The Private Practice Section of the APTA established the Peer2Peer (P2P) Network a few years ago and since then has provided a great opportunity for PT owners to collaborate with fellow PT owners and discuss how to improve their businesses. In this episode, Nathan Shields interviews Randy Roesch, PT, owner of Business Solutions Consulting Company, and Steve Anderson, PT, Executive Coach for Orange Dot Coaching. They are also current facilitators for P2P. Both have personally benefited from networking during the course of their careers, making them a great resource about the benefits of networking and what P2P has to offer. Nathan then also highlights his mantra for successful business ownership, which is Reach Out - Step Out - Network.
We are going to talk about networking. I've got Randy Roesch and Steve Anderson, both physical therapists and facilitators for the Peer2Peer Network in the PPS section of the APTA. If you don't know much about it, I highly recommend you look into it and possibly apply because the application process is closing during the month of January to join the network. I specifically want to talk about not only the network but also the importance of networking, whether it's the Peer2Peer Network or Entrepreneurs’ Organization, Vistage or BNI to name of the few networks that are out there on the country. Networking has provided to the people in my network, the benefits of growth and accountability. I'm sure there's more to it than that. The Mastermind concepts have been around a long time and seem to be initially labeled by Napoleon Hill in Think and Grow Rich. In terms of growth, usually what I find is that the benefit that leads to that growth is the fact that you've got multiple minds coming up with solutions to problems, specifically your problems.
You also now have access to resources, people that may have been there and done that or they may know a company that might be able to help you solve that problem. They might have someone in their network that they can refer to you to help you improve or grow. Secondly, the accountability as owners, we don't have anyone holding us accountable other than maybe our spouses, but the health of the business maybe. There is no one to hold us accountable to the goals that we set forth initially. We all know that if we have an accountability buddy, we'll do better when it comes to achieving our goals. That being said, I wanted to highlight The Peer2Peer Network, especially since it pertains specifically to us as PT owners. From a greater perspective, I want to make sure you all understand the importance of networking with whatever network it is. Let's get to the interviews.
I have Randy Roesch and Steve Anderson. They are both facilitators of the Peer2Peer Network in the Private Practice Section of the APTA. I wanted to bring them on because if you've heard my mantra before, it's, “Step out and network.” Not very often we talk about the importance of networking, especially as independent physical therapy owners, but it is huge. First of all, I want to thank you, Randy and Steve, for coming on.
Thanks for having us.
Randy is the Owner of the Business Solutions consulting company but also a doctor and a physical therapist. Steve Anderson is also a doctor of physical therapy. He's a former CEO of Therapeutic Associates on the West Coast and is an Executive Coach for Orange Dot Coaching. They both are working hard on the Peer2Peer Network and they'll share a little bit with us about the details here as we go along. Before we get into the details, I want to learn a little bit about you because you were both successful physical therapists in the past. I want to know a little bit about your path. Randy, do you mind sharing with the audience a little bit about your professional path and what got you to where you are?
I graduated from the Mayo School of Allied Health in 1973. I've been a PT for a long time. It started out, as most of us do, in acute care and decided that I wanted to do something on my own. I was practicing in Florida and the director in a hospital. I talked to the hospital about getting a piece of the action and they said no. I went out and started my own private practice. Over the course of years, I built that company. The name of the company was RehabWorks. Some of you may have heard that name. I think it's still around in some areas. Eventually, I had four partners and we had a company in 26 states. We employed 1,800 therapists at that time. We were in hospitals, nursing homes, school systems and outpatient clinics. It was a wonderful experience.
We finally reached the point where we couldn't continue to grow without some influx of funding. We pulled interest and joined a company called Continental Medical at the time and that company eventually went public. I've been in the corporate world too. It was an interesting experience. I stayed on for four years and then decided that getting back into private practice was what I wanted to do. I joined my husband in his private practice for several years and then started my consulting company. I've been working with PTs in private practice for the past years. It is a fun ride.
Steve, how about you? Tell us a little bit about your path and what got you to where you are.
It's a little bit similar in the sense that I started out as a staff PT. I joined a company that I was impressed with. The name of the company was Therapeutic Associates. I started with that company. In a few years, I became the director of one of the clinics in the company and eventually became the CEO. I was with the same company for 37 years. I was the CEO for 19 years. It's an interesting company because it is a shared ownership company. It's a legacy company. It's owned by physical therapists. When I retired at the end of 2016, I believe there were 50 PT partners. The directors of each of the clinics have ownership. It continues on and it's doing great in the Pacific Northwest. We also have a hospital contract in Southern California that we've had interestingly enough since 1954. I retired at the end of 2016 and I did what has always been my real passion, which is helping leaders become better leaders. I started Orange Dot Coaching. I now do coaching services for executives, NPT and in the business world as well.
Since we're talking a little bit about networking, specifically the Peer2Peer Network. For either of you, did networking play a part in your progression in your professional path?Everybody is willing to share in Private Practice Section. Click To Tweet
It did for me. I was active in the Private Practice Section beginning in the early ‘80s when I started my private practice. It was an amazing experience. I met many wonderful people. The thing that I found in the Private Practice Section was that everybody was willing to share. It was amazing. You would go to these meetings and people would tell you what to do and what all the resources were. It was great. It was one of the reasons that I've stayed active in this section. I wanted to give back because it helped me so much in the development of my company.
For me, I felt like I was on an island when I opened up my own clinic at the younger stages. I thought I had to figure all this out on my own. I felt like it was up to me to figure everything out. Little did I know, once I started networking, that there are other people out there that have already been there, done that and know all the answers or can give you the resources. If I had only tapped into something like that earlier in my career, things would have gone so much smoother. What was your experience, Steve?
The Private Practice Section was great for me too. I've heard her say before and I felt the same way that you go to your first meeting or two and you say, “I've found my people. They understand me and they helped me.” Some of my dearest friendships continue to this day that I found at the Private Practice Section meetings. I love them. My story also goes in the sense that I was part of this big private practice company, Therapeutic Associates. I was elected by the board to become the CEO at 41 years old. I was excited and felt pretty cool about that. The real truth, I was scared to death.
Just like a lot of my clients, I’m overwhelmed with the enormity of the job and to do so networking was extremely important to me. I got a lot of help from friends in the Private Practice Section, but I also found something that we may touch on here a little bit too. I joined a group called Vistage, which is an international group that puts groups of CEOs together and there were 12 to 15 in a group. I did that for seven-and-a-half years. We met on a monthly basis and that was extremely valuable to me. I learned a lot in that period that we're going to talk about, how I learned a lot after that type of setting. A huge proponent of it, I felt that it took me to the level where I needed to be interacting in life in that environment.
That's a great point, Steve, because my business partner and I were part of the Entrepreneurs’ Organization. Much like Vistage, it gives you an opportunity to network, talk with and share issues with people who are outside of the healthcare, specifically the PT industry so that they can maybe challenge some of the perspectives that you have. “Why do you have to do it that way?” They don't come from where we're coming from. Sometimes it's helpful to talk to people outside of the PT industry to look for some of the answers. It gets a little bit different perspective on how things go outside of the industry, what expectations are, what company norms or business norms are. Whether it's a Peer2Peer Network, Vistage, Entrepreneurs’ Organization or BNI or any number of this business that can be hugely helpful in your ability to overcome some of the issues that you're having, but also mingle with other professionals.
The key to that set up or organization, which I know Peer2Peer does as well, is that you need to get to a level of trust and vulnerability with people to get to them to the bottom of things. The way they're set up like that, you can get there because you get to know these people. It's amazing. There were tons of business stuff that came up, but quite frankly, there was some personal stuff that came up too that shocked me at first. When you're running a business and you're working these long hours and doing things, sometimes you have issues at home that you'd like to run by people, “How did you handle this?” If you have that trust and vulnerability, I'm already set into the group, but you can go there and help there as well.
As far as Peer2Peer Network is concerned, Randy, what's the history around Peer2Peer Network? How long has it been going? What got it started?
A couple of people that were on the board, they always laugh about how they were out having a beer one night. Mike Horsfield and Jeff Ostrowski got to talking about how nice it would be if they had a board of directors that they could talk to and they could share problems. They talked about how they could maybe create this group. They thought they came up with this brand new idea that nobody had ever thought of. As Mike says, we realized that the Mastermind concept has been around forever. It started in the early 1900s. That's what it's patterned after is that Mastermind concept. We call it networking on steroids because it's a way for PTs to network with each other and learn from each other. They went to the board of directors of the Private Practice Section. They said, “We'd like to try a couple of pilot groups and if it's successful, then maybe this is something the section would want to offer.”
They had two groups, five people, who were in companies with gross revenues of less than $2 million and five people who were in companies with over $2 million. They started working together on how to better their company. They talk about the problems they had and the things that they had in common that they didn't understand and could help each other with. They loved the experience. They brought that back to the board and said, “How could we make this happen?” They decided to try this Peer2Peer Network. At the point that I joined them, I had been very active in the section as was Steve has for many years. I was very excited about the opportunity to do something like this that would be so beneficial for therapists. We opened it up. During the first year, we had 35 new people join. Now, we have 157 network members and 29 groups.
The groups are made up of 5 to 8 people. As I said, we have this arbitrary cutoff at $2 million. Steve and I interview everybody that's coming into the programs. We get to know them and then we put the groups together. We look at what your strengths and weaknesses are, so if somebody wants to learn more about social media marketing, we might put them in a group with a younger person who's got a lot of experience with that. If someone wants to own a building, we'd put them in with somebody who owns a building. We build and put these groups together. The groups meet on an annual basis face-to-face. We have a summit every year in April. It's a three-day summit and then the rest of the time, they meet on a monthly basis. Usually, video conferencing and then there are tons of emails and texts going back and forth. Most of them have a Dropbox as a way to communicate with documents that they want to share and so on. We're getting amazing feedback from everybody that's in the program. The one thing that I often hear is, “It's the best thing that PPS has ever done. These are the people who saved my practice. They helped me make some of the decisions I needed to make or learn how to move forward. I was stuck.” It's been a great program.
The person who turned me onto Peer2Peer Network, and I didn't know much about it at all, was a friend of mine who owned a clinic up here in Alaska. He said the same thing. He met with a group of about 6 to 7 people. He was having issues with recruiting physical therapists, especially up here in Alaska, how to retain therapists and how to move his clinic forward in different aspects. He grew 85% over the course of one year and attributed a lot of that success to Peer2Peer Network. It sounds like that's not an uncommon success story.
It's really not. As I said, we've had several people who have said that it's made tremendous in their business. The thing that I find interesting and Steve maybe found this Vistage, but what people are saying is a lot of times, especially solo owners didn't have to be accountable to anybody. They had great plans but they weren't accountable. A lot of the stuff, you go to these meetings, you're all these great things, you come back with great ideas and then you get busy and it goes away. This is like having your own little board of directors and you have to go back and talk to and say, “I did that. I didn't do that.” “Why didn't you? What's up?” These people are setting goals and they're holding each other accountable. That's what they say has made a tremendous difference.
Would you agree with that, Steve?
Absolutely. That's what I experienced when I ran a bigger group. We hold each other accountable. I think for the smaller practices that don't have that, it’s a huge benefit. People you know and trust, you don't fool. You don't show up to the meeting and BS them because they'll call you out in a second. Sometimes, as humans, we need that. I would totally agree with Randy on that.
I've recognized the same thing as I've been in some of those groups. It's hard to make excuses for some of the things that you didn't get done and that you had committed to because they'll call you out on it. They'll say, “You can't use you are busy as an excuse. We're all busy. How are you going to prioritize and get things done?” I love that you brought it up, Randy. That accountability piece is huge because who's holding the owner responsible to get things done? If it's an employee, they can huff and puff and maybe they might even leave. It's nice when you don't have to get to that point and someone else out of empathy and an environment of security is providing that ability to hold you accountable. That's huge in the growth of small business owners.
In the groups, we talk about the rules of engagement. The things that people learn and help each other with is that they trust. They have this huge trust. As Steve said, that was important in this group, the commitment to the group. They show up for the meetings. They schedule these monthly meetings and everybody shows up unless there's some kind of emergency. Everybody comes to the summit every year. They work hard on balance sharing so that everybody's talking, sharing and not just one person taking over the group. It's important. We don't have any competitors in the groups. Number one, we have a wide variety. We have people who have been in practice for 30 years and people who have been in practice for three years and they might be in the same group.
We also are very careful that they're from different geographic areas. That vulnerability, you're not to talk about opening a clinic if you know that your competitors sitting there. I'm moving into that area. The confidentiality piece is extremely important and then the ability to play well in the sandbox. We've been fortunate because we've had very good results with the people who have been in the program. Very few people have left. We've had a few people who have left because they sold their practice. One of the criteria is that you're the CEO in your practice and an owner and some people are not able to continue anymore. We've had a few people who have said, “This isn't quite for me. I've gotten all that I could get.” We've had less than 10% attrition. I think that's pretty good.
What are the criteria? I think you've covered a few of them.
It’s a PT or a PTA and you have to be a member of the Private Practice Section. You are the chief executive in the company, which typically is the owner. I think we only have one person who was the CEO and not an owner, but he was the CEO of the business. There's a fee. It's $750 a year and that covers the costs of the summit as well as what we do for the program. It also covers benchmarking. PPS, we developed and started in Peer2Peer Network. Some people have probably heard about benchmarking opportunities through PPS. We have twelve KPIs that we monitor. That's done on an annual basis. We have an outside firm that does all the work. It's all anonymous, but we use it so that you can compare yourselves regionally and nationally to all the benchmarks and the groups use it to extensively compare to each other, “How come your cost per visit is this? Let's talk about how we can make me more like yours.” That's been a huge benefit for the members of Peer2Peer.
That is huge, especially when we don't have the business acumen and the ability to compare some of those finances like, “How much of my gross revenues am I spending on the payroll? What is my cost per visit? What is my average number of visits per new patient?” Those kinds of KPIs you want to compare and see where you're at. Am I below average? Am I above average? It's good to have an idea of what's happening in your clinic compared to the industry. There aren't a lot of benchmarking data out there for physical therapy owners. It is a huge benefit to have that available to us.Solo PT clinic owners do not have to be accountable to anybody. Click To Tweet
We've expanded it now. We've opened it up so that other members of the Private Practice Section can also get into the benchmarking program. I think we are offering 500 slots, but we thought the more the merrier. We can have more information and more data. That's why we opened it up beyond Peer2Peer.
Steve, you're talking to some of these people who are considering joining the network. What are some of the issues that they have that you have to address? What kind of encouragement do you find yourself reiterating to the PA owners that are considering joining the network or any network?
Whenever you're running a business, it doesn't matter the size of it. There are two things that I see. One is being overwhelmed like, “I know I've got so many things to do, but I still have to treat patients. I still need to do this. How am I going to get it all done?” Seeing what others do and how others have handled that is extremely important. The other thing I see in my clients a lot too because I know I have it big-time is what's known as the impostor syndrome. When you're sitting there thinking, “Everybody thinks I know what I'm doing because I have a successful practice and I don't have a clue.” That's a hard thing to deal with. When you're in a group networking like this, there are two things that happened. One is you hear about people in the same boat so you can say, “I'm not weird thinking this.” Secondly, people are going to reassure you that you're not clueless, that you do have some skills and you are successful for a reason. You can build on that and that's what that group brings to you. They say it's lonely at the top and I would totally agree. Sometimes you need people that are very objective and willing to tell you what you need to hear and not just tell you what they think you want you to hear to the organization.
Randy, what are some of the common concerns that they bring up as to why they don't want to join the network?
I don't talk to very many people that don't want to join because my job is to find people who want to join. I would say that some of the people who have decided not to remain, it's been primarily a time issue. They don't feel like they have the time to devote to it. Even though in my mind, it's not a huge time commitment. It's probably a few hours a month for the call and then some emailing back and forth and those kinds of things. I don't know if it’s the true reason why they didn't want to stay with it. To reiterate what Steve was saying, we're finding that a lot of people, no matter what size the practice have a lot of similar problems. They appreciate the opportunity to be able to have someone to talk to about it and learn from other people.
To add to that, I find this with people I do work with as well. Sometimes they said, “I really want to do this, but I don't have the time.” It's a funny thing to say because the reason you do it is so that you can find more time and be better at what you're doing. It's like, “I need to hire somebody, but I'm not going to hire him because I don't have time to train him.” You just need to find the time to bring them on and train them and then help you expand it. The same thing goes with leaders is there's never going to be a good time. There's never going to be, “Now it's exactly the time to do this.” You have to decide, pull the trigger and go.”
I think you have to recognize that and I want to get your feedback on this as well, whether it's networking or something else that you might commonly recommend the PT owners do, but they've got to take the time to put on the owner hat and recognize that they are the leaders, the owners of their company. Sometimes, if they're treating patients full-time, they do not recognize that. They're putting on their owner’s hat sometime around midnight when they've already lost a ton of energy. They're neglecting parts of their business because they're not fully executing in that ownership seat. If you were to go back and talk to yourself or maybe a younger version of yourself that owned a clinic like some of these owners do, what are one or two things that you would highly encourage them to do? What kind of mindset or encouragement would you give to them at this stage if they are treating full-time, not much time to run the business type of situation? I'll start with you first, Steve.
You mentioned earlier when we first started about working on the business and not in the business. We probably all read The E-Myth book and understand what that means. It's one of those things where I find that when you're in small business and you've got all these pressures on, you tend to think very short-term. What I try and tell leaders is that you need long-term strategies so you can kill it for six months, nine months, a year, maybe a couple of years and do well and be profitable. At the end of it, you can't sustain it. A long-term strategy is what can I do to set things up now so that when I am 2, 3, 4, 5 years down the road, I can sustain what I'm doing and continue to grow because otherwise, you're going to hit it. There are only so many hours in a day one person can do and you're going to tap out unless you're preparing for that growth along the way.
What would you share, Randy, in terms of talking to that younger owner?
I think Steve’s spot on. They use the phrase, “We're running our business by the seat of our pants,” and that's how it feels as a PT because we didn't learn any of this stuff in PT school. I think as Steve said, we can work as we all did really hard, but at some point, you got to figure out how you're going to run this business and be able to not be working 80 hours a week and trying to have a life besides your business. Looking ahead and trying to make a plan, you got to start somewhere and you're going to work hard for the first few years. It's important not to neglect thinking about your goal, where you want to take this thing and how are you going to get there and plan it out rather than go day to day and figure that somehow it's going to work.
I love that you shared the long-term aspect because a lot of times we were thinking short-term, how many visits are we getting this week and new patients and not looking long-term as to what we need to grow in terms of company. If someone wants to join the Peer2Peer network, Randy, how did they go about doing it?
We take applications and the application period is open now until mid-January. They go to the PPS website, which is PPSAPTA.org. There's a networking tab right on the main page of the webpage and that's where the Peer2Peer Network lies. Once they go into networking, they'll see Peer2Peer and they'll see the application. There's a list of FAQs in that tab. Steve and I are also available to chat with anybody at any time to talk with them a little bit more about the program and see if they think that it's right for them. We often do that.
Is your contact information on that webpage? Would you be willing to share?
I'm willing to share it, but our contact information is on that webpage so that they can send us an email and then we get back in touch and talk with them, answer their questions and do interview calls with everybody to where I'm in. We want to make sure that they feel it's a fit, that they're going to enjoy the experience. My email address is RRoesch@Ymail.com.
They can reach out now. You said that the application period starts now, but did that start in September or October?
The application period is open all the time but for the class coming up, we're going to have to cut off probably about mid-January. Steve and I interview everybody who's coming into the program. We put the groups together and then we do some group calls before the summit in April. We have a lot of work between January and April. We try to get things tied up by mid to late January. If people are interested, they need to apply as soon as possible.
It only comes around one time a year.
We do a new class and we bring in 50 new people a year. That's 8 to 9 new groups every year. We're continuing to grow at that pace, which is great. We're very excited about it.
The exciting thing this year is the conference is in San Diego, which I'm excited about.
We held it in Alexandria, Virginia, which is where the Private Practice Section headquarters are. We did that for the first four years and we have people from all over the country, like, yourself, from Alaska. We had people asking if we could possibly consider moving it. We said, “That's only fair.” This year we're on the West Coast, in the beautiful San Diego.It's important not to neglect thinking about your goal, where you want to take it, and how you are going to get there. Click To Tweet
That's April 22nd to 24th or something like that.
The meeting starts on Wednesday afternoon. We end at noon on Fridays, so people can get back home for the weekend.
Anything else you want to share, Steve, in regards to the Peer2Peer Network or some of your insight to the audience?
I think we've covered most of it, but it's a wonderful program. I commend the people who came up with it, Mike, Jeff and Randy for driving it for the first few years. It is a top-notch thing in the Private Practice Section. I believe everyone could benefit from it. My advice to you is don't say you don't have the time. Find the time. It's not very expensive. If you take a look at Vistage and some of those other groups, you're spending some pretty big dollars and this is done very economically. I don't think the cost is an issue. You just need to find the time.
Thank you, both, so much for taking the time to join me here. I appreciate it. Thank you so much for sharing your insight and the work that you've done in the past.
Thank you, Nathan.
It has been fun being on the program.
Dr. Roesch began her career as a Physical Therapist, graduating from the Mayo Clinic School of Allied Health in 1973.
She practiced at the Mayo clinic for 6 years and then moved to Sarasota, Florida where she was the Director of Rehabilitation at Blake Memorial Hospital for 4 years.
In 1983, Dr. Roesch opened a private practice outpatient clinic and began providing rehabilitation contract services to local nursing homes, Easter Seals, and the local school system. Over the course of the next 6 years, Dr. Roesch acquired 3 partners and grew her business, known as Rehabworks. Rehabworks employed 1800 therapists, and provided rehab services in outpatient clinics, hospitals, long term care facilities and school systems in 26 states.
Rehabworks was sold to Continental Medical Inc. in 1989. The new company then went public. Dr. Roesch stayed on as Chief Operating Officer for 4 years. In that capacity her primary role was to value and acquire businesses as well as lead the transition team for these new acquisitions.
In 1994, Dr. Roesch started Business Solutions, a consulting company to provide services to therapists in private practice. Today she concentrates her business in the area of succession planning and practice valuation.
Dr. Roesch has been very active in the Physical Therapy profession over the course of her career, including volunteer service with the APTA. She has served on the Board of Directors of the Florida Chapter, the Private Practice Section, and as Director, Secretary and Vice President of the APTA Board of Directors. She served as the Interim Executive Director for the Private Practice Section. She is currently a Trustee and Board Secretary of the Foundation for Physical Therapy Research. She is also the Facilitator/Director of the Private Practice Section Peer2Peer Network program. Dr. Roesch has received our professions’ highest honor being named as a Fellow of the American Physical Therapy Association in 2016.
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Dr. Dimitrios Kostopoulos passion for physical therapy is obvious, and his vision is unique and outside-the-box. He has a number of PT businesses and is successful in each one of them, thus he has a unique perspective on the state of physical therapy and the issues negatively impacting PT clinic owners and the profession today. However, he also has the answers to the three issues he presents. Following thru on each of those items will put you on a path to freedom, but if you don't take the time to study, implement, and do the administrative footwork necessary to run your business, you won't make it. Dr. Kostopoulos shares that that knowledge on the subject provides a greater responsibility in the area that you are learning something about, and knowledge, responsibility, and control always go together.
Dimi, thank you so much for taking the time to be on my podcast. I was excited to bring you on as a guest simply because over the time that I've known you, you have so many things going on in your life business-wise. I figured I need to talk to this guy and see how he gets things done. How is he so effective and productive? Dimi not only owns and practices in his own physical therapy clinics in New York, he also owns the HODS company, Hands On Diagnostic Services, where he not only provides electro-diagnostic services for physicians but also trains physical therapists in electro-diagnostics. He does a significant amount of work in the APTA. He has a professorship, am I right, Dimi?
Yes, at the SAU school of medicine.
On top of that, he's doing research and he’s at all the APTA events. The man is busy, the man is productive, and he's definitely successful. I’m anxious to bring you on, Dimi. You've been a great influence in my life and honestly one of the reasons why I'm in Alaska. For the audience, would you share your story what got you into PT, what got you into physical therapy ownership, and to the point where you are now?
First of all, Nathan, let me just say, what an amazing work you are doing with this podcast and what a gift you are with this podcast to the physical therapy profession, especially private practice physical therapy.
Thank you. Keep going.
We can start talking about each other accolades here and the feeling good, but the bottom line is let's get into something that people can be helped and we can give them some information and some advice that they can find useful right now in what they are doing in their private practices. You asked me why I got into physical therapy. I did not. They just put me into physical therapy. I was born, grew up, and went to school in Greece. The educational system in Europe is a little different than in the United States. What you do there is you choose an area of interest which can be either generally the medical sciences or generally the sciences of physics and math and all that, or then philosophy. Depending on the area that you are choosing, you take special exams and they just put you based on the score you got into a specific area. Physical therapy was not my first choice by the way. It was actually my second choice. Medicine was my first choice. Physical therapy was my second choice, but I did not score that high so they put me in physical therapy. I took it as it went.
I finished physical therapy and during the time I was starting it, it was awesome and I fell in love with the subject after I was exposed to it, not before. When I finished my studies in Greece, I came to the United States to do graduate studies. I worked for a couple of years in hospitals, but then in 1992, I decided to open my own private practice and this private practice very quickly, in a few years, grew to multiple practices. My business partner, Kostas, and myself from 1992 to about 1997, 1998 ended up creating and developing thirteen physical therapy practices doing 2,400 to 3,000 visits weekly. We were the second largest physical therapist owned private practice in the New York state.
Was that difficult to ramping up, the sheer magnitude of that? How were you able to maintain it?
From 1992 that we started the practice until 1995, the first two and a half, three years, we went just from one office to two and a half offices. In the middle of 1995, beginning of 1996, we’ve got involved with a consulting firm called Survival Strategies. From Survival Strategies, we’ve got very intense instruction, courses, and programs that helped us develop the practice. From the end of 1995, we literally started opening a new office every couple of months. Towards the end of 1998, we had thirteen physical therapy locations.
Why did you decide to reach out to the consulting firm? My target audience is the independent patient practitioner who has his own clinic and there, of course, are other physical therapists who are more established, but they might be in that boat where they're considering consulting or they haven't reached out yet. They don't know who to reach out to. What led you to reach out to the group Survival Strategies? Was there a turning point or something that made you think, “I need to do this?”
It got to a point that I was so confused because I had zero knowledge in how to manage a business. I did not know management. I did not know how to manage finances. I had no idea how to market. I was going out there to meet a physician and I was going with an attitude, “I’m Mackenzie-certified and I’m Maitland-certified, and I’m this and I’m that.” Who cared what certification I had. It was not effective.
You noticed that you were losing control in your business or did you have a particular incident that sets you off?
I started not sleeping at night. Seriously, I was very stressed out because I did not know how to handle things. I was feeling, “How am I going to handle my payroll? Why I did not save money last month? I did not think that I will have more expenses this month.” I was not thinking in an organizational way. I was not planning properly. This is finally what changed. There were a lot of things that changed when we sought help from a consulting firm, both in the management area of the practice and also in the way we approach the community. The way we approach the referral sources changed tremendously too and made a huge difference.
After gaining some organization going through the consulting, there was a quick change and effect that led to continued growth in your physical therapy practices at the same time. Did that include the continuing education part of your company?
Yes. We started in 1994 the continued education company and we started offering courses in manual therapy since 1994. That's hands on seminars at www.HandsOnSeminars.com. Here is the thing I wanted to mention, that knowledge on the subject provides a greater responsibility in the area that you are learning something about. Therefore, you can control that better. Knowledge, responsibility, and control go together. You acquire knowledge about something, now you take more responsibility because you have more knowledge about that area, let's say the private practice physical therapy area, and therefore you can control that area better. There is another equation which is magical, control equals income. The greater the control you have in a business, the greater the income you can get from that business.
I can totally see that as we're talking about it, considering you're not alone. A majority of us, 99% of us physical therapist that own our clinics, don't have the business knowledge. We all have these same characteristics where we become very good practitioners and some of the better practitioners in our professions, yet we don't have the business knowledge. That's what leads to the confusion that you experienced, to staying up at night, the disorganization in our lives both professionally and turns out to affect us personally. As we gain that business knowledge, and we have to do that, we have to set aside the time to educate ourselves whether it's through a consultant or some other means, some resource, whatever that might be, to learn about business. As we do so then, we organize our lives, we become more responsible, and we have more control. Thus, we gain more power and we gain greater income.
I'll give you some data about the income aspect that we're talking about here. A few years ago when we established a hands on diagnostics, the national franchise that helps physical therapist developed diagnostic testing services within their facilities, we paid an independent survey firm over $50,000 to do a survey to physical therapists around the country. The number one issue that private practice owners have is reimbursement. Here is what happened in regards to reimbursement to me. We developed all these clinics, we had a beautiful run for several years, and in 2004 in New York state we started receiving a series of letters from the insurance companies where they were decreasing their reimbursement rates by more than 50%. Imagine that in November of 2003, you are receiving from Blue Cross Blue Shield $140 a session and then you are receiving a letter that effective January 1st, your reimbursement will be a flat rate of $55 a session, take it or leave it. That’s painful, isn’t it? Then Aetna follows and United Healthcare follows and the other insurance follows. 90% of insurance companies in New York State end up slashing their rates by 50% to 60% at least, so we had to do something about it.
That was probably another time in your life where you were staying up late at night, I assume.
Totally because although we were holding in our hands the golden goose or the golden egg, we could not see it. We did see it finally looking more carefully on our financials and our statistics.
You were on top of your financials and your collections. You’ve got the letters but then you started seeing the cold hard numbers and you thought, “I've got to do something different.”
At that point, this was a pretty large organization. Sometimes making changes in a large organization, changes take place but it might be a little slower until the changes go all the way down to the line of command when you have under you 150 employees to manage. What happened though, Nathan, is we realized that although reimbursement for physical therapy services were cut so deeply and we were hardly making any money from physical therapy services, the diagnostic services that we were providing at that time, predominantly electromyography nerve conduction studies, were yielding for us at least ten, fifteen times more than a physical therapy session.
You were doing the EMG nerve conduction studies prior to this?
Yes, since the late 1990s. Once we realized that, it totally changed our entire business model. It totally changed our focus. We started dedicating time and energy and effort in identifying how we can properly incorporate a variety of diagnostic services within our physical therapy practice. Fast forward in 2018, right now we have only one single physical therapy practice. The rest we have sold and we cashed out to our clinical directors. We did not sell out to a company, we sold out to the clinical directors. When you sell out to one individual, one company's much easier for one person who is working within the practice itself to actually make money from it. At this point, we only have one physical therapy practice which is doing very well, but despite the fact that it has high numbers, it's reimbursement is very crappy. The reimbursement for physical therapy in New York state is still $65, $70. You're not making money from it. At the same time though, my business partner and I have a local diagnostic company where we have eight full-time staff members exclusively doing diagnostic testing. This is where the major income comes for us right now.
That's amazing that you're willing to make that pivot. Considering who we're talking to, the independent practitioner, it would be really hard for you to make that pivot if you were in the situation, like a lot of physical therapy clinic owners, if you were treating full-time. There's no way you could have made those administrative decisions, those business decisions, if you were focused on patient treatment all of the time, I’m assuming.
Private practice owners do not value enough themselves and their time. A demonstration of that is the fact that they are spending all of their time doing treatments instead of doing any management. A private practice owner with a single PT practice who wants to expand and grow their practice must dedicate a minimum of two days a week exclusively on managing that practice. That is the only way that that person can grow the practice. If they just want to stay the way they are and just working as a PT in that clinic, then they don't have to do that. Somebody who wants to expand must spend a minimum of two days a week in business management. As you grow that time, they expand too.
That's my audience. Those are the people that we're talking to. They’re the ones that are looking to grow. If they want to stick around and just keep their one-practice clinic, that's fine, but they can always do it better. I'm targeting those that are looking to grow. Considering what you've gone through then over the past ten, fifteen years, what is your vision then for the future of physical therapy ownership? What do you see on the horizon? What positive and negative things do you see coming down the pipe?
The three top problems that physical therapists face right now are number one, reimbursement, number two, staffing and maintaining staff and number three, competition either from other physical therapy practices or competition from physician-owned physical therapy practices and from hospitals. These are the three major issues that PTs are facing in general. As a profession, when it pertains especially to a physical therapy, the single most important issue we are going to face is reimbursement or reduced reimbursement for physical therapy. Here is why I'm saying that. This is not an arbitrary thing or just a perception thing. There is data to back it up. What happened in January of 2007, Medicare changed how they pay for the initial evaluations. Now you have a three-tier code for initial evaluations instead of a single code, depending on the complexity of the problem.
They didn't change the reimbursement for each one of these codes. They pay the same. Why do they want to see that complexity? I believe very strongly that we are driven into a system of paid per visit, regardless of what you do. A flat rate per visit for Medicare regardless of what procedures you do based on the complexity of care, which means that if you're in your initial evaluation, you select a mild complexity, no matter what you do to that patient in the future, you are going to receive an x amount of money, let's say $50 for a sprain. No matter what you do to that patient, there is a moderate complexity or a severe complexity at different rates. I am suspecting that the most important issue and challenge we're going to face is that reimbursement issue as a profession. There is a solution and the solution is to expand as a profession our repertoire of services to patients.
Those physical therapists who are not looking at 2018 but they are looking at 2020 and beyond should be looking at other avenues and other things that they can incorporate parallel or in conjunction to their physical therapy services and practices so that they can expand not only the number of offices but expand operations in different services and diversify their incomes. They can bring in laser, they can bring in exercise programs, home exercise programs, gyms. They can bring equipment that they can sell to patients and materiel, nutrition and wellness, all those are things that they can do.
To do these things, they have to get trained on sales. They have to become good sales people because all of these things are cash based. On the other side, they can follow the route that I followed through HODS, Hands On Diagnostics Services, where you can incorporate diagnostic testing within your practice that pays five to ten times more compared to a single physical therapy visit. At the same time, it is insurance reimbursable. You don't have to sell to the patient to pay cash. This is where I see physical therapy, we have to expand our operations and our scope of practice so that we can be able to survive in a very difficult upcoming future in terms of reimbursements.
What really drew Will and I to HODS and the training in electro-diagnostics is that it was relatively easily incorporated into the current structure of our physical therapy clinics. We didn't have to add on a completely new square footage for gym space. We didn't have to bring on a nutritionist or learn ourselves in wellness practices or something like that. Simply we could add those services on as part of our physical therapy and completely within our scope of physical therapy practice, both with the diagnostic ultrasound and the EMGs.
I want to mention that EMGs is one of the major components. At the same time, musculoskeletal ultrasound can be a major component also. Evoked potentials, videonystagmography, VNG testing for patients with vertigo and even in patients who have hypertension and hypotension, autonomic nervous system testing is also something a physical therapist can be involved in. Physical therapists can be involved in doing Transcranial Doppler Testing as well as an electroencephalography testing. There is very large gamut of things that the physical therapist can be directly involved. Many of these will be directly reimbursed to a physical therapist. Others, the physical therapist will have to do them in conjunction with a physician or under the auspices of a physician.
There's been talk in the past about our ability to eventually perform and read x-rays. What are your thoughts on that? Just as a tangential discussion.
Actually, this is a fact at this point in a few states around the country. It is the position of the APTA that the physical therapist should be able to not only interpret and use, but also order imaging for patients who they treat. This is something that will happen, I believe, within the next few years.
I love your passion and your vision because it's completely applicable. We need to take a stand for those services that we can provide within our scope and not let them get away from one reason or another dude or groups that would rather us not be doing some of those services. It's important for us to take a stand and create a greater vision for what we can actually do.
If you don't mind, Nathan, I would like to plug in something else also in your program that on September 21 and 22, Friday and Saturday, HODS is going to sponsor a private practice summit in New York for private practitioners who would like to find out more about how they can grow their private practices, how they can incorporate a lot of these services. Also find out new tricks on how they can do their billing more efficiently, and so on and so forth. I don't know if I'm breaking the news to you on this, it will be hosted by your business partner, Will.
Then it's going to be great. I know it's going to be awesome. Thank you. If someone wanted to learn more about that summit, where would they go?
You addressed the reduced reimbursements as the issues facing PT owners. Let's move on to number two.
Staffing is an issue because of two main reasons. Reason number one, the number of available physical therapists in the country is much lesser than the demand for physical therapists. This issue was increased a couple of years ago when the immigration laws slightly changed in regards to specific professions including physical therapists. It is proper now to bring physical therapists from the Philippines, from India and other countries. The United States was the number one importer of physical therapists from India and the Philippines. This right now has changed. It is more challenging to do that.
That creates a lesser number of physical therapist available in the marketplace for them to be hired. There is a competition with higher salaries. Who is going to hire these people? Hospital organizations can afford much greater salaries that you as a private practitioner can afford. The second reason why it becomes more difficult to hold staff in a practice is because as reimbursement goes down, you have a lesser ability to pay staff bonuses and higher salaries as a private practitioner. No matter how much staff members love you and they have been with you forever, if somebody next door can offer them $15,000, $20,000 more per year, many people will take that offer.
They probably should. That goes to the point. Reimbursement rates are going down, the demand for physical therapist is going up, and so the salaries in turn go up.
There are three solutions I will give you about the staffing problem. Number one, create a team environment. People will look at the money, but number one, they will look at the way they get treated. If people are treated well, they are not going to start looking for another place to be hired.
The studies prove that money isn't the number one driver for people in their employment. If they can find something where they can align with the purpose of a company or feel like they're a part of something greater than themselves, or nowadays a lot of talk is about culture and how strong it is and I completely agree with that. If the culture is right, you have a team atmosphere working together for a single purpose and alignment that will override their demands for money many times.
As I said, three solutions. Solution one was exactly what we just said about team spirit, team culture, an environment that promotes growth. Number two solution, create a program where people can grow professionally by helping them with continuing education. This can have many different forms. You can seek continuing education from various organizations out there like Hands on Seminars or you can do in services within the organization, something that makes people feel that they are growing professionally. Number three is create an appropriate bonus system where people can be bonus for production. What we have seen a large number of HODS members around the country, because they make more money through diagnostics, they can afford to pay greater salaries and greater bonuses to those staff members who are involved in the diagnostic area. I'm going to give you a very specific example on that, Nathan.
I'm going to speak numbers now. When I hire in New York a physical therapist for my physical therapy practice, I pay somebody right out of school as a physical therapist somewhere in the neighborhood of about $65,000 to $70,000. If I hire somebody right out of school to work for my diagnostic business, I will provide them the entire training and I will start them at a salary of $85,000. That's the minimum salary that I pay. Later on, I ended up paying them much higher. They can reach to $100,000 to $120,000, and so on and so forth.
The salary itself is higher but the training that they're getting on top of that only makes their credentials greater, which allows them to earn more down the road.
That's about staffing.
Going back to the points number two and number three, one of the successful actions that my friends in California, Brandon and Richard, are doing at Coury & Buehler Physical Therapy, they shared with us was that they developed a mentorship program for their new grads. Between the staff of PTs that they had and they themselves, they had a specific mentorship program in which someone was assigned to each new grad that came in. They would spend weekends, I want to say one weekend a month over the course of a year or two, where they would dive into certain diagnoses or certain body parts as part of their mentorship program to help them learn and grow, coming straight out of school. They said that the hiring of new grads improved significantly based on that one action that they were able to provide mentorship. That rung true to a lot of the new grads coming out. The fact that you're doing that, and I've seen that also as social proof in Brandon and Richard case, is very powerful.
Number three, competition. Here is the point where if you want to expand, you cannot afford to be just a clinician. You have to become a real business owner where you are looking at expansion plants and you're looking at new, fresh ideas that you are going to bring and incorporate in the practice so that you can attract your community, so that you can attract even physicians sending you patients because you have something used, you have a niche. Whether you want to bring in a laser and promote laser or you want to bring women's health or you want to create the TMJ program, any type of niche that you can create that you can drive people into your facility.
The more people who come in for an event or for some reason, the more people will eventually stay for services. Incorporating diagnostics sets you thousands of miles ahead from the competition because simply not everybody can do that, not every single person can incorporate that in their practices. It requires a special person who can think about this very seriously and dedicate and committed to it. That can set you up way ahead from your competition in the area.
That's not just a physical therapy concept, that's a business concept. The more you can niche down and set yourself apart, the more you'll separate yourself from the competition, especially in physical therapy where I believe our services are becoming commoditized, to the point where you hear a number of patients I have and you may have as well, a number of people you come across might say, “Physical therapy didn't help me.” You don't say that about dentistry. You don't say, “Dentistry didn't help me.” You said, “So and so dentist didn't help me so I'm going to find another dentist.” We've been commoditized to the point where people will say, “Physical therapy didn't help me,” instead of saying, “That physical therapist doesn't know what they're doing or I didn't like my interactions with them.”
“I'm going to find another physical therapist that can help me.” Because of that, it's even more necessary that we niche out and do what we can. Plus, when you consider hospitals don't look at physical therapy as a profit center based on my experience with hospital executives. Usually it's a loss that they take on the books. They know that it's got to be part of their care and they've got to provide it to meet certain standards or requirements or whatnot. They are not looking at it to generate a significant profit so they can provide the physical therapy. We've got to do something different.
Nathan, when these patients go to the hospital for physical therapy, even if physical therapy doesn't make money for the hospital, these patients will get also their MRIs. They'll get these diagnostic test, that diagnostic test, in the hospital. They'll see other physicians in the hospital which creates then a regimen for the hospital. What I'm proposing here from a business aspect only, you have the audience already in your practice, you have the patients. By adding diagnostics on those patients, you are adding significant additional revenues for a captive audience that you already have in there. Simple as that.
Dimi, you've provided a ton of knowledge so far. It's great. Any incorporation of those concepts for any physical therapist would increase the value of their clinics and also improve their lives. The stuff that we talked about thus far have been great. If you were to go back and tell something to your younger self as a business owner, what advice would you give?
Go first to business school and then go to physical therapy.
Get some business acumen, get some business training, whatever that is.
In one or the other way, get early on. Get to learn business management administration, marketing, PR, because these are tools that can put you in a causative position over your business. You can make you more causes to make you to be able to achieve things in your business the way you want them instead of the effect of the troubles you have and the environment.
That's one reason why I have the slogans to step out, reach out and network. It is those steps that we take, either stepping out to reach out to a consultant, to read a different book, and then step out of your practice at a minimum of probably two days a week to do administrative tasks can be visionary for your clinic. Be looking ahead and working on your company instead of in your company, then networking and getting to know other physical therapists because a lot of them are going through the same issues. If we don't work on these things together, then we're going to just get run roughshod by the other segments of the healthcare professions that will take advantage of our inability to fight back.
What you're doing with this show and podcast is a great service to the physical therapy private practice community. That's really awesome.
What's in the near future for you over the next couple of years, Dimi? What are your big goals and plans?
We're still working with our consulting firms, Survival Strategies, through the years. We are in a program called Power of Choice. With that program, we are working in completely with what is called phasing to, meaning phasing out completely from three of our four businesses. Both my business partner and I want to be completely out from the PT business, the seminar business and our local diagnostic business.
When you say phasing out, you're not selling, you’re going to be passive?
Correct. Just having only a role in the management of the businesses where the businesses have been running very effectively at 110% every single day, every single week, every single month.
You're going to the Board of Directors level. That is great. Then what?
I have a tremendous passion about the HODS concept, the concept of creating an autonomous physical therapy industry, a physical therapist becoming an autonomous provider and becoming the provider of choice for the different diagnostic testing modalities. I want to dedicate most of my time and effort on that because I believe this can change the landscape of the entire physical therapy profession.
Dimi, if people want to get in touch with you, how do they do that?
A couple of things, first of all, DiagnosticsForPT.com is the website for the diagnostics. I have absolutely no problem sharing my cell phone number with everybody. I shared it in my emails. If somebody calls me or texts me, I do answer. It’s 917-538- 2242 or Dimi@HandsOnPT.org.
I would be surprised if you didn't get a few calls. Thank you so much for sharing, Dimi. The concepts that you shared were invaluable and timeless and a lot of people could learn from your expertise and advice in what you've gone through over the number of years. Let me also say thank you for your vision as it pertains to physical therapists and diagnostics. You're almost a lone voice out there but it’s a valuable voice for our profession, so I appreciate you.
Thank you so much for everything that you are doing every single day for our profession.
Thank you, Dimi.
Good luck with the podcast.
I appreciate it. Thank you.
Dr. Dimitrios Kostopoulos, DPT, MD, PhD, DSc, ECS is board certified in Clinical Electrophysiology with over 30 years of clinical experience. He has also MD, DPT, PhD and DSc degrees. There are fewer than 200 electrophysiology specialists worldwide who have achieved a Doctorate of Science Degree (DSc) in Clinical Electrophysiology Testing. Dr. Kostopoulos is one of them.
The doctor is a Clinical Affiliate Assistant Professor for Charles E. Schmidt College of Medicine at Florida Atlantic University. He is a past member of SACE (Specialization Academy of Content Experts) for the ABPTS examination board on electrophysiology, an elected member of the Nominating Committee of the Academy of Clinical Electrophysiology of APTA, and an adjunct faculty member of Springfield College.
He is the editor of the Diagnostic Section of the Journal of Bodywork and Movement Therapies, and the author or co-author of numerous books, articles and research papers related to his fields of expertise.