E447 | Why You Shouldn't Start A Cash-Based Practice
Nov 04, 2021
Today, I wanted to talk a little bit about what a cash-based practice is and what this opportunity actually is. In preparation for a training I put together for the Institute for Athlete Regeneration.
I had to really think about justifying why somebody would even want to go this route. It's hard for me to come up with reasons why you wouldn't want to do this and today I go over why. Enjoy!
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Podcast Transcript
Danny: So I was having a conversation with one of our staff members about documentation, and he had come over from an in-network practice that he was working at, and he was talking about just how long it would take him to document and click through and the workflow, and just how time-consuming it was and how much easier it's been with the software that we use, which is PT Everywhere. And I know for us, we're very, very aware of sort time leaks within our staff and our own schedules, and it's just one of the worst things you can do is just waste time on things when you could be doing them more efficiently.
One thing for us is we have to document. It's something we need to do. And you need to do it as efficiently as you possibly can, because that's where you're going to save a lot of your time. We were seeing our staff members save upwards of an hour a day, as far as cleaning up his documentation, making it more efficient. What if you got an hour of your day back just from documentation? What if all of your staff did the same thing? I highly recommend you take a look at PT Everywhere. It's been a huge time saver for us and really has made a big difference in our efficiency of our practice. You can check them out at pteverywhere.com. I think you're going to really like what they had to offer.
So here's the question. How do physical therapists like us, who don't want to see 30 patients a day, who don't want to work home health and have real student loans create a career and life for ourselves that we've always dreamed about? This is the question and this podcast is the answer. My name is Danny Matta, and welcome to the PT Entrepreneur Podcast.
Hey, what's going on guys? Dr. Danny here with the PT Entrepreneur Podcast, and today we're talking about the cash PT world, and why someone would want to go this route. If you are a clinician and moving away from working in a high volume clinic, or really just kind of getting a better idea of what the actual opportunity is, and what brings this up is I'm putting a training together for a friend of mine, his name's Toko Nguyen, he owns Institute for Athlete Regeneration, and it's for their fellows and residents. And I'm talking to them next week for a couple hours just about the business side of this stuff and the options that they have, and really what the landscape looks like.
And part of it was, I was thinking to myself, I was like, "Okay, well, what's the justification for why somebody would want to go this route? Why would you want to take a chance on yourself and start up a cash-based practice, let's just call it that, maybe it's hybrid, whatever. Let's just say cash-based practice. Why would you want to do that?" And as I was kind of organizing my thoughts and building out what I'm going to go over, it's almost so obvious to me why somebody would want to do this, I have no idea why you wouldn't want to do it.
It's hard for me to even come up with reasons why not, because as I look at this and I look at the numbers on this, the average PT is going to come out of school with over $100,000 in debt, with the average starting salary of that individual being about $65,000. It depends on which state you're in, what you're looking at. Some is far less, some is far more. It depends on the demographic area of the state. But if you're an entry level PT, that's about what you can see. I've seen as low as the upper forties for people with no sort of structure of bonuses on top of that. It's not like they're in a residency, they're just a first year.
So imagine that. Go to school seven years, $100,000 in debt, and you're making $50,000, $60,000. It's a challenging financial environment for people. And now, on top of that, you throw in the fact that you're going to be seeing a lot of people, so it's a lot of patients, it's a lot of documentation. It's typically a frustrating environment of people that maybe don't want to get better. I think that's even more frustrating for people that are ultimately trying to become good at what they do and actually help people. So they're working on their clinical skill set. They're getting better.
In the example of the group that I'll be talking to, these are residents and fellows that have gone even more into the education world to learn how to be a better clinician. And the people that come out of this group are awesome. They're great, so they're clinically very high level.
Now, you take somebody like that and you put them back into this world of high volume of work comp, Medicare, personal injuries, where maybe they're not motivated to get better at all, because, well, they're going through litigation, so why would they want to? Yeah. So you are working with people that maybe aren't giving you in return what you're giving them, as far as your energy and commitment. And now you're starting to get frustrated. And now you have an hour to sometimes three hours worth of documentation that you have to do and catch up on after work over the weekend.
We hired somebody at our practice here in Atlanta that had functioned in network world for a long time. He ran a practice. It was a couple miles from where ours is at. And he told me, he said, "My Saturday morning routine was writing notes for two hours," to catch up on all the patients that he had seen. That's your Saturday morning routine. What a awful Saturday morning routine. I would much rather you drink a cup of coffee and take your dog on a walk, or make your kids pancakes, something like that. And they're swapping that time out to document.
And the other thing that I think people see is, it's not like things have been trending the direction where they're going to be seeing less volume and they're going to be making more money. If anything, for quite some time, well, over a decade, two decades, who knows how long really at this point, where insurance reimbursement has gone down, expected volume has gone up to match what they need to make. I get it. On the business side, I understand if you need to make a certain amount of money per hour, and insurance is paying you less, the people that are seeing those people have to see more people in order to be profitable, to keep your doors open. I understand, and I feel bad for in-network clinics that are small. They can't throw their weight around. They don't have big contracts. And those are the people that actually really, I think are in the worst spot.
If you're a big, private equity-backed, hospital-contract negotiated, huge organization, you're absolutely killing it. They are making so much dang money, so it doesn't really affect them in the same way. But you may not want to work in that setting. So you've gone to school, you've gotten all this debt. You're not making a ton of money. You're trying to be a really good clinician. And the path forward looks like it's slowly melting away and getting worse. I call it death by a thousand paper cuts, because it's like, "Oh, okay. Well we'll just add this little survey. It only takes a minute or two minutes or whatever. Oh, okay. So I just have to do this other two-minute survey for everybody that comes through here every day." So now I've got 20 people, before you know it, I'm at 45 additional minutes per day of some shit that I have to do that really doesn't pertain in any way to whether this person is going to get better or not, on top of the documentation you already have to do.
So it's a frustrating environment. And as I'm thinking about this, why would I even need to justify why somebody would want to go this route? It doesn't make any sense. Why would you not want to go this route? It's almost the question should be, "Why not?" Tell me why you wouldn't want to do something on your own, where you could make two to three times as much money just on your own, be able to work with the people that you want to work with, be able to see them one at a time, be able to just dictate your own rates, be able to define your own niche, be able to grow a business to multiple six figures, seven figures, whatever you want to do, be able to springboard that into other arenas, be able to create time, freedom, and financial independence, to be able to pay your debt off a shitload faster. Why would you not do that?
That's the question. The whole fucking training for these people might just be this: "Tell me why not?" And if you decide you have a better reason for why you want to go down the path that our profession has slowly been drug into, which is really not a good place for our providers to be, based on things that you cannot change. You're not changing the way United Health decides to pay people. You're not going to go to Blue Cross, knock on their door, and be like, "You guys are being assholes. I think maybe we should renegotiate what you're doing so that I can provide quality care to people." They don't care. They don't care on that level, not at all. They have shareholders that they have to be upheld to, in terms of their profit. And these are massive companies, like hundreds of billions of dollars, I'm talking with United Health, in terms of yearly revenue.
So, if you're looking at it, and you say to yourself, "Well, what's the best opportunity for me to use my degree that I worked so hard for, I paid so much money for, and I put so much time into, and my skillset that I want to be the best in the world at, I want to be an amazing clinician, what's the best opportunity for me?" The best opportunity vehicle that I know of now, and this might change as the economy changes and opportunities change, but as of right now, the best opportunity that I know of is for you to create a low-overhead, cash-based practice. Define the people you want to work with, get them directly into your door, not worried about physician referrals or insurance. Get them amazing results so good that they can't help but tell all their friends and family about how amazing you are, and how much better you are than any other medical appointment they've ever been to, and grow your business in a way that is stable and predictable and ultimately scalable past yourself if you decide you want to do that.
And this is sort of the thing that I tell people, it's like, "Let's say your floor, if you decide to do your own thing, is that all you can ever do is make $100,000 a year, but you get to work less, pick the people you work with, and have complete say over what you do with your day, would you take that trade out for where you're currently at? If so, that's the opportunity that I'm talking about. And if you're in a side hustle right now, you've already started the beginnings of that. A lot of people go that direction.
But being able to go to full time, you really have to be able to understand how to sell, how to market, how to set your business up in a way where you understand what somebody is worth as far as revenue goes, your business, how to work with those people, not just clinically, but also from the customer experience side, how to get out there and market efficiently, how to build systems and bring other people in, especially on the admin side to help really leverage your time more. These are all things that no one taught you. This is what we do. This is how we teach people how to build these businesses.
So, if you're listening to this and you're a really solid clinician, or you have aspirations of being an amazing clinician, and you get into the real world of what PT looks like, and you feel like you've been lied to, and you feel frustrated, this is where we help. This is what we help people do. And as I was going through this training, I literally just couldn't think of any reason not to do this in our current landscape.
There's just no better opportunity, other than you go do something else. You go, take your degree, your experience, and you go get a non-clinical job. And for some people, that's the right decision for them. Maybe it's just not what they want to do. Maybe it's just not the lifestyle that they want to have or not what they're interested in. A lot of us, think about this, now you're in your early twenties when you got into PT school. You're in mid-twenties when you gradate, you're 25 years old when you graduate. Think about how little you fucking knew about the world at that point in time.
For me, that was 11 years ago. When I was 25 years old, I was a complete idiot, idiot. And I was married and I even had a dog. I had some responsibilities. I didn't have a kid yet. That didn't come for a couple years, like two years after that. But if you made this decision, you're 25 years old. You work in the profession for a couple years and you decide, "Man, I made the wrong decision." Cool. You still have a doctorate. You've shown people that you know how to follow through on things. You're smart. You've done research. You can lead people. You can be a part of a team. You can learn these other skills. Go do something non-quitable. Don't be miserable in our profession and just bitch about it all the time. Go do something somewhere else. You can do that.
But if you're miserable in the profession because you can't do the things you want to do, and your time is taken up by a bunch of people that you don't want to work with and documentation, you don't want to write, which you can't get away from, but you don't have to have that volume of it, that amount in terms of patient volume and length of notes that it takes within the in-network world. If you don't want to do those things, there's another alternative. You just have to decide whether you are willing to take a chance on yourself to do that.
That is the linchpin. It's jumping into what we considered the abyss of the unknown. And that's what scares a lot of our profession away from doing this, rightly so. This shit is not easy, but it's very achievable, especially with a plan, following a proven plan in particular, of steps that you need to take to be able to really make this thing work. But you got to be willing to take the leap. You got to be willing to jump into the abyss, dive head-first into it, and not necessarily know exactly what's going to happen. I think that's what scares people off more than anything. It's the only thing I can think of that would stop somebody from actually doing this.
So I want to share that with you guys. Sorry for the 12 or so minute long rant, but I don't get it. I don't get it. If you're miserable and you're stuck and you hate what you do in this clinic that you go to every single day, and you sit in your car and you think about not turning the freaking car on because you don't want to go. And Sunday nights, you get a little depressed, how long are you going to do that before you realize there's a better way? How long are you going to feel like that? How long is that going to impact the people around you before you finally decide to do something on your own, take a chance on your own and go for it?
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Hey, real quick, before you go, I just want to say thank you so much for listening to this podcast. And I would love it if you got involved in the conversation. So this is a one-way channel. I'd love to hear back from you. I'd love to get you into the group that we have formed on Facebook. Our PT Entrepreneurs Facebook Group has about 4,000 clinicians in there that are literally changing the face of our profession. I'd love for you to join the conversation, get connected with other clinicians all over the country. I do live trainings in there with Yvese Gigi every single week, and we share resources that we don't share anywhere else outside of that group.
So if you're serious about being a PT entrepreneur, a clinical rainmaker, head to that group. Get signed up. Go to facebook.com/groups/ptentrepreneur, or go to Facebook and just search for PT Entrepreneur. And we're gonna be the only group that pops up under that.
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