own education about finances. On top of that, I started meeting regularly with my biller, which I didn't do before. I was reviewing some of the billing reports and asking them to tell me, “What does this mean? What does this say? What should I know about this, that or the other?” That's when my ship started tightening up or when I started plugging some holes in that bucket. I could see the difference in finances.When you have a plan, you start to know your identity. Click To Tweet
All you were doing is putting your attention in an area that maybe you didn't confront for a while. One of the things that happen to a lot of practice owners is there's a lot of financial terminology that people don't understand and I totally get that. It's an easy area to say, “I don't want to confront this.” You need to dig into it and have some key metrics. A big thing, especially from the household perspective, is making sure that you have measurements or statistics to track your overall financial condition. It's not that hard to do. That's an obstacle that I see as well. A lot of people don't have correct financial statistics that they use to measure the kind of progress that they're supposed to be making.
A lot of people like looking at account statements. You look at your 401(k) statement and see how your mutual funds are doing. “I see that my bank account is a little bit bigger than it was from the week before and that's okay.” These are some of the things that I've asked people, “What do you use to measure your financial progress?” It's crazy some of the answers that I get. You have to look at that and have a list of metrics that can gauge the condition of the household if you're going to run it like a business. If you’re going to do that, you’ve got to do it professionally.
As people are trying to walk that path towards financial freedom or simply improving their financial situation, what are some highlights or actions that they can take in order to do that?
One of the biggest things is that you have to have a target. The first thing would be like, “What's the financial target that I want to achieve?” I created this chart called the Seven Zones of Financial Freedom. I wanted to make sure that people realize, “What financial condition am I in? What does that mean from a statistical point of view? What financial condition am I trying to get to?” That's defined by how much income I’m making, what my overall net worth is, how much ratio of my good debt versus my bad debt, how many income streams does my household have? These are things that you can look at and you can measure. The first thing would be like, “What financial zone do I want to get into?”
Regardless of what it is, personally, for a practice owner that is in control of your financial destiny, that can create as much value as you want to in your marketplace. If you want to be in a condition where you don't have to have concerns about money, your overall financial target has to be at least $7 million to $10 million of total assets. That to me would be a fairly safe financial condition to get into. It doesn't mean you have to save $7 million. When you look at the value of your business, maybe your real estate or other endeavors that you get into, that's the target you should be shooting for. That's a big thing because we haven't been taught to have that point of view. It's been like, “Let's accumulate a couple of million dollars in a 401(k) plan and let's hope that we don't run out of money.” That's not financial freedom.
As we get started at a young age, we think that retirement goal is so far off that it's not feasible to consider that down the road. The more attention you pay to it, maybe you get a little accelerant and you can get closer to that goal faster than you think. It doesn’t have to be all in your clinic. It could be on other vehicles but there's no reason why you can't accumulate those kinds of assets.
The wealth accumulation is almost like a hockey stick graph or a grind. When you’re trying to create an owner independent practice, you're trying to put these things in and you're not seeing these huge results, then all of a sudden over a two or three-year period, you see these massive results. Wealth building is the same way. You're doing the same repetitive and boring things that you would do and you're like, “I don't know if I'm making a lot of progress.” It accelerates towards the end. The other thing would be the time frame to get into a financially independent state. It doesn't need to take 25 to 30 years to do that. You should be able to do that within 7 to 10 years if you're concentrating on your main money source, which is your practice and building that up.
Are there some things out there that you hear financial advisors recommend that you'd say, “That’s probably not the way you should go?”
To me, it's more of a mindset than the recommendations because I found that every investment vehicle has its place. It's the utilization of it and how you're applying it to your situation. There's not a bad investment, aside from someone trying to rip you off. There's some workability to retirement plans, managed accounts, life insurance or annuities. It would be like, “What's your strategy first?” That would be the first thing I would start with, “What’s your overall strategy?” I'll give you an example of what our strategy is for most of our clients. I have an acronym for it. I call it PREP. It stands for Produce income and be profitable in your business. That's the first target. Second, make sure that you are setting up an automatic and systematic way that you're retaining cashflow from the business to the household. Eradicate all bad waste like interest, cost and debt. Protect your assets from any kind of loss including taxes and lawsuits. PREP, that's a strategy right there. If you focus on those four things, you're going to have a mountain of success.
Anything else that falls below that would be tactics. “Do I buy this policy or that policy?” “Do I put money in this investment or that investment?” It's all part of an overall strategy. A lot of practice owners get caught up in tactics as opposed to strategy. This money market accounts yielding 0.5. Should I put my money on this one or should I put this one that's dealing 1.2? They put their attention on things that aren't going to move the needle on their financial condition. We spent a lot of time thinking about what's the strategy first and then tactics. It was Sun Tzu who had a great quote that he said, “Strategy without tactics is the slowest route to victory, but tactics without strategy is the noise before defeat.” I thought that was important. I know when someone's about ready to lose financially when all they want to do is talk about investment products and performance of something. They’re all about tactics, they're not about the overall strategy. It's interesting.
Do you see a typical pattern when it comes to physical therapy owners? Are they focused on tactics more so? Is there something about physical therapy owners that's unique and that you have to fix even if it's mindset or strategy?
For the most part, physical therapy owners are healthcare professionals. They love to help people. A lot of them are trying to push themselves out of the practitioner role in trying to be better executives and owners. I see that in more so in the physical therapy field than I do in veterinary or dentist. People that are veterinarians or dentists, they love being practitioners. Not that physical therapists don't like being practitioners, but they seem to have the business acumen. They can see what could happen if I get a lot of physical therapists here working under me and I grow this business and I scale it. I can create something that has a mountain of value to it. From a mindset standpoint, I still see a bit of scarcity and some of the decisions that practitioners make. Money is scarce and it’s either this or that. It's never both. A lot of what we're trying to do is trying to make sure that they look at it from that perspective, “I don't have to do this or that I can do both.” How much money does the practice need to produce in order to do that and making sure that I keep my profitability level at a certain amount so I can do that?Money loves attention like a two-year-old at the mall. If you take your attention off them, you have no idea where they're going to end up. Click To Tweet
That's true for most physical therapy owners. There's a scarcity mindset. There's a lot of fear involved in what we do. They also tend to be a significant amount of burnout from what I can tell, so that's why maybe there's that transition out of patient care more so. You don't see a lot of older physical therapists in the profession.
That's funny that you should say that because a lot of the burnout comes from an industry where you're relying upon insurance reimburses. A lot of the reimbursements are going down and the profit is being eroded away. The burnout comes from the fact that there's a lack of exchange there. You're putting all this work and you’re putting all this effort in. You're seeing 10% or 7% profit margins and that would tax me. You can go buy a Puerto Rican bond for 6% and not have the headache of employees and regulators coming in there and saying, “You overbuilt here.” “You didn't code this correctly.” I can see where it taxes and makes a practice owner burnout. Once you solve that profitability issue adding additional services that maybe you didn't before and you get that backup, that's where you see people live it up a little bit.
As you've worked with private practice owners and you've seen them in all kinds of different financial conditions, what are some of the successful actions that they're taking? We talked about the mindset and we talked about strategy. We talked a little bit about tactics. Anything else that you recognize what helps that struggling maybe not struggling? How do those physical therapists improve their financial condition on top of those things?
A lot of it starts with their own personal training. When I say personal training, personal financial education training. Know what some of the basics are of money. Let's not be scared about it. Profit and loss statement is not something that is difficult to understand. That's not even that important to know. You should know about it but knowing some of the basics of money. You need to seek advice from people that are qualified to give it. That's a basic of money. Staying out of bad debt and that would be another basic principle. Things that they probably inherently know but are having a tough time applying. To me, it always starts with making sure that you have your attention on your main money artery.
I call it the main money artery, which is your practice. There's this idea that you have to go out and create all these different income streams that are true for the most part. You definitely want to have multiple income streams flowing into your household. You want to make sure that you have one that's flowing like the Mississippi first. If you can get that one going and setup system, the money then flows to the household to create other income streams. That's probably the most successful action that I've seen. There are some of the most successful owners that I've seen have gotten their practice to a point where it's cashflowing. They set up the system where they take a portion of their business cashflow and automatically every single week set it aside in the household to help create other income streams in the household. That's been the most successful action that we've done with practice owners. If I can get someone to do that, it's game over. They start to feel like, “This practice is starting to serve me as opposed to the other way around.”
I had Christopher Music on and he talked about setting aside 10% of your revenue every month, maybe weekly, but at least monthly. That blew my mind. That's the first time I'd heard that concept and I thought, “If I had set aside 10% of my gross revenues every month for the past sixteen years or whatever I own my clinic, I'd be in a much different situation.” It was cool how he laid it out if you set aside that like it's an expense. Christopher mentions this, you guys mention it. I've read it in Profit First, a popular financial advisory book by Mike Michalowicz. You set aside the Profit First that becomes like an expense line. Inevitably your business grows to meet it.
You have to. We operate with the concept that I know that a business is going to try to spend every flipping dollar that it makes and then some. You know that going in and you see that when you look at practice owners over and over again. I see that pattern. I know business is going to try to spend every dollar that makes. I also know that it will make the exact amount of money it thinks it needs to make to survive. Know those two things, so when you incorporate that 10% as an actual expense and you put it in, you have to do it on a gradient though. If you try to do it too fast, it could cause some problems but if you do it on a gradient, it’s amazing what happens. Things change overnight because you've incorporated that expense. The business thinks it's an expense, but it's simply the accumulation of a reserve pool for the household. If I could tell your whole audience if they did that one thing, they would never regret that ever.
It will change their financials entirely, especially if you look down the road. It's going to be a completely different condition.
Most of the practice owners that are doing $1 million of revenue a year, they're like, “We’ll do the math on that 10%.” “$100,000 a year?” I’m like, “Yes.” When you look at that, that's your owner's compensation. If you're a good owner, that's your owner's compensation. You deserve it. I always tell owners, “If Medicare comes in to audit you, who are they going to audit? They're going to audit you. They're going to audit the practice and you own that.” If you have a lawsuit who gets served. Whose names are on all the notes of any of the practice acquisition loans? It's you. You took all the risks to put this thing there by God, you deserve to get that 10%. That's a reward for you.
Sometimes I have to convince people. It was the funniest thing when we first started, I thought that would be the easiest thing that I could possibly do. I'm like, “There's nobody that would say no to that.” It's the hardest thing to get a practice owner to decide. I knew we were onto something when we started that because I’ve got the most push back when I started saying, “We need to put this money away.” “We can’t do it.” There’s no way.” “There's no way the business is yet too many expenses.” “I can't do it.” We figured out a way that they could do it, so it doesn't cave them in. Once we got that in, everything clicked right after that event for the business owner. It was fascinating.
It's interesting how it also changes the mindset. It changes the energy around the person as you have them focus on their money lines, their lifeblood, their main artery, whatever you want to call it. Once they put their attention on that, the energy changes. They take on the control that they didn't seem to have before and they seem a little bit more focused.
When you do that, it enhances your financial awareness and then it gives you confidence. That's the most important thing in any industry, you have confidence. When you have confidence, you make better decisions. You slow things down a little bit. You control time like an athlete that you see that's competent and what they do, they have so much confidence. They can control time. Most physical therapists are good at doing that from a training standpoint, but on business and an ownership standpoint, they're not as good at that until they get trained to do it. It's establishing financial confidence that does increase your confidence by a high degree.When you have confidence, you make better decisions. Click To Tweet
As you bring on physical therapy owner as a client, is that something you work on them with? What was your typical work look like that might set you apart from other financial advisors?
The first thing that we do is we give them a detailed financial scene that we want them to get to. We define what your ideal financial condition would look like. I don't think that a lot of advisors do that. They'll say, “Let’s save enough for retirement.” They don't give them a clear definition of what their financial condition looks like. We've created a road map where we encompass all the different component parts of your financial life. That’s the thing that differentiates us as well. Your financial life, the body is made up of several different systems. You have the circulatory system, the respiratory system, the endocrine system and all these different systems.
There are nine financial systems that make up your household, from asset protection to estate planning to income planning to debt and credit to tax optimization. There are several different systems and our job as financial advisors is to make sure that all of those systems are operating at their optimum level for every one of our practice owners. Whereas a lot of financial advisors will focus on the investment side. That's 1/9 of your overall financial scene. We put people's awareness on that and say, “Maybe let’s not only look at your investments while they're important. Let's not put all the focus on that.”
I have to say that I work with Econologics and I have enjoyed my experience with them especially compared to other financial advisors that I’ve worked within the past. Simply by the fact that you guys are in communication with me which is typical of the financial advisors that I've had in the past. I wish I had started working with you earlier. To give voice to the first exercise you're talking about. My wife and I went through that, setting a target you talked about $7 million to $10 million. That might seem to be a lofty way out there for some people. You also had us break it down to, “What do I need to be making per month in order to get to those goals?” That gives you a little bit more concrete and current number that can work on. I have that number, and my wife and I have those numbers in our head, “We can have this kind of lifestyle if it makes this much per month, but we can have this much better lifestyle to make this much per month. Let's try to reach for that.” That guides us on a lot of the decisions we're making as much as it pertains to income, investments, and whatnot. That's valuable.
Thank you. When you break it down, I know sometimes we set big targets for practice owners. You will be sometimes a little bit like, “There's no way I'll be able to do that.” When you break it down to like, “We don't have to do all this now.” What can we start? Where can we start? We build upon that. Financial planning is a set of boring repetitive activities. As you continue to do them, you see little mini results. All of a sudden, it’s like, “Boom.” It's amazing how it works. Traditional financial planning is like, “If you put $10,000 away for the next 25 years then you'll have blank amount.” Real-life doesn't work that way. People change, business owners change. Their confidence and business changes. The production of their business changes the industry that you're in. There's so much money pouring in private physical therapy.
There are so many opportunities out there to create a practice that you want to that there's no reason that you should restrict yourself at all. To your point, set big targets and big goals. Let's work backward on what are the actions that are going to lead to get there. When you get the numbers down, it's not that much. It's not that hard. It's not that much and that's where a lot of people appreciate you. You need to have a written plan not only a proposal of, “Let's put X amount of dollars and this investment strategy and X amount of dollars and that and this investment strategy.” That's a proposal. A plan is like, “These are the sequence of actions that I need to take in order to accomplish this.” Most people are operating on financial proposals and not financial plans and that I've seen.
The plan goes back to your ideal financial scene. I want to invest in my children's education. I'm going to have this much at retirement so I can live the way I want. I want to invest in these kinds of vehicles. I want to live mortgage-free. Those are the things that you start from and work on.
That's where it starts. What are the financial goals of the household? Which a lot of people have done. It digs into, how are we going to measure that? That's where I've seen, in our industry there hasn't been a lot of good financial metrics that measure the condition of the households and how we integrate the business into that as well. We have seventeen different financial diagnostic statistics that we look at. We can show someone, “Here's a statistic that you need to look at and we want to improve.” It goes above looking at the performance of an account. It's something that will help someone change their overall condition.
Is there anything else you want to add to the financial stuff that we hardly get into it or what?
I don't even know. This is getting fun.
I know we’ll definitely have you on again, so we have to save a little bit.
For the most part, the keys I want to leave people with is, no matter what your financial condition is, good, bad or ugly or no matter where you're at in your life cycle, whether you're still growing your practice, whether you're mid-career or whether you're thinking about exiting out. You can always do something to change your trajectory. You can always do something to change your financial condition. The sooner that people can realize that their household is the parent company. Make sure that you're wearing that identity of a Chief Financial Officer assuming that beingness, there's a good book called Atomic Habits on if you ever read it before.No matter what your financial condition is, you can always do something to change your trajectory. Click To Tweet
I've heard a couple of people mention it. I need to read it.
The main point of that was, the actions aren't that hard. It's who you have to become if you want to be successful at something. You have to become the identity of that person. Your financial conditions are no different. You have to assume the identity of someone that's responsible with money, that knows how to acquire and control money, and that can expand money. That's an identity. That's the Chief Financial Officer identity. If you can assume that identity, understand that and wear that, the actions are easy. It's not that hard. It's don't spend more than what you make. Take 10% of what your practice does and set it aside, invest prudently. The basics are not that hard. You have to assume that identity of the person that is going to direct this whole thing.
I love that idea because you are exactly where you think you should be. There's an internal dialogue that's always going on. If you assume or if you take on the mantle of, “I am good with my money and my business makes money for me,” then that's what will happen. If you are careless with money and you think, “I spend more than I make. I need to do better with my money.” That's exactly where you will be.
It's 100%. I have created what's called a Chart of Money Attitudes. I don't know if you've seen it or not. Every single day I’ll say certain things to myself like, “I'm a creator of money. My financial decisions are naturally right. I'm fully responsible with money. I want enormous wealth and I want others to have wealth too.” All these affirmations, things that I'll say to myself every single day because I want to make sure that my attitude towards money, which if you want to look at it, this is where it starts. What's your attitude towards money? If you have the attitude of, “I can't have money. Money is scarce. I'm terrible with money. It always disperses,” you're going be bad with money. You need to give yourself a checkup from the neck up every once in a while. When it starts with your money, that’s a key thing. Make sure your attitude, in terms of money, is in good shape and get out of some of the fixed ideas that you have or get out of some of the following gurus and around. You don't need a guru. You need a guide. The attitude comes from other places too, from parents and the experiences that they’ve seen and all kinds of things. We can get deep on this one.
It brings us full circle. It's where we started. It all starts with your mindset and your attitude with money and recognizing that the business works for you instead of you working for the business.
You hit it right on the head.
If people wanted to reach out to you, Eric, how do they do that? What do you have coming up?
We have a three-day training academy for private practice owners. We built our system for private practice owners. We don't work with engineers or teachers or any other of those types of vocations. We work with private practice owners and we built our financial planning specifically for them. We also create a financial planning education system where we teach them the basics of how to increase the value of their business and then how to make sure that they turn those business profits into personal wealth. If they want to contact us you can definitely start by going to our website which is EconologicsFinancialAdvisors.com. You can email me directly at Eric@Econologics.com.
We created 100 question assessments that will give you a snapshot of where you stand in your personal finances. I would recommend that if anybody has any uncertainties, confusion, or I don't know in regard to their personal finances or curious. Everyone's curious about their credit score. What's my credit score? We've created an assessment that will give you a financial score. If people want to go to our website, it's called the Financial Prosperity Index. They could click on to that and it will take them right to that assessment. They can take the assessment. We will give you a free 30-minute strategy session where you can ask us anything you want in the subject of money and personal finances anything at all. As long as you take that assessment, then I'll assure you that you'll get that free 30 minutes or longer depending on how long it takes.
Thanks for coming on. We'll have to have you on again because I know you've got more to share for private practice owners.
We'll keep it on topic next time. We’ve got a lot of different places right there.
It was good. I love it and like I said, I love talking money.
It's all good.
Thanks for your time. Thanks, Nathan.
Eric Miller Has been in the financial planning industry for over 20 years. He’s a co-owner of Econologics Financial Advisors – awarded an Inc. 5000 honoree for 2019.
As the Chief Financial Advisor for the firm, Eric has had the good fortune to have over 10,000 financial conversations with private practice owners in various healthcare industry and helped guide them into a more optimum financial condition using a proven system.
As a business owner, one of the most fundamental aspects to have if you want to grow, improve, and be successful is a vision. Our guest, Travis Robbins, PT, learned the importance of creating a vision the hard way. He spent years going deeper and deeper into debt while building a multi-clinic PT company, never really looking for a way to get profitable. However, once he hit rock bottom, he decided he had to do something different. What did he do? You'll have to listen to the podcast to find out (hint: reach out - step out - network)! Nonetheless, once Travis got in the right mindset and developed a vision for what he wanted to achieve with his company, he has since been profitable and has the stability and freedom he couldn't envision before. The owner's #1 job - create and hold the vision for the rest of the team to look to. Once you get their buy-in, you'll have all hands on deck to see that your vision comes to fruition, but a clear and compelling vision has be there first because no one else is going to create it for you.
I've got Travis Robbins, a physical therapist out of Pennsylvania joining me. I'm excited to bring him on, not only because it's been a long time coming. We've been communicating for some time now. Travis brings some great information about the fundamental aspect of any business owner and that is to have a vision. I've alluded to it in the past, but never had an episode that's more focused on the importance of having a vision. It's rather simple and it can be overlooked. It's fundamental if we want to grow, improve and be successful in our clinics. We talk about the importance of finding a vision, having a vision, and relaying that vision to the team. Otherwise, they don't know where we're going if we don't know where we're going.
That doesn't give us a lot of purposes to get up in the day or even for your team members to get up and go to work if they don't know where the company is headed and where they fit in that plan. I'm also excited to bring on Travis because he's got great rags to riches story. Not necessarily that he came out of destitution or anything like that, but not unlike the other physical therapists that I've interviewed on the show, he had to hit rock bottom. In his case, it’s hundreds of thousands of dollars in debt before he turned things around and became ultra-successful. He is doing that now and has a greater vision to be double his current size and even more successful and significant to him, his community, his family and the profession around them. You'll hear all about that. I'm excited to bring that to you. Let's get to the episode.
I've got Travis Robbins out of Pennsylvania. He is the CEO of Next Level PT and also the owner of some of his own clinics there in the Pennsylvania area. First, thanks for coming on, Travis. I appreciate it.
Thanks for having me.
If you don't mind, share with the audience a little bit about your story. You're a successful practice owner. I believe you are where a lot of other physical therapy owners want to be and that you're working hard on your clinics, but as the leader, tell me a little bit about your path and how you got to where you are right now.
In terms of PT, almost every PT says that they were in some form of sports or athletics in high school, had some injuries and then went to PT and said, "This is pretty cool. I could do this for the rest of my life." I got some guidance from a guy that went to my high school. He went to the college I eventually went to. Ithaca College is the best physical therapy college universe. I got into PT. I loved it. I love every aspect of it except organic chemistry, not so much, but the rest of the stuff was good. I got out into the field. I'm sure just like other private practice owners were, I was like, "I can do this a little bit better."
I didn't know what I didn't know, but I did look at things. I worked for a large conglomerate. I had nine jobs in my first eighteen months when I got out of school. I'm unemployable. I did everything. I did home care. I did a lot of different stuff. I was 24. I didn't have a mortgage. I didn't have kids yet. I'm like, "I can eat Bologna and cheese for a while. If I'm going to screw up, I might as well do it now. It's pretty easy to recover from.” I opened up my practice. I rented 200 square feet in the backroom of a chiropractor’s office, opened it up and hung my shingle. I'll never forget the first patient I ever had. She fills out the paperwork. She says, "Do you accept my insurance?" I had no idea that I had to talk to insurance companies to say, "Can I be a provider for you?"
I treated for the first four months and I didn't get paid because I didn't have any provider numbers. You don't know what you don't know. The first part was, “Maybe this is a little harder than I thought it was going to be.” I loved it. When you put your name on there and you’re going to work every day. It's a dream that I had. I always wanted to own my own practice. Things got off from there. I started to add more locations and added more levels of complexity to what was going on. In the middle, I struggled. I opened up my practice in 2003.Everybody that starts with practice for the most part is a good practitioner, but we don't get the training or the skills to run a business. Click To Tweet
In the middle part of the journey to try to figure this out is tough. At one point, we were borrowing money to make payroll. We were over $350,000 in debt. I would go to the bank and say, "Can I have some more money?" They said, "No." I said, "That's probably a good idea. I need to sit down and figure this out." I was a good practitioner. Everybody that starts with practice, for the most part is a good practitioner, but we don't get the training or the skills to run a business and we think we can do it.
Tell me a little bit about that middle part. Did you have multiple clinics at the time or were you still the solo practitioner/owner maybe with another couple of providers? What was your exact situation?
At that point, we had four locations and trying to make everything work. We tried to do the best we could through force of will, which can only take you so far. My mom always said to work smarter, not harder. I wasn't afraid of hard work, but I wasn't making the right decisions because I didn't have the right knowledge. I wasn't talking to the right people. I didn't have the right training. It was at that point where I was like, "I've got to figure something out." Starting a mastermind was the big turning point for me.
You got to a point where you were hundreds of thousand dollars in debt. You talk about it now and it doesn't sound emotional, but I'm sure it was super emotional at the time, super stressful.
Whether you're a man or a woman and you have your own practice, you're the hero of your family. You go to work. It's your job to put food on the table in one way or another. You're coming home every day and your kids meet you at the door. You know in the back of your mind, “I'm not doing a great job. If I was doing a good job, I probably wouldn't owe a bank $350,000 and not be able to know how I'm going to make payroll next week depending on the collection.” You wear this armor. People in your community are like, "He's got four practices. He must know what he's doing." I'm like, "It’s so far away from that." Putting up that image is mentally and physically draining.
You not only had the debt but what you didn't share is that you had also gotten married in that time and also had kids?
By that time, I had four kids. From the day that my wife got pregnant with my first kid to the day she gave birth to my last kid, she was pregnant more of those days than she wasn't. We had four right in a row. As anybody that has kids knows that they're not cheap, that's one way you would describe them. You've got these obligations. I've got these four kids and I'm in this debt. I'm like, "These kids are going to want to go to college probably. I can't even keep my practice to flow." Everybody goes through this point, "Maybe I should pack it in and I could get a job at the hospital. Maybe that's what I'm supposed to do. Maybe I'm not cut out for this." I'm glad I kept going.
Where you like me and that there were some days where you didn't see your kids at all? You'd get home too late and leave too early. I would even tell my wife, I'm like, "I don't think I've seen my baby for three days awake." It's crazy.
Yeah, everybody does that. You're working. If this patient wants to come in at 5:30, I'll treat him at 5:30 AM. If they need a spot at 8:00 and I've only got four patients on my schedule that day, I'm not losing one of those patients. I'm sure everybody reading this can relate to that.
You hit that low point. Where did you see the light? For me, I don't know if there was something that I found more than I was like, "I've got to do something different." The situation turned you, but what got you going in the right direction?
I'll tell you as we were at our lowest point, we went to the bank and asked for money. They wouldn't give it to us. I had to lay somebody off. In truth, looking at the business numbers, I probably should've laid people off earlier, but I just couldn’t do that to somebody. We looked at numbers and said, "I cannot afford to have this practitioner come in on Monday.” The one we had to let go was a mother of four. She was the sole breadwinner of her family. On Friday, we had to bring her to the back room and we had to say, "I can't pay you. You need to grab your stuff and you can't come in on Monday." I remember her leaving and I was overcome with failure. There's lots of failure in business no matter what business you're in, but that was tough.
It was at that point, it's like, "If I needed this to happen to get me to take some action, I can't miss this opportunity." It was at that point. I've got to figure this out. It's going through my PT books, becoming a better practitioner and treating my patients better. That's all important stuff but unless you the business knowledge and someone that can help you out. We always say, "If you find someone that's ten steps ahead of you, it's possible." It's not impossible. If you hang out with that person for a little while, you're at least going to get some stuff through osmosis where you'll figure stuff out. I don't give out a ton of advice, even though I have a consulting company. The only real advice is if you can find someone that's where you want to be and you had the opportunity to spend some time with them, that's the best use of your time.Work smarter, not harder. Click To Tweet
What was your first step that next week or maybe in the next month after letting that person go?
I started to look at different options and that's when I started to look outside the industry of physical therapy, both in and outside. There are other businesses that are doing well. I would read a lot of business books. I would read a lot of self-help books. That stuff was all-important. It sent me in the right direction. It wasn't until I started to find other private practice owners. I was in my private practice ten years before I ever met another private practice owner. That was probably one of the biggest mistakes. I don't know what that is. There were other private practice owners in our area. I could've knocked on their door. There's this scarcity mindset where it's like, "Why would they help me out? They're trying to go after the same patients that I am going after. It doesn't make sense for us to work together." When I switched over to more of an abundance mindset, it's like, "There are more patients here than any of us can all treat. If we can present our information and show our value the way that the value of physical therapy can be presented, there's more than enough patients."
Do you think that some of the business books and the self-help books that you read that changed that mindset and started allowing you to see other perspectives outside of your own clinics?
I'm sure almost everybody has read Think and Grow Rich by Napoleon Hill. If you're going to start out somewhere, that's a great place to start. It's not the best title. It's like you want to get rich quick, which is not it. It is like a philosophy around abundance. He talks about in that book the power of the mastermind. I was reading that and it says, “It's not when you have two people together, it's not one plus one equals two. It's one plus one equals three or four or five.” Once you get this collective mind together of one or two or three or more people, problems aren't as daunting as they seem. When we do consult with other practices, I don't do consulting on my own practice.
What I do is I ask other founders of NLPT, "Here's my number. Here's what's going on. What am I not seeing?" Inside of a couple of minutes, they'll point out something that was so obvious that you're so upset you didn't see it, but you're so close to it. You're so close to your own practice that you can't see it. Every time we explain this to one of our clients, it's like, "You knew that, didn’t you?" "Yeah, I knew that." You're so close to that it's hard to say.
You changed your mindset and you reached out. Did you get a coach? Did you get a mentor? Did you join a mastermind? What did you do after that?
All of it. I've had individual coaching inside and outside the PT industry. Probably the biggest thing was going to an internet marketing conference. This might not make a ton of sense, but around that time, I was starting to follow some online guys that were doing some online sales information products and that stuff. I said, "Can I apply it to physical therapy?” It 100% does. There was a guy named Pat Flynn that had a popular podcast. When he was starting out, I was on his list. I won a ticket to this event in Chicago. I flew out there and I sat at a table with some interesting guys. There was a pediatrician that sold an online course to pass your boards for pediatrics. There was a self-help guru, motivational speaker. There was a handyman that taught you how to start your own handyman business. There was a golfer who was the youngest ever winner on the minor leagues, the PGA Tour. He was selling a golf product to people online and we started our first mastermind.
We just met online. We used GoToMeeting at the time and every week we would meet. We put our heads together. I got to see how there are similarities and differences. There are tons of similarities to all businesses. It's the little differences when you see something that someone else does in another industry, it's like, "I can apply that to the physical therapy industry." Once we started doing that, it’s like, "There's a ton of power in this. This is good for business, but how can I apply this to the world of physical therapy?" I need to get out there and talk to more private practice owners so that I can do a similar concept.
My path sounds so similar to yours. I'm sure the time frames aren't the same. I started reading books. I started networking. I joined the Entrepreneurs' Organization locally, meeting with other local business owners who were not physical therapists. It was in those things and maybe Pat Flynn had some structure to it that I started learning about visions, mission statements, values and how to incorporate values into your business, setting quarterly goals and annual goals, figuring out your BHAG and all that stuff. I was learning about some of these business books. I started developing that entrepreneurial business side of myself, developing the mindset and getting to know that we can get stuck in our own physical therapy perspective, our limiting beliefs that we all agree on. When another person outside of our industry looks at it, they're like, "Why can't you do that? You should. That's not an excuse." Those kinds of things come up. It sounds like your story is very similar. It seemed like you start to develop those things for your own practice.
It takes time. There's no quick turnaround here. In the beginning, what we see is you get knowledge and knowledge is good, but if you don't apply it, then that becomes a problem. At some point, I would over-consume. I would listen to 100 podcasts a week and I wouldn't have any action on that. I started to narrow that down and started to apply it, the things that were important. You would start to get little wins so you would learn about something, you would apply it and it works. That's reinforcement. I'm on the right path. Sometimes you would learn about something, apply it and it wouldn't work. You get as much benefit information out of that at the time. Trying to do the application part is the hard part. Gathering knowledge is good and important, but applying it is hard.
From what you learned, what got you steamrolling? What created the biggest bang for your buck of transforming you or transforming your business?
I do think it was the vision part. There are lots of people that have written tons of books on vision. Cameron Herold who is in another mastermind that I'm in, I feel he has the corner on that. In terms of where do you want to be in ten years? Around that same time, I had PT come up and ask me, "Where are you going with this?" It was an arresting question because I'm like, "I'm trying to make payroll next week.”Knowledge is good, but if you don't apply it, then that becomes a problem. Click To Tweet
“I'm trying to get out of hundreds of thousand dollars of debt. That's my vision.”
I noticed that no matter how big your team is, if you don't have a clear vision on where to direct them, it's hard to attract the right people to whatever you're trying to do. It's hard to retain people that are good. I would see some people would leave because they said, "I don't know this is a private practice. Travis is running it. He does everything. Where's my upward mobility here? I don't think I'm going to take this practice over from Travis. What's going on?" Now since we've opened up other clinics and implemented a clinical director, there's room for that. It wasn't until I set a clear ten-year mission before it started to make sense. A lot of people will read this and be like, "That's the key to a successful private practice."
Maybe not universally, but I can't tell you how important it is, this tool that we have created and have amalgamated from different books and even different companies like Infusionsoft. Maybe you have heard of Infusionsoft, but they have an executive training program that you can go through. One of the founders of NLPT has gone through that and he came back to me, he said, "You've got to come and check this out." I had some ideas about what I wanted to do. It's having a ten-year mission. Telling people where you're going to be in ten years is important because it helps you recruit the right people. We use this tool in our meetings. We use it in all of our recruiting. We use it in our onboarding. It's this one-page tool that shows everything that is needed to get to where we want to get to in ten years.
In ten years, I want to have ten clinics doing $1 million in revenue. There are other metrics that you put on there. When you slide this across the table with somebody and you explain it to them, you watch them get excited. Steve Jobs would always talk about when he interviewed people, he had a wooden model of the first Apple computer and he would put it on the table. If your eyes didn't light up, the interview was over. It was like, “This person is not what I need to get to where I want to go.” I want it quite like that, but you get some information about, "This is where I want to go in ten years. I've got four clinics right now. We need to add six more. Here are the people that are going to need to do that. Here are the resources I'm going to need to do that. Here's what I'm going to need to be good at to get there. Here's where we're weak and we need people to help us out here. Are you interested in getting on this journey with us?" They jump out of the table and say, "Yeah."
I got an email. I started reading a book called Building a StoryBrand. The guy's name is Donald Miller. If you want to get clear on your marketing, your tag lines or whatever you want to put out there, it’s a great book. It takes you through a whole process called My StoryBrand. One of his emails specifically talked about that if there's one thing you can do as a leader or as a boss, and that is to set the vision and iterate that every day, multiple times a day over and over again. What it does for the employees and people on your team is that it gets their buy-in. If they're not bought in, they'll self-select typically and you let them go. You get some cohesiveness and everyone can wake up the next morning knowing exactly where we're going. I know what I'm doing going to work because I've got the leader's vision in front of me. I've bought into that because not all of us are visionary. It's not easy to come with visions sometimes. Not all of us are creatives.
When you hear a vision that you can buy into, maybe you don't have to have so much of your own. You can buy into that one and take on that vision. It helps so much to get people on board. That's what I found as we developed our leadership teams is when we came up with visions and goals that extended beyond a year or two talking about the number of lives that we might affect or how we might make a difference in the community, that's when you could feel the energy in the room can build up and you start sharing that with people. The culture emanates from that. The retention improves with that. The ability to recruit improves with that. You were talking about in your interviews, so much comes from establishing that vision in the very first place. I'm sure as you've implemented that you've seen some of the same things in your practice.
I can't directly link it to that, but I have to think it has something to do with the fact that we're hitting a lot more in the hires that we're making. We're hitting our goals. On this one-page PDF that I have, at the very top it says, “I have ten locations. I have 35 therapists. I'm seeing over 2,000 visits a week.” I had no idea what that looks like. I have thirteen therapists now, 13 to 35. What does the company party look like? I don't know. That's the most important thing. Don't think you have to copy mine for this to work. I don't want ten clinics. I don't blame you. Some days I wonder if I want ten clinics. It doesn't matter what it is. It only matters that you have it. It matters that it's very clear and very compelling.
If anybody is a history buff, John F. Kennedy in 1961 gave a speech. He said, "We're going to put a man on the moon by the end of the decade.” Think about that. It's very concise. We're going to put feet on the moon. We're not going to go into space. We're not going to throw rockets up there. We're going to do it by the end of the decade." It has a time deadline. He wasn't down there at NASA l putting the spaceships together. He wasn't down there doing the hiring probably. All he did was we put the right people in the right places to be successful. We did it before the end of the decade. If someone can put someone on the earth and on the moon, you can definitely set a clear vision for your private practice and you can get there.
A lot of it is planting the flag and if it's not a little bit nerve-wracking for you, it's probably not strong enough. It's probably not compelling enough. You got to find a way that stretches you.
It should definitely scare you. We did this with our mastermind group now. We had this private Facebook page and as part of the homework for vision, that's what I teach. You have to post your ten-year vision. I'll go through the process of how I pick mine. How did I get to ten clinics? Originally, I had written five down. I talked to another founder in NLPT, Arlan, who has a big vision. He says, "I want to have 50 clinics." I said, "50 clinics? I can't go to these meetings and put down five. I've got to put down at least ten." That's not a great reason to pick ten. It was like when you get yourself around people that have a big vision, you want to step up to that. It's powerful. When I first wrote it, I had two clinics. Now we're a little bit ahead of schedule. I still can't believe. We do quarterly and annual offsite meetings and we go through it.
We're like, "Where are we on a ten-year mission? We're a little ahead of schedule." If you didn't tell me that when I first started this and if you'd taken me in a time machine to where I am now to when I first started this mission thing, I wouldn't believe you. It happened and it wasn't important. I didn't do everything. In fact, I had to keep removing myself from stuff because I'm the bottleneck to making sure that this stuff happens. You put something on paper and you put your thought behind it and you share it with other people. When you use that to get the right people on your team, it's incredible.
Give us a little bit of your timeframe. You hit a low point and I don't know what year that was, but how long do you think it has taken for you to transform your business to a point where you felt it was maybe it's not four or five clinics strong, but you felt like, "I'm heading in the right direction and I'm accomplishing some of the goals that I had set forth initially." What was your timeframe there?No matter how big your team is, if you don't have a clear vision on where to direct them, it will be hard attract the right people. Click To Tweet
It's not as long a turnaround as you might think. It's only been over a few years. It wasn't that long ago to where it was in dire straits. I had this realization. I said, "I've got to get some help. I got to get some other private practice owners that know what they're doing because my bank account clearly says I don't." I had to get that. Some people have been in private practice for a couple of years. Some have been for fifteen, twenty years and sometimes they don't see that there's a possibility I could get what I want out of private practice. Why did you start your private practice? You didn't start to work twelve-hour days and get paid less than your employees and break-even at the end of the year. It's not why you did that.
Few practice owners get the practice that they dreamed of when they first opened their doors, which to me is heartbreaking because your heart is in the right place, the effort is there. If you don't know the right action steps to take, it's hard to get success. To me now as I spend my time, I spend more and more of my time in the consulting world and less and less of my time in my private practice because it does run better when I'm not around. They're monkeying around with stuff. I want that opportunity for other private practice owners because it is rare. We talk about time choice and financial freedom so time freedom. Do I have to go to work now?
I don't have to go into work for the next couple of weeks if I don't want to. That's a choice that not a lot of private practice owners want. Financial freedom, are you successful? What’s the scoreboard of business? Are you making a profit? I know some PTs have a big problem with that and private practice owners have a big problem with that. If you're reading this and you are a private practice owner, you in your heart of hearts know that your practice is giving out excellent care. If there was more of you around, do you think your community would be better? “Yes.” In order to do that, you have to run a profitable business. That's the health of the business. Having financial freedom is important. Choice freedom, can I choose to do what I want to work on? I can go out and work on a woodworking project in my garage or I can go work in my practice. It's hard to appreciate if you've never had it before. I didn't have it before like a couple of years ago. If you don't know what that feels like, the quality of life that I have achieved by putting in systems to remove myself from my practice, it's hard to describe and I want to give that to more people.
That's a point where you're at because you've experienced a certain amount of success and you still are, but now you're switching over to significance. That's where you're extending out your effect, your power. It’s more than just yourself and your clinics. Now it's becoming more than you. That's why I have to commend you for sharing with people that there are ways to do it. You don't have to reinvent the wheel. If you create systems and improve your culture, create your own independent vision. I'm not going to tell you what it is but create one. Create your own thing so you can set your own goals.
I had a call with a guy who disappointed me. He was selling his practice. He'd been in practice for twenty-plus years. I said, "if you keep working too hard, treating patients all day and working on the business after hours, you're going to burn out eventually." He's like, "Yeah. I passed the mark ten years ago." It hurt me because it doesn't have to be like that. Maybe you feel the same way. I wish I knew some of these things when I first got started and had to go through all that. It takes some growing pains and you take some lumps, but you don't have to get to the point of burnout. You don't have to get to hundreds of thousand dollars in debt in order to make some of these changes. If you start implementing them now, you get so much benefit and pay off from doing it before you need to.
In terms of timing, we work with private practice owners that have been in business for eighteen months and some that had been in business for twenty years. It's always the same thing. The best time to plant a tree was ten years ago. The second best time is right now. I do say this, I went through ten to twelve years of struggle. I don't know that I would go back and change that. You learn so much from your failures too. At the time, it was painful. I have some lessons to teach from. No matter where you are in your private practice, reach out and get help.
Private practice owners are hesitant to ask for help. They have a hard time admitting that they were wrong or that they don't know what they're doing. We come from science backgrounds. We're intelligent. If you get through PT school and you take the boards, I don't care how smart you think you're a smart person. I don't know if it's admitting that you don't know what you don't know. We see that a lot. It's never too late. We're seeing turnarounds inside of a couple of months in some other practice by pointing out simple stuff, stuff that you can see. It's helping people out and watching them improve. When we started as physical therapists, what is our focus? Our focus is our patients.
Getting results with our patients is important. Once you can get that down, most people look for something else to fuel their competitive fire. For me, in my practice, it was, “I can put myself in a successful situation and help patients.” I like getting wins with patients. I don't treat at all anymore. I'm on a part-time basis or covering vacations. I'm more excited about, “Can I help someone else with any issue that they're having with?” If they want to become better clinicians, yes. I want to teach that. If they want to run one of my practices, yes, I give them the tools to be successful and get financially rewarded for that. Working with other practices, can I help them achieve the freedom that I have now? That's what I'm focusing the rest of my career on.
Your power, your sphere of influence is definitely expanding it and your ability to affect more than the patients that you have your hands on is significantly greater. It’s exponential. As you work with people, do you find that you're spending more time on visions and mindsets instead of their KPIs or do you work together on some of those things?
The cool part about our organization is we have nine founders. When we first got together a long time ago, our first in-person mastermind, we rented the Airbnb in Chattanooga. It was nine practice owners that came down and we put up our financial metrics that fire the guys that were being into finance and that metrics said, "Let's get this stuff together. We're going to throw it up on the whiteboard and you're going to pick apart your practice." Through that process, that weekend, we went from, "We're just trying to help out our own practices with the power of the mastermind.” Every time somebody put the numbers up there, we would put them up and we turn around and like, "Please help. I don't know what's going on. I know there's something wrong, but I don't know where it is.”
They point it out and be like, "What's your length of stay?" I said, "Why isn't it higher?" It was like, "How do you know that number?" They pick it apart. Inside of a half hour, I know exactly what I need to do when I go home this weekend to get an improvement in my practice. For whatever weird reason, each of us specializes in something different. I had had a ton of experience. I'd done masterminds. I loved the vision stuff and I've seen the power of that in my practice. I teach that. You have founders that are experienced in finance and real estate. It’s setting up real estate deals and buying buildings so that you put your practice in it and the advantages of that.
Marketing and metrics, people that are expert in, "There's a ton of metrics you can look at, but what are the most important ones?" It’s pulling them out. Human resources so we have a guy that is amazing at hiring right people and putting systems in place to make sure that you're doing that properly. We didn't get trained on how to do that in PT School. Each of us all has our own corner, a world of business and physical therapy that we love to teach about. Yeah, that's how we separate the duties. I'll use some stuff about my KPIs and that stuff. If you had an in-depth question about it, I would kick it over to Arlan or one of our other founders.No matter where you are in your private practice, reach out and get help. Click To Tweet
Is there anything else you want to say about vision in particular and its importance?
No matter what vision you said, we've talked about it, it's not important what vision you said. It's important that you have one. It's got to be clear and compelling. It has to have some finite numbers to it. It has to scare you a little bit. We've talked about that. That's what clear and compelling is. You've got to have a visual representation of that in your practice. In my practice, we have posters of our vision. You have to use that. That's a real tool. Every time we introduced somebody, every time we onboard somebody, every quarterly off-site, we have an all-day, quarterly offsite meeting, we're going to get this thing out and put it up there. We're going to pick it apart and say, "Where are we at? We're in year three and our way to year ten. Where are we supposed to be? What changes do we have to make?" It can't be a thing that you say, you put it in a drawer and never look at it again.
That's valuable. It’s exactly what you said and the same thing goes with values. If you have a vision and if you have values, that means nothing if they're not reiterated over and over again. People should have them memorized if you asked them any time what your values and vision are. They know what that means. It's not just a word. It's not just the vision. They know what they're doing to show that vision or to show the values that the company has. It's important that those things get practiced on a regular basis.
Core values are important. I teach that in our program too. The example that I give is Chipotle because it’s everywhere near you. It's a nationwide chain. I said to the person that was checking me out, "What's that thirteen?" He said, "That's our thirteen core values in our company." I said, "What are they?" I do this every time I go to Chipotle. I've never had someone been able to name more than three of them. It's important to have core values. It's important to have a vision, but you got to use it as a tool. When we teach the staff, I will call up a practice that we're working with and I'll say, "I need to talk to the front desk."
I’d say, "How many of the core values do you know of your company?" I know we know they have core values in place but having them isn't good enough. You've got to reinforce them. You've got to keep going back to it because you've got to hold yourself accountable to it. I've told everybody I know, not just my employees. You share this with your patients. You share this with your vendors. You share this with your referral sources, whether that's physicians or local small business partners. I'm trying to get as many people on board as possible to get me to where I'm going to get to. I've already made this so public that I almost have to do it at this point. I'm holding myself accountable to that. The power of making that public can be really scary.
If you do that, you will be amazed at the people that will come to your side to make sure that you get there. We share this stuff with our patients too. If you have a small private practice like with most people, that's the practice they have in one or two locations or four or five or something like that. Your patients are rooting for you. They want to help you out. I don't go a month where someone doesn't look at that poster in one of our offices and comes up. They said, "I have an idea." Sometimes the ideas aren't so great, but every once in a while, a patient will say, "I can help you out with that. I know this guy that might be able to help you out with real estate or I know this person that can help you get there" because if you have a good product, people want to help you. You have to give them the tools to do it. If they don't know where you're going, your employees but also including your patients, it's hard for them to help.
I love the value that you brought especially in regard to vision because I don't think we talked about it enough. Especially planting the flag, setting banners and putting that BHAG out there or your ideal scene and whatever you want to call it, putting it out there is fundamental to your success. If you don't know where you're going, then your team doesn't know where you're going and everyone's going their own different directions. When you can get people aligned to that vision and get the right people on the boat, people come to your aid. They help you out. They get you there. I appreciate it. Thank you so much for your time. If people want to get in touch with you, how would they do that?
I'm terrible at email. What I'm forced to do is I give out my cell phone number. If you call me, there's a good chance I won't pick it up. If you can leave me a voicemail, there's a good chance I won't listen to it. If you text me, there is a 100% chance that I will open it. My cell phone number is (610) 955-3718. If you text me and I've got your number, I will send you that ten-year vision that I have. It’s a PDF. It's a Google Doc that's in our Google account and you can take a look at that. That's probably the first thing that you need to look at to get excited about that. It shows you the structure and it can help trigger some ideas about where you want to set your ten-year mission. I've said it a ton of times. That's been one of the big factors in getting to me to where I am right now. Not to say that I know everything and I've got the perfect practice. I don't know that anybody has a perfect practice, but it's a lot better now than I used to be a few short years ago.
You set that up and maybe it goes back to Napoleon Hill's Think and Grow Rich. You put it out there and the universe starts working in your favor. Either internally you know that you have to change your ways in order to get to that point. You also need to come across the right people to get you where you want to go so things happen. It's magical and the more you can make it something if you can visualize it, if you can see it, smell it and know where you're going to be. “When I achieve this goal, I'm going to be at this place and it's going to feel like that.” Those kinds of visualization patterns really help out when you have a clear vision.
That's a huge factor. We've talked a ton about how we are working with clients. We're starting up another mastermind group. We don't do a lot of them. We only do three a year and we only accept twenty practices. That program is not for everybody. You have to apply to do it. If you apply, we're going to get on a call with you and evaluate your practice a little bit. It's a free consultation. Anybody's interested in that, they can go to NLPT BaseCamp, Next Level Physical Therapy, NLPTBaseCamp.com/apply and there'll be a quick form you fill out there. We'll send you an evaluation and answer a couple of quick questions about your practice to see that if it's a fit for you.
Do you also have a Facebook group page?
We have a Facebook page. Go on Facebook and put NLPT BaseCamp if you did a search there. The stipulation is you got to be a prior practice owner. If you're answering the three questions that we ask and jump with the group, there are almost 600 private practices that are in there now. That's an incredible resource. It's all free. There are tons of free information. I posted something about going into a physician's office and some tips on that. I got fifteen responses in the first five minutes. It's a responsive group. We're all trying to help each other out.
It's a cool thing that we've built and for anybody that's interested in getting a little bit of help with their private practice. I would definitely suggest that. The mastermind is coming up. We have our early bird rates. If you guys are interested in getting some more information about getting a group of people together and talking about the power of the mastermind, if you're looking for a way to accelerate whatever vision you have, you want some help with that, what we have dedicated the rest of our careers to doing is making the dreams of private practice owners come true.
You're talking to the right audience. I'm simply assuming, considering the nature of my podcast and the name of it, you're talking to a bunch of PT clinic owners. We should all be on board. Thanks for your time. I appreciate it, Travis.
Travis grew up milking cows on the dairy farm that his great-great-grandfather started in the late 1800s in Upstate New York. All male Robbins have been self-employed ever since. He opened up his private 18 months after graduating from Ithaca College at the age of 24… this after having 9 different jobs in those 18 months.
He earned his Fellowship in the American Academy of Manual Physical Therapy through the Manual Therapy Institute His company, Robbins Rehabilitation, has won Best Physical Therapy Practice as voted by the readers of the Morning Call for the last 8 years. Robbins Rehab has also won the Healthcare Heroes award for its charitable donations of time and money in the Lehigh Valley and they won the “Best Places To Work” award for the small business category by the Lehigh Valley Business Association.
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On this episode, I'm lucky enough to bring back Heidi Jannenga of WebPT. She joined us before and we discussed the State of Rehab Therapy that WebPT does every year. We're bringing her back again because the new State of Rehab Therapy Survey and Report is out again and you can get that at WebPT. Heidi and I sat down to discuss some of the takeaways that she took away from this year's survey. It's a little bit dark on the front or maybe not dark, but somewhat discouraging. We talk a little bit about the burnout issue that is in physical therapy and what might be leading to that. There's still a large amount of student debt out there that the new grads are coming out with and salaries haven't changed all that much and yet reimbursement rates are declining. We talked a little bit about that and we also talked about some of the greater opportunities that are out there for physical therapy as well.
We see a lot of consolidation that could lend it to greater reimbursement rates, as some of those companies are starting to negotiate with insurance companies and gathering their data and outcomes. Also, from what I can see as a possibility that those larger corporations are willing to invest in greater benefits for physical therapists and invest into the cultures that they're creating. There's a further opportunity out there and the needle hasn't changed much in that 90% of the people that need musculoskeletal care are not getting it from physical therapists. In spite of the fact that all 50 states have direct access, still eight out of ten providers are reporting that insurance limitations or their perceived insurance limitations are a barrier for patients to get physical therapy. Simply, it's important that we educate ourselves and start acting like the forerunners and the gatekeepers of musculoskeletal injury.
There's an opportunity to communicate with the public and be on the front lines and not waiting for the referrals. There's an opportunity in regards to the burnout and whatnot. It's an opportunity for you as the owner to sit back and say, “What am I creating here that would make my culture such that people want to stay, that would keep them engaged? How can I align purposes or find people that are aligned with me and our purpose as a company?” To work together as a team, develop a culture max out of the customer experience and make it enjoyable for them and thus, that makes it enjoyable for the patient. There are a lot of opportunities there even though we see some negative signs that came up from the report, but there are also some positive signs and we go into that a little bit.
Heidi is a busy person. I'd love to spend a little bit more time on what WebPT specifically is doing to overcome some of the challenges that physical therapists have in regard to the amount of time it takes to do documentation. Also, to address the regulations that are upon the physical therapy providers themselves on a day-to-day basis. Nevertheless, I'm sure that will come up in WebPT’s business conference called Ascend 2019 in Minneapolis on September 19th to 21st. Check out their website. I’m sure if you Google Ascend WebPT 2019, you’ll get all the information that you need and if you mention that you are a reader of the blog, you will be able to get a discount. Check that out and put it on your calendar. It's one of my mantras, “Step out, reach out, network.” This is an opportunity to network, get some business training, see what's happening out there in the industry and network with other successful physical therapy clinic owners. It will be a great opportunity for you to learn and network and feel like you're not alone in this. Let's cut to the chase and we'll get right to the interview with Heidi.
I've got Heidi Jannenga of WebPT. She's always very busy so I'm excited to bring her on. Heidi, thanks for taking the time to spend a little bit of time with us and talk about The State of Rehab Therapy.
It's honestly my pleasure. We have lots of interesting things that have happened over the year and I'm anxious to share a little bit about some of our new findings that we had from our 2019 State of the Rehab Therapy Industry Survey. I'm excited to be here. Thanks for the opportunity.
It's great that you guys have done this survey and I think this is the third year running, if I'm not mistaken. Looking over it, the amount of data information from it is interesting because I don't see a lot of this data coming forward from other parties and sharing such a broad perspective of The State of Rehab in general. First of all, thank you for doing it because I think it provides a lot of great insight into the profession for all of the professionals. What was your impetus for doing it in the first place?What we don't want to do in PT is lose the best and brightest minds coming into this amazing profession. Click To Tweet
That exactly was the impetus that when we went out looking for data, we couldn't find it. At WebPT, our mission has always been to help therapists achieve greatness in practice. To be able to truly do that effectively, we need to understand the lay of the land, like what is happening and getting direct feedback from therapists themselves. In order to understand the state of our profession, we wanted to be able to see sweeping industry trends. We wanted to understand more about how people are treated and what barriers they're encountering nationwide. We decided to embark on our own survey and we started it. Every year, we've gotten more and more people to be able to give us feedback and take the survey.
Each year, we've dived into a little bit more information based on what we received the previous years. To be able to compare, we ask a lot of the same questions as well. We divided everything up into four categories first of all, which I think is important as you look through the survey. We dove into things like payer mix and therapist productivity, referral sources, utilization of direct access, market consolidation, provider burnout, technology use, growth strategies and salary. A lot of the top of mind things that people are asking about. We get lots of questions around these things that we wanted to have interesting information directly from the sources which we frankly couldn't find elsewhere. We said, “No one else is doing it, we're going to do it.”
You found a hole in the market that was needing to be filled. How has it changed in the last few years? Is there some data that you found that's most valuable now that you didn't expect back before? What are some of the things you're noticing in the information that you want to collect?
We had about 6,500 unique responses to the survey. Just for clarification, 53.2% of those were not WebPT members. This is a clear, very diverse population of respondents and definitely not biased by whether or not they're using WebPT. At the end of the day, 90% of our questions had nothing to do with technology or EMR usage, although we did ask a little bit about that because it's important to us. About 63% of the respondents were therapists. We also had rehab therapy assistants, so 8.5%. The rest were classified as non-clinical, whether that's an executive, a clerical worker or a student. About just shy of 50% of the survey takers were also in outpatient private practice, which we also liked. It gave us a diverse cross-section into the entire industry, not just outpatient where some of us live and breathe most of the time.
Some of the things in the past that have been thought-provoking around salaries and student debt were asked. Despite our information being spread and wide and the American Physical Therapy Association does a great job of making this an important issue, the needle has not moved that much yet in terms of the amount of student debt that students are carrying these days. We might have talked about before that the average is about $70,000 in debt when a therapist graduates from PT school and close to 35% will have over $100,000 or more in debt. You compare that to the average salary is about $65,000 coming out of school. The question mark becomes, “Is the juice worth the squeeze? Am I getting into something that I'm going to be in debt for a long time to be able to pay off those $100,000-plus in debt?” There are also the sentiments of burnouts that we captured quite a bit in the survey.
Is that something that came up? I don't remember it last time the burnout that you're recognizing.
We added that. We now ask very specific questions about burnouts and thoughts about leaving the profession based on the feedback and also the data that we received in 2018. The survey continues to evolve based on information that we're getting and wanting to learn more about the industry as a whole. That was unfortunate but also an important data point. About half the survey respondents are considering a profession change in the next five years and one in five of those respondents would like to move into a non-clinical role.
Some of the reasons that people were giving for that are the immense compliance and regulatory burdens that t they feel like they have to endure and not at the end of the day, why you and I got into this profession. I didn't want to have to fill things out in triplicate and have to substantiate everything that I specifically need to do three times over before I get approved for it. We're getting squeezed on a number of visits. We continue to get reimbursement changes that happen. It's harder and harder to be a physical therapist who wants to affect change and treat patients.
I've noticed the burnout thing a little bit more recently. Someone said you look around our profession, you don't see a lot of 60, 70-year-old physical therapists that are practicing at full-time and loving it, just like you might see a family practice doctor or a general dentist or someone like that who it goes to work every day and loves their job. You don't see that a lot in the physical therapy profession. I don't have any data behind it and maybe you guys do, but there seems to be the burnout, the constant focus on production now that reimbursement rates are declining and the regulatory issues that are on top of us to stay in line. All that squeeze makes you question whether or not it's worth it and that makes it difficult.
The burnout is becoming earlier. In general, we age out because we have such a physical job as a physical therapist. It's in our name. Whether it's transferred or whether it's manual therapy, it's a very physical job. You're getting down and showing people exercises every day. It's not conducive to be doing that into necessarily your 70s. I don't know that's really changed so much. It’s in terms of the earlier burnout and also seeking other professional tracks as a physical therapist, not just being held to, “I'm going to be in clinical care for the rest of my career,” which I thought was interesting. For me, having taken a completely different path outside of clinical care, what I don't want to do and what we also have seen is that there is a decline in students applying to PT schools. Now, the outcome of after PT school and that burden, things like that are starting to become issues to even getting recruits into PT school. What we don't want to do is lose the best and brightest minds coming into this amazing profession.
At the same time, once they're in and once they are starting into clinical care and they find out, “Maybe this isn't necessarily what I thought it was going to be.” We need people to stay in clinical care, that's why we become a physical therapist. I also love the fact that some of the smart and brightest people are doing things representing the physical therapy profession in other ways, whether it's technology, whether it's entrepreneurship, whether it's going into public health or whether it's going into hospital administration. To demonstrate that our profession has a lot of very diverse but brilliant people that are not just ancillary providers. I see it on both sides that it's not great that we have the potential to lose clinicians that can help people and continue to improve the overall brand of who we are. I think that brand can also be accelerated by having more therapists exploiting the value of rehab therapy and PT in different arenas that we're not represented in now.
I interviewed somebody like that, David Self of Keet Health. He was the guy that went through PT school and never treated patients but rather developed his PRM program. It's people like that that you can hopefully say, “There is a track for physical therapy to treat patients and whatever, but there are also other tracks outside of it that can lead you to promising careers as well.” It's tough when you see on some of the social media posts and maybe you've seen them. I've seen them as well. People are saying, “I'm doing this and that and I'm interested in getting to physical therapy. Is it worth it?” I see, just looking forward, some of the respondents are very positive, “It's a great profession.” Some are very negative, “No, it's not worth it. It's tough.” Nowadays with the social media and the capability of people to reach out ahead of time and talk to larger audiences, it's tough if people aren't happy in their positions inviting those bright people into the profession.
There's whole track now of non-clinical PT rise even on social media. Meredith Castin leads a whole podcast and blog post and a group of non-clinical PTs, which I don't necessarily see as a bad thing. They are promoting the profession of physical therapy in such a fantastic way that sometimes I think clinicians who are treating patients all day don't have the opportunity to do. There are a lot of opportunities there but to your point, those that are in clinical care and those that we need to continue to have a pipeline of more amazing clinicians that want to do clinical care. Even those that are getting to the horizon of their career have said that, “I am not as readily willing to tell people, ‘You should become a physical therapist anymore.’” That's the sad part because usually your evangelist of people who love what they do are willing to tell more people and get people excited about the profession.
Did you find that through the survey, some of your hallmark findings were led into the burnout that we're talking about, whether it's some of the challenges that came up consistently that led to the possibility of some of this burnout?The PT profession has a lot of very diverse but brilliant people that are not just ancillary providers. Click To Tweet
The regulatory change, the number of hours that people are working. Of those respondents who I mentioned who are considering a professional change, about one in four of them are doing to decrease the hours that they have to work. I thought that was very interesting. Whether that's based on working more than 40-plus hours in order to make ends meet, you're working your regular full-time job, but you're also doing PRN work on the weekends and things like that. I did that when I was coming out of PT school as well. I don't think that's anything new. In this next generation, work-life balances are even more strongly emphasized and wanting that a component of their life. I think that's reflective of this next generation’s expectations of their professional life. The other thing I would say and part of the reason that we publish this information is for people to use it and take the data and say, “What could I do differently?”
As new grads coming out, they're looking for a great culture in clinics. They're looking for a career passing and mentorship. They're looking to learn. There are a lot of therapists, whether you're new or not, that are wanting those things. As we get busier and busier, sometimes it's hard to find that balance or those great cultures. For leaders to be spending time and money, the bottom lines are not what they used to be. The additional ability to spend more money on benefits and things like that is not as easy, but it's also important. That is a good segue into what we see as far as consolidation in the market. It's been the pendulum that has swung back a little bit through my career.
When I first came out of PT school many years ago, it was very dominated by “corporate PT organizations.” We had the dissolving of a lot of those organizations due to corruption, the Medicare fraud. We saw the rise of entrepreneurship. With that, we see the opportunity now. Private equity money floats into our industry several years ago and now we're seeing the cause and effect of that with many medium-sized organizations being on the quest to grow. I don't always think that's a bad thing. There is a lot to say about economies of scale. I think that people have learned a lot from the past and how they want to do things. There's technology now that helps to make more of the communication and centers run more efficiently. We did see in our survey that larger organizations do have a higher patient volume requirement.
About 40% of our full-time therapists in single providers see six or fewer patients a day, which if you're seeing cash-based patients, I could see that. Still, that's a very small number overall. In organizations with 21 or more full-time providers, they're seeing about nine to twelve patients a day. If you have twenty-plus providers, your patient load can increase from twelve to fifteen patients per day. I think corporate organizations or these large entities get a lot of bad rep for having to churn and burn and see tens of patients a day. Twelve to fifteen patients didn't seem at outrageous to me or outrageous at all to me. I think that there has been a tide change in terms of being more efficient operationally and yet still being able to give great quality care with also that emphasis on outcomes.
You talked about the swing towards more, if you could say corporate care or consolidation. The benefits definitely could be these entities having greater funds, the economies of scale in which they can reinvest into a culture where they can reinvest into providing greater benefits that the entrepreneurs might not be able to provide. Also, coming back to having a seat at the table with the insurance payers to renegotiate those contracts and bring reimbursement rates up. Even though some people might hate to see that coming down the horizon and more mergers and acquisitions occurring, you can see some benefits on one end when they might be willing to reinvest if they're willing and able to do so with maybe a little bit but still maintain high productivity. I think there might be a little give and take on that.
I think one of the downfalls in the past, which we've learned from was that these large organizations try to undercut each other to increase the volume of patients by decreasing the amount that they were willing to take per visit. You don't see that as much. Insurance companies have already done that for themselves because now they also have a lot of data of what they're willing to pay. What we are starting to see and it's low, only 17%, 18% of organizations that collect outcomes data are using it to negotiate with payer contracts. The majority of those are the larger organizations, but they're using those outcomes to increase their payment adjustments, not trying to undercut.
Insurance companies have already that for us because of what we were willing to take in the past. Now, we're negotiating to increase. If I'm going to get better outcomes in improved utilization and less visits, overall that the insurance company pays less, even though the price per visit is higher.” That's the negotiation that's starting to happen now with data. To be honest, that's what it’s all about now. Being able to prove with hard facts and clinical outcome data as well as utilization data, patient-reported outcomes but also patient satisfaction scores as well as the trifecta. What we've talked about in the past of what everybody's focusing on, making sure the patient’s happy, make sure the providers doing what they're saying they're going to be doing and also being cost-effective at doing that.
You talked about some of the things that can link to upset for a provider, whether that's regulations and student debt and satisfaction in the profession. Are there some things that you recognize are challenges within the care of treatments that therapists are regularly reporting? Whether that's pressure from supervisors for production or the documentation time that it takes to get a patient through or time away from patients that don't make them? Are there some of those things that came up?
Those are all part of the challenges and opportunities. The things that we found were most concerning to therapists that were within this policy and regulation area where high co-pays and co-insurances, referrals and certification requirements, then the therapy thresholds or targeted medical review thresholds given by insurance companies. The autonomy of practice is not what it used to be. The burden of the high co-pays and co-insurance is now the pressure to show value and have patient buy-in becomes so much greater because there's so much more out of pocket costs.
That's tough when a physical therapist has to have that financial conversation. It's something that's come on over time, especially in the last several years or so. I didn't have to have those conversations as much earlier on, but it's almost regular now that you see that the patients are having to have some conversation regarding the financial responsibilities of the patient have and displaying the value that we provide as physical therapists. That can be tough for people who aren't used to that situation.
This goes to a bit of a crack in the foundation of ourselves as professionals in terms of the brand of physical therapists in the first place. Of people understanding the doctorate level professionals that they're seeing. That your average consumer understands the education and the value that a physical therapist can deliver but not only that, just the fact that we should be the first provider that people are thinking about for musculoskeletal injury. That's another good segue into one of the biggest items that I'm going to be talking a lot about and have talked about, but emphasizing it now is the direct access issue.
We have now direct access in all 50 states. We have that now. It's not new. Some states like Arizona, where I'm from, we have completely unrestricted access and we've had it for more than twenty years. Yet people are still very intimidated by the ability to take someone off the street, walk into your clinic and have them get treated without a physician referral. The confidence in ourselves as therapists has to be promoted. I don't know how we get past the change in behavior. We have the knowledge and we have the skillset. It puts us in this incredible driver's seat of more level-playing fields with referring physicians because now we become a referring provider as well. Especially in states where you have some limited access where you can only see them for an initial eval and/or maybe a couple of visits or even just the initial eval, let's take the Medicare. To be able to then send that back to a physician and say, “Patient came in. This is what I found. Here are some issues that you might want to look at. Here's how I can help this patient as a physical therapist. You go do your workup and then I'd love to see them back to help them with the issue that they came in with.” Now you become a much higher prominence, if you will in the overall healthcare continuum where people see you as more of an equal.
Where do you think our hesitancy or fear to take the reins in those situations comes from? Is it just from a longstanding history of being, for lack of a better word off the top of my head, subservient to the other medical professionals? Are we not getting proper training beforehand in our schooling? Where do you think that comes from?
Let's face it, we're still a fledgling profession in terms of the grand scheme of things. Where we started was being subservient to physicians and having to rely on referrals from the get-go. It's the longstanding behavior that you have known for most of your career and I don't think that referrals should go away 100%, but I think that it should be a 50/50 split in your clinic. It's going to take a lot from not only ourselves of being willing to take these patients in, which I think is the first stage. Secondly, doing a lot more promotion and education to the consumer as to the value that we deliver and who were good at helping. I will say that I truly believe that the time is now to be 100% emphasizing this. This is why this is my biggest soapbox because of the opioid crisis.In this next generation, work-life balance is even more strongly emphasized as a component of life. Click To Tweet
We know that insurance companies, hospitals and everybody are focused and this is at the highest level of administration of all of these different entities of finding, even at the state level. I was listening to NPR and even in our state level, the top of the conversation in every healthcare arena right now. A significant percentage of the patients that have been given opioids suffer from chronic pain and musculoskeletal pain. Who else is better to be treating these patients for musculoskeletal issues? It's us as therapists. There was a big study that was published by the American Physical Therapy Association and OptumLabs and UnitedHealthcare in which UnitedHealthcare finally came out and said, “We've had this data for a while but now because of this crisis, we understand that physical therapists need to be a primary provider. We need to get them in earlier as an intervention provider for these patients that come in with musculoskeletal issues, specifically low back pain.”
They published in their study that if a physical therapist or I should say conservative care provider, so that includes chiropractic or massage therapy, is the provider that the patient is seen for in the early stages or more acute stages of their injury, they have a 75% to 90% chance that they will never encounter opioids through their episode of care. The data is there to show our value. We just need to scream from the rooftops. I keep threatening that and maybe I should do it. Get a crowdfunding thing to do a Super Bowl commercial or something to make this a known thing, who we are as physical therapists and what we do and how much value we can add to patient's lives.
My next question is part of it is communicating to the public and some of the other healthcare individuals, but how do we change within to have the confidence to stand up and say that we are the masters of musculoskeletal injury care? We are the first line of defense. We are the gatekeepers or whatever you want to call it. It doesn't seem like we've taken that upon our shoulders to be that. From your perspective, what needs to happen? What do we need to do?
First, it comes back to education. Although we've had direct access in all 50 states for quite a long time, in our survey we found that only 13.5% of respondents said patients could directly access PT in their state.
They didn't know.
It baffles me that they don't know, but they don't know. 80% of the organizations said that they still require a physician referral for treatment. Roughly eight in ten respondents claim that payers are the top reasons why. We know that that's not true. It’s a lack of education and lack of understanding of the changes that have happened. Most insurance companies now will allow at least the initial evaluation. If your state practice act says you can see them unrestricted for more visits, it may not be the case based on insurance, but the majority of insurance companies now will pay for an initial evaluation, even Medicare, which is always the one red flag that people throw. The biggest barriers to direct access in which it is perceived are insurance requirements and then the lack of awareness in the patient market. There are not that many patients walking in the door.
This is where this movement for patient retention management, more marketing to the consumer, more of a change in mindset that we are a consumer-facing provider and not just a B2B or a physician to therapist provider where all of your targets in the past and marketing efforts have been much more in terms of getting to know your physicians. Now there's this change, which I'm hoping becomes more of a tidal wave of understanding that we need to go directly to the consumer and get these people to understand that, “You can come in and see me. Here's who I am, I'm an amazing therapist. I can help you in so many different ways.” We just got to get them into the clinic.
Being an owner in the past and I'm assuming that probably a majority of your respondents not only coming from outpatient settings but if they are owners, they've probably been owners for a longer period of time. I'm making a couple of assumptions there.
Only 50% of our respondents were outpatient. It is the broad spectrum of respondents.
From my personal experiences is that you hear that, but you're not sure if you trust it enough to change policy inside the clinic and risk losing so many visits on some patients by not getting that referral or getting the prescription ahead of time. I think it's constant education that needs to be consistently reinforced and then taking action and dipping your foot in the water a little bit more and saying, “It's okay. Come on into the pool. It's all right.” It's a lot of education and showing proof of concept to these people that you don't have to have some of these things. You can be the gatekeeper, you can stand up and you can be the person at the forefront and not need what was needed in the past. That can be difficult when you said we need to shout it from the rooftops in order to get the message across.
Change is always difficult. If you don't have a cash pay schedule now, you need to make one and what do I charge? There's the fear of, “I don't want to charge too much.” All of those unfortunately things that our clinician brain takes over versus the business brain. When we know that people are willing to pay $100 an hour for a personal trainer, why wouldn't they and why shouldn't they pay that for a doctor-level professional who is going to do so much more for them than supervise and provide an exercise program? It's also the mindset and when you said, “How do we make changes?” It does go back to student education in our academic setting of priming the pump early. The confidence in who we are as therapists have to come from the education first and truly believing that this is the norm. This is what you should expect when you go out and if you don't see this, how do you help to make that change as well?
It's a tactic that we've used even from a technology perspective. Introducing electronic health record and electronic medical record in the academic setting and having students use it. When they go out to their clinicals or even when they go out for their first jobs, to then see something that is much less efficient, not as user-friendly or pen and paper, that they are willing to raise their hand and say, “Have you ever tried this? Why are we doing it this way?” It’s the old adage of asking why.
A lot of it is education. Do you see anything else that we need in our tool belt to become more of the front-line defense? Not just to let therapists know that they can be, but from my perspective and because I'm a little bit biased, I'm doing more diagnostics. I do EMGs and I have also been trained in musculoskeletal ultrasound. Do you see diagnostics being a big part of being recognized as that first line of defense for musculoskeletal injuries?
Of course, we have a shortage of primary care physicians. Pushing that line of the scope of practice with these additional certifications and aligning with physicians who are willing to have that information and refer you patients to get that information or that data I think is important. Also, going straight to a patient. The patients’ potential population out there to have them understand, “These are our certifications and value-add activities that we do as physical therapists. It’s part of our scope of practice. It's part of who we are and what we do.” This goes back to the part of our big purpose and mission here at WebPT in the data that we've found and validated with a lot of insurance data as well is that 90% of patients who have diagnoses that a physical therapist could help are not getting into physical therapy. We're fighting over this 10% of people and that number hasn't grown. It comes back to what a lot of people have been talking about for the last several years of the brand of physical therapists.Physical therapists need to be a primary provider and an intervention provider for patients with musculoskeletal issues. Click To Tweet
Tell me what is WebPT working on to help alleviate some of the concerns we talked about or some of the exciting things that are coming forward that WebPT is working on that you'd like to share?
We're continuing to work on efficiency. It's been one of our big mantras here. We’re starting to release our WebPT Documentation 2.0, which has a full new look and feel, but more importantly, much more efficient in terms of getting through your documentation. We're using the data from this survey to make sure that we're hitting all the marks on the biggest barriers. We are working on what we're calling WebPT’s network effect of now working with credit card processing as well as with our outcomes tools. Getting that data and information out there through an analytics platform that can help and empower our clinicians and our owners to use the data. Go and negotiate more with insurance companies to increase those reimbursements or payments that they should be getting.
From the marketing front, we're continuing to improve our PRM or Patient Retention Management platform in which we have so many cool new ways of increasing your HEP, your Home Exercise Program compliance, as well as retaining patients so that you have this constant communication them. Our big thing with that is to hit that 90%, to get more of the marketing component out there. Not only to retain the patients who have come to see you, but how do you increase that by social media likes and email and everything else that you can do to get your clinic more notoriety.
You talked a little bit about analytics and that was always something that I always wanted more for my EMRs, the management statistics so I can have more access to that. Even if it's not for going out and renegotiating contracts, that's a great end goal. Just to manage the day-to-day and make sure that you didn't have holes in your bucket and you could manage it appropriately and manage it by statistics. That's exciting stuff.
We have a whole dashboard of the top nine clinic metrics. You can watch it. All about efficiency where you don't have to do a bunch of spreadsheets and have all this backend work. The data's already in our EMR so how do we then aggregate that and allow you to use that on a day-to-day basis to run your business at the highest efficiency?
That's where the independent practitioner is going to be benefited the most by an EMR like WebPT. Being able to have that as a dashboard and not go looking for it and spend the time on it and thus manage their clinics. Though we're not trained as businessmen, we own businesses. Even though we're not trained as such, it's important that we have those KPIs available to us on a regular basis and managing them and tracking them, even though that's maybe not our forte. It’s exciting that WebPT has that available to us to help us manage appropriately and thus capture what we're supposed to be getting paid for. Like we talked about, maybe reinvesting in culture, reinvesting in benefits and making it a wonderful place for physical therapists to join and be a part of.
This is an area, especially for your small businesses and single provider owners who are wanting to grow or are wanting to make their business more efficient. We have heard you because this is an area that we don't come out of school knowing a lot about, is the business side of physical therapy. What are the KPIs I should be looking at? How do I take those KPIs and make sense to them? What do I do when it goes down? What are the dials that I need to look at to be able to improve those numbers? That's also why we started our annual rehab therapy business summit which is called Ascend. We've been doing this now for years. This 2019, it’s going to be on September 19th through the 21st in Minneapolis, Minnesota. We would love to have you guys come out. If you come to the website and decide to sign up, please let us know that you came from the Physical Therapy Owner's Club show and we'll make sure that we get you a discount code.
Thank you for doing that. I, number one, love the idea that you've got the Ascend conference going and that it's focused on the business aspects, especially like what you talked about. We come out of school, we don't know some of these things and then you hear about, “You need to keep your KPIs.” “I can start keeping my KPIs.” As you said, when they go down, now what? I'm reading the WebPT dashboard that I have and my stats aren't where I want them to be. What do I do? That's where a conference is so invaluable. The networking can be incredible. My mantra is step out, reach out and network. This is how you network. This is how you get information from the other successful business owners. This is how you learn successful actions and take advantage of those who have gone before so you're not reinventing the wheel. It's conferences like this where you'll gain a ton of information and get some of your business acumens.
You learn from people from similar-sized practices to larger practices. We've got speakers from all over the country, the best and brightest minds that we can pull in for an event like this. We’ve got some amazing keynotes from outside of the industry, which we also are big promoters of, to learn from people outside the industry. It's going to be an amazing two full days of super content and lots and lots of learning. Most importantly, lots of networking. We have a lot of time for that very specifically because we know how valuable that can be. Hopefully, we'll see you there. Let us know if you've found us on here and we'll make sure we give a good discount.
Thanks for your time, Heidi. I appreciate your willingness to talk to us, especially about the insight that WebPT has gained from the state of the industry.
You're very welcome, Nathan. Thank you for all that you're doing for the therapy owners out there. The more education that we can get on this business side and more people working together towards the greater cause of helping our profession only makes us stronger. Thank you for everything that you're doing for the industry as well.
Dr. Heidi Jannenga, PT, DPT, ATC, is the President and Co-Founder of WebPT, a six-time Inc. 5000 honoree and the market-leading software solution for outpatient physical, occupational, and speech therapists. Heidi leads WebPT’s product vision and company culture initiatives while advocating for the rehab therapy profession on a national scale. She's an APTA member, belonging to both the private practice and sports medicine sections, and she's on the board of directors for the Institute for Private Practice Physical Therapy.
In 2015, she won the Arizona Physical Therapy Association’s Physical Therapist of the Year Award, and in 2018, she received the APTA’s Marilyn Moffat Leadership Award. Prior to co-founding WebPT, Heidi practiced as a physical therapist for more than 15 years. Today, she regularly speaks as a subject-matter expert at regional, national and international technology, entrepreneurship, and leadership events, as well as at national and international PT industry conferences.
Heidi serves on the boards of numerous organizations, including the Arizona Science Center, Support My Club, the Physical Therapy Political Action Committee (PT-PAC), the Institute for Private Practice Physical Therapy, Conscious Capitalism AZ Chapter, and the Arizona Community Foundation. She also dedicates time to mentorship within WebPT (through her women’s empowerment group PropelHer) and in the broader community (through her work with physical therapy students, entrepreneurs, and women in business).
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.
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.
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.
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 firstname.lastname@example.org, that stands for Therapeutic Associates Incorporated PT. Email is the best.
Thanks again for your time. I appreciate it.
Thank you, Nathan.
Dr. 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.
My guest is Greg Todd out of Florida. You might have seen Greg around. He's got a ton of stuff going on. He's the owner of multiple PT clinics. He is the Creator of coach and consultant companies called PT Builder and Smart Success PT. He's a mentor. He's a fellow podcaster. He's got a great event coming up. Look out for that. I'm excited to bring Greg to you because in his story, he came to recognize early on in his career, and that was even prior to owning his PT practices, that it wasn't the traditional PT skill set that was going to get him where he wanted to be in terms of success, significance, the effect on his community that he wanted and the wealth that he wanted to achieve, and even the freedom that he wanted to have in his life. He turned to recognize that he needed more non-traditional skill sets and the build-up of those skills. Whether that was learning how to lead others, doing better in marketing and sales or at least having the ability to communicate better with other people and becoming the visionary of his own life and the visionary of the companies that he wanted.
I'm excited to bring Greg to you because it harkens back to the same message that came upon with my interview with John Woolf where we recognized that it requires a change of mindset, that it is not the traditional skill set that's going to get us further as PT clinic owners to achieve the goals that we want to achieve. Read into Greg's value stages that he brings up for any member of a company, whether you're an employee or the owner, and how that correlates to the amount of money and freedom that you have in your life. That's invaluable. He also talks about four different types of people that exist in the world. I'm sure you can relate to all four of them, whether that's yourself or others that you've come across. I will let Greg put his own words to it. Read his story. You will get a lot out of it because he brings a lot of energy and a lot of wisdom to the story and to the message that he's carrying forth.
I’ve got Greg Todd, a physical therapist out of Florida. He is the Creator of Smart Success Physical Therapy and also the Co-owner of three physical therapy clinics and soon to be four. Todd, first of all, thanks for coming on. I appreciate it.
It's my pleasure. Thank you for having me. I appreciate it.
Tell me a little bit about you, Greg, where you started from, what got you to where you are and what you're doing nowadays.
I've been a physical therapist since late 2000 and got into the field because my mom told me to. My mom was a medical transcriptionist for an orthopedic surgeon. She told me and indoctrinated me that, “Greg, you need to have a skill.” She loves her husband but, “Don't be like your dad.” My dad was an entrepreneur and he used to work for a company called Primerica. She says, “You want to have a stable job. You want to have a skill so that you can get a job when you get out of college.” Initially, she wanted me to be an orthopedic surgeon. The orthopedic surgeon that she worked for, the day that I went to go meet him and shadow him, he was in a pissy mood that day. He said, “Don't do what I do. I'm on my third wife. My kids don't know me. Do what they do,” and he had physical therapists that worked in his office.
That is the story of why I decided to go into physical therapy. I knew that I needed to get a stable job because my mom told me to. I knew that physical therapy was in demand. It was between physical therapy and pharmacy. I've always wanted to do physical therapy because I love sports, but I was leaning towards pharmacy because I had a speech impediment and I stutter a lot. I was very afraid that I wouldn't be able to communicate with clients because of my stuttering that I struggled with all my life.
I ended up deciding on PT and that's how I got into it. I was not planning on being an entrepreneur. I just wanted to work 9 to 5, come home and have a good living. I always knew I wanted to have a family. Within four months of me being a physical therapist, I was married to my college sweetheart. I quickly realized into the profession that there was a hard ceiling and it wasn't necessarily the money, but it was the time that I wasn't able to get back with the hard ceiling that I was experiencing. We had our first child and then that turned into two, three, four and I realized that this is not going to work. It's such a hard salary cap and more importantly, it was such a hard time cap. I realized that I was not going to be able to ever win the time game if I was just a staff physical therapist.Communication in the real world is treating everything like an advertisement. Click To Tweet
I thought that I was going to reach my ideal pay by year ten. My first job, I make $39,500 a year. My plan was to make a 4% increase every year. That wasn't bad back then because I was coming out in 2000, 1997 is when the Balanced Budget Act came. You are lucky to have a job. $39,500 and I had a full-time job. I was like, “We're good.” I was making $7 at the most. I'm like, “This is great. No problem.” The issue was that I was under the assumption that you're going to get a 4% increase every year and I had a plan to make $50,000 by ten years. I know it sounds crazy now, but back then that was like, “$50,000, I'm going to get a 4% increase every year. I'm going to hit the corporate numbers. I'm going to hit the company numbers. I'm going to take care of patients. I love physical therapy.”
On my first year, the company that I was working for was a big corporation. They had continuing education courses every single weekend that were company funded and that was within the company because it's such a big company. I did 180 CEUs in my first fifteen to sixteen months. I thought that was the way to achieve the 4%. I had done over 100 continuing education units by month twelve and I've got a 1.5% increase in pay. That was the first a-ha. When I went to my boss, I was pissed. I'm like, “Why did I only get a 1.5% increase in pay?” He was like, “You didn't do anything wrong. That's what we give for staff PTs.” I was like, “How do I get an increase in pay?” She says, “You’ve got to be a clinic director.” Now, I understand how the whole levels of earnings work. It was the first time that I realized you don't get rewarded for being a better clinician in the real world. You get rewarded for moving up in management and you get rewarded for other things, but you don't get rewarded for clinical excellence, which is sad but it's the reality of the situation.
That's no different than being a PT owner. You don't get rewarded for your skill set.
You get rewarded for running the business right, but I didn't understand that and most people don't understand that. If you think about it, it doesn't make sense because we put so much effort into CEUs, into this and that. You've got to get this. You’ve got to do this. You’ve got to become a CSCS. You’ve got to become an OCS. You've got to become an SES. You've got all these different things but nobody talks about that does not get you any closer to having financial freedom and any closer to having time freedom. I went through this journey for about three and a half to four years. My wife and I started to have marital problems. It’s nothing crazy. She was frustrated that I was working so much and that I was on this quest to do every single CEU course there was out there. At that time, I also got the opportunity to work with professional tennis players. I was working on the WTA and ATP tour. I was trying to become an OCS. I was trying to get every single manual therapy certification there was on planet Earth. At the end of the day, I was getting nowhere in terms of earning more and getting more time freedom.
Where it culminated for me was when I asked my boss where I was a clinic director at a brand-new clinic. I had achieved the numbers that they wanted after a year of working in that clinic and gone beyond 50%. I said, “All I want is one day off a week. I want to work four twelves. You are paying me a salary for 40 hours anyway. Let me work four twelves and let me get that one day back so my wife and I can start to spend more time with one another,” because that's where the frustration is coming, that I'm never there. He said no. That was the day that I knew that it didn't matter. I had to become an entrepreneur. I had to go and open up my own thing so that I could be in charge of my schedule. I did not want to do this, but they forced my hand and that's it then.
It wasn't tragic but in a sense, it's a challenge. It’s not even failure but something took you to the point where, “I've got to do something different.”
I’ve got no choice. It was either that or the marriage. They made it very clear. Just to give you an idea of my schedule. People may go like, “What was your schedule like? Was your wife being a brat?” No, she wasn't. Here is my schedule. I started seeing patients at 7:00 AM at the clinic I was working at. This is a company called CORA. I was seeing patients until 8:00 PM. When my tennis players were in town and they weren't out of the country for tournaments or whatever, I was going to their houses or their condos in a place called Saddlebrook after work. It’s about five to ten minutes from my clinic. I was going there and I was working with each person an hour to an hour and a half at a time. I was sometimes leaving Saddlebrook at 11:00 PM.
I’m getting home by midnight to 1:00 AM, eating, then staying up until 1:00 AM and she's asleep. She's waking up to take our daughter to her mom so she can go to work. This was the normal day. Then the weekends were going to Continuing Education Courses. At that time, I was trying to get my Manual Therapy certification to the University of Saint Augustine. That was Monday through Friday for us, then Saturday and Sunday, I was in Saint Augustine trying to become this better clinician. It was a rat race to the bottom. That's all it was.
I love having you on because I'm all about stability and freedom. My story is similar. I wanted stability and freedom, unlike my father. Something that could give me the opportunity to be like my uncles who were in the healthcare profession. They had time and money, and I wanted that. I love having you on because that's what I'm all about on this show. Was it at that time that it finally clicked for you that your clinical skill set made no difference or did that come up a little bit later?
At that time, I started to get it but I didn’t still fully get it. I've started to realize that I was blaming the companies. I was like, “I think they're trying to screw me over. What I'm going to do is I'm going to leave and I'm going to open up my own thing.” I had a non-compete so I had to leave the area for one year and then I came back. During that time, I ended up with this guy who saw that I was working with all these tennis players because the tennis players followed me. He had a very small clinic called Renewal Rehab. He's like, “Let's team up. You will have all the insurances if you work with me.” We decided to become partners. We’ve been partners for fourteen years.
At that point, I still think clinical didn't mean anything and it does mean something. What I did realize at that time was that the corporate system wasn't set up for me to be autonomous, for me to make decisions, for me to do things that I feel were in the best interests of the patient. I knew that at the time. I knew that enough to say, “I’ve got to get out of their system.” I thought that if I went on my own, all these awesome things that I had: OCS, CSCS, all the Manual Therapy courses that I did, and all these different things were going to flood all these people to me. At one point, I was working with three either current or former number one players in the world. I truly thought everybody was going to come to me but it didn't work like that.
You had to come to the realization after stepping aside, working with this other guy and partnering up with him that patients didn't show up, I assume.People are interested in stories. They're not interested in facts. Click To Tweet
There are a couple of things that happen. At that point, I was still working a lot with physicians. I had verbal agreements that, “When I come back to this area, will you send me patients?” They’re like, “Yeah.” Until you come back in the area and you say, “I'm open,” they don't give a crap. There are a lot of things that I had to come to terms with. A lot of PTs think, “If I know this person, if I have this certification, if I do this, if I know dry needling and if I know that, all of these people are going to want to come to me because they are going to want the best.” That's not how it works. That's not how the game works.
What are you telling owners nowadays? What's cool is you're also working with physical therapy students and telling them what the game is like. What are you telling them to focus on? What are you telling them about the system? What do you encourage them to do?
I'm explaining to anyone that wants to get clients into their door, “No one gives a crap about you. They just care about themselves.” That's the main thing you have to understand. The big thing that I'm telling them is everything that's in life or the way that things are with your clients is they don't give a crap about you. They don't give a crap about your certifications. You have to learn how to communicate with them at a very high level. When I say at a high level, I'm talking at a low level. That means we have been trained to communicate the way that we communicate with our colleagues. That's not how it works in the real world.
In the real world, you have to treat everything like an advertisement. You have to talk to people in a way that they're interested in. You have to be able to do things that are going to connect with them for their needs. That's not something that we are trained on. You have to hook people. People are interested in stories. They're not interested in facts. I was trained that the way you need to do it is you need to bring out your JOSPT or the journal article but nobody gives a crap about that. I had to train myself that the higher level of communication is communicating at a third to fifth-grade level with people. That's the big thing that I tell owners. That's what I'm having to do for my clinics and make it very simple for people to understand what it is that we do.
A lot of your focus then is on what people might call soft skill set. It's sales, marketing and patient engagement. It's interacting with people and building relationships.
I'm going to tell you what one of my coaches trained me on. I don't think most people understand this. At my conference, I have him speaking three times because I know that people's minds will be blown once they understand how this works. What he trained me on is that there are four levels of value. We have been trained for our entire life pretty much at the lowest level of earnings, which is implementation. Let's talk about the four levels of value. Implementation is the lowest level. The next level is managerial and unification. That third level is communication and the fourth level is imagination/vision.
Let's break it down. If you take the lowest level, which is implementation. Implementation is somewhat like if you go to a hotel and you want your room cleaned. You want to make sure that your room is clean day-after-day that you're in it. If you check into a hotel and the room wasn't clean, you'd be pissed. You'd be like, “Can somebody clean the room?” That's not a good experience for you. That's a low level of implementation. Someone that's like a maid or a cashier at Walmart. As physical therapists, we are also at the implementation level as well. It is the lowest level of earnings there is. The next level and I didn't realize this when my boss was telling me this in 2001. She was saying, “If you want to get higher than 1.5% increase of pay, you need to become a clinic director.” What she didn't even realize is that the next level is managerial. That is someone that's overseeing all the implementers. You get paid more to make sure that the implementers don't kill themselves, don't kill each other and that they give a good service to your customers. That's a higher level of earnings. Not a lot but it is a higher level of earnings.
In the corporate structure, that brings more value.
When I look back now on my journey in 2004, that was what my boss was telling me. My boss was saying, “If you want to go up in this company, you need to go into regional management.” That's the only level to go. There's no 97110-OCS code. It's 97110. It doesn't matter who does it. It doesn't matter if there's a 97110-eighteen years of experience. It doesn't matter if there's a 97110-36 years. There's a 97110 code. It's just for implementation. There is no way that it's going to pay you any more. What I realized is that if I can go up more in management/unification, which is the second level of value, you can get paid more but it's still a hard cap. There's only so much you can get up the corporate ladder. Here's what I've come to understand. The third level is communication. Meaning that if I can learn how to communicate, if I can learn how to market, if I can learn how to do the hardest thing for any business, which is to get clients and keep clients, it is the highest level skill that you can have.
Think about the people that make the most amount of money in this country. It is the best people that are in sales and entrepreneurs. Entrepreneurs are salespeople. They're selling you on their vision. It is the high-level authors. The first job I ever had was a sales job when I was fifteen years old. I sold newspapers for a company called the Sun-Sentinel. I made $11.50 over two weeks. I sucked in sales. Now, I'm good at sales. I did a webinar and I made $138,000 in two days. It's a skill that if you get good at, you can make a lot more money. I was watching Kevin Hart's Irresponsible tour on Netflix. That guy makes gazillions of dollars by doing a stand-up act for an hour. It's something he's got good at. The best singers make a ton of money. It's all communication. It all falls under the communication umbrella.
They’ve got a robust sales program in social media, you name it, it’s all about sales. You build a brand.
It's all communication. Best actors, best singers, best authors, salespeople are all great communicators. Communication is an amazing skill to have. That's why it's the second highest level of value. Then the top level is the visionaries. It's like this. When you think of Apple, who's the first person that comes to your mind?The people who make the most amount of money in this country are those that are best in sales. Click To Tweet
It's interesting that you didn't say Steve Wozniak, because Steve Wozniak was the person that actually built the machine. You said Steve Jobs because he's the visionary. At the end of the day, the visionary is the one that’s like me having the vision of this program called SSPT. I make the most because I was the one that envisioned it. I was the one that was able to sell the program. I was the one that was able to build a mission and turn it into what it is now. I get paid the most. That's what people don't understand. They don't understand that throughout your entire educational system from pre-K to grad school, you've only been taught at the lowest level. It sucks but it's also optimistic because it's like, “If I go and learn these things, I could accelerate my income and my earnings to astronomical levels.” That’s what I try to teach people.
You had to go down this path yourself to figure it out that you were losing money or at least you weren't tapping into your potential as long as you stayed an implementer. To those physical therapists, I know you've come across them, that are still working on patients, what are you telling them? How are you getting them into increasing their value and getting out of that?
I don't have a problem with people working on patients. The big thing that I need people to understand is that you want to make it a goal to do more things at the higher levels of value than just stay at the implementation level. I'm not saying for people to go from, “I've been treating patients for the last one to twenty years that I've been a clinician and just go cold turkey away.” I'm saying to respect the other things and start to work your way up to those other levels of value so that you can now burst through the ceiling. The reality is most people aren't even paying any attention to it. They're frustrated. They're like, “Why does my career suck? Why am I burning out? Why is this happening? Why is that happening?”
They don't understand those four levels. They don't understand this is how it works. They don't understand that every single CEU course that you go to, what does it teach you? How to implement more. There's no CEU course out there that is saying, “We're going to teach you for a day and a half how to implement, but then we're going to take the other day and a half and we're going to teach you how to communicate what we taught you.” Nobody does that. They don't even know it. I figured it out and it was my coach who put the pieces together for me. He was like, “This is because it's the four levels of value.” I'm like, “That makes so much sense.” That's how my whole career has gone.
Tell me about that a little bit because I'm a big proponent of coaches. You've got to step out and recognize that you're not creating more value by simply treating patients all the time. You've got to be a visionary if you're going to own a practice, make more money and have more stability and freedom. I highly believe that coaches and networking are integral to making those steps. Tell me about your journey towards getting a coach and working with a coach. Did you start right off the bat or did you get to a point where you’re like, “I need some help.”
Let me bring it back to maybe 2004 or 2003. My older brother has always been the entrepreneurial type. I've always been the anti-entrepreneur. That's how it was in the family. I just wanted a stable job. He was always the one coming up with ideas and this and that. He's always been telling me about Tony Robbins, about this person and about that person. I’m like, “Whatever.” I always thought that personal development meant that something was wrong with you like you needed to see someone. I didn't understand the whole thing. It wasn't until I experienced pain as in the way that I thought things were going to work out is not working out, that I started seeking out direction. My older brother was probably one of the first people that I'm like, “Maybe you are right. Maybe I should go open up my own thing.”
From there, I never got my first coach until 2012. I started realizing the power of having how much people knew that I didn't know. I always thought that coaches were CEU like continuing ed people. I realized that there was another world out there that I had not even tapped into. It was in 2011 or something like that when I went to my first real event. I started realizing that there is so much crap I don't know. I started looking, “Is there anybody in physical therapy that does this?” Nope. There's no one in physical therapy that does this stuff. I had to take coaches from outside of my profession, learning and then how can I implement and incorporate this into what I do? That's what I did.
I realized that there was definitely a need to have people that thought the way that my coach has thought and be able to apply it in a field like physical therapy where people have no concept to any of these things. Now, I have many coaches. I have one person that I've employed as more of my mentor and then I have coaches for different things, those different levels. I pay a lot of money to have coaches because I'm realizing that you tell me one or two things and it can be the difference of doubling my businesses. It could be the difference with allowing my missions, all the things that I'm doing to take it to another level. I believe in self-education and I believe it has catapulted my career infinitely more than traditional education. I'm willing to pay for it.
I love that you shared your insight on that and especially what you pay for it. You didn't share dollar amounts.
I pay over $100,000 a year.
I've done the same in the past. What it turned out to be the following year was easily double that in increased revenues. It's funny because I will talk to friends who are like, “I'm thinking about getting a coach, but this guy wants $10,000 for a year and they're hemming and hawing.” I'm like, “You don't even know that $10,000 investment could triple, quadrupled or do more in the next six months to twelve years that you don't even realize.”Convincing is getting you to do it for my reasons. Persuasion is getting you to do it for your own reasons. Click To Tweet
Nathan, I want to tell you something that's important about this. I was Facebook Messaging a guy that's like, “I've been listening to your podcast. I've been doing this and doing that. I'm ready to take this one course that you have. Tell me something to get me over the edge.” I was like, “Here's the deal. I don't convince people. I'm not into that.” I do persuade, but I don't believe in convincing. Convincing is getting you to do it for my reasons. Persuasion is getting you to do it for your own reasons. I need to have you come to the conclusion that this is in your best interest. I'm going to say the reason why people are like, “Yeah, but I don't want to get screwed over by a coach.” I was like, “This is why every single coach I've had, whether it's been a great experience or not a great experience has been beneficial for me.”
We are in a profession where everything that we've done, for the most part, I'm assuming the majority of your audience have only done traditional education. People are like, “How is it that you're able to do all these things?” I have a $30,000 coaching program that people work with me for a year and people are like, “How can you get to the point where you charge that?” I was like, “It's when I started paying for it myself that I realized that my worth has gone up.” I can tell the person like the one you’re talking that's like, “$10,000 or $15,000 or $20,000.”
What I've learned is that there are four different types of people out there. This is something that my coach taught me as well and I will share it with you. There are feeple people, there are freeple people, there are cheaple people and there are premiumple people. This is how it works, but it makes perfect sense. I can say for me, it has changed everything in my businesses when I understood that I've been all four of those people. The first person is freeple people. These are the people that want everything for free. What ends up happening is that when it's time for them to sell anything, they have a hard time selling anything. They're so used to getting everything for free that they feel like a hypocrite for charging. The problem is nobody gets results in them because if you give me free stuff, you don't take it seriously. It's the way it is.
Then you have cheaple people where everything they want are discounts. The thing is when it's time for them to get people to buy into their stuff, they're discounting everything. What happens for them is they're like, “I give so much and I'm not getting anything for it.” Those people end up quitting because they're not charging their appropriate fees. Then you have feeple people. They are people that are comfortable with paying a fee. They don't want to pay for the best, but they're comfortable with paying a fee. What happens is in return, you get people that don't want to treat you as the best. They just want to treat you as, “Okay, you're decent, whatever.” Then you have premiumple people. Premiumple people is where I finally got myself as somebody that used to be a feeple person and now I'm a premiumple person. I’m willing to pay premium for the best.
I have my event and I'm paying someone $25,000 to speak at my event because I want the best. I've looked at my bill so far for that event and I've racked up over $100,000 of bills because I want to have the best of it. I will make a ton of money because I'm willing to accept it. I know that I only give the best so I don't have any hiccups with, “First, he was going to pay me $2,500 a month or $30,000 for the year.” I have no problem with it because I know that I give the best of my people. I don't even know how to not give the best. I've had to train myself to get to that level. I think most people don't understand that and they have this hang-up with selling, “I don't want to sell.” You don't want to sell because you're a feeple person. You probably get everything for free. You should feel awkward. It's like me cheating on my wife and asking her to be faithful to me. It doesn't make sense. That's not how it works. If you're faithful to me, I'm faithful to you. If you love me, I love you. If you don't love me, it's hard for me to love you. That's the way it works and most people don't get that.
It comes back to mindset. You hear about the mindset of abundance and making sure that, “There's plenty of it throughout the world,” instead of a mindset of scarcity, “There's only so much of it out there. Whatever you got, you’ve got to keep it. Someone's out there to screw you over.” Instead of thinking, “There's an abundance of money to be made out there. There's an abundance of love to provide to people. There's an abundance of knowledge to provide to people. We can all share in this boat together.” Switching from that scarcity mindset to an abundance mindset is hard for some people to get over.
I've been there. It's very difficult for people to get over. I'm at a point in my career where I have four kids. My wife's love language is time. I don't have to work anymore. I have an exit plan where I don't have to work if I don't want to. I want to do this but what I have come to understand is my wife would prefer that I hang it up. She's made it very clear. She says, “I would rather you hang it up because you're giving so much to people.” What I've noticed is this. I started Smart Success PT on May 29, 2016. It was for one year that I was coaching and educating people for free.
Do you want to know what my show up rate was for the calls that I did? At this point, I'm only working two days a week in my clinics. I only do evals, everybody else does all the other stuff. I had all this time for myself and my wife, but I told my wife I want to help out this new generation of physical therapists and teach them the things that I've learned. I would block off six to eight hours a week for complimentary coaching calls with me. My show up rate was 30% because I was giving free stuff. I was attracting freeple people and they didn't respect it. What I did was instead of me hitting the dream at 38 years old back then when I started this whole SSPT thing, I was creating another nightmare in my marriage. My wife's like, “Here you are taking time away from me to give to these people that don't even value your time.” Now, I have to charge $30,000 a year because now my show up rates are 100%. It actually saved my marriage. We don't need the money. I don't want people wasting my time.
You have to recognize that you provide value and you’re worth something. There's something to that. There has to be a monetary obligation. Otherwise, people do exactly what you're talking about. They keep in the value of the service that you provide if you're not willing to charge a premium for it. That's a constant battle for physical therapists because at our core we feel we should give away even our services for free. We feel bad asking for a co-pay. We feel bad for asking for a deductible. It hurts to our core to ask people for money. We've got to get over it.
We've never been trained on any of this stuff. That's why everybody struggles with it. They've never been trained on value, personal development, how money works and that you not collecting the money from people is hurting them with regards to getting them to commit. There's so much stuff. Trust me, I struggled with that as well. I struggled with it mightily. Then people are shocked when they get canned. It's like, “They cut my hours. How did this happen?” It happened because nobody paid attention to money. Nobody paid attention to value. “I don't know why patients are canceling. Maybe it's the weather.” No, it's not the weather. The value's not there.
Here's the interesting thing. I give the most amount of free content out. I have 900 videos on YouTube. I've been doing this four to five days a week for four years. You could see that I go on Facebook Live pretty much every single morning and I turn it into a podcast as well. I'm on episode 500 of my podcast. Here's the deal. I give out free stuff because I have made a commitment that I'm going to dedicate six hours of my week to serve my healthcare profession. I'm going to give out but everything else is paid. This right here is one of the six hours. When I and you talked, I knew that I had one more hour this week of my six hours that I give away. I was like, “No problem.” This is one hour but after that, if you want to work with me, you have to pay.
What has happened though is that people have seen, “This guy gives so much value for free. What does his paid stuff like?” It's not a problem for people to pay me money and they pay me a lot of money. It's no problem. When they pay, they realized, “This is worth it.” I've had 475 people take my course. It's the only online course that I've never had a full refund. It's never happened before. It's a $3,000 course. That's the entry level to work with me. The deal is that we have to get over this whole money work that we have. You've been taught that money's evil. You've been taught rich people are stingy, this and that. There's so much crap you've been trained on. You've been indoctrinated on that so that you would stay at the lowest level of earnings, which is the implementation level. What people don't want you to know is that anyone could get to the other higher levels, but then it screws up all the people that are at higher levels. Now they don't have implementers and they're panicking. That's why I'm getting so much flak from different establishments because they're like, “This guy's turning all these people into entrepreneurs.” Now they're all waiting, “Who's going to work for us?” It’s freaking people out. I'm having fun with it. I'm loving it. I love watching all this happen.Your Value, and thus your Earning Potential, increases as you climb up through these stages: Implementor, Manager, Marketer/Communicator, and Visionary Click To Tweet
You're doing great and I love the energy that you bring in. I know that you have a conference coming up. Is your conference a lot of this like how to market, how to sell, how to change the mindset or am I off base? Tell me what is your purpose.
That's what it is. It's called SSPT Live, which is my flagship course, Smart Success PT. The conference is three days. It's based on how I have my method set up for SSPT. The first thing that I believe everybody has to do is they have to calibrate themselves. We have to change their mindset. They've had a worker bee mindset, “This is all I can do,” and we need to help to calibrate people. It's like having a compass. We need to know where we're going first. The first day of the conference what I do is I'm going to show everyone there's not one way to do it. There are many different ways to do it. The people that I've been coaching that are now at a level to where they're at the top 1% in earnings in physical therapy, I've been able to do it for our practice owner, for mobile concierges, for people that are doing online coaching, strictly online, canine physical therapists. I've been able to get all of them, at least one person beyond the 1% in PT.
The first day is about giving you the belief that you can do it in any way that you want. The second day of the conference is about teaching you those higher dollar value skills: the communication, how to be a leader and how to have a vision. That's what the second day is about. If we can focus you on the first day and then we can start to teach you those skills, the third day is about giving you the ability to have a legacy. It's showing you. My whole thing is calibrate, care, create. Calibrate you and getting you focused. Care is showing you the high dollar value skills. They are true care skills that you're going to need in order to win and then create. Create wealth, time, financial freedom. Until you create those things, you cannot create a legacy. You don't have the time to do it.
People say like, “It's such a nice ride.” There are many nice physical therapists out there, but they've never created time and financial freedom. They can't do the things that I'm doing. They are good people but they can't do it because they have never focused on creating time and financial freedom. They can't give back, which sucks. Overall, if you think about it, our profession typically attracts people that are good at the core, but they suck with making money and with knowing how to create time for themselves. They can't do anything impactful.
That's where you see a lot of burnout. You don't see a lot of 40-year-old practicing in physical therapy out there. You get to the 40-year-old mark and you're looking at you can't be a staff physical therapist anymore if you've been a manager for a period of time. There's a hard ceiling there. They're not fulfilling their potential. They're looking for other things. They will get a realtor license or something like that.
Do you want to know what the sad thing about it? When you think about it, the entrepreneur is always telling the implementers what to do. The problem is that in our profession, you don't have enough entrepreneurs. I'm an entrepreneur and I have clinics. Why is it that my employees are happy? They're happy because I am an entrepreneur, but I'm a physical therapist at heart. I want to set it up so that my people are happy day-in and day-out. I have a very unique set up at my office to where the culture is amazing at all three of my clinics. Here's where the problem is in physical therapy. The problem is that most entrepreneurs that are running physical therapy locations are not physical therapists.
They don't have that, “We need to do what's right for the patient, but we need to also do what's right for the physical therapists.” They don't have that pull. What's happening is they're like, “Blue Cross Blue Shield has decreased by 10% in pay, add more patients in the schedule.” Easy fix, go work harder. What's happened is that the entrepreneurs never had that moral code entrenched in them on what it's like the moral code that we have as healthcare practitioners. This is the reason why I'm trying to create many entrepreneurs in healthcare so that when they grow, expand and scale their businesses, they now have already indoctrinated them the moral code of a healthcare practitioner. Whereas if you think about it, most of the people that are running these big organizations are not healthcare professionals. They don’t care. They only care less.
I know you've got to get going. You shared a ton of content. I'm sure we could go down another road with another topic, especially that one in particular. Unless you have something more to share, make sure people get your content or at least your contact information.
You can find me @GregToddPT. That is my handle on Instagram and YouTube. If you want to opt-in to my mentorship list, I send out an email every single Monday called Mentor with Greg. It's something that is on my mind that I feel I can help people. I've been doing it for two and a half years. That's MentorWithGreg.com and you can opt-in to that. My event is SSPT Live. We’re nearing in 500 people for the event. That's pretty awesome. On Facebook, it's www.Facebook.com/ThePTBuilder. I go live at about 7:30 every morning. I usually do a 20 to 25-minute talk of whatever I feel can help people. I also turn it into a podcast and the podcast is called The Hunt for Greatness. I'm everywhere. If you want to binge on my stuff, you can binge on it as much as possible. You will be bingeing for months.
The stuff that you're sharing on your Facebook webinars and also your podcast, is that stuff specific to PT or is it more business in general?
It's for everyone but I have an affinity towards physical therapists. My program has taken in the first five or ten OTs, we have dieticians, chiropractors and we have people that are not even in healthcare. It's going beyond because at the end of the day, if you think about it, no one's learned any of this stuff.
A lot of it is basic business principles or entrepreneurial principles that are beyond just the PT.
It's funny, 10% to 15% of my people aren't even in physical therapy school yet. They're learning the stuff and they understand, “I'm taking this information. I could become a consultant.” They're making money to pay off their entire physical therapy education. I teach people how to create money. That's what I want to teach you. If you can learn how to create it, that money is just exchange. I'm teaching people to be more valuable so that you can make whatever you want.
Thanks for your time. I appreciate it. I wish you the best with everything. I appreciate it.
Thank you so much, Nathan. I appreciate it.
For the past 18 years, Greg has dedicated his life to helping people with the skills that he has learned in his physical therapy career.
In the last eight years, he has helped thousands of people in physical therapy (and now other allied health professions) because of the skills that he learned beyond traditional physical therapy schooling.
This has led him to live the life of his dreams for himself and his family, and now helping others, just like you, create the life of their dreams for their families as well.
Dr. Tim Thorsen, DPT has had a lot of success in gradually expanding and stabilizing his physical therapy company. Although he had done that in many different ways, Tim had found how it was when he relied on the right people, who are aligned with his company, that he has been most successful. This goes back to Jim Collins’ Good to Great principle - first who, then what. Tim shares how he applied this in his company and gives great insights on topics from expansion, good and bad debt, and renting versus owning your building, to orthopedic residency and health care options for employees.
I have Tim Thorsen of Health In Motion Physical Therapy out of Wisconsin. I met Tim at Christopher Music's Private Practice Millionaire seminar in Florida. After meeting Tim, I quickly found out that he has seven physical therapy clinics in Wisconsin and I thought I need to have this guy on my podcast to see what makes him successful. As we go through this interview, you'll find that we cover a ton of different topics anywhere from expansion and when to expand. We talk about orthopedic residencies, renting versus owning your building and healthcare options for our employees. You can see that we covered a bunch of different topics. Hopefully, a couple of those topics are meaningful to you.
Tim is the CEO of Health In Motion. He's also a Doctor of Physical Therapy through the University of Wisconsin-La Crosse. He's got a few certifications. He has OCS. He is also a Certified Manual Therapist, Certified Myofascial Trigger Point Therapist and a Certified Clinical Instructor. He's also the Orthopedic Residency Program Director at Health In Motion affiliated with University of Wisconsin, Madison Hospital and Evidence In Motion, EIM. Tim is originally from Rhinelander, Wisconsin and found a lot of success building clinics in more rural settings. There's definitely a benefit to that as I've found some of my success in doing the same, but let's get into the episode. Hopefully, Tim has plenty to share for you. I thought it was educational for me as well.
Thanks for joining me, Tim.
It’s my pleasure, Nathan. Thank you.
I know about you and your success. I met you and I'm excited to bring you on and talk about some financial stuff as that pertains to us as business owners/physical therapy clinic owners. Do you mind sharing with everybody a little bit about yourself, a little bit about your story? What got you to where you are now?
I’ve got a typical backstory for many physical therapists especially. I got hurt in my junior year in the fall playing football. A separated AC joint, second degree and pinched axillary nerve or probably traction to axillary nerve when you think of the mechanics of that. Hitting someone on the wrong side of the body, don't do that playing football. I got hurt and got diagnosed by an orthopedic surgeon, went down, got an EMG, nerve conduction velocity test which everybody should go through at least one of those in their lives. If you’ve got a second-degree separated shoulder and you’ve got a pinched nerve, then good luck with baseball. You're not going to be throwing a whole lot. It was not said to me but it was evident on my end of the equation. I got diagnosed. My hand was frozen.
The thought was maybe working on a dental rough, I ought to go ahead and look at something in healthcare. I jumped almost right away within a month back into school and I was going to be a nurse and then I could get my nurse anesthetist degree and discovered this thing called physical therapy in the pre-internet days up in the occupational health handbook. I was like, “This physical therapy thing sounds cool.” At that point, I transferred from Oshkosh to La Crosse, Wisconsin. I got into PT school and it's been a great ride. Me and my family are thankful for the field of physical therapy. We had the drive to go back and put physical therapy on the map in North Central Wisconsin to be able to get out and reach athletes that maybe were being hurt like I was. My wife and I were both from that area. We moved to Atlanta. I worked there and learned how not to run a private practice so it’s a great experience.
I got called back to my hometown to Rhinelander. A system that I did an internship with kept calling, upping the ante which of course has never happened to another physical therapist either. I decided to move back there for one to two years, paid off some debt, bought a nice small home and got where we wanted to be. I looked around for a practice within the Midwest and particularly in Wisconsin. I looked far and wide at the time. I talked to many private practice owners because I was looking for a private practice that had a vision for the future. They wanted to go ahead and work, look at eventually mentoring someone and having someone come in and help them to take over and/or build their practice. Have some equity, they have some buy-in, and I looked Eau Claire, Wausau, Green Bay, all in Wisconsin, several different places. I interviewed and talked to people and nobody was able to articulate or even say they had that vision or plan.If you're considering if it's the right time to expand, think about Jim Collins' mantra in Good to Great - 'First Who, Then What' Click To Tweet
After a few years of working at the system approach, the rehab director talked to the VP at the small hospital at that time and said, “I know I've given you a lot of these ideas to get physical therapy more visible. I encouraged you to build an outpatient facility. I know you said those are great ideas, but it's not where we're going. I want to do that. I want to go out and move out and I want to be upfront with you. That's where we're headed.” “Congratulations, we get where you're coming from.” The VP said, “If I were you and had your degree, I'd be doing the same thing potentially.” I said, “Thank you.”
That was probably November of 1993 and then April of 1994 we opened our doors. As they say, the rest is history other than the great people that we've been blessed within our organization to come work with us. That's all the way from our front office coordinators to our providers and the executive team and the folks that are working to become part of that executive team. My minority partner, Ben Solheim as well, who does a great job and is a hard worker. It’s not what we work in. It’s the people we’re able to help bring together to work together, to bring something too successful and what the world considers a successful venture, that's the most important.
You started off with one clinic. How quickly did you ramp up? Where are you now?
We had one clinic in 1994. In 2000, I had two of my folks that I'd worked at the hospital with for a few years that had been looking. We talked on and off. In 2000, they had joined us. We had people driving from 30 to 60 miles away to see us. I'm going to say it was the great therapist that's why they drove there. It’s the package. What I was trying to encourage the hospitals to do, we branched out 30 miles one direction to Tomahawk, 30 miles in the direction of Eagle River within several months. That's how we grew the practice and since then both of those partners have transitioned.
I had one other partner as well who was with us, a great guy. He's now an instructor at UND in North Dakota, in the Orthopedics Department. He had six kids at the time and thought that was a good part of the retirement plan if you can be working for the system at UND and get them to cover your children's education. I say that facetiously, but he’s a great guy, a great individual. They’ve been with us once. They moved back more toward home, he’s from that area and then moved back and now is a professor at UND. A great family and a lot of great people. We had that three for a while. We're at seven now. We never had the idea that we want to be big or we want to grow.
Quantity was never the issue. We wanted to continue to do quality work and serve our people well and do a great job with every person that came in the door to see us on a one-on-one basis with our care. In 2014, I got a call through Jim Hoyme and he said, “I got this guy moved over in your area. He’s working for a corporate entity and wants to be in more of a private practice because he worked in the cities with OSI.” Ben gave me a call, it was August of probably 2013 and said, “Tim, I talked to Jim and is there any way I can work with you or work for you, anything?” I said, “Let’s have a conversation.” We sat down that August and then we were open in Wausau by 2014. With that location and since then we've added the fourth and then we've added three locations. One purchased since then and then two other de novo clinics that are the smallest clinics, but we assume we’ll follow the growth trend that we've seen in the others as they mature. The key when we get the right people in place.
You've been through a number of partnerships and you have some experience you can talk to about that.
We did not know it beforehand like anything else and like with the rest of our team and things that we're developing. We're learning from other people like yourselves and other colleagues that you draw from the peer-to-peer group. APK has been a good source of information on going through the Evidence In Motion EPPM program. Practice management has been a great learning experience, networking with colleagues and being able to bring that information. I'm not going to say any of our information is original per se, but we're drawing together the best of the best concepts and then we're working together with our internal team to distill down what works with and for us in our culture.
You've been in practice for many years. In the last few years, you've added three practices and brought on a minority partner. When did you feel it was time to expand? When was it appropriate? When did you think, “Now is the time to do this?” Now that you have a little bit more experience opening a few, are you finding a pattern as to when it is appropriate to add on the next location?
Yes and no. The first ingredient is people that you feel are ready for the opportunity. When Ben approached me, he was ready for the opportunity and then it wasn't, “Is there a demographic that supports it in that area that we're looking at?” It was like, “We have an opportunity here because of what we do with our residency program training. We worked with both UW-Madison, Meriter Hospital centers at UW Health, but we also work with Evidence In Motion as well for our baseline residency program where we do a lot of training.” We have a foundation to attract high-quality therapists. We feel we have a solid organizational background on what we do with folks clinically as practitioners.
Since adding those clinics, we’re working on developing executives and leaders to not only to take over the organization but to be able to multiply and add wherever they decide to serve in the professional physical therapy. As leaders within the profession influence not only our own but other industries and that's our next step. I would get down to the fact that we've got a decent foundation. We need to share this with more people and we need to let other therapists benefit. If they benefit, what's ultimately happening is more consumers at the grassroots level have a way to enter directly to a physical therapist. To get physical therapy care that's less costly and a better value for them personally and for the system as a whole.
It's where you are now, but I'm assuming it's what's led to your growth to this point and it's a concept that Jim Collins shared in Good To Great about it’s first who then what. When you have the right people in place and in the right seats on the bus, then you can consider like, “What do I need to do to help this person continue to grow? What can I do to help them leverage their strengths to maximize their potential to the benefit of the organization and the community?” You sound like you've bought into that concept that once we find the right people, then the opportunities will present themselves or we will be in a position to create opportunities.When we get the right people in place, we succeed. Click To Tweet
I’ve read Good to Great years ago and that's why Jim Collins has written many books and we steal those principles and we put them into action. It’s probably one of the strengths areas that I have is converting stuff that people talk about into action.
If you follow that pattern even from the get-go, even from your first clinic, you go through a lot of trial and error with a bunch of different people and character types and personality types. Once you find out the personality type and the type of people that you want in your organization and that are aligned with you, then you can grow even when you're a small practice. You go through a lot of mistakes before you hit the right people, but you maintain that idea that at first, it's who then what. You mentioned creating the foundation and part of that is people.
You also then established the way you want to do business and that is written standard policies and procedures so that if you went to any Health In Motion practice in Wisconsin, they'd probably be running about the same. There might be a little bit of difference in culture because of the people there, but they're going to do things about the same way. You've got a steady baseline foundational financial picture where all of them are probably running fairly strong before you open up the next one. That might be a little bit of a drag on the cashflow and stuff like that. When I'm talking about foundation, there are other things that go into that you've established over time that make it easier then to expand off of.
I'm not a real systems guy and probably anybody you talked to that knows me well would tell you that. We've had to go to that and many have come to understand and appreciate that structure. I give a lot of accolades. The EPPM program through Evidence In Motion for me, it was back in 2012, 2013 that I went through that. There’s some good framework that was put out there for me. It took more structure than that for me. We've worked with MEG Business Systems, Brian Gallagher. He came in 2016. If you ask our staff and it was totally against our culture, but we knew we needed to put in some structure and Brian has been integral in that and appreciate not only his work and effort in that area but our friendship. He has a good heart that way and is interested in seeing the profession and the individuals that need more of a system like myself grow.
I've heard good things about Brian. I had a previous interview with Rob Brown up here in Wausau and he went through Brian Gallagher’ system with MEG a number of years ago as well and he had good things to say about it. Interestingly, when he went through the system like that to incorporate structure, he came up against a lot of resistance and found out who was going to stay on the team and who wasn't. What any structure and not to say anything bad about Brian, it's any structure or anything that you try to put into place and hold people accountable. You could come up against some resistance. Did you notice any of that?
We did a little bit and it was unfortunate. We had some significant loss of great therapists, but at the same time they probably needed either something different or needed something different to grow. We tried to go ahead and bring it in and explain what was going on or why. Some people are going to embrace that, other people may run from it. It allows them to grow, maybe to move to a different situation or maybe they can grow more optimally. That does happen any time and we tried as best we could and yet went through the process. We're better individually. Other individuals chose not to stay on the bus and will find their way will be in areas and situations that they can continue to get better and practice their craft and hopefully integrate situation.
It’s no fault of theirs if it doesn't align with them. That's fine, but sometimes going through that process can be difficult. It sounds like you agree with what Rob would say is that after going through the structuring process of their systems and putting some policy and protocol in place. They filtered out some of the people that weren't in alignment with that. They're in a better situation.
Hopefully, that is a win for themselves and they’re finding what they need or where they need to be and they’re being challenged to grow personally and professionally.
If there were any statistics or metrics that you followed that led you to think, “We're in a good position as a company to expand.” Did you have any patterns that you saw financially that helped you recognize that you're at a point to do that? Do you simply leave it to, “Do we have the right person to do this with?”
My wife who has a background in accounting and business, Lisa, has been invaluable to our practice from day one. I could focus on the business, the organization growth and doing what I did first as a practitioner. As a practitioner/executive and now as an executive/owner, and a mentor within the practitioner realm and because she's been number one who hates that. Number two, she knows her stuff with numbers well and has always liked to have money in the bank. Not that anybody else's wife or whatever liked to have money in the bank. They feel much secure that way is my understanding.
I've been blessed that way because I've never had to think about finance. I can honestly say financial is never a big decision driver. All we knew is that we are running a large cash balance and we can go ahead and invest in things that we were believing was good. It seemed like a good alignment with the people who were there. We could get behind it because we knew that it was an investment and would grow in the future, which is good debt versus bad debt. This was a good debt because we trusted the metrics that were there. That we were seeing the people we are getting involved with, and we knew that it would be an investment and grow over time.
One of the things that I leaned on back a few years ago when it came to expansion especially when you're going from one to two and maybe two to three clinics. It might not carry so much weight when you're getting as large as you are because if one clinic were to falter, it's not as big of an impact on seven or eight clinic practices as it is if you're a one or two clinic practice. In general, some of the advice I was given was that if that one clinic is running 80% to 90% capacity, now you're in a better situation where you could take on a second clinic. If that first clinic is only running at 50% to 60% capacity, you need to focus on building that one up before you go ahead and open up the second one. Percent capacity in my book is dependent upon the size of the clinic and how many patients you're pushing out per week based on the size of the clinic. Is that something that you can relate to?You go through a lot of mistakes before you hit the right people. Click To Tweet
Ironically, at the time we didn't use those metrics because we had a cash balance. We had practitioners that were all working together within the same, but we knew that there was a lot of folks that we're driving to see us for over 30 miles. It made sense to extend that 30-mile radius because we knew them beyond there. We could reach another 30 miles because we're talking more of a rural area or non-urban. Those cash balances didn't really make us in because we've always been frugal with running things and very good stewards of things. Do we go ahead and risk what we have here to go ahead and invest in this next opportunity? We would.
You brought up good versus bad debt. Talk to me about your thoughts on that.
We’ve been thankfully blessed we never had to worry about it from an operational standpoint with the practice. We were at our first location. We rented a fitness center and our rent was $250 a month. The size of the space was about 15x6. That was our reception area. It was wide and a small little window that we'd open to greet our patients and they'd sit down on our one or two chairs. We had access to everything in the fitness center, but then we had two little treatment rooms behind that were basically less than regulation size. They were about 8x10, about 80 square feet. We had a big gym space beyond that, but that was our humble start to keeping overhead low and looking at your cost versus what your revenues are going to be.
We've been able to be blessed by that model every time we stepped out of the same situation but more capital behind us. This was back in the day and you didn't have to know nearly what you need to know in the heavily regulated and compliance required world we live in. We started out meager, modest and then we said, “We're renting here.” I approached the owner who lived in Milwaukee and has a big fitness and racquet club. I approached him because even the people that were running the fitness center then were leasing from him. I met with him in Milwaukee and it was 1997 circa and I said, “Can we buy the building from you, work with you and do a partnership?” He said, “I’m not that interested.”
We looked at our options. We offered the current owners of the fitness center that we were in, “Come with us. We're going to put on a second story.” We stayed with one story and we moved into about a 5,000 square foot building. That would be our first example of good debt because we chose to set up a separate LLC, go ahead and rent them ourselves instead of renting from someone else. That's a model we've duplicated now in five of seven markets. That's led to what I would call good debt because all that debt is pretty much gone and we focus on paying ourselves rather than paying someone else. I could put on my landlord hat occasionally, which isn't bad.
Commercial real estate is always easier to handle than residential real estate. There are not as many headaches and especially if you line it up correctly. The benefit that I recognize of having a real estate holding company that I use to purchase the building and I rent to myself as the physical therapy tenant allows me to have added expenses that I could ride off and do other things like any small business could. The benefit of that is not that you can have separate liability and you should minimize your liability of owning the real estate company, but also take advantage of tax savings here and there. Use that to accumulate more wealth as a practitioner. You don't want to have all your wealth in physical therapy. Having your finances diversified over real estate as well can only be beneficial.
There are many advantages to opportunities. You're talking a lot of my wife's language with that, but the principles I definitely get. Talking tax and accounting is her world.
At your size now, how many employees do you have?
We're probably pushing on about 35 employees’ total. Some of those are from coordinators, job sharing and part-time. We're at about sixteen providers and we're looking to bring on three more. Two are already coming on and we're interviewing for another position. We've been blessed with the residency program, which certainly in Wisconsin if not in the country where we’ve been an affiliated program with UWHC out of Madison. It’s about a three-hour drive from us, but we started that in 2009 working with Catherine Lyons, who was a pioneer. She started one of the first residencies in the country in 1998 at UW Madison. We've been blessed and glad to participate as an affiliated partner with them as well as with Evidence In Motion, which has done a bang up job in a relatively short period of time out there. Their organization does impress me.
You've been able to then recruit through that residency program. That's something new to me. How would you recommend another owner become an affiliate like that for residency programs? Can they create their own?
They can always create their own directly through the APGA following the guidelines and implementing their own program. You’ve got to have a considerable amount of internal impetus to go ahead and do that. If you’ve got the faculty and the folks on staff that wants to do it, go for it. That's one great way to get directly involved in an intense but rewarding way. The way we look to do it was through residency affiliation both with UWHC and also with Evidence In Motion. They provide the didactic component. We don't necessarily have to have all of our folks providing didactic content, not that we couldn't do that. We ask that question sometimes. We've left that alone at least for now because we like our affiliations and our options that we can provide to incoming residents as well as to the rest of the folks working with us.
I see that as a great possible recruiting tool for those owners that are in areas where it's difficult to recruit physical therapists. Do you find that it's been a real boon to you as far as recruiting PTs, especially solid PTs?Whatever care we get, we pay at the cash rate. Click To Tweet
We've grown most of our own solid PTs internally through those residency programs. We’ve got great clinic leads that are on the exact track to become leaders in our organization and/or within the profession. We're relatively young in that process but that's largely where they'd come from. These guys and gals are spot on. How I've seen each of them grow not only with the inherent skills that they brought in but what they've been able to access and add, technically competent, highly empathetic. I can't say enough about their practice as practitioners and then their willingness to take that next step to be developed as leaders in the organization, in the profession as that executive moving into that executive realm. Who's going to take it on and own it? We don't know, but we're offering it and seeing how they develop and how they come along.
I can imagine that the people that are part of those residency programs are A players, movers and shakers in the first place. Otherwise, that residency program application process probably filters out the dross anyways. You're getting some solid people coming through simply because of the residency program and that leads to a special candidate that you can work with.
The willingness, whether it's for myself or anyone, to be mentored and to mentor is a powerful way that we can transfer not only information and knowledge but wisdom. That's in our practices. We need to be able to manage those patients. We need to be able to manage people and it all comes down to communication and relationships. As physical therapists or the practitioner we're teaching, we have to have that connection to those people. If we have the connection, it becomes so much more valuable. It resonates with them when you can connect.
That's a tangent that we didn't discuss, but I'm glad we talked about the residency program and your affiliation there, and how it affected your company. It seems like it's been a big foundational support to your growth and the number of executives that you can choose from to be part of your executive team.
It offers them an opportunity. People generally that come into residencies are looking for that lifelong development growth and opportunity. We hope to be able to provide that. Other owners can hear this and say, “I want to do that too because we need more residency offerings in the country.” That's a be all and end all from a success standpoint, but it gets him on the track to then decide, “Do I want to stay as a practitioner? Do I want to consider this exact thing or leadership training thing maybe?” We'll each do that differently in our own organizations, but those are the basic principles that we need to share and encourage others in.
That can be a definite recruiting tool to your practice, but one thing I've recognized in general from a basic level is that the benefits you provide your employees as they come on. When we're interviewing physical therapists, they'll ask of us, “What are the benefits? What are you providing?” One of the big ones is healthcare. What healthcare benefits are you offering? Talk to me a little bit about some of the ideas that you're having on providing healthcare benefits to employees. I'll share with you my thoughts as well.
It's a challenge. Anybody in private practice is providing your own employees their own insurance and our insurance even it's a challenge. I don't think there's anybody that can tell me that it's not. If they do, please take my information and get ahold of me. We struggle with it. Over the last couple of years, we've looked at going self-insured. Companies as small as ten or less now can go self-insured, but we look at the feasibility at least in our area and we're not getting the straight dope. It's too costly and we went against that option. We drag what I would call a pre-ACA plan or a grandfathered plan through the ACA or Obamacare. We still offer that because some employees are coming on, they think they need a traditional insurance plan. We carry that and we do offer it.
A lot of my folks approach me with this thing called health share ministerial plans. They’re the one they approached me with. Initially it was this thing called Liberty HealthShare. What is that? As usual, google it and start reading about it and put my HR person Sandy on it. She talked about tons of information and she's a great person in this position. She had her own insurance, had been on our plan and have looked the ministerial option. Her husband became a postmaster so she's on a government plan and a pretty good one for most postmasters.
Our HR person has all the details with it, but the bottom line I'm even on the HealthShare ministerial plan. It costs me $300 a month and I'm covered for a catastrophic medical in any state and not limited to a PPO. I can go ahead and they do still WellCare checks every year. I can go in for an annual physical. I’m generally healthy. I work out regularly. I'm teaching genetic background. I'm not worried about it. I’m like, “Why do I need to go ahead and give an insurance company over $1,300 a month? I can go ahead and hedge my insurance. I'm putting $300 a month on me and saving $1,000 monthly.” It’s huge. That's my personal experience. On HealthShare ministerial plan, we don't expect every employee is coming in to know those exist, but we tend to educate them over time and then they choose it because they talk to their colleagues and other folks. Their peers are the ones that brought it to me initially. That's where we're at.
Especially the physical therapists that you're bringing on. They’re physical therapists and they tend to be relatively healthy. They're younger. They usually don't have a lot of issues. Why would you want to throw as a single individual $500 to $800 a month for a high deductible plan when you can use some of this healthcare sharing accounts or health sharing?
They're not insurance.
They do comply with ACA. You can count as coverage because of my family, same thing. We have the typical Blue Cross Blue Shield plan. The deductible was going higher every year as well as the premium. We were getting to over $10,000 a year in deductible, paying the same amount or more in premiums every year. I've got seven kids and my premium was going up to $1,300 a month for a high deductible plan. My wife approached me about these ministerial plans and we're currently on one called Samaritan Ministries and there's another one called Medi-Share that's a popular one out there. Now we pay $500 a month. To get some specifics, the expectation on our end, now we're in control. We're responsible for our health that we pay the first $300 of any bill that comes across.It's not how you feel in any situation. It's what you do after it. Click To Tweet
Whatever care we get, we pay the cash rate and they can get reimbursed and I've found that to be a huge saving us because we're a young family that doesn't tend to get too injured. We still have catastrophic care. We're responsible for the first $300 of any episode that we encounter and that's been a huge saving for us. We've been on that for the last few years. I can't count the thousands of dollars that we've saved in premiums and whatnot in dealing with that and the deductible money that we would have had to pay on top of that. I'm a big proponent of the health ministry programs that are out there. It's saved us a lot of money.
It is amazing, Nathan, and people won't believe it. A lot of times they don't have the information. They don't know this is possible. The old adage is used against them, “If it looks good, it’s got to be a lie.” It is that cool and that true. I’ll hear the other one which is, “It’s not covered by any laws or insurance.” I’m like, “Who am I going to trust? Am I going to trust insurance companies that we have such a great time relating with on a regular basis in our practice who never lie? They don't receive something you send them eight times or more. Who am I going to trust?”
I call it throwback insurance. They are a mutual organization or a collegial organization. We agree with their ideas or values. You sign on to those. They are in the business of pooling money and covering each other's care. They're not in the business of million-dollar CEOs that I've seen. They're not in the business of building buildings not that you've ever seen an insurance building anywhere. They're not in the business of generating excess cashflow to invest in the stock market and generate their own financial security through those investments. Hypothetically, not that that would be true of an insurance company.
There are options out there. You talked about the ministering programs. Our company also provided some telehealth services, those are relatively inexpensive, you can cover an employee for $50 to $100 a month. The one we used was Redirect Health where it gives our employees and their families access to an on-call physician 24/7. This company will also go out and negotiate cash rates at physician's offices and specialties and diagnostics and give you coupons for your pharmaceutical needs. The telehealth services have been huge in saving time, money and energy that it takes to go and see these doctors where we can sit on the phone and either talk or sometimes we FaceTime. I had a kid that had an acne problem and he would FaceTime with the physician from Alaska to Arizona and she said, “I'm going to send in this prescription for you. You have to go to the pharmacy and pick it up and here's the coupon code for your prescription.” There are other options out there besides your strict conventional health insurance. That's what we're trying to drive.
It's phenomenal what's out there. I didn't know about Redirect at all until you mentioned it. I was explaining the situation to my wife that she got a little strep throat thing when we've been down here. I think it was dryer than Arizona. She did a telehealth call. Everybody's got smartphones. She was able to show her throat over the phone or FaceTime or whatever version you want to use of audio-visual. She talked with an internal med physician back up north and it was $60 or $70. They called in a prescription of amoxicillin down here good to go.
We did poke around the area first. We thought, “It would be good to go in.” I even look through the FMMA which is a Free Market Medical Association website for a direct primary care physician in this area and there weren't any listed. She got on the phone and called a few. She called her buddy, David Bird with FMMA. Maybe he doesn't know they exist, but she should be listed on their website. She called around and made three or four or five calls and they were nice enough to refer her to someone else. Bottom line, she didn't find anybody in and we called back home and did that thing. It’s inexpensive. She was able to get treated and is feeling great.
We've covered a ton of topics. We've been all over the board, but a lot of cool topics as it relates to your ownership and your expansion in general. Anything else that you want to cover?
We need to really bring everyone. Physical therapists are generally great examples of this of personal responsibility and everybody talks about rights so much. Everybody wants their rights but no one wants to go ahead and take personal responsibility for themselves. Stuff's going to happen, this is planet Earth. Whether it's my separated shoulder and a pinched nerve and football as a junior and I was a lot better baseball player than I was football. Everybody has gone through that head trauma. It's not what you do or how you feel in any situation. It's what you do after the fact. Do you pick yourself up? Do you get back up? What can I do about this? Are you going to say, “Woe is me?” Making those personal individual choices and we as physical therapists empower every people every day to make those choices, to focus, and we can through motivational interviewing.
It’s cool listening to your podcast with John Woolf. He needs to get hooked up with the FMMA and look at all the Health Rosetta concepts that are out there too with Chase and Schwartzman. The Free Market Medical Association is onto something because we are their movement and musculoskeletal experts. It’s like ACA is carved out, pediatricians tend to practice internal med and practice on monthly membership models. We are their cohorts to help with movement in the trenches. We are the doctors of physical therapy, the doctors of movement, and they readily admit that they don't know a lot about movement or musculoskeletal. The World Health Organization told them in 2004 and 2014 that their education is wholly inadequate and it will not change.
If people wanted to learn more about the Free Market Medical Association, how do you access information about it?
FMMA.org. They're doing some great work there at Oklahoma City so real to the central in the country and the principles are there and the organization they're putting together are solid. They've got a good internet-based presence even though their website. When you're not a member isn't the most laden with information, but they do have a conference coming up here in April. It’s April 11th through 13th, Thursday evening through Saturday at noon. That's in Dallas coming up. I know I'll be at that and cool stuff going on in that realm of things to change healthcare.
Is that an organization that physical therapists can become a part of and tap into?
Yes, I'm a member and they wholly embraced it. Not enough of our colleagues are yet. Membership is nominal and they don't understand yet. I haven't articulated clearly enough how we can work together to change things because of the direct contact we have with many people one-on-one for the time that we have whether it's traditional therapy or other innovative models that we're working on to work directly with employers.
If people wanted to reach out to you, maybe ask you questions about your residency program or the Samaritan Ministries that you're talking about or FMMA, are you available?
Thank you so much for your time, Tim. I appreciate it.
Nathan, I've enjoyed it. I sound a little bit confusing on the number of topics that we've covered. I look forward to sharing at any point in time on any topic you’d like. That's one of my favorite things to do.
I appreciate it. Have a good day.
Owner of Crom Rehabilitation, Dr. Roy Rivera, Jr., PT, PhD, DPT, MCHES isn't a social media expert. However, he has leveraged social media and his clinic’s specialization to become the number one result on Google and Yelp for "Houston Physical Therapy." Considering how huge Houston is and adding that to the fact that Roy has only been in practice for four years, this feat is undeniably amazing. Roy tells us how he did it. Contrary to what you might expect, it isn't difficult. He shares the ways he generated positive reviews while talking about the importance of getting clarity on your growth strategy. Roy takes us into his own journey from quitting a job to securing financing to build his next clinic.
My guest is Dr. Roy Rivera out of Houston, Texas. He owns Crom Rehab and Physical Therapy and has so for several years now. He reached out to me via email and we went back and forth about ownership. He shared some of his successful actions. I thought some of his stuff was unique enough that I want to bring it on to an episode. To give you a short bio on Roy, he's a Licensed Physical Therapist. He has been practicing for a few years since 2005. He's worked in various healthcare settings, long-term acute care hospitals, skilled nursing facilities, inpatient rehab, outpatient ortho and sports medicine clinics. Outside of practicing physical therapy, he’s also a faculty member at Cross Country Education and has provided continuing education conferences and seminars for PTs, OTs, speech, chiros, psychologists, physicians, etc., with topics that include rehabilitative research methods, ethics, and professional responsibility.
He's also a Faculty Honorarium at Hardin-Simmons University where he has lectured on ethical principles and policy issues in healthcare. He started consulting as an expert witness in trials involving physical therapy care. His past affiliations at TIRR Memorial Hermann Hospital, Texas Children's Hospital, Children's Memorial Hermann Hospital and Texas Medical Center have allowed him the opportunity to work alongside some of Houston's most reputable pediatric and adult orthopedic surgeons. He's unique in that he has years of experience treating individuals across the lifespan with orthopedic and neurological conditions. His broad scope of knowledge and human gross motor development from birth to older ages enabled him to be a more effective well-rounded physician. He has a whole-body cross-training approach to his personal wellness and this also holds true as professional treatment approaches. We're going to talk about his story as it relates to starting off in hospital care and then jumping into outpatient orthopedic clinic ownership and some of the things he stumbled upon and intentionally worked on to improve the growth of his company. He's got some great insight. I hope you get a lot from it.
I've got Roy Rivera of Crom Rehab out of Houston, Texas joining me. First of all, thanks for joining me, Roy.
It's not a problem. I'm happy to be here.
Roy was somebody who reached out to me via email. After going back and forth a couple of times on email, Roy was able to share with me what's been successful for him in the last few years as he's developed his practice. I wanted to bring him on to share that with the audience. There might even be a couple of other topics that will be useful for our audience. In order to get to that point, Roy, do you mind sharing this with us your story? What got you to where you are now?
I graduated back in ‘05 with my Master's. It was at the time when the tDPT still was in its infancy because the year after I graduated, the tDPT was introduced. I said, "I can't get behind on this." At the time, it was Boston University and Rocky Mountain in Provo were the only two or one of the first that were doing it. I jumped on board with the Rocky Mountain program. I got my Transitional DPT. I was a little crazy and jumped right into my PhD. I thought I wanted to be a researcher. I love to lecture. I love to teach and I've had a short history of doing that. I have done that. I think of that as setting myself up for the future. The end goals would be to set up a few practices and a few clinics and I don't want to say fade into the shadows but retreat to the university and lecture.
Lecturing and research is your passion.
That's what I like to do. A lot of that surprisingly carries into everyday clinical practice, which is good. It has helped us be successful. I went into working for one of the largest hospital systems here in Houston. I was with them for about maybe ten to twelve years or in that range. I did everything from ortho trauma to outpatient to ortho trauma in the kid's hospital. PD Ortho Trauma was my last rotation in that big hospital system.These days, the consumer is more educated in what they can and can't do as well as what they're willing to pay for. Click To Tweet
You got an itch to go out and do your own thing. Did you see yourself as being a hospital lifer at one point and then had some switch or something that made you think, "I want to do this on my own and do my own thing?"
This is exactly what happened. I went through my educational process while I was working at the hospital. It got to a point where I sat down with my superior. He literally said, "You have reached the end of the road here." He said, "You have done everything that you can do here. You’ve reached your max level of PT that you can reach. Your salary is capped. You're at the top." I'm sitting there thinking, "I'm 32 and you're telling me that life’s over." I said, "I’ve always had this itch to go and do my own thing." I have known people that have had private practices, but I’ve never dug into it. Not having a business background, it was very intimidating. I literally made a decision one night. I sat there. The next week, I pulled my 401(k) and cashed it in. I opened up Crom Rehab in November of 2014.
For your supervisor to give you that gift is cool. He obviously saw something in you that wasn't getting fully realized. A strength, a capacity to do more and to sit down and probably at the detriment of his department. He never wants to lose a physical therapist that's awesome and great and all that stuff. To give that gift to you and say, "You've reached the top of the line here. You need to go off and pursue some dream or do something more." Do you see it like that now that you're looking back at it?
It was a blessing in disguise. It was my home. You get to know people for years and years. You get comfortable. I'm not going to lie. I miss working 7 to 3 Monday through Friday.
You get a different schedule when you own it.
I'm not going to lie about that. I do miss that. Other than that, I wouldn't change anything. What I have now is amazing. It’s an awesome thing.
Now, you have the one clinic which is about 2,200 square feet. Do you have other providers with you and whatnot?
That's a funny question because we have in the past had other PTs in the practice. Part of my challenge is finding somebody who has the same mission and vision that I have. Trying to find a lifer and not somebody that's using this as a one to two-year step to move on to somewhere else. That's been my challenge. It's myself and I have two PTAs. That's been our model for the most part. We're a small operation, but we're making some big waves.
You’ve been open since 2014 and I know you have plans to expand to your new clinic that you're excited about. One of the reasons that I wanted to bring you on that you said in your email is that your growth isn't the traditional pattern that I'm used to because I'm a little bit older when it comes to PT ownership and whatnot. Your growth has been more around using reviews specifically Google and Yelp?
Our social media has played a big role in our success and in our growth. A lot of people these days and I don't want to say Millennials but a lot of older people too, they're catching on. They're using services like Yelp. They're using services like Google. The consumer is more educated in what they can and can't do and what they're willing to pay for. We're having a lot of success using our reviews and having our patients put the word out there about the work we do, about the successes and about our outcomes. It's brought us a lot of opportunities.
You've been so successful at it that you don't necessarily do a lot of physician marketing. I'm assuming that you have a few relationships out there. When it comes to your marketing strategy, that isn't the core of it?
That's not the core of it. To be honest with you, I'm in the new facility. In the new facility, one of the positions that I budgeted for was a marketing manager. To have somebody that manages your Yelp page, that manages your Google page and manages your Instagram account and all that stuff is for us critical. A smaller component of that is the face-to-face physician referral model that's probably going to be about 25% of what we do.You can't do everything forever especially as your clinic grows. Click To Tweet
I presented it as Google and Yelp solely, but you're using some of those other social media platforms. What other social media platforms are you using and how often are you posting?
We post on Facebook. We post on Instagram. I try to do at least one post a week is my goal. A lot of the reason that people come back or are attracted to us is the culture that we have in our building and our facility. They'll post links to articles on ACL repair and new trends in ACL repair and new trends in this, new trends in that, which you we know is great. That's awesome. Some consumers want to see that and they love it. Consumers also love to see Dr. Roy at lunch goofing off. It sounds silly to say, but they like to see a personal side to the facility and not think of it as such a white-coat place. That is the attraction. That's what draw people in.
Break it down for me a little bit, how do you ask your patients to leave a review for you? I'm sure it's become second nature for you now. Describe for other people, how would you talk to somebody about asking for a review?
Once the patient goes to their discharge session on their final day, we give them their little parting gift. We get everybody a nice coffee mug with our logo on it. I personally sit down with every single patient who discharges. It’s something I make time out to do even if I'm in an eval or if I'm doing something, I'll say, "Give me one quick second, I'll be right back. I’ve got to say bye to somebody." I'll talk to the patient. I'll say, "It was great having you here. I hope we met all your expectations. We're not a giant hospital system. I don't have a lot of money to market like a lot of the bigger systems do, but if you could get on Yelp or get on Google and say something nice about your experience here, it would mean a lot to us." I'll follow-up with an email from my work email.
For me, it's not system generated. I'll include the links to our Yelp and our Google pages. All the patient has to do is click on it, write their review and they're done. They also have that element of they can contact me whenever they need to. It's that personal touch accessibility that they love that. That's priceless. It's funny we’re talking about it, a lot of our current patients or current clientele are repeaters. We're going through a phase right now where we're having a ton of repeat patients. I said, "What's going on?" Shouldn't that be the goal? You go back to the same PCP.
Have you broken down the numbers? Have you figured out what your percentage of repeat patients are versus new referrals?
We have all that in our EMR. I haven't broken the numbers down and looked at it. We do track that. We do have that in our EMR.
You'll find as you continue to grow, you're four years into it. As I got more established, it ended up becoming like 60% of my patients were repeat patients because we built a solid relationship with them or their family members. They were coming back. It was almost disconcerting. I'm like, "I'm putting a ton of effort in marketing physicians but 60% repeats. The beauty of modern technology is exactly like you said, "You can reach out to them now." Not necessarily via mail but now through emails and through social media platforms. They start following you. You can be in front of mind a little bit more often and take advantage of those repeat customers over the years. You're establishing that now. You're seeing the fruits of it.
It's awesome to see them come back. For them to be excited to come back and I say, "You're hurt, why are you so happy?"
You'll eventually get those people. You get ten, twelve years into it. I'm probably talking for a few guys out there as well that have been around for a while. They got people who come back ten years later, they're like, "Tell me about your kids. Remember my kid? They were ten. Now they're twenty. They're in college." Showing me pictures and they'll remember aspects of your life that you're like, "How do you know that?" They talk to you like they haven't missed a beat. Kudos to you for developing that relationship that's great. As we were talking, you’ve been able to specialize some of your marketing down. You’ve gained some real success and traction with that. Would you mind telling us about that?
As I was telling you earlier in the emails, we're sports medicine orthopedics. Our practice is very general. There are a lot of us out there. There is a lot of sports medicine. I know a lot of ortho places. We're thinking about market segments. Are there any populations that we are leaving out or that we could serve a little bit better? We were approached by a local community hospital. It's not a big one. It’s a local community hospital that they have a grant through the Ryan White Foundation. It's for patients with HIV, who have orthopedic needs like everybody else. They said, "We've contacted a lot of hospital systems. We've asked people to take this contract. It's a direct network contract. We get paid directly by this community hospital through the grant.” I'm such a small guy that I said, "I'll look at the contract. I'll work this with you." I sat down, I looked at it, the number of referrals that I got from this community hospital and it's going to be patients that have HIV that they had a knee replacement or they have tennis elbow. It's nothing that you would think that would be gravely acute or anything. It's outpatient ortho needs.
As we started seeing more and more of this population, I said, "Where do these patients go for their rehab? Where do patients particularly the LGBT community, where did they go for their healthcare and their health needs?” I started marketing to physicians and meeting physicians that they cater to the LGBT and the community. That's what they do. They are PCPs for the LGBT community. As I started making these contexts and these networks, they saw my affiliation with the Ryan White Foundation. Our referral sources started a boom from there.You have to bring something tangible or there's nothing to run by everybody. Click To Tweet
We also have a local physician, she's a PCP. She is also catering to the LGBT community but a little more specifically to patients who are in transition. It might sound silly. For patients to come in and appear as Michelle, they give you their ID, their insurance card and it says, Michael. For us not to make a big deal about it and for them to feel comfortable and create a safe environment and a safe culture for them, it's made a huge difference for our numbers. We cater to a community. I told you that I didn't want to say the word niche, but I have the thing against the word niche. We could call it or consider it. It is a niche. We have a local magazine here called OutSmart. It’s the biggest one in our area here in Houston that caters to the LGBT population. We took out an ad in OutSmart. That's the only paper thing that I have out there floating around in terms of advertising. Other than that, our efforts into this community in our area is untapped. It has been a blessing for us to grow clinically.
You're such a great resource for the community. What people can get from this as the way you specialize is essentially the pattern that you used. You focused on a group. You started working within that group and marketing towards the physicians that serve that group. You have set up your culture such that it's very accepting and very common through everybody that you serve that population so there's a lot of comfort there. What people can take from that is, as you specialize you can focus everything you do onto that and double down on it. Whether you want to be the specialist for the youth soccer league or the baseball program, basketball program or CrossFit if you want to focus on CrossFit athletes and that stuff. You focus on not only the group and you learn their language and even accept part of their culture within your clinic, so they feel comfortable there. You're also focusing on those doctors that are serving that community. That's where I think you see the benefit of it. The pattern that you used can crossover to anything?
It is a pattern that we use. We were so blessed to find that unique segment of the market that exists everywhere. I don't know of any other clinics that do that or who claim to cater to that. It is Houston. We're a giant city. We have a lot of variety here when it comes to health care. We have the largest medical center in the world. That's the truth. I couldn't believe it but we do. We have a large medical center in the world. There's a lot to go around here. I can imagine establishing something like this in a smaller community, which could be a very successful thing.
I want to point out that through your efforts with Google, Yelp and how you've set yourself up with social media, but you told me that you’re top of the list when it comes to people Googling for Houston physical therapy?
That's my one bragging right. When you get on Yelp, look up in the whole city of Houston, type in PT or rehab physical therapy and we generate at the very top of the list. We're number one in cities when it comes to physical therapy. That is what has shot us up to the top and helped us to gain a lot of patients that we wouldn't have had otherwise because their physicians tell them, "Go here. Go there," the way the pattern is. They do their own research and they say, "These guys are number one, what's going on?" They read the reviews and the rest is history. I’ve had a lot of people ask me, "How much do you pay to be number one?" I’ve had a lot of people ask me that. I say, "We pay zero dollars. I pay nothing to Yelp. I pay nothing to Google." Zero dollars there for that marketing. What you do is, if you generate enough reviews and they have to be positive reviews, then you rise to the top without having to pay for anything. It's been an awesome experience.
Have you spent quite a bit of money on your website as well to make sure that follows up and looks as good as your reviews?
The website, I did it myself. I didn't hire anybody to do that website. I used a platform online. I used Wix online. I did it myself. I promise in the next facility that I'm going to hire a professional to do it.
That broke my assumption. For some reason, I had the idea that your website is probably great and top of the line and thinking you have to follow up your number one setting on Google and Yelp with a beautiful website. You smash that all to pieces. I can't assume that.
I tap dance. I scrub toilets. I do the website. I'm at that point now where we're growing. I've got to allocate people and services to do these things so that we can grow. That's where we're at.
You can't do everything forever. You're getting to that stage where you're recognizing that. I'm glad you see that. You're going to have to make a lot more Roy Riveras in your company to make this successful. Tell us a little bit about your growth. I know you're going to open up a new facility. You said it's been a project for sure that's been over a year. You’ve got an SBA loan. Is there something that you can share with us, maybe a little bit about your story? Maybe some of the advice that you'd give to people who are looking to build their own facility and get financing through SBA that stuff?
I went through a Goldman Sachs program. It's a national program. It’s called 10,000 Small Businesses. Their whole goal is to take small business owners and to take them through literally a crash course in an MBA. It's for a semester. It's completely paid for 100%. You pay absolutely nothing. You become a Goldman Sachs alum. I said, "Why not?" I know Jack about numbers. When I started and if you asked me, "Let me see your balance sheet.” I'm like, “What's that?" I had no clue. I had no idea what I was doing. I did this Goldman Sachs program. The whole purpose of it is to develop a growth plan. That's the whole purpose of the Goldman Sachs program.
In this whole semester, you're working towards essentially writing your growth plan. I did that. I went through it. I wrote my growth plan. At the end of the course, you have a tangible plan that you can walk into the bank with. You can present it and it's ready to go. I identified my growth opportunity, which for me was adding aquatic therapy to a new facility. We're adding an aquatic therapy component. You'd think as big as Houston is aquatic therapy is very hard to find. It's in demand. We have patients call us asking us if we do it. I said, "Having so many people asking if we do it, then why are we not doing it?"In life, you need to go off and pursue some kind of dream and do something more. Click To Tweet
Rule number one, if you approach a bank or a lender with an idea, that's all they hear all day, they hear ideas. You need to approach them with something you can hand them, something you can give them, something that is proof that you're as invested as they are going to be. I came up with my growth plan. I presented them with my growth plan. We went into negotiations from there. The bank wanted to fund. They said what about this SBA process. I started the SBA process, which it's a lengthy application process, I'm not going to lie. At the end of the day, I said, "They took everything from me but my blood,” but then I was wrong because then they did take my blood. I had to take a blood test for life insurance. They go the mile. At the end of the day, it's an awesome interest rate. I got the money that I needed to open up my new facility. I broke ground. We started building. It's an exciting time right now. We're going to be doubling in size. I'm already interviewing for positions because I'm not going to be able to run this show by myself.
Any advice to other owners that might be looking to do something like that?
Definitely look into the SBA as an option. Don't settle for any regular bank or regular lender. There are a lot of government monies out there, especially if you're in the minority. I know there are special monies for minorities and for female owners as well. There's a lot of stuff out there that's not just banks. Do your research on the type of loans and be prepared to come to them with something tangible. They want to see numbers. They want to see growth. They want to see projections. That was the first thing they asked me, "Do you have your projections?” I had to come up with my five-year projections. I did that as well. You’ve got to be prepared. Come with your stuff not just ideas.
You had the benefit of a Goldman Sachs program. I'm sure people can find programs like that to help them build business plans and growth strategies online. You’ve got to bring something tangible.
You have to bring something tangible because there's nothing to run by everybody. It's a group decision when they make those loan decisions. They all sit down and they run it by each other. There's a system that they have. I know a lot of local colleges, their business schools will do things like that. They'll have these resources for people. You might want to check one of your local universities, their business schools to see if they have those resources available to small business owners. The Goldman Sachs program is a national program. You can apply from literally anywhere. I'm not trying to plug. I'd highly encourage it. It took me to the next level. It helped put my ideas onto paper and that helped me get to my next level.
You gained some clarity in having some structure like they provided you. It helps you get clearer from what it seems like. As you went through that education, were there any books that they recommended or are there any business books that you highly recommend yourself that you've come across?
They have their own curriculum that they've written. All of their curricula is their trademark. They didn't take us outside of their curriculum and what they were doing. I now started to get into this whole reading about business, reading about marketing and listening to your podcast which I love. This is all very new for me, this growth and the business aspect.
I did an episode on books. I've got some recommendations for you as well, so anytime you're ready for the next book, you let me know.
I'm happy about that.
If people wanted to see what you're up to, maybe see your homemade website or follow you on Instagram or something like that, what's your address? How would people get in touch with you?
It's the name of our clinic. It’s CromRehab.com and all of our links are there too. Our Yelp page, our Instagram page or Facebook page, everything is on there, our bios and everything that we do is all on our website.
What's the next big project for you? Is it all in on this new building or you've got other things you're working on?
We're working on the building. Once this building is done up and running, I'm already thinking right now about expansion beyond this one building that there’s going to be our flagship as I've been calling it. Watch out, Houston. We're coming for you, Houston.
I wish you the best. It's great having you. I love the insight that you've provided. The way you've used modern technology or social media, whatever you want to call it to grow and progress like you are and specialize. You've had some great experience over the last four years. I can only see you’re improving after that. Good luck with everything.
Thanks. I appreciate it.
Roy, thanks for being on.
Talk to you soon.
Jerod Bowen, PT has spent the past nine years dealing with start-ups, sales, and acquisitions of different healthcare specialties - physical therapy, family practice, chiropractic, surgical centers, etc. Along the way, Jerod's been able to witness the trends and, thus, has a great perspective of what's coming for physical therapy. As he sees it, we're at the “tail end" of what's been happening in the healthcare industry, and that is larger organizations and networks will grow their entities in order to cover the whole continuum of care. In addition, they'll be looking to save costs in a value-based model. That means that they'll be looking to add more and more physical therapy especially since they are incentivized to provide more cost-effective care. We know we're the key to that! Whether you're looking to sell your clinic or not, you need to be aware of the changes that are coming. The way you're operating your business now won't be the way you're operating your business ten years from now.
My guest is Jerod Bowen, physical therapist and Business Development Manager of Empower Physical Therapy. I and my business partner, Will Humphreys, owned Rise Rehabilitation Specialists in Arizona for a number of years. In 2018, we merged with a number of other clinics and put ourselves on the market, and thus formed Empower Physical Therapy. Will is now a member of that executive group, as is Jerod. Jerod, as the business development manager, is the guy in charge of finding, searching out for and recruiting other clinics to merge with and/or acquire. The purpose of bringing on Jerod is because he has a unique perspective. Although he's a physical therapist, Jerod has been working in mergers and acquisitions for a number of years, not just in physical therapy but also in other healthcare arenas, especially primary care physicians, chiropractors and surgical centers.
I thought it would be a great opportunity to bring him on and share with us his perspective of what physical therapy is currently doing, especially with the implementation of MIPS and where we might be going in the next five to ten years based on his views of what has happened with primary care physicians over the past five to ten years. They have used the program but it's not called MIPS, it's called MACRA. He gets into that a little bit and shares with us his thoughts about where physical therapy, in general, is going. The good news is the demand will always be there, considering the number of Baby Boomers that are turning 65 over the next couple of decades and the added efficiencies and efficacies that physical therapy can provide the typical patient, especially those with musculoskeletal injuries.
There are always going to be a huge demand for physical therapy. It’s just how are we, as private practice owners, going to fit into that scheme. Are we going to align ourselves with other networks - hospital networks, insurance networks or other groups - or are we going to stand independently? That's a choice each of us has to make. Some people might find it necessary to align. Some people might want to stand their ground, and if they do so, they can still be successful. I just wanted to bring Jerod on in order for you to get a lay of the land.
I've got Jerod Bowen, a physical therapist out of Phoenix. Jerod is part of my group, Empower Physical Therapy, based out of Arizona. I wanted to bring him on mainly to talk about the market for physical therapy clinics, sale, purchasing, mergers, acquisitions, that kind of stuff. In the past, I've interviewed John Dearing who shared a little bit about what it would take to get your clinic to sell and a little bit about the market. Jerod is the business development director at Empower Physical Therapy and he's doing this on a regular basis. I figured I'd bring him on and see what he has to say. First of all, thanks for coming, Jerod. I appreciate it.
Thanks for having me.
If you don't mind sharing with everybody a little bit about where you came from, your roots in physical therapy and what led you to the point where you are now.
I started off like almost anybody who's reading this as a therapist. Even though I'm a therapist, I haven't practiced much at least hands on for the last six to eight years. For the first part of my career, I was a practicing PT for about that amount of time. In the interim, I was developing businesses. I was one of those weird guys in school that knew I wouldn't practice therapy lifelong. I immediately went to get a business degree here in Arizona. I never intended to stay, but I did stay in Arizona and have an MBA from ASU. I've always been interested in business development. That's the beginning of my story. At one point, I had four offices here. Just out of MBA school, I jumped in and started expanding in private practice. I realized fairly quickly that I was making about as much money in owning four practices as I did with one. Anybody who's expanding business realizes that any of their net margins or operating capital or operating income gets funneled into the next business.The Way You're Practicing Business Now Won't Be The Way You're Practicing Business in 5-10 Years. How Will You Adapt? Click To Tweet
As PT developers, we live meager as we're expanding our businesses, but that's how it is with most businesses. We roll up our shoulders and we expand. That's what I did for a handful of years. I came to realize, as part of my story, that there was more involved than just therapy in terms of healthcare and making money. I saw a development wave of urgent care is coming down the pipeline here in Arizona and other markets. That was my next big jump. I jumped into the urgent care market. I built and sold an urgent care company to Tenet Healthcare. That took about two to three years. It was a robust little program and an amazing sale. It gave me a taste of what mergers and acquisitions were like. I got my first taste of what a sell was like and I was hooked. I was a business junkie after that. Once I sold our urgent care platform, at that point I was not practicing PT. I took my PT operations and I merged them with an investor out of West Coast Investors.
Collectively, we worked together and expanded. We had about 40 offices that we owned by the time we’re done. It took us about three and a half to four years, but we bought and acquired about 40 offices. Our service lines included family practice, PCP practices, we had pain management clinics. We’re very much involved in surgery centers. Outside of that, we got involved in interventional radiology, which is an incredible up and coming field. When we ran our family practices, I had a lot of exposure in that realm to the MACRA program. It was a primarily driven program initially, but now we're seeing that come into fruition more on the PT and what this means for therapists.
What is MACRA?
The MACRA program is a system basically created by the government. The government comes together with Medicare replacement plans specifically. It's a measurement system that the government uses to align incentives. If you manage government-supported patients, Medicare programs or federally funded programs that are managing patients through healthcare which Medicare is, Medicare wants to make sure that patients are being managed in a cost-efficient way. The MACRA program is a very complex program but at the same time, it's a scoring system. It measures performance in regards to how a PCP manages a patient.
Is that different from the MIPS program that's been rolled out?
It's all tied in. Generally speaking, it's all the same.
We're experiencing a little bit of what the rest of the healthcare industry has been dealing with for a few years by going into this MIPS program.
PT is on the very back end of it coming into it. What does this mean for therapists? I have my mind wrapped around it. If you have dealt with the PCP realm and ACOs, how they're set up, and other types of businesses, PT is very much on the bud end as well as other specialty practices. PCP is more on the back end compared to the PCP market. The family practice, the PCP market, has been involved in this for several years now.
Based on your experience with how MACRA affected the PCP market, what can you predict for the physical therapist as they deal with MIPS or whatever value-based incentive program that comes along down the road?
Let me back up a little bit. If you look at how the payer systems are set up, it's interesting. You have now what constitutes five to seven major payers where ten years ago, you had all kinds of insurance plans that supported patients. The five to seven payers right now in the private market are Blue Cross Blue Shield, Anthem, Cigna and Humana. UnitedHealthcare is one of the biggest ones. If you look at what has happened in the past ten years, some of the largest acquisitions that have ever occurred in healthcare happened when these larger insurance companies came in and acquired the smaller players. When they came in and they acquired those smaller players in the market, they consolidated what now looks like more of a single-payer market in a single-payer system. The interesting thing is it's not a single-payer system. You've got about five, six, seven big companies all publicly traded.
If you look at their stocks, you can see these companies have gone through the roof over the last ten to fifteen years. They're still worth more than they've ever been worth before, some 40, 50, 60 times book value relative to where they were fifteen years ago. If you look at that trend and you ask why, all of these insurance companies were positioning themselves to comply with MACRA and for the incentives that came with it, because the government is paying these payers to outsource Medicare. If you look at these Medicare replacement plans, they are really managed plans under privately held companies. Now that these privately held companies manage Medicare plans, they are aligning themselves with Medicare to get funds from Medicare.
They're getting incentive payments on top of what they already receive from Medicare.
Medicare looks through the MACRA program. They assign a fixed cost per patient annually. They'll look at a patient and they'll say, “How do we know how much money to pay Blue Cross Blue Shield or United for each one of these patients that they're managing on our behalf?” They assign a fixed amount per patient based on how chronic that patient is and how expensive it's going to be to manage care. That measurement system comes back through this MACRA program. They're looking at the number of ICD-10 codes that are being assigned to the diagnosis and they're assigning scores to these patients. These insurance companies are getting paid by Medicare based on how chronic each one of these patients are. Inherently, the more patients you manage, the more incentives and the more money you're going to get from the government.
What can we then see in the future for physical therapy based on some of this MACRA and MIPS stuff?
When Blue Cross Blue Shield or Humana or these larger payers receive their revenues, they still have to pay the doctors to manage that care or just larger institutions. We're downstream from what the payers get. The payers turn around and re-assign that incentive back to doctors based on how doctors and how institutions manage that care. What does that mean for therapy? It means the more cost-efficient and more cost-effective healthcare becomes, especially for these Medicare replacement plans, the more cost savings and more profits to these larger institutions. For example, if the government is cutting Humana a check for an individual's life and that individual is managed in a cost-efficient way, then Humana just pocketed a lot of money because they manage the margin. They're also paying that doctor for managing that patient's life. Right now, it's either through standard fee for service, which is now changing to full risk or cost containment for hospital systems.There will be power in numbers, whether that be through networks or through joining a group. Click To Tweet
A lot of these bigger hospital systems are working out a cost containment plan with the payers and going full risk on these plans. You have a larger hospital system, for example, that meets with an insurance company and say, “We will share in the risk of managing this patient's life. If we make money, we make money. If we lose money, we lose money, but we're going to come in together and work together on this.” The insurance companies are still paying fee for service, but they're going full-risk contracts with hospitals, and not just hospital systems but larger institutions to help manage this patient's life because they're coming in on a fixed rate.
To tie this into therapy, this is how this works. As we become umbrella and engulfed in this on the PT side, we're participating in the data tracking. Everybody knows that therapy, in general, is going to be much more cost-efficient than surgery or other means, as long as the outcomes are where they need. Therapy becomes a big deal now for these institutions. It’s such a big deal that they're going to start looking to either acquire PT practices or downstream practices to help manage their own care. If you look at Arizona right now, Banner did a major acquisition. They cut a deal with select physical therapy and they did a carve-out and bought out a portion of select physical therapy companies anywhere here in Arizona where Banner had a presence to push all their therapy into their own clinics to manage those plans themselves. They're not looking to make money on therapy as much as they are looking to save money down the stream on there.
They're looking at physical therapy as a way to manage costs better. They recognize that doing therapy versus doing surgery is going to cost them less. Because that happens, then they're going to get more incentives and more kickback on the back end because they manage the case better. They don't really care so much whether physical therapy is a profit center or not. They just know in the bigger picture of things that utilizing more physical therapy underneath their umbrella is going to somehow improve their incentive payments.
It's important that it makes money because they don't want to lose money, but it's not the driving force behind it. The driving force is managing. If you look at the history of the PT market, if you look at what happened in the primary care market, there's a stat out there that shows nationally about 50% to 55% of PCP practices, privately owned practices, have either been bought up or absorbed by larger institutions over the last ten to fifteen years. This happened as a result of the MACRA program. These larger institutions realized that if they can get in front of the patient and own the patients, then they also inherently own the downstream that comes with those incentives. It’s a control mechanism.
We're trailing that on the PCP side. As a private practice owner, we need to be aware that larger institutions are coming in to acquire and to absorb PT. They're going to look at de-fragmenting the market or try to consolidate and own their own therapy which is going to cut out the private practice owner. That's exactly what happened in large degrees to the independent private practice owners, the PCP market, in large degrees. Nonetheless, these larger institutions want the data, and those who manage the data best are going to be aligned for those types of incentives when it comes to the Medicare replacement plans and the private payers.
When you're dealing directly with Medicare and not an outsource plan through a privately held institution, Medicare still has their incentives. Medicare comes in and will say, “If you comply and turn this information back to us and manage it correctly, we're not going to cut your reimbursement.” It’s their way of saying, “We're going to incentivize you.” On the flip side, you have payer systems that should be coming and working with physical therapists through major incentives to help manage care because they do that with doctors. There's such a demand on the therapy side, you don't have some of these larger payers coming and saying to the private practice owner, “Let's give you some incentive for managing our patients, our Medicare replacement plan like we do the PCP.” We're not seeing that.
Do you see then physical therapy trending in the same direction as PCPs over the next five to ten years where over half of the outpatient clinics might be hospital-owned or network-owned?
Absolutely. I see that trend. What does that mean for the private practice owner? They need to be aware of that because let's look at how that affected the system here in Phoenix. You have Banner, a large hospital institution which has its own payer system.
They do their own insurance.
Containing that cost is a big deal for them. They come in and they acquire physical therapy, which means they can take all fee for service away from outside private practice owners and keep it in-house. That was painful for several practices around here. That trend will continue. They're not the only ones looking or seeking to do that. The larger institutional networks start to narrow. Look at Banner, they're narrowing network. They're not using a hundred different private practices now to manage their care. They narrowed their network down to one. They are the single provider for therapy and they employ those. That is the threat that we see as a private practice owner and that to me is where the new market of therapy is starting to develop these opportunities that come up for the larger institutions like ourselves. Empower Physical Therapy is a good example. We were private practice owners that came together and formed one larger institution to be able to play on this platform where these larger institutions are playing.
There's an opportunity there because we all know that physical therapy saves money and can help with any efficiency or efficacy. Physical therapy and the industry as a whole has a bright future for it going forward in spite of all the regulations and changes that are occurring. We also have to recognize as private practice owners, the changes that are going to come. We saw them happen with PCPs. That same trend is going to happen to physical therapy as well. We saw it with Banner. We need to be aware of these changes and recognize that if we're going to take advantage, we need to have our data. We need to know our stats, whether that's through EMRs or whatnot. We need to know our stats and we need to know our numbers and also recognize what our futures are. I talked in an episode about exit strategies. Where do you see yourself being in five to ten years? If you're going to be the independent practitioner that's not aligned with these networks, then you have to have your ducks in a row. If you're looking at an exit strategy in the next few years, then you might need to consider this as an option because we saw it happen in the PCP market. Does that sound about right? Am I aligned with what you're thinking?
It does make sense to degrees. There are some interesting things happening with therapy that did happen in the PCP realm years back. It's tough to be a PCP nowadays. The primary care doctors, just like most doctors, don't make what they used to make. Think about it, when you have five to six to seven predominant insurance plans in the market or companies that manage these plans, they basically get to pick and choose who they work with. There is no demand on the insurance side. It's more of a single-payer market. On the flip side, there is an unlimited amount of therapy clinics or PCP that they can work with. They can be selective on who they work with. This is a leading question. Think about it, if you're one of these five, six, seven payers, is it easier statistically or from a time management standpoint to go to one single private practice owner or go to a large institution and cut a deal with them to get this information pushed back?The best way in to maintain the integrity of how therapy is delivered is to make sure those who know how to deliver it are in charge of it. Click To Tweet
If you can make one decision and work with one person versus working with a bunch of different small individuals, you're going to focus on the one person that can affect hundreds of clinics.
At the end of the day, as private practice owners, we need to realize that it's like the PCP market. If there will be power in numbers, whether that be through networks or through joining a group like Empower. We’re more of an acquisition-based model with a different mission than some of larger PT institutions out there. Our thought process and our mission's a little bit different. To summarize, private practice owners need to be aware that this MACRA program and this measuring system that pre-exists was not specified to us.
It's a more PCP-driven program, and we're on the tailend of it. The data management, just like in the PCP realm, follows the same trend. We need to be aware as private practice owners that the data management through larger institutions or larger groups is going to be more valuable to these payers than a single practice. If the incentives tend to follow in time the larger institutions as opposed to the private practice, there's a threat there. We don't see this yet but it's going to be easier for the Humanas and the Blue Crosses of the world to come in and say, “We're going to start cutting these individual practices out because we have enough and we're going to start aligning incentives a little bit more aggressively with these larger institutions,” or they may just cut plans all together.
We’ve seen a lot of mergers happened over the last few years, at least from what people are telling me as they have attended PPS. The number of large clinics that were looking to acquire individual practitioners was quite strong over the last couple of years. It seems to have faded a little bit, but I think the direction is still going to go that way simply because these insurance companies are going to want to deal with larger groups. Those larger groups are going to be able to come to the table and say, “We can negotiate and affect 50 clinics instead of just an individual practitioner that can only affect two clinics in a small niche of geography.” I think the trend is going to continue to go that way, not to say that there isn't space for the individual practitioner who has few clinics. That's why I will continue to share content for those people. You have to recognize that there is a trend out there and you need to be aware of it.
To the advantage of the private practice owner. Keep in mind, I'm a private practice owner. I'm not a big fan of necessarily large institutional consolidation. One of the reasons why we formed Empower is to continue to focus on maintaining as a group generally the legacy that these private practice owners have created, and making sure that the care delivery model is protected by assuring that PTs are continuing to manage and operate these clinics. On the flip side of things, let me put it this way, if you have private practice owners out there developing clinics, at the same time all the power to them because there are some good things that are trending our way as private practice owners. If you're in an area like Phoenix or Scottsdale, you have a major trend of Baby Boomers coming in. Our fee for service is going down, but we're able to counter that as private practice owners through trends of increase in volume because of Baby Boomer flux.
What’s interesting right now for owners that can see this is these mid-market firms or these larger institutions that are coming in to acquire your therapy right now are buying into those trends. It’s something I haven't seen before. A few years ago, I had four clinics on the market. You can see the reason. These institutions - let's say the larger non-hospital institutions and the individuals that are specifically in the realm to make money and to roll up - see these trends occurring and Baby Boomers are starting to influx. This healthcare, these mid-market firms, these financial intuitions that want to acquire PT clinics, these owners of smaller platforms are being approached by these guys because of the Baby Boomer trend. That's a big plus for the private practice owner. In a good area where there are retirees coming in, your net loss per visits are going down because your fee for service being eroded by these payers is being offset through volume.
I was talking to a PPS about some of the trends. If you're looking to sell anywhere, if your exit strategy is somewhere in the next five to ten years, there's no guarantee that it's going to be as hot of a market it is now as it will be five to ten years from now. Getting on the front end of that wave would be beneficial and something to consider. That's something that we saw. We weren't necessarily on the market but you approached us and said, “Maybe we can take advantage of this if you guys are at a certain spot.” Thankfully we were and thankfully we've been able to create as a group that is not corporate per se. When I say that, I'm trying to say that all the executive positions within the company are physical therapists. They're not guys that came from some business degree or private equity firm and are forcing things down our throat. These are physical therapists that structured the company, that are established as the executives within the company. They want to maintain that physical therapy focus and the individual practitioner focus that I don't think you get when you deal with a lot of other corporate entities that are out there and own physical therapy networks.
There's the underlying joke in Empower that all of these key positions are filled by PTs, but we definitely did not want a PT as the CFO. There will be some of those areas where we just want to keep PTs out of altogether. We chuckle about that one, but absolutely, we were all solid private practice owners. I was an owner in nine clinics before Empower came in. That's just physical therapy outside of the other service lines and companies that we owned and operated. We wanted to maintain the integrity of the delivery model. I'm not saying that those larger institutions don't do that, but what better way to do it if we have the option to keep the private practice owners as directors in these companies. If you look at our CEO, Steve DiPaola is a physical therapist. He has large institution management. He's an incredible guy. He does well for us. He has division in terms of where large institutions need to go and he's a great complement to us. Sean Miller, our COO, is a physical therapist. We have business development, physical therapists, our regional directors, physical therapists.
The best way in my opinion to maintain the integrity of how therapy is delivered is by making sure that those who know how to deliver it are in charge of it. That's a big deal for us. One of the differentiators with the Empower model is we wanted to make sure that that was protected. What better way than to make that the case. It's an exciting platform on that end. Then to comment a little bit further on valuations, let's say it was 2011, 2012, I interviewed a lot of different buyers for the company that I owned on the PT side. Urgent care got gobbled up quick. I had six or seven people bidding for that, but not for my PT clinics at that point. It was very interesting. One of the reasons why we were able to put this deal together is because the market is special right now. It wasn't six years ago and it wasn't ten, fifteen years ago prior to that. We're in a unique situation where you have money markets out there or financial institutions or mid-markets or private equity firms that are looking to consolidate.
If you're going to align with one of those companies, what are their values and where are they going? Do they have a vision of what we just talked about in terms of large consolidations? Tapping into that new market of therapy which comes through this narrow network that we talked about, taking advantage and position yourself against this wave that's coming and has been coming for some time. There's a lot of money right now as the market starts to trend downward. It will affect all industries. Therapy will trail it. Who knows where valuations are going to be. Right now, there's a trend towards therapy acquisition. It's been going on for the last handful of years. It tends to follow the Baby Boomer influx.Don't try to compete with mature markets. Target areas where trends are increasing. Click To Tweet
The physical therapy owners out there need to know that they are dealing from a position of strength, whereas a few years ago, they weren't. If you know multiples and EBITDA, you could have bought a physical therapy practice at a multiple of one or two, whereas now that's doubled or tripled at this time or even more, depending on the size of your clinic. There's a real positive trend that's going on right now and we don't know how long that will last.
Here's what gets confusing with private practice owners. You're a great example. You said it yourself you weren't for sale. Most of these small, robust PT platforms out there that are developing are not for sale and rightly so. They're capturing the Baby Boomer influx, they're growing, and margins are decent. There isn't a big reason to sell. That's why coming back to who are you partnering with? If you were dealing with the right platform in the institution, we try to profile our owners a little bit. If there's an owner that wants to retire and be gone out of that platform but still preserve their legacy, there are exit strategies. That's not the case with the mainstream market out there.
Mainstream market or guys like you and I, Nathan, that have our own clinics, we're fine where we at. The question is what are you still doing to hedge your risk against what's up and coming with these narrow networks? At the same time, is there a way that I can partner with a group and continue to grow and expand with all the financial incentive I could have had, in many degrees, a major and financial incentive to continue to grow and expand, whether that be through equity or elsewhere, and reduce my risk and take some chips off the table right now with this market? That would be my recommendation for any private practice owner.
A lot of people think a sale’s final and I'm out of my company. It doesn't work that way when you're looking at the right partners. That's what we realized even with Empower Physical Therapy. We're not in this to go in and buy everybody out and say goodbye. It doesn't work that way. We're looking for good owners, great owners, to join us and to continue that ride with us. We've got the structure to make that work. To summarize, you can still take advantage of everything the market has to offer right now as a private practice owner and enjoy the benefits of continued growth after capturing some of those synergies. You can attest to that.
We weren't looking to sell. We had been approached a number of times over the years to sell our practices. We’re not intrigued to give up 70% of our clinic and then essentially become clinic directors and only have 30% ownership. When we decided to merge with you guys and put ourselves on the market, it was a great opportunity for us to take some chips off the table and become a part of something bigger that's looking to expand and grow and listen to the voices of the owners that were coming into the group, that let us create our own culture and let us create our own mottos and logos and become a bigger version of ourselves, to the point now that Empower Physical Therapy is spread across California, Arizona, Louisiana. Am I missing anything?
Texas and other cities.
We're looking around, talked to some guys in Idaho in the past. Nonetheless, how many clinics does Empower entail right now?
Close to 30 right now, but we've got ten more that will be part of our team. Our goal is partnering with private practice owners like yourself, like myself, helping them position themselves for what's up and coming and helping them also to take advantage of all the synergies this market has to offer. The last thing we want is for them to vacate. For the retiring physical therapy owner, it's just the opposite for them. We can work to maintain their legacy and also work on a strategy where they can exit in a shorter period of time or whatever period of time works for them. It's about the private practice owner and customizing the plan that best fits for them.
What advice would you give to those guys who are just starting their practices? Maybe they’re in the first couple of years or thinking about starting a practice. They're not necessarily the people that you're targeting to merge or acquire with. What should they know or what should they be focusing on at this stage in their clinic development?
Making sure that if you're just starting out, if you don't have your contracts, depending on the area you're in throughout the United States, I can tell you in Arizona and other states, some plans are closed panel whether they be Medicaid plans or whatnot. Do your research and find out, especially if you're a new graduate coming out and you're looking to say, “I want to own my own practice.” It's not as easy as opening your doors and hoping that these insurance companies will credential you. Remember, they have all the demand, they have all the power, and so they’ve already narrowed these networks. You need to make sure before you open a clinic that you have all the insurance plans available to you. If you do not, the first thing you want to do is to look for a private practice owner that you can work for and possibly take that practice over or look to acquire those contracts. Buy them out right off the bat. That would be the advice I would give to the young guys and gals coming up that are hungry and eager to get into their own clinics.
What if they niche? What if they figured something out in terms of vestibular or women's health or pediatrics or something like that?Niche markets compliment the larger mainstream flow of care. Click To Tweet
Remember, niche markets complement the larger mainstream flow of care. If you look at outpatient physical therapy, I think we could all say that outpatient orthopedic-based therapy is the main driver in the realm for a lot of these groups. To come in and create a specialty practice, if I were to look at that, I would look at doing one of two things. If you go independent, it's a little bit challenging in the sense that a group like ours, if you want to look at joining or selling out at some point, those companies are a little bit more challenging to buy out if you're a larger institution. You’re better off being developed internally. If you have that skill set, then you want to do one of two things. You may want to look at a larger institution and help them develop that in a larger platform because you're going to have an automatic feeder mechanism. If you have enough business on the referral side and relationships established, you may break out and do that on your own independently. Just realize again that it's difficult to deal with larger institutions that are looking to acquire because there aren't very many of those types of facilities and they're very hard to replicate.
If someone was able to scale a niche practice, let’s say pediatrics that has a nice footprint in a geographical pattern and a solid referral base, does that make it more attractive?
Much more attractive. Then again remember there’s a Baby Boomer trend going on. Probably the best advice I'd give anybody right now is target areas where those trends are increasing - retirement communities or little niche markets or fast-growth markets. Try to be a de novo in one of those fast-growth markets. Don't try to compete with mature markets. If you look at larger cities, they've been developed for a long time. You're better off going into a very mature market with a lot of competition. If you want to try to exist in that kind of market, look to buy somebody out who has a market position already. Otherwise, go create your own market somewhere. Don't be afraid. Look at you, Nathan. You had clinics in rural areas. Back in the day, people didn't want to expand there. Look what that did for you. You're a great example of that. You did something that nobody was willing to at that point in time. Look where you ended up because of that risk you guys took. I wouldn't be afraid as a young entrepreneur to step out and say, “I'm going to go tackle a new market, even if I have to drive another 30 minutes to get out there, whatever the case is.” You got to be thinking that way.
I was always happier to be a big fish in a small pond. It worked out well. Anything else you want to share with us, Jerod, from your experience in the past and in the present market?
If any owners want to reach out and chat, it can be casual. It doesn't need to be a business pitch in any way or form. I'm coming from that angle of private practice. I am a private practice owner. I'm a big advocate of private practice owners, whether they're part of larger institutions like ours now. This is new to me, but the larger institutional play, I understand it and I get it. That's why we did it and brought it together. My DNA is in the private practice realm, the smaller setting, and my goal is to preserve that with the company that we formed. At the end of the day, my goal is to preserve it whether with or without us. If you have private practice owners out there that need some guidance or want to elaborate a little bit on what I've shared, I'm very open to elaborating further. Beyond that, I’m glad you had me on, Nathan.
How do people get in touch with you?
I'll give you my email, JBowen@EmpowerPT.com.
It's great having you on, Jerod. It's not an exciting topic, that's for sure. I hope it was educational for some of the physical therapy owners out there to see what's coming down the pipe, just so that they're aware. Hopefully, this didn't come across as something that's scary or something to worry about, but it's something you need to be aware of. The way we're doing business now isn't going to be the same way we're doing business ten years from now. As the owner and leader of your clinics, you need to be looking ahead. You need to be the visionary and see where you're going and what you need to do as a clinic to stand out, to work into the system or take a stand and be outside of the system, and know exactly what you're doing as you're outside. Just know where you're at. Thanks, Jerod. I appreciate your time.
Same to you, Nathan. Take care.
· Physical Therapy Graduate School in Houston, TX – TWU (2003)
· Master’s in Business in Phoenix, AZ – ASU (2006)
· Actively treated as a physical therapist from 2006-1012. After 2012, focused 100% on start-ups, mergers, and acquisitions.
· Started an urgent care business in 2010 and sold to Tenant Healthcare in 2012.
· Owner of 4 outpatient PT locations in Phoenix from 2006-2012. Merged PT practices into a new start-up company and worked on start-ups, mergers, and acquisitions in various healthcare service lines.
· From 2012-2018, owned and operated close to 40 offices in 3 states. Businesses included physical therapy, family practices, pain management, surgery centers, labs, and outpatient intervention radiology.
· In 2018, orchestrated the development of Empower Physical Therapy with select private practice owners in Phoenix, AZ. Sold out of my previous platform and joined Sheridan Capital and the Empower Team as VP of Business Development for Empower PT.