The Profit Paradox: Why Your Clinic Is Busier Than Ever But Making Less Money - Nathan Shields’ Appearance On The SPRY PT Webinar With Alex Bendersky, PT

[00:00:00] Right? It's not why we got into business. We wanted to open up clinics usually to have some freedom, but when profit margins are thin and you're staying up late at night to cover payroll or worried about covering payroll. Welcome to the Private Practice Owners Club. Your hosts and coaches, Nathan Shields scaled his practice and exited for millions, while Adam Robin went from working 60 hours a week in one clinic to scaling to multiple clinics while working less than four hours per week remotely.

[00:00:29] This podcast is meant to share with you exactly how they did it and how you can build a business that supports the lifestyle that you truly desire. And don't forget to join the Private Practice Owners Club community on Facebook, where we are obsessed with providing even more resources that help owners just like you win the game of private practice.

[00:00:55] Welcome everyone to a webinar for our SPRY customers and for everyone else who's coming in. And today we are honored to have Nathan Shields as our guest. So thank you, Nathan, for being here. So first I'll do the introduction. And again, it is truly an honor and a pleasure to have you because I've been listening to you, what seems like, for years. And I know that you have such a strong following in our professional community.

[00:01:19] So Nathan Shields, PT, ECS, is a physical therapist, entrepreneur, and a founder of Private Practice Owners Club, PPO Club, where he helps clinic owners transition from overworked clinicians to confident CEOs. After scaling and selling his multi-location practice for three times the national average, Nathan shifted his focus to teaching private practice owners the system and leadership strategies that create true professional freedom and maximum profit.

[00:01:45] Through PPO Club podcast, now with over 350 episodes, an active community that includes Facebook group, webinar, workshop, and conferences, Nathan continues to equip owners practical tools to grow. Most recently, he has been conducting deep dive business audits for practice owners, uncovering hidden revenue opportunities and increasing annual profit by tens of thousands of dollars in annual margins squeezing healthcare environment.

[00:02:10] After several years in Alaska with his wife and seven children, Nathan returned to Arizona into 2024, where he continues to lead the PPO Club community and host this podcast. So Nathan, thank you so much for being here today. Hey, thanks for having me, Alex. I really appreciate it. This is really great. And I think what a terrific opportunity for us to actually add insight. I think one of the processes and one of the spiels is information and knowledge is never created. It's always discovered.

[00:02:39] And I think you are a true wealth of knowledge. So a privilege to have you. Oh, thanks for having me on. You can tell by the podcast that I do where I interview a lot of successful business owners and industry leaders slash influencers. It's set up to share the wealth of their knowledge because I've never thought of myself as that wealth of knowledge. So it's nice that you would consider me as that type of person. And especially if you think about everything, your entire experience.

[00:03:09] So like growing a successful business, selling a successful business, being able to coach others. I mean, that's there's you are a wealth of knowledge just from your experience, from your understanding. I think just the deep layered understanding, not just the superficial stuff, right? Oh, yeah, that's very nice. I guess I do have that experience of the gamut of the ownership journey, if you will.

[00:03:31] I've started the practice, grew the practice, added multiple providers, added multiple locations, went through the sale process. Actually did that a second time with the practice that we had up in Alaska. So I've been through that a couple of repetitions now, the entire thing. So I do have some experience to glean from.

[00:03:55] And also with the podcast that I've done, like you said, 350 episodes, I'm learning a lot from a bunch of other people. So many times the information that I share is not what I personally experienced, but what other people have experienced through the podcast and my interviews of them. And so I'm excited to hopefully share some great value with the listeners today. And I think there's no singular generalizable experience, right? Everyone just lives in their own experience and learns from it. So that's truly a privilege. So just some housekeeping.

[00:04:24] We will go through these five main points today, but we'll cover some other issues as well. You will notice that every slide will have a QR code. A QR code is linked to an actual document that either is an empirical piece of evidence that supports these statements, or it's a document that has been created through a blog on Nathan's website that you should go visit and hopefully explore also. So the first question for you, Nathan, is this paradox of busy clinics, right?

[00:04:52] And that is that we are busier than we have ever been as a discipline, as an organization. And at the same time, we're generating less profit than ever. So what is behind this paradox of profitability? Well, there's the obvious stuff, right? Declining reimbursement rates, increasing expenses via inflation, cost of living, etc. Right. So we're obviously getting squeezed.

[00:05:18] And the difficulty remains in the fact that we have to change with the times. And that's not easy to do for most people. Right. Right. And so we are going to continue to get busier. Right. Like you said, bullet point number two, patient demand remains strong in most markets.

[00:05:38] The baby boomer, that curve of people that in that age bracket are going to continue to get older and move up into the 65 plus years of age range and require more and more care for. I don't know what it is. At least another 10, 15 years before that starts decreasing a little bit. So the demand is always going to be there. The therapist schedules are going to continue to remain full.

[00:06:06] Yet, with declining reimbursement rates, like the margin squeeze essentially that I shared, we're busy yet less profitable. Maybe even busier and less profitable. And so we really, it's incumbent upon us as individual business owners and as a profession, frankly, I wish there was more done industry wide to help us in this endeavor.

[00:06:31] But it's incumbent upon us to learn how to increase our margins, frankly. Like we're not in the business to see single digit profit margins. Like that's not the ideal American dream. Right. It's not why we got into business. We wanted to open up clinics usually to have some freedom.

[00:06:52] But when profit margins are thin and you're staying up late at night to cover payroll or worried about cover pay, covering payroll and how am I going to keep these people on the team if I can't increase their salaries? Then that's not the idea of freedom. And that's not what we signed up for. So there is definitely a paradox and we've got to change. Right. Like it's the dichotomy of working hard or working smart. And I think. Yeah. Yeah. There's a lot of that for sure.

[00:07:17] I think maybe like even it's a domain specific culture quality that we were so used of just rolling up our sleeves and working hard and breaking a sweat. But instead of just actually looking into these things and seeing like how can we generate a profit that actually affords us the lifestyle that we're looking for. And I think with that, I'll ask you the second question, which is that with objective data and with data in general, if you can't measure it, you can't change it. Right.

[00:07:41] So what does a busy clinic actually measure in terms of KPIs and what does it need to measure and capture in order to support this financial health of the enterprise? So what they need to measure, there are the obvious ones. Before I learned more about my metrics, I lived and breathed my total visits and my new patients and maybe my cancel rate. Right. Thinking those told the whole story and I lived and breathed those.

[00:08:10] And my emotions would follow along according to the roller coaster of those numbers, unfortunately, and my sleepless nights as well. There are quite a few to measure and too many right now for me to list off the top of my head. I mean, I have my spreadsheets that I cover and I can go into further detail if you wanted to reach out to me independently. But I think it's imperative, number one, for every business owner to know their financials.

[00:08:38] So knowing what your profit and loss statement says every month, reading, knowing how to read it, knowing what your, your profit margin is. And on that sheet, maybe most importantly, what is an important KPI I'll throw out there right away is your percentage of employee compensation compared to your gross revenues.

[00:09:01] And this goes to the example of where we're getting squeezed that used to be, I've been out of the business eight years as an owner that my employee compensation versus my gross revenues used to be, if we could keep it below 50 to 55%, then we knew we were, then we were profitable in the range that we wanted to be. We had good profit margins, right? Now, if that number isn't below 60%, then you're not doing very well, right?

[00:09:31] So that's one KPI I can think of right off the bat. And when I say employee compensation, it's not just salaries, but it's also paid time off, payroll taxes, anything that goes into payroll, put it into the employee compensation bucket that measured against your gross revenues on a monthly basis needs to be below 60%, right? So there's a KPI that goes directly to your financial well-being and you need to keep it there.

[00:09:55] And if it is above that, then you need to minimize expenses or increase the production with the salaries that you have, right? So that one right off the bat is a good measure. And one of the measures that I'll do in my audits on a regular basis and see, okay, are you productive enough? Is your team productive enough? And when I say productive, here's another KPI. I'm expecting my providers. I use the term utilization.

[00:10:25] I don't know if you use the same term, Alex. Utilization, efficiency, maybe billable hours, something to that. I always call it utilization. But all the available appointment slots, how many of them are filled on a regular basis? And so given a week's period of time, if you had 100 appointment slots of those, how many actually came in? And I'm expecting that number for each individual provider to be between 80% and 85%, right? At least.

[00:10:55] At least 80%. If they're down in 75%, 70%, especially below 70%, then that person isn't quote-unquote productive for me. I know they're not generating enough revenue to generate enough profit for my clinic. And I saw that in an audit recently where a number of the providers were in the 70% to 75% range. And thus, I saw that employee compensation metric that I mentioned first, but also was in the 70% range.

[00:11:23] That tells them likely their profit margins were actually like 8%, 7%. And they're struggling to make it month to month. So those are a couple right off the bat. I don't know if, are there a couple more that you think we should get into? No, I think that's actually perfect. And the employee compensation ratio, right? So understanding the difference between equilibrium, there's two ways to get to equilibrium. There's the homeostasis, homeostatic change, right?

[00:11:49] Like what your employees cost to what they generate in terms of revenue. And fortunately or fortunately, our employees' cost is capped by how many hours in a day, how productive they can be. And we have to set up these expectations for them. Like you're expected to see X amount of patients. And then what they actually generate. And that's based on their rivals. And I think that there's a lot of psychology to this, right? But it's the perceived value.

[00:12:13] Like I think it has to come from a clinician to drive this value to the patient to understand that you need to be here. Because you make this commitment with me. And now it's this subjective verbal commitment that I'm going to take care of you. But you need to be here in the clinic because that generates revenue. And I'm very lackadaisical about cancellations, about no-shows. And I'm just like, I'm okay with it. We're already as an industry, I think the least productive healthcare enterprise in the United States out of all the healthcare systems.

[00:12:41] And that was one of the things that you have to consider as a clinician, even if you're not a business owner, is that you're just not generating enough revenue to support yourself. So if you want to get paid more, you have to generate more revenue. Like it's the way it works, right? Yeah. And unfortunately, that goes back to their education. Honestly, I'll put the blame on the physical therapy schools on that one. Like they don't talk about business metrics or the financials around business enough.

[00:13:09] So those therapists that come out don't understand that they need to produce in order to justify their salaries. I would change the wording that you put in there. It's like when you're talking to a patient, they need to come not to, you mentioned to generate revenue. Of course, we wouldn't say that to the patient. You need to come in order to achieve the goals that you want.

[00:13:31] It is in your best physical interest to come to physical therapy at this frequency for this period of time to get to this point so that you are healthy and can do the things that you want to do. And so the mindset has to be what's best for the patient is best for business. And that's totally the case. And therapists, unfortunately, don't take responsibility for their patients.

[00:13:56] I would say, I don't want to make a huge generalization, but a majority of the time they don't take responsibility for their patient caseload to come in at the frequency and for the duration that they need to get the results that the patients want. And that you know what's best for them.

[00:14:15] And if you can teach your team, say what it is, it's selling a plan of care and get the patient to stay engaged with that plan of care on a visit by visit basis and tell them, this is where you are along the course of our plan of care. You're 50% of the way there. You're 75% of the way there. And this is what we're going to do to get you all away. It's still going to take some time. Of course, we want to be a quick fix culture, but we have to talk to our patients.

[00:14:41] And the best therapists simply know how to sell the plan of care to keep the patients engaged. When you do that, you will generate more revenue because you're doing what's in the best interest of the patients. And I think that the key here is, too, you're absolutely right. There is an optimal dose response as far as physical therapy encounters are concerned. And I think people, general population, it understands that when they're prescribed medication, if you're prescribed an antibiotic, you're supposed to be compliant with the full course of care, right?

[00:15:11] You have a 10 days worth of medications. You're supposed to take three times a day. And that's your dose response. Your dose response is that volume of medication that you have to intake to complete the course of care for that specific antibiotic. For physical therapy, it's a physical agent. The agency here is that you're going to comply to these activities that we have lined up for you for your specific diagnosis. And that will take six weeks.

[00:15:35] That is the optimal time frame for your in-person care that will help you overcome whatever clinical barrier you're facing. But I think clinicians need to understand that the dose response comes from compliance. And you have to integrate compliance into this, as you're saying, providing the plan of care. But also, it's the story and the narrative that we have to give to patients that you have to be here. You have to work together with me. You have to work, right? It's an alignment and an alliance that we don't have. And I think that's perfect. There's also a counteractivity.

[00:16:05] Can I just add to that? Of course. If I can just add to that, you can do more. You can generate more revenue and more profit with the current patient load if you were willing to focus on it, right? And that's what a lot of my audits are telling people is like, listen, you don't necessarily – the people that I've talked to, you don't necessarily need to see a lot more patients.

[00:16:28] What you need to do is get your patients to come in at a greater frequency, which would benefit them, right? If they're coming one time a week and you're in musculoskeletal outpatient therapy, you can't tell me that seeing patient one time a week is enough. I just can't fathom that, right? It's not logical. So they need to come in at a greater frequency. They need to come for a better duration.

[00:16:52] And if you did that, if you caught the fish that are already in the barrel, you'll generate more revenue and profits simply by doing that. And that's in the best interest of the patient. I think that's very well put. And I think that we can play on this a little bit. And that is that patient volume has been one of the dominant KPIs that we're looking at. And why don't we look into the stratification of specific need?

[00:17:15] I think in a way, if we're incentivized to look at this volume as a fundamental KPI, why don't we not look into the patients that actually need us? So the ones that we're seeing once a week, but really need to see three times a week because we know that these are high-risk patients. We're not communicating. We're just trying to either maximize for all or maximize for none instead of being professionals and understanding that you need to be here three or four days a week. Because with your condition, if you're not, the downstream cost is going to be exponentially higher.

[00:17:44] So better to spend time here for the next six weeks than to spend time in an OR in a year or two. So why are we not having this conversation with patients? I'll go to the lowest hanging fruit, and that is we don't know how to have those conversations with patients. We weren't necessarily trained or coached in those conversations, and so we don't feel totally comfortable. And then there's plenty of therapists, if they were like me, especially if they were younger, we're still trying to get over the imposter syndrome.

[00:18:11] We set high bars for ourselves, and we're like, oh man, I don't know if my skills can get you the results that I'm talking about, right? And so there is a little fear that we're not going to follow through on what we're committed to with this plan of care. So I think it's a few different things. But if I could add really quickly, just because we started with KPIs, that's another KPI that I think doesn't get looked at enough is the average visit frequency per week.

[00:18:39] And I ask owners all the time, what do you think it is? Musculoskeletal outpatient setting. And they'll say, oh, it's probably between two and three, right? Because that's what the typical protocol is. And then when we actually do the metric, actually count the numbers, it's closer to like 1.3, 1.2. And if you actually made a substantial difference in that metric alone, you change who's currently coming to getting them to come more often,

[00:19:09] which is in their best interest, which is also in the best interest of the business. It's changing that metric from 1.3, let's just pick it to say 1.7, right? What is that? That's like a 30% interest and a 30% increase in your visits per week. Right there. Just doing that, just following that one metric, right?

[00:19:32] So again, it's looking at what's in the best interest of the patients and getting them to come in a way that will maximize the recovery will benefit your business. And I think that's understanding the margins, right? Actually, and we can go into like this slide that margins define industry, but the failure of our system to educate our clinicians in a business acumen is the downfall of the business, right?

[00:19:54] So what and how much revenue can you actually change when you operate your business efficiently? What are some of the things that you have seen that individuals can optimize their efficiency without actually changing anything else about their business? Well, that last metric that I shared is a good one, right? Increasing their average frequency per visit. Another one is tracking percentage of completed plans of care.

[00:20:21] I think we might get into this in a later slide, but since we're here, it's a metric that in the past was hard to generate. And I'm hoping that our current EMRs, especially SPRI, can do it for us to an extent as long as you keep your active patient list set up right. Like actually discharge the people out of the system that are discharged and keep the active patients active.

[00:20:44] That will give you a healthy metric and then measure how many of those people on the active patient list are actually coming on a regular basis and how many of those people are completing their full plans of care. And so tracking that metric, I will go back and say, I believe WebPT did a study. I did a full podcast on it like around 19, 20, 20, maybe that the average completed plan of care rate was 30%, 3-0.

[00:21:13] That's good if you're playing baseball, right? But a 30% success rate is horrific, I think, as an industry. If you're saying we get 30% of our patients better and I'll be generous. Maybe some people get better sooner than the plan of care was set out to be, 50%. Maybe 50% of the time we're super successful. And man, if you were to track that metric alone, I probably said this a couple times around these KPIs already.

[00:21:43] But if you were able to track that metric and see how successful are we at getting our patients to complete the full plan of care, man, that would drive business right away, right? Without seeing any more patients. Yeah, they're already there. I mean, they're already coming, but we're just not getting them, right? And part of it, I think, exactly what you were referencing, there's a lot of externalities and a lot of downstream effects that we're not even looking at.

[00:22:08] And so someone who is looking into doesn't want to burden a patient to come in because, like, you know, it's your time and I understand and you can cancel this week. I'll see you next week.

[00:22:46] Do you feel better? So I guess it's a short-term investment and long-term investment, too. Let's look into… Well, it's in the best interest of the patient. Like I said before, I want to make WebPT made a correlation between that metric alone is losing individual private practice owners approximately $150,000 a year. Just because the success rate is at 30%. It's a significant impact on your financials.

[00:23:12] Just as it is, it is an impact on the patients that aren't coming. And a shameless plug, I think, with a product like Spry, I think where we have a business intelligence tool that are baked directly into the platform, you can visualize all of this. You can actually monitor and track it. Like, you don't have to guess. There's no guesswork. There's no digging through your Excel spreadsheets. It's right here in the platform. It will tell you who's tracking and who's not tracking. That's why I think smart systems need to be operationalized for smart businesses.

[00:23:43] So let's talk about the profitable and non-profitable time. And that has to do with a time clinicians spend on these redundant tasks that don't generate revenue because they are not clinical. They are just redundantly administrative. And so what can a business owners do to reduce this administrative burden on a clinician so that the clinicians can focus on what they do best, which is provide clinical care? Yeah.

[00:24:07] I think I actually just made a comment in LinkedIn today because someone posted about the benefits of AI and documentation because that up until now, documentation was the physical therapist's biggest headache, right? All the surveys would say as much. Yeah, they're concerned about reimbursement rates and salaries and whatnot. But if they surveyed back in the day, it was always documentation.

[00:24:29] And so to overcome that, if you're not using AI at this point to help you with your documentation, you're just a couple of years behind already. I think there's opportunities there because not only does it help you with your documentation, but to your second bullet point here, they also have compliance guidelines within there to tell you how to be more compliant with your documentation.

[00:24:52] And even your coding with some of these AI tools to maximize the codes that you're using for the same care that you're providing. Why not get paid more for the work that you're doing, right? So using the AI tools that are available to you and some of those administrative tasks, maybe AI can't do them, but could a virtual assistant do them? I'm a big fan of virtual assistants.

[00:25:16] And actually, I'm in the process of hiring on my own executive virtual assistant as within a couple of weeks because these administrative tasks are distracting. They're draining. They're not productive. You know, they don't lead to revenue, but they still need to get done. And they're like part of the work that just has to get done. So utilizing the AI that's available to you, utilizing virtual assistants, there's a lot of good companies that can help you with virtual assistants out there.

[00:25:46] My friend, Will Humphreys has virtual rock star. My partner, Adam Robin has inboxes zero. There are great VA companies out there that can help you get the work done so that you can spend more time being productive and your therapist can spend more time being productive and doing what they really want to do. They don't want to be doing any of this stuff. No, no.

[00:26:04] And if you think about it, like even like that patient onboarding, like as far as a loss of time, like the inefficiency in patient onboarding, like when the patient comes in and they still haven't filled out their paperwork, that's 10 minutes of your time, right? That's 10 minutes of billable time that you're spending in a waiting room waiting for someone. Like you have digit, you've been able to digitize that process with such high degree of fluency and with a high degree of precision that you have, like we have our Spry kiosk that like it's pretty much everything. Outcome measures, patient demographics.

[00:26:33] You've got a spry kiosk. That's cool. Yeah, it's awesome. It's actually spectacular and it's so well appreciated. I think even beyond the product, it's like patient comes in, they're ready to be seen. Like they don't have to go anything beyond that. Like the conversation can start about the patient and focus on the patient, not on administrative stuff. But let's talk about a revenue leakage. And this one more in terms of as an industry, we're very comfortable about not collecting 100% of what we're owed.

[00:27:02] So ridiculously comfortable losing 20% of our revenue to these administrative garbage because it's part of business. But no other business can take a 20% loss of their margin and still be happy about it. So what can you do to reduce some of these denials? What can you do to be in compliance with some of these payer-based contracts so that you can actually be profitable?

[00:27:24] Well, yeah, it's exactly what I'm doing when I do these audits is looking for the revenue leaks within an organization by looking through their operational and financial and billing collections metrics. But I also presented on this PPS this last conference. And there's four areas where I'm looking for leakage if I'm an owner.

[00:27:43] And it's not on the bullet points here, but I'll tell you the fastest, easiest way to plug revenue leakage hole is over-the-counter collections at the front desk. If you aren't tracking that daily, what should be collected versus what actually is collected on a daily basis, you're losing cash flow.

[00:28:04] And the studies show that once that patient walks out the door and doesn't pay their co-pay, co-insurance, deductible, portion of the deductible, whatever it is, you're losing 50 cents on the dollar if you're not collecting at the time of service. So that's an immediate switch that can increase revenue today if you're not doing that. Your collections over-the-counter should be 100%. No give on that.

[00:28:34] And the easiest way to get to 100% over-the-counter collections is get credit cards on file. If you don't have credit cards on file, do it today. Do whatever you have to do. It's like a paragraph maybe to your financial agreement and your new patient paperwork. I'm sure there's plenty of examples of what that paragraph looks like, sounds like. I'm sure Spry is totally compliant to keep and store credit cards on file, right?

[00:28:57] What I'm also seeing as I was studying for that talk I gave is that patients expect some kind of digital payment process nowadays. Like, it's almost a burden for me to, like, walk in and have to pull out my credit card. If I can just give it to you and then I show up the next thing and they say, hey, we're just going to charge a card on file. And they're like, okay, yeah, no problem.

[00:29:20] And then the agreement is also, hey, at the end of the month, if the insurance has processed everything and I have a balance, you're just going to charge my credit card on file, right? I'm not going to have to, like, write a check and mail in something to you and go to the post office or whatnot. Dude, just charge my card on file, please.

[00:29:48] Dude, just charge my card on file. The AI does it, but that's possible. The coding inconsistencies, your providers need to know the difference between AMA and Medicare billing.

[00:30:16] Sorry, physical therapy schools are only teaching Medicare billing processes and not all insurance companies follow Medicare guidelines, right? So if you're with a commercial payer, you leverage the AMA billing processes and you can generate more revenue that way. Know what your CPT codes are paying individually. Like, know exactly what does TheraX pay versus TheraAct. In general, therapeutic activity pays more.

[00:30:44] Make sure you're using that a lot more than therapeutic exercise and have the documentation and justification behind it to do so because it's greater skill and you should get paid more for the skill that you provide, right? So knowing how to bill appropriately, code appropriately, knowing which insurances deny certain codes so your providers aren't using them. You got to know all these things and you got to be in communication with your billing collections team. So if they're just okay with denials of line item CPT codes, that's not okay with me.

[00:31:14] I mean, you need to teach me so I can teach my providers what those CPT codes are that we shouldn't be using or what we should be using instead of others. There's a whole matrix around that that needs to be understood all the way through the providers. It's the foundational knowledge, I think, and alignment. Every agent in your clinic should be aligned on the same source of truth, right? Right. And just to add one more, I know you moved on to the next slide, but if I could add one more is simply this. Know your cost per visit.

[00:31:44] I can ask almost every owner what their average reimbursement is per visit and they know it within a range. Rarely do they know their cost per visit. So if you're looking at these insurance contracts, you got to know where you're losing money and by how much. I mean, you can assume that UnitedHealthcare is charging you, is paying you $65 a visit, maybe. And by the way, that hasn't changed in 25 years since I started my clinic. So, yep, they have record profits. Funny how that works.

[00:32:13] But do you really collect $65 a visit? Because if you're not, if patients haven't paid their balances, maybe that $65 a visit is less than $60 a visit because they didn't pay their balances or something like that or they got denied here and there. Maybe it's under $60 a visit and your cost per visit is still $80, $85 a visit. You're losing $20, $25 a visit. If you're okay with that, okay. Yeah. Well, listen, if you're okay about losing money, right? The joke's on you.

[00:32:43] So let's move on to the next step, which is the workforce attrition and workforce bottleneck. We are definitely losing a lot of clinicians to non-clinical jobs. We're not getting enough clinicians to enter the PT training. So we do have this bottleneck. Do you think hiring a new grad is an optimal way of boosting revenue and boosting productivity? Or are there some of the other strategies that you would recommend? Ooh, there's a lot of different ways you can go with that.

[00:33:14] You would like to think that new grads would cost you less and generate the same amount of production. But there's too many stories where that's not totally true. You can generally expect that your more experienced therapists are going to be more productive and thus you're willing to pay them more. You're going to have to spend more time and energy with a new grad to coach them on the way that you expect patients to be seen in your clinic.

[00:33:40] Teach them your culture and teach them what production looks like and how we get there. And their ideas of what's ethical and not ethical might not really be realistic. And based on what we can assume that the physical therapy schools are teaching them. So the pro for hiring a new grad, of course, is that you can. They're moldable. They're not coming in with any preconceived ideas. This is how things should be done. Whatever you teach them is the way things are.

[00:34:09] And so you might be flexible. Of course, they're going to tend towards a lower salary. But if you have a new grad, you're going to have to spend a lot of time with them to get them to that point where they are productive. Culture and building culture. Yeah, yeah. You have to teach them the culture and teach them what it means to be productive and what that looks like. And this is how we're going to get you there and give them support. And once you get them there, the ones that do really well and buy into the culture do great. They do wonderfully well. And so you just have to make sure that they're value aligned.

[00:34:36] They're the type that are anxious to work in that setting with you. A lot of it, whether you're hiring a new grad or someone that's experienced, a lot of it goes to the interview process, the recruiting process. Are these people value aligned? And bringing up production as part of the interview process, I think, is imperative for either one. Like, hey, we expect you to see 50 visits a week on a 40-hour schedule. Are you going to have a problem with that?

[00:35:03] And the last thing you want to do is bring up that production expectation after you've hired them, right? Yeah. You need to be right up front. This is how we do things. Come and shadow with us. See how these, this is how we work. This is how we schedule. These are the patients that we see on a regular basis. So that's not a new conversation when they join the team. The sunk cost fallacy, right? So let's discuss the attrition of prescriptions.

[00:35:28] So even though we have a direct access in all 50 states, some form of direct access, we still very much are a referral-based business and continue to be. There's a statistic in a primary care environment that 70% of physical therapy referrals written by a primary care physician or primary care practitioner go unfilled. So what are some of the ways to capture these people that have an intent to come, have a prescription to come, but don't come? What are some of the best ways to do it? Wow. That's an incredible statistic.

[00:35:57] A lot of it goes back to marketing and promotion of exactly what we do. I don't think we've done well enough to the general public to separate ourselves as to what we actually do, that we are musculoskeletal experts. I've had too many experiences where people equate us to chiropractors or massage therapists still, right? And so you would think after decades that maybe the differentiations come clear, but they're not.

[00:36:27] And so that's imperative upon us to differentiate ourselves, to make ourselves the experts and set ourselves up well. The other thing is I've heard plenty of times where people say, oh yeah, physical therapy didn't work for me. And that's like saying, yeah, dentistry doesn't work for me. You know, we've become commoditized. Like you just find a different dentist. So you find a different physical therapist. They're not all the same. And so the marketing and the promotion and making things as easy as possible for people,

[00:36:56] because if someone's getting a prescription and they don't have, and there are plenty of referral coordinators at these doctor's offices that are saying, hey, there's plenty of physical therapists around. Just find one that's in your network and go and see them. We trust these people, right? The first thing they're going to do is look at your online presence, maybe even your social media presence. And if that's not there and if it doesn't look good, then they're just going to move on to the next place. Make it as easy as possible. Make sure maybe book an appointment button is on the top of the first page.

[00:37:22] Maybe you have phone numbers at the top of the first page that make sure your Google reviews are current, right? And that they look good and you've got a number of them. I think there's a threshold there. Algorithms may have changed, but you want to be, you want to have at least 35, 40 comments slash reviews. So you build up an online presence because people are going to look at that nowadays more so than the doctor's recommendation or maybe as much as the doctor's recommendation. Absolutely.

[00:37:50] So this one, actually, I got from your website and I thought it was a powerful quote, right? Like the leadership and identity. And so what is the way to get clinic owners and operators to rely on true objective data instead of intuition, right? And versus the other way, what are some of the arguments? Yeah.

[00:38:17] Well, if you're going off of how you feel and what your bank account says, then you're going to be reactionary and it's not based on objectivity. So it's imperative. I like to say that there are many owners out there that don't know what to measure. And even though they, if they were measuring it, they might not know what an appropriate benchmark or expectation is for that metric.

[00:38:44] And lastly, if, even if they had some of those metrics and the benchmarks, they might not know what to do about those metrics and benchmarks. And that's where, frankly, and this could be self-serving, but you need to pay the tuition to learn. Coming to this is appropriate and you're well-intentioned, of course, but you need to pay the tuition to learn what the metrics are and where they should be and how to improve them, right? You need to know your KPIs. You need to be measuring them on a weekly basis.

[00:39:11] One of them, the over-the-counter collections on a daily basis needs to be reported to you, but there needs to be weekly metrics. There needs to be monthly metrics that you need to understand your financials, right? So there, you have to take it upon yourself to learn. You have to pay the tuition. That's time and money from someone who knows and can teach you. That's how I got out of it. I was in a funk. I was busy. And to the point of the title of this entire presentation, I was waking up at four in the

[00:39:39] morning to finish my pen and paper notes, getting home usually around 7 p.m., got to the clinic by 6.30 or so to see the first patients. And that was on a routine basis. And so there would be days that I would go at a time where I would not see my newborn babies awake, right? I would only see them in the crib. I wouldn't be able to interact. There would be days I would go without that simply because I was busy. And at the time, yeah, this is 20 years ago, I was busy and I was doing okay financially.

[00:40:10] But my life sucked. I would go on vacation. And whenever you go on vacation as an owner, that's when all hell breaks loose. That's when I'd get the calls. The physicians are calling and they're upset or there's a problem with the so-and-so quit, of course, while I was on vacation, but not while I was there and I could handle it. All that kind of stuff. And that was not the lifestyle that I wanted. And so I finally recognized that I needed to do something. I needed to pay somebody to show me how to get out of that and learn how to be a business

[00:40:38] owner so that I could achieve the freedom and the vision and dreams that I wanted to as a business owner. That is wonderful. So let's just quickly brush up on this. What is your take on a value-based care? Are we going to continue to be the volume-based providers or is there a future for the value-based care? There's a path to value-based care. Where, well, if you're going to take the low-paying contracts, the only way you win is on volume. You just have to figure out volume if you're going to take those.

[00:41:06] And so could you provide value in that situation? Yeah. I'm not going to say that you can't. I mean, if I'm not mistaken, I think Australian therapists see their patients like 20 minutes at a time and they get results. So there is a path forward. You just, you got to be clear on what you're willing to provide. That means if you're totally clear on what you're going to be providing and the type of clinic that you're going to have, that means you're going to filter out things that are going to align with the type of value that you provide.

[00:41:34] And I think that's what you're saying about Australian-based therapist. I did my fellowship with NIAMT and one of the instructors was a British-born, Canadian-trained therapist that was seeing 60 to 70 patients a day. But these patients had full expectation of exactly what was going to happen. They knew that the intervention had a specific system. And that's having a systems design, which is like, there was a full transparency and understanding. That's what you're getting.

[00:42:00] So what is a system design that you would recommend? And what are just one way you can even assess your own system, best improvement to your existing system? So how do I best set up a system? Is that the question? Or how do I ensure that my systems are... Well, setting up a system usually starts with a person who is running the system super well. Like they know the system and they do it well and they create the product that is expected at a high level, right? That has to be in place in order for the system to be generated.

[00:42:31] Once that is done, like we have a system that generates X product at a great level. Now we need to write it down. I mean, it's the whole premise behind E-Myth Revisited, a famous book by Michael Gerber for entrepreneurs is like you need write down your systems, generate systems so that it is no longer person dependent, but system dependent and can be replicated over and over and over and get the same product. Right? So it used to be you had to write that down.

[00:42:57] Now you have things like loom.ai where you can take a video and screenshot if you need to, what you're actively doing on your screen to follow the process or talk out the process. And when you're done, it will write out the SOP for you, the standard operating procedure of that system for you. So now you copy and paste that and turn it over to someone else so they can replicate it and generate the same product. Absolutely.

[00:43:24] So let's then talk about a measuring the right matrix. If you had to give someone, and I know it's like we're short on time, but what is some of I'm talking a lot, Alex. I do. I think this is, I think Nathan, this is something that we should have actually done like a three part series because I think you honestly, you have so much to give and there's like, it's such a good, elaborate thinker that this is great. Yeah, probably in retrospect, we should have booked the next week and we'll have like a

[00:43:54] little bootcamp, right? I can always come back. And that would be great too. But you know, the Rubik's Cube, I like this graphic because I think to create a graphic that is putting it all together, standardizing a practice, standardizing a structure, there is a specific structured standardization that all private practice owners in US can follow to at least create a better efficiency or is it still going to be a one by one case where each individual practice owner needs to follow each individual path?

[00:44:23] I think there is a pretty common path that allows for some customization according to the culture and values of your organization. But the patient life cycle is common throughout. And I would build my systems, I'd start with my systems built off of the patient life cycle. You can do this also with the employee journey, right? Just what is the life cycle? Let's start with the patient first, but the patient life cycle from, let's think about

[00:44:52] each step from that first call and interaction with your clinic to their balance going to zero. Let's talk about the 13, 14, 15 steps in between, like a follow-up call. They come, what does it look like when they come in for their initial evaluation? What does that come look like when they come in for their follow-up visit? What does that look like when they come up for a progress note? What does that look like for a discharge visit? What does that look like when they get their first bill?

[00:45:17] All those things, like let's line out systems for each of those interactions with the patient. And let's do the same for our team members. What does that initial recruiting system look like? What does the interview system look like? What does the onboarding process look like? How do they, is there a path to progression? And these are systems we can build off of that life cycle. What does off-boarding look like for a team member? And we can build systems all around those life cycles that are pretty uniform, but that

[00:45:44] can be individualized each clinic. And I think smart clinics require smart technology, right? So these systems require accountability. You have a system needs a system. And these systems need to be present. And I think that's where going into the ideal conversion of passive non-revenue producing time into an active time requires this optimized system in each domain, like in the onboarding domain, in a patient management domain, in a human resource domain.

[00:46:15] Like there has to be a structure. What can a clinic owner do as a first step to build a stronger, sustainable practice? It's a loaded question, right? Like this is like a four hour question, but what is the best way to go into the clinic? So today is Thursday. So like starting Monday, you go into the clinic and you're like, I'm just going to do something different and I'm going to do this A, B, and C. And this one thing that you do differently. What would it be if you had to give one thing? There's a trait I think that is necessary for a really good CEO slash owner of their business. And that's observation.

[00:46:45] And so if I'm going to go in on Monday, I'm probably going to start observing interactions at the front desk and see how well those are going. And if they are following the processes that I'm expecting, right? And how those interactions go. I mean, we're a people business and a lot of those patients are going to decide whether or not they're coming back if based on that interaction at the front desk, right? If it's a really solid interaction actually could make up for some poor therapy on the back. But if it's a really bad interaction, you could be a miracle worker.

[00:47:15] They ain't coming back. So like, I think starting there, but then so putting me on the spot, what am I going to do Monday is probably start observing that maybe then going on to observe my providers and how they're working and whatnot and see where there's some inefficiencies and whatnot. And I would say if you could start looking at your metrics, that would be great. But for someone who doesn't know where to start with their metrics, it's hard to say that. I said, go look at your metrics. They're like, okay, cool. Where do I go? Yeah. Which matrix? Right. No, I think so. Like to build on what you're saying, that's spot on, right?

[00:47:45] Because I think like we see the system as again, like two bipolar system. It's either you're struggling or you're flourishing. Like you're, and there's something in between, which is languishing. So how many practice owners just flow by? They just go into the clinic on Monday and like it's a, it's the same redundant groundhog day, but maybe go into the clinic and observe and actually be vigilant to what you're doing. So I think your recommendation is pretty good and pretty excellent. So I think I want to leave it just a couple of minutes for people to ask questions.

[00:48:12] And right now they're like, I hope people are going to have questions here, but before the questions, can you give a little bit of an insight for our audience, both live audience and audience are going to see this in the recording. How can they contact you? What can they do to actually get your help on a deeper level than just this one hour webinar? Oh yeah. Well, I didn't even put my email on there. Dang it. I should have considered that, but you can email me Nathan at ppoclub.com. PPO club stands for private practice owners club.

[00:48:40] Nathan at ppoclub.com. Me and my partner, Adam Robin are active on our Facebook group. So go to the Facebook group, private practice owners club, Facebook group, and I've got a LinkedIn. So look for Nathan Shields PT on my LinkedIn profile and you can DM me there as well. So it's not hard to find me. Yeah. And I hope everyone who is here are going to take an opportunity and to come and find you and actually use your services because I think it's, everyone needs a coach, right?

[00:49:07] Like a basketball team without a coach is just a group of guys throwing back, shooting the basket, but you need to have that structure. And I think you are the ideal person to guide people to a better, more thriving business. Well, thanks, man. And I also have to plug the podcast, private practice owners club podcast, you can find it on all the medias. I think there's a ton of value there. Absolutely. And just a little plug for us.

[00:49:31] We have another webinar coming up here where we're going to discuss a new AI system or an advancement in our AI scribe system. And that's going to be in April. And so I hope people are going to come and join us. And hopefully, Nathan, you're going to come and join us on April 8th too. But we can actually use this as a point of discussion. What have you seen in terms of private practice owner responsiveness and relationship with these smart systems? What is the word on the street?

[00:50:00] And what can we do to get more people to start optimizing and utilizing these smart systems? Well, it's like any typical technology advancement. There's going to be your early adopters and the people who come along a little wise, and then people who are the late adopters. I think it's more imperative now than ever to implement AI into your business now. If you're considering AI and don't have anything to do with it right now, you're a couple of years behind the curve.

[00:50:29] You need to ramp up because AI is changing a lot of things. And what is happening six months from now is not what's happening now. And if you're doing business the same way now that you were doing five years from now, it's going to be hard, right? I don't have a lot of optimism behind that. So you've got to learn how to implement it into your business because, frankly, it's in your best interest. And it's not technology or human. It's human using technology. I think that's... Leverage it. Leverage it. It makes life easier.

[00:50:57] I mean, you might not be technologically savvy. There's plenty of providers out there that say they're not, but it's a great opportunity. And frankly, I'd be surprised if most therapy graduates aren't expecting some kind of AI to be used in your organization. Well, yeah. I think that for me, it's the young ones that are coming in that can be used as resources to actually teach people in practice for a long time. Like the seasoned clinicians, as I would call us.

[00:51:26] To actually teach us the insight of this emerging technology. It's here. It's evolving. I think what we're going to discuss on April 8th is like we're now going beyond just basic AI into these agents and this agentic AI, which is really cool advanced technology that is so far ahead of anything that's even been here in like the last year or two years. So people see AI now as just more of like a chatbot. But this stuff is like, it's a rule-based engine and these rules are wonderful.

[00:51:55] So one last question for you then before we wrap up. And this is what is on your roadmap? What do you see for yourself as well as for our industry ahead for the next five or 10 years? For the industry, that's hard to say. If owners aren't really making significant changes in their organization, then it's going to be, it's just going to get harder and harder to stay as a private practice owner. You got to start making some hard decisions and dropping some contracts.

[00:52:25] And you have to start with knowing your numbers if you're going to do that and how to negotiate or just simply dropping them. For me personally, yeah, right now I've been doing the coaching consulting. We have workshops, we have conferences. So you can go to our website, ppoclub.com and look under events to see what's coming up next. And right now I'm kind of excited about these audits that I'm doing to find, you mentioned in the bio, tens of thousands of dollars.

[00:52:51] I'm surprised at what I'm finding that's available there for owners to generate without seeing more patients, without being busier, right? It might take a little bit more effort on the administrative side, but you can capture so much more money with the business that you have. Work smart. And you're the coach for it. So like you're going to coach people to work smart. So Nathan, I want to say, I absolutely appreciate your time for being here and your guidance in our industry. I'm like a long time PT.

[00:53:19] And so there's a few voices out there like yourself that really have clarity and understanding of what is needed to be done. So thank you for your time. Thank you for being part of this experience. And I hope you the best of your future. Thanks for having me, man. It was fun. It's great. Thank you. Thanks for listening to the Private Practice Owners Club. If you enjoyed this episode, would you mind doing us a huge favor and leaving a review? This helps us get the podcast out to more clinic owners to help them create greater freedom

[00:53:49] and profits so they can own their future. And visit our website, ppoclub.com to find more resources and connect with us.