Do you know the biggest issue facing new PTs? It's not finding employment or the "right" job that meets their goals. No, their biggest issue tends to be the amount of debt they are burdened with after a long road or scholarship. The average PT comes out of school nowadays with >$150k in student loan debt. Considering the average salaries in out-patient practices, this can be an overwhelming obstacle to stay in the PT niche of their choosing. The episode's guest today is Bart McDonald, the author of Debt-Free PT. Bart talks with Nathan Shields about how he wrote his book to help new PTs and practice owners become aware of the current state of debt and overcome it as a collaborative endeavor. If you want to know more about the major issue most PT graduates face, this episode's for you. Tune in!
I've got a longtime friend and fellow physical therapy owner, Bart McDonald, owner of Superior Physical Therapy and Diagnostics in Idaho. Bart, thanks for joining us.
Thanks for having me on. This is a fun platform to be able to discuss good business things.
Thanks for joining me. I've known you for quite some time. Why don't you go ahead and share with the audience a little bit about where you're coming from as a PT owner, what you've been doing and what got you to this point in your life?
I grew up in Idaho. I ended up going to an undergrad at Brigham Young University then bounced from there out to Emory University in Atlanta. I was bent on a goal that I had to own my own physical therapy practice. Why I went into physical therapy? I was very excited about it. I realized within one semester at a private university that I was going to have more debt than I had first projected. That was a tough realization.
I don’t know if anybody reading has had that same realization, but I didn’t remember going in and talking to the department head one semester in and saying, “Dr. Catlin, I’m going to be upside down financially when I get out of school, I’m going to have almost three times debt to income ratio.” She said, “I don’t know what to do for you.” That was it. She was super nice, but that’s the facts. It was scary.
I got out of school and went back to Idaho. I was in a hospital-based practice, then I started a bunch of side moonlighting-type experiences to try to bring in money for the family, money to pay off debt and was able to get into a private practice within about four years out of graduate school. I started a private practice on my own, recognizing that’s what I wanted to do. Number one, that’s where I was driven. It’s where your passion leads you.
Secondarily, I was never going to get out of debt unless I owned a business associated with the love that I had for physical therapy. I couldn’t only be a W-2 employee and be able to get out of debt from where I was so I started that practice. Then from the end of 2004 until now, we’re opening our fifth location here in Southeastern Idaho. It’s been a wonderful ride and a lot of fun.Go where your passion leads you. Click To Tweet
Congratulations. You made some great strides there in your professional and ownership journey. Along the way, you alluded to some of the issues that you had in terms of taking on debt to get through physical therapy school. Thus, I know it's been within you for some time to write a book or at least address the issue of debt related to current physical therapy students and you've become an author. Tell us a little bit about it.
I wrote a book called Debt-Free PT. This project has been on my mind because this is the journey that I went through personally in my business and physical therapy career. I had over six figures in debt myself and came out making $39,000 a year. That’s terrible in that ratio. Also, for anybody out there that’s younger than us, they’re going to go, “That’s what they used to pay?” That is what I’ve used to pay and wages have gone up a little bit, but so has the debt. Probably a couple of years ago, I had one of my associates, a smart PT, who loved sports. One of his goals was, “I’m going to get board certified in sports.”
In his undergrad, he had been a collegiate athlete. We loved working with our sports injuries and were inside of our Gold’s Gym clinics. To describe this, it’s a 3,000 square foot clinic that is connected to a Gold’s Gym, so you’ve got your pool, strengthening equipment, dynamics, more functional sports-related rehab equipment at your fingertips. You can do anything in there. It’s amazing, especially for Idaho. I think there are probably some people that are like, “We find those sports centers for rehab everywhere.” Not necessarily an Idaho. This is the physical therapist’s dream for sports. He was in that clinic and we would always talk about which ACL he was rehabbing and which athlete and if they were getting better and stuff.
One day, I am looking at my email and I get something that pops up. It’s an email from him with his resignation. This blew me away because I thought this was my most satisfied employee and PT associate in our practice. I’m like, “I’ve been missing the boat here. What I’ve been missing?” I dropped what I was doing. We rearranged some things on his schedule so we could sit down and meet. He said, “Bart, it’s the craziest thing but I am so stuck financially. This is my dream job and yet I can’t stay.”
Seriously, looking at him, I almost got teary-eyed because I’m like, “What do you mean you can’t stay? This is your dream. You’re there. You’re right.” He said, “I’m way over $200,000 in debt. I’m married. I’ve got a couple of kids. I can’t buy a house and I can’t fix my car. I’m struggling to have enough to pay for my groceries. This huge student loan debt payment that’s due every month. I don’t know what to do about it. I’ve got a job offer in Geriatrics, so I’m going to have to drop my dream job to take something that I never thought I’d ever do.”
Don’t get me wrong. I think for those physical therapists that join our profession that loved Geriatrics, number one, it’s totally a critical aspect of physical therapy practice. I’m over the opinion that whatever is your passion, you got to follow that dream and find a way to make it happen. When I started researching a little bit more on student debt, I realized that I had been missing the impact of what’s going on in our profession right here, right now because the debt load is so heavy. It took me months of research.
I started researching out what the situation is for our new grads. What are they entering in? This didn’t get a lot of press because of COVID, but in 2020, the APTA released an impact study for student loans. Basically, it came out with a few stats that were quite alarming. First and foremost, majority of all of our new grads have over $150,000 of student loans. It was $156,000 is what they reported. You’ve got some in those private universities that are way over $200,000 like my friend.
Some may have found cheaper ways to get through school. The average being over $150,000 was quite alarming. The study was even a little bit better. They took a step further and they said, “How does this impact the physical therapist’s life?” They listed off these percentages. It’s a great study. Over 60% were saying, “I can’t buy a house and car. I can’t get married. I’m putting off having children. I can’t have a family,” including my friend’s problem, which was, “I can’t practice in the type of physical therapy setting, which I’d love to practice.” As I got thinking about this, I said, “That’s a shame.”
Another thing that they compared was other medical professions and allied health professions, we are one of the worst for debt-income ratio. It’s really high. In looking at all that, I thought, “This burden of debt is terrible,” but it mirrors what I went through with my family and me because I did go to a private university. I did have over $100,000 with a much lower income at that time, the ratios were similar.
One night, I remember I came home, I was so frustrated to see people struggling to be able not to pursue their passion within the physical therapy career. I started making notes. From there, whenever I would start driving, I would start talking into my phone. I don’t know if you’ve ever done this, but brainstorming. It’s almost like this mind-meld vomit with your phone, where you’re dumping stuff and ideas.
I started sifting through these ideas and realized that the path I took is similar to what each one of these individuals faces. They might be a lot worse in so many ways, but then I started to even think about, “What are the solutions to this problem and outside of the APTA’s impact study?” As an aside, we should look and talk briefly about what the APTA suggested we do about it. The APTA is a phenomenal body and organization. What they’ve been doing and the transformation that the APTA has made in our career to be a reactive body or organization to be such a proactive, both capital deals. Otherwise, I can’t say enough about our organization. There are phenomenal.
All of the struggles that are up against us as a profession with this debt, you could tell by the suggestions that they were making, they don’t have a lot of control over this. In fact, almost not. The market and the business side of education is driving the outcome that we’re seeing for our new graduates. They came up with ideas like, “We should brainstorm what it might be like to restructure that DPT Degree,” but we don’t have any idea what that looks like. We’re going to have to get together with educators and come up with some solutions, but we don’t know. We need to get that national health path. We’ve been trying to get scholarships for the underprivileged.
We’ve been talking a lot about diversity in the APTA and the lack of it for the last year-plus. I think the APTA is making some strides there, but what are we going to do when the answer from some of our minorities would be, “I wasn’t born with a silver spoon. I didn’t have all of the opportunities that might have been given to other people that are readily joining the workforce and physical therapy. How can I be successful in this?” We need to be able to answer that question.
They brought up solutions to a lot more questions than answers. I almost feel like that’s what the APTA should do. It’s not the APTA’s burden to be able to solve all of our problems. That’s why we have smart people all the way through our profession that need to put our heads together. The APTA, in my opinion, is the springboard to organize and make that effort a reality. That’s what I expect for them and from our profession.
The book that you wrote is geared to help the physical therapy student or even the new grad to overcome any debt-related issues that they have. I think the important thing about your book, for my audience, is that owners recognize what they have to deal with. That can impact so many things. I don’t think you’re here saying, “We’ve got to up our salaries,” or anything like that. The importance now, where we’re standing as simply make owners aware of what these new grads are coming out with and what the average number looks like.
Not that it should necessarily affect the average rate or salary for a new grad because our reimbursements are relatively staying the same, but recognize what they have to deal with and what you can do to help alleviate the issue. Are there some programs that you can put in place? Are there bonuses that you can put in place related to productivity? Can you be a little bit more understanding of the fact that they’re going to want to moonlight or could you provide them moonlighting opportunities yourselves to gain some extra? I think the important thing now is, number one, to make them aware.
I came back at this same symposium. We had a bunch of owners together. When we discussed some of the impact studies from the APTA as a group, there were a lot of shocked people as owners of what that looks like for these new grads. There are some good strategies. As I came in and decided I was going to put a book together, it was two objectives. Number one, I need to write a book from my standpoint, having walked their path recognizing that I was in a similar debt-income ratio and I was able to get out of debt within six years, which was miraculous, but I went back through and created a step-by-step of how I was able to do that.
My wife and I had a very team approach. We put together a chapter followed by a home exercise program for that new graduate. Step one, analyze the debt. Let's look at what this debt looks like, see how the interest is impacting you, short-term, long-term and create a strategy for debt elimination. After walking through each of these chapters at the beginning, which is for me, as a new graduate, these would have been very revolutionary ideas. I had never encountered debt like this. The most debt I'd ever had prior to this was $100 on a credit card. I was debt-free coming out of undergraduate and maybe add debt on a car for $2,000. The beaver that was getting us from point A to point B.
We get through that and then the backside of the book can be taken on, as you said, ideas and more of a proactive way so that PT cannot be at the mercy of the interest rate, but how can I moonlight it? What are the steps I need to do to talk with my current employer? How do I not lose my skillset? If I'm going into outpatient physical therapy and maybe I have a love in sports or I've got a love in general orthopedics, whatever that looks like is fine. How do I not lose my skillset by moonlighting or going into some other aspect to make some more money? It even breaks down within physical therapy the most profitable aspects nowadays of our profession. Honestly, it's not always outpatient physical therapy.Our mistakes are part of the journey as long as we're learning from them. Click To Tweet
We've got a lot more lucrative things, sometimes in-home health and skilled nursing. Again, if you want to do Geriatrics, you've gone the right way as far as the money side of it as well. In that second portion of it, it's all breaking down the facts. Helping them create much like you would a business plan, a 1 to 5-year plan and even a 10-year plan for their own career. It's a career and business plan for themselves, whether they own practice or not.
If you're going to talk to owners about this, I think one of the first things that they might want to do is number one, read the book and maybe have a few copies on hand for other physical therapists as they're working with them so that they can give them some of these tools. Financial literacy is lacking in all of our educations, so providing them this support would be a huge help.
It was interesting. Most of the owners in that symposium in Texas, where we unveiled the book there. The biggest buyers were owners and were buying 10 to 15 copies for all their therapists and for their PTAs as well. When I was talking to the owners, I said, “What’s your biggest frustration when it comes to this topic?” There were two.
One was this common idea where they couldn’t recruit and retain because the debt was driving the decision for many people in our field. Two, it had this uncomfortable feeling. There are times where people that they hired as the owner like it was almost their responsibility to help dig them out of debt rather than a personal responsibility where it’s my student loans. Maybe as an employee, I’m coming to you. Nathan as the owner of the practice and saying, “I’ve got $200,000 in debt, Nathan. You got to help me dig this out. First and foremost, I know I’ve only worked for you for 90 days, but I need a $10,000 raise.”
I’ve heard that. That’s not a surprising request. As if reimbursement is going up and money grows on trees. There’s a lack of understanding. As an owner, I don’t know if you’ve come into the crosses, but when I’ve had a conversation like that, I am so surprised and almost upset. It’s a lack of understanding on my part and the PT’s part. We want to get out of that.
I think having the awareness, recognizing the state of physical therapists coming out of school nowadays and what they're dealing with in terms of debt load starts there, but then what do you recommend past that? What can owners do to speak to these new grads and the people that have a lot of debt load? What would you say to them outside of, read the book and help them out, then what? What are some of the things either you do or some of the things that you might recommend on a general scale?
One of the chapters that we do address is that moonlight. I think that the name of the chapter is Sacrificing More. Again, owning that debt because there is a misunderstanding or a hope that might be misled in a lot of these new grads that, “I’m going to wake up tomorrow. I’m going to have a government leader that’s going to forgive $200,000 in debt.” While we’re looking at an interesting financial status or in our history as America, I don’t know that any business owner or any individual should bank $200,000 of debt forgiveness on their future. That’s a tough way to go, but yet that’s pretty prevalent.
With coming to moonlighting as a suggestion and embracing that type of an idea of what needs to happen in order to sacrifice, there are also some other things in the third section of the book that is more based on owners, but also the new grad can glean from. There are other ways for PT owners to make better reimbursement. That’s what is also addressed.
For instance, in our practice, we’ve done Musculoskeletal ultrasound and EMG for a few years. It makes more per hour than anything else I get reimbursed for physical therapy. It also saves patients tons of money in MRI costs as well as unnecessary surgery. We’re saving the system money and yet, as business owners in physical therapy, it should at least attract our attention because the reimbursements are better.
At a time when all we’re talking about is decreased reimbursements. I can’t find any other aspect of physical therapy that is such a dramatic win-win, patient and practice. What we did in this is we started a couple of years ago, we decided that we wanted to get the training that was necessary within Musculoskeletal ultrasound and EMG that we were going to go all-in, especially for ultrasound. We were going to ask and then require all of our therapists to engage in this process. As we saw more therapists start down the learning path, we realized that they were having to spend a little more time in the evenings studying.
It’s not a road if you got done with PT school and decided you were never going to pick up a book or a journal again. That’s not the right road for you if that’s our expectation, but for those that are willing to study and work hard. We’ve figured out that we could give a significant percentage of the profits from this back to the therapist then leverage what the government has been doing in the CARES Act to give us the ability to pay essentially direct into that student loan account and save them by having about $5,000-plus for that first segment of our loan reimbursement each year comes out pre-tax. Our system that we set up and I think not everybody fits the same.
For ultrasound, we decided, “We want that diagnostic ultrasound piece for our patients.” We recognize that the research shows that it changes our plan of care as physical therapists for the better over 62% of the time when we use it. It’s for the patient’s benefit and it’s so much cheaper than any other imaging that’s out there to be able to guide the PT plan of care or medical plan of care for musculoskeletal injuries.
Secondarily, if we can invest back in the therapist and we’re getting a pay as much as $10,000 a year in student loan repayment per therapist. That is a bit of a game-changer. When we looked at the APTA’s impact study on that, it showed that only 8% of any employers within physical therapy aren’t engaging in any amount of student loan repayment.
The average student loan repayment within the ones that were participating, within the 8%, was about $18,000 total. We’re talking $10,000 a year, five-year contract plus what the cost savings are in that pre-tax dollar. We’re estimating that we can get somewhere close to about $60,000 in loan repayment over a five-year contract. It’s a game-changer for sure.
What can it do for your recruiting? If a student or a new grad is looking at a place where they can work and know that this person is going to help me with one of my major problems coming out of school. One of those is like, “I want to improve my skillset,” and the second is, “I've got this huge debt load on top of me.” If you can speak to that in your ads and you're recruiting. It definitely helps you connect with those people a lot more. Have you recognized that yourself?
That's been a tremendous benefit to us. We also recognize that it weeds out some of those folks that are not interested in learning beyond graduate school. We're honest about it. There's a learning curve like anything else in physical therapy. If I was going to sit for my OCS or SCS, I've got to study. If I'm going to sit up for my ECS and become a Board-certified Clinical Electrophysiologist or I'm going to become fellowship-trained in musculoskeletal ultrasound, we're all talking the same type of commitment.
Because we're marrying a problem, the problem being debt in the student, with a problem that we have, which is recruiting, retention and being able to do it on that commonality, I don't think you come across too many physical therapists that don't want to learn and don't love to learn. That being the solution between the debt and the growth needed inconsistent staff for the PT owner, it's the match made in heaven for recruiting.What is going to happen in the next generation when student debt has crushed the entrepreneurial spirit? Click To Tweet
When you talk about some of the things that an owner can do, you've set up a bonus plan of some that can be tied directly to their student loan debt. I'm assuming there are other things that could be done. Maybe you highlight these in your book. They could be sign-on bonuses, especially if they're going to move from one state to another, something like that, some expense repaid or simply sign-on bonuses, to begin with. Have you thought about or even used it yourself, maybe putting them on four-tens, so maybe they have a three-day weekend to moonlight and spend more time? Is that something that you've also considered?
In fact, we have made that change. Honestly, as an owner, I’ve always not enjoyed the idea of four tens because I want each therapist to be totally engaged in their caseload and not be distracted. I had our board of directors, which is mostly made of clinical directors, came to me and said, “You’re talking the talk about loan repayment and moonlighting but you’re not walking the walk when it comes to enabling these guys to have the time to be attractive to other agencies, home health, or skilled nursing that would like to would like to do it.”
Now what you’ve seen in the past and I had to do a little bit of self-recognition because I realized some of these guys that are leaving our practice to go and take on something that makes more money in Geriatrics, I had not done all I could. For 4/10s, this has been something that’s been helpful. Other ones, we’re shifting it around and we’re trying to create a caseload based on their full scope.
We try to sit down with our PT associates in our practice on a quarterly basis. Those that want to be open enough to talk about their 1 to 5-year plan or 10-year plan. That’s what we’re trying to do with each one of them. If I want to be transparent on their debt, then we’re helping them track their debt. Not as if it’s my responsibility, but then I go, “I did create for one of your other coworkers an introduction to a home health company that’s good. That’ll work around your schedule. They like a 4/10 scenario, which day of the week. They’re looking for Tuesdays to be their PT Day, but they want 8 to 10 hours. Are you willing to do it? This is what they’re willing to pay.” I’m setting up moonlighting for them and trying to change some of the priorities of the way we cover our caseloads to facilitate and making it happen. Honestly, years ago, I would have done this. I needed to make some changes in my own mind.
What was the result of switching over to that 4/10 schedule? Has it been a relatively win-win for both sides, an extra day for them and similar, if not better productivity for you?
It's been similar productivity. One of the things that I think that's been helpful on that is that we work all of our PTs in a PT-PTA team. The day that the PT is off, the PTA is in and vice versa. Normally they're working side-by-side for 3/10, then that 4th, 10-hour day, they have some separate time away from their team member. It's worked out really well. Of course, you got to look at your supervision rules and the individual states and see how that works but that's something that's been productive in our physical therapy practice within those teams.
To come back around, where are you able to retain the therapist that wanted to take off after all?
I was not structured at that time for my good friend that bailed. I’ve had several attempts at a conversation with him like, “You can come back. We’re ready now,” but that’s tough because we had our chance. We have to recognize that each one of us in private practice like, “This is a journey.” Sometimes we kick ourselves and say, “That was a huge mistake,” but I don’t think we can look at the learning experience that we have as owners.
I don’t want to be too narrow-minded and say we don’t ever make mistakes. Our mistakes are part of the journey as long as we’re learning from them. We prioritized a more flexible schedule. We prioritized what moonlighting can make, mean for them and how to have important critical financial conversations. We usually have it with their spouse and take them out to dinner and make their family finance.
Not that we come at it and say, “We’re going to fix this for you.” Don’t get it wrong, but them, bearing their financial soul and talking about together. We tell them, “We want to help you by a level of accountability that most employers are unwilling to do.” We don’t have a money tree. We’re not going to bail you out. There are no bailouts, but we will try to facilitate and help, and we’re totally committed.
I think the more you can show that you are aligned with their issues, concerns and purposes in their lives, the greater potential you have to retain them and work together to create a powerful relationship.
A few years ago, I used to hear from new grads, “What do you want coming out of school?” Number one was always mentorship followed by a competitive salary. How to become debt-free is now number one. Hopefully, for owners out there, we've put in the time and effort. In writing this book, I wanted to make a book that was inexpensive because the last thing that a new grad needs is another $200 book. We all spent hundreds of dollars on our books every semester. Our goal was to keep it right at or under $20 and be able to give somebody a quick read at something that they can put into practice. If they follow the home exercise program at the end of each chapter, they're going to be successful with it.
If people wanted, especially if owners wanted to find multiple copies of this book, what would they do?
You go to our website. It's Debt-FreePT.com. You can order as many as you want and we’ll deliver them to your practice.
Anything else you want to share that maybe we haven't covered here that you think is vitally important for owners to understand or do in light of this issue that new grads are coming out with?
I guess the real light bulb that went off along this process for owners or personally as a practice owner is I recognize that drive that each of us has had to be an entrepreneur to make the best practice possible, make a difference one patient at a time with anybody and everybody coming through our door, and make a product that people would seek after and that would change lives. That’s who we are in our practice. Frankly, every time I talked to somebody with passion and private practice of physical therapy, it’s almost the same phrases come tumbling out or something like that. Those core values and everything that we stand for are real.
The struggle is, what is going to happen in the next generation when the student debt has crushed the entrepreneurial spirit? There won’t be that opportunity. I jumped in and have a 3 to 1 debt to income ratio. It’s pretty miraculous that I got into private practice. It came through a lot of hard work and a lot of moonlighting. There are probably a few owners that say, “I don’t know if my associates were willing to work that hard,” but there are those that are out there that are. The struggle is if the debt barrier is so high, their dreams can never be accomplished, whether they’re doing it with you as a part of an ownership expansion or even on their own.
You look at physical therapy in general when we look at who’s our champions? Who are the champions within our profession? Look around in the APTA and private practice. We have these long-term stalwart heroes in my mind. What’s going on Capitol Hill, trying to fight, decrease in reimbursements that are coming off the backs of private practice and has for years. We have some very stalwart serviceable, intelligent, and driven educators as well that are totally engaged in the PT world.
When we think about sheer numbers and the finances that drive the protection of our profession, it’s private practice. If all of a sudden, there are no entrepreneurs in our blood anymore because the barriers are too high. I fear that what we have enjoyed and our love of the game might not be there in the next generation because the barriers with debt are too high. My last message to the owners is if you want to live a legacy or leave a legacy to the next generation, it’s time to take the student debt seriously, not that you have any anymore, but every single one of the PTs that you work with, they do.If you want to leave a legacy to the next generation, it’s time to take student debt seriously. Click To Tweet
It's not necessarily going to get better. The costs for education have outpaced inflation 2 to 3 times over the years. I don't know if it's going to get necessarily significantly better. We have to do what we can on our end to help that.
That's a great take-home message. I would look to see that the APTA is going to make some wonderful strides there but they're not going to do it without us. We, as owners, got to do all we can do.
If people wanted to get in touch with you and maybe talk to you about it and what you're doing, get your insight, how do they reach you, Bart?
You can shoot me an email anytime. It's BartMPT@Gmail.com. Pick up one of our books. They're cheap. Take a look at it. It's a great financial solution and probably the best ROI, in my opinion, that any of our new grads can pick up.
That's a huge help. I'm so glad that you've formulated a book around that to address it because I don't know if there are any other books out there like this now that share this wisdom and the statistics that you brought up. Thank you for doing so. Thank you for shedding light on that.
It was a journey and something that I hope from a personal basis, a great way to give back to our profession.
Thanks for taking the time to be on the show as well.
Thanks for inviting me, Nathan. This has been great.
Talk to you later, Bart.
Bart McDonald, PT, MPT, ECS, FMSK, is the President and owner of Superior Physical Therapy. Bart began his career at an outpatient clinic in Montana. He later worked at Bannock Regional Medical Center.
Bart started Aspen Physical Therapy and later decided to open his own clinic, Superior Physical Therapy in 2008 which has grown to four clinics in southeast Idaho.
Bart graduated with his Master’s of Physical Therapy from Emory University School of Medicine in 2000. He specializes in knee, shoulder, and spine rehabilitation, Electromyography and Nerve Conduction Study testing and is ASTYM certiﬁed. He is Board Certified in Clinical Electrophysiology and is a Fellow in Musculoskeletal Ultrasound.
Bart grew up in Nampa, Idaho, is married and has three children and one grandchild. When he’s not working, he is spending time with his family, water skiing, or downhill skiing.
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