How clinicians really feel about variable compensation

Marla: Welcome everyone, and thank you so much for joining today's webinar, how clinicians Really Feel about Variable Compensation Models. I'm Marla Raneri. I'm the head of Clinical Innovation and Clinical Strategy at Prompt Health, and I'll be moderating today's conversation. We brought together a really unique group of perspectives.

We have thought leaders who design these models. Clinicians who are actually practicing under them every day, and all of you here today as well. So this is particularly important right now because this conversation isn't just about compensation. I'd say it's across healthcare and especially in rehab, we're seeing increasing pressure around burnout, retention, and the challenge of recruiting and keeping clinicians in the industry.

So this is really because clinicians' expectations are shifting. They're no longer just looking for a job. They are looking for a long-term career that allows autonomy in how they practice, flexibility in how they structure their schedules, and to be rewarded for delivering high quality care. And at its core, this is about helping clinicians feel more like doctors.

Trusted to make decisions, manage their time and be aligned with the outcomes that they're driving, while still ensuring business can grow and succeed. And many organizations have tried to solve this with productivity based incentives. Uh, but those still are primarily rewarding volume and in many cases contributing to burnout even more rather than solving it.

Uh, so that's what we're gonna be talking about today. Uh, it's very different than the productivity based incentives. We're gonna be talking about variable compensation models and how those are designed to better align compensation with overall performance and contribution. Some see that as an opportunity.

Others may be more cautious, and many leaders are trying to navigate both these perspectives. So today we're not here to debate the theory. We're here to understand it and to talk more about what it actually feels like in practice and how the clinicians who are experiencing it and using it, what they.

Really feel about it. So before we get started and jump in, um, just a couple of housekeeping items. We want this to be interactive, so please feel free to use the chat throughout the entire session. You can share your perspective. You could get to know everyone, introduce yourself right now. Um, 'cause we really want this to be about all of you guys and we, we love hearing from you.

We also wanna hear your questions. So instead of putting those in the chat though, we want you to put those on the q and a button on the bottom of the zoom. This way we can monitor them throughout. We can ask them, uh, and we don't get them to them today. We can also. Email you back later and answer any question that you put in that q and a button at the bottom.

And finally, this will be recorded, so we will be sending it out afterwards and we will make sure that you can share it with your colleagues and your friends. Um, but as I said, we wanna hear from you. So let's start with a poll. You're gonna see a poll pop up on your screen and it's just gonna ask you what best describes your current compensation model if you're a leader or if you're a clinician that you're currently in right now.

So is that straight salary? Is it salary plus a productivity bonus? Um, or is it salary and performance base? The alternative compensation model we're talking about today, or just other, you could drop that in there. Um, and it's really interesting to see how many organizations are either. Still doing the salary model or adding some of a bonus with, with that productivity model or of course transitioning and thinking about transitioning to a different model, which is newer, but doing a really great job in the industry right now.

Um, so Great. We'll have all of you guys add that into the poll. I'm gonna Great. And that'll allow us to see a little bit of those answers. Okay. So it looks like, um, good. We've actually got a lot of people in salary and performance based models today, so that's great. Love to see that. And then about 50 50 in straight salary and, um, salary and productivity.

Great. Well, let's introduce our panelists that we have, we've put together for you today. Um, I'm actually gonna have them introduce themselves. So Larry, let's start with you.

Larry: Sure. Thank you. Uh, Maria, this is Larry Bens, I'm a physical therapist, uh, founder of Confluent Health. I've been involved in private practice for about 40 years.

Marla: Great. Thanks Larry and Jason, we'll move on to you.

Jason: Sure. Thanks Marla. Well, hi everybody. I'm Jason Womble. I'm a a physical therapist and I've been a physical therapist for 26 years and I am one of two founders of, uh, prompt compensation.

Marla: Great. And now for the main event, which is our clinicians in the room, if you guys can tell us your name, where you work, your specialty, how long you've been a pt, and how long you have been treating under the prompt compensation variable compensation model.

That'd be great. So Sarah, we'll start with you.

Sarah: Hi, I am Sarah. I am from Salt Lake City and I am working with Mountainland Physical Therapy. I have been, uh, specializing in women's health and pelvic health for about seven years. And then I have been on a, um, variable compensation plan since 2021. Um, so about five years now.

Great.

Marla: Thank you so much. Pleasure to have you. And Derek, if you'll go next.

Derreck: Hi, yeah, I'm Derek. Um, I'm currently out in Arizona, um, working for spoon or physical therapy. Um, I treated wide variety of orthopedic cases, um, have a neurological population in vestibular conditions. Um, but then, yeah, I've been on the prom com for about three years now.

Marla: Great. Thank you and really pleasure to have all of you joining us today. Um, Jason and Larry, I'm gonna have you guys set the stage first. If Jason, you could just tell us and define what variable compensation models are and why clinician move towards them.

Jason: Sure, happy to Marla. So at its core, a variable compensation model is typically a compensation model that's comprised of two buckets.

Bucket number one would typically be some, some sort of guaranteed or base pay. And then bucket number two would be what we typically refer to as variable pay. And the reason we refer to it as that is that that bucket of pay is tied to variables. There could be one variable, it could be multiple variables, uh, and the practice would decide what those variables are.

But at its core, it's an approach to compensation that is calculating pay from those two buckets, which are added together. And that is what comprises the total gross pay for the provider for that week or pay period. And one thing I should mention is typically neither one of those buckets is a bonus.

You referenced that earlier, Marla. There's a distinction between variable compensation models and bonus structures, so it's important to point that out as well.

Marla: Great, thanks. And Larry, from your vast experience, not just in the PT and MSK industry, but outside the industry, why do you feel variable compensation models are something so important to be evaluating?

Larry: Yeah, so it's a, a, a great question. I approach it from two perspectives. The first is professional, uh, physical therapist or a doctoring profession, or at least that's what we're told we are. And in today's world, if you graduate in, uh, an approved program, you're gonna have a doctorate, uh, degree. But we oftentimes don't like to accept the responsibilities of a doctoring degree.

Everything from direct access to, uh, compensation models, liability, compliance, all the things that go with it. And part of this natural transition to a real doctoring profession is how we get paid and how we get paid should be a function of what we produce. Um, in terms of our own practice, generally in terms of MSK, outpatient, you know, settings, I'm speaking for the most part now, there has to be a safe onboarding.

There has to be appropriate, uh, upskilling and all the things that go with mentoring, but that's ultimately what doctoring profession would be. But the second I would argue is actually practical. If you look at the world in a bifurcated way, pre COVID, post COVID, which many of us look at, I do from an operational end.

In the post COVID world, we had a bunch of headwinds. We had high inflation, which means wages skyrocketed. Not just pt, uh, salaries, but also front desk salaries. Um, so did all the other, uh, all the other folks that make up a PT private practice. The second thing that escalated with supplies and all things related to rent inflation, that's what it does.

But all of a sudden you don't wake up and have your PTs or other personnel asking you now that inflation is under somewhat control to reduce their salary. So we've been left with an impact on practice dynamics. The second. Is shortages, do we have a profound shortage in pt? And that's been well documented.

And the third is really sort of the practical, um, amounts of this is reimbursement headwinds. We have had 15 to 20% reduction in a nominal basis, yet alone. Not even an inflation adjusted basis related to, uh, not just Medicare, but all payers in general. And so the combination of those has made the viability or the operations of the business of PT extremely challenges, meaning margin, erosion, no margin, no mission, all the things that go with that.

One of the very effective strategies you can put in place is to manage your PTs as a doctoring profession where they become the rock stars and make, uh, even more, uh, money, which reduces other costs that you often have associated in your practice. So I view this as an existential transition for both the professional reasons and to really have a viable outpatient, uh, business.

Marla: Perfect. Thank you. I, I think that's such great insight and like we said, you've got such a good span of, not just in our industry but outside and how this is working outside of the industry as well. Um, Jason, from your perspective, what have you seen work or not work when clinics roll out variable compensation models?

Jason: Yeah, well, we've, we've been helping practices do that now for about, uh, 12 years, Marla, and we've definitely established some best practice strategies in terms of rollout, and I can detail those very quickly. Um, what typically works is a couple of things. Number one, offering more than one plan. Providers can choose from.

Number two is allowing those providers to change that plan over time rather than choosing a plan. Some combination of those two buckets I referenced earlier, and then being saddled with that for better or for worse indefinitely in their practice. Allowing them to change it over time is a good idea.

Another strategy that we strongly recommend that works is a grace period or an or an introductory period. And Larry and I have talked at length about the value of that. You really need to allow a practitioner time to get ramped up, to get comfortable with their caseload, et cetera, especially if they're a new grad prior to being enrolled in one of these models.

And then the last thing I would mention is the ability to. Essentially shop for a compensation model using your own data rather than picking a plan off of historical or what if scenarios. Picking a plan that is a data-driven decision off of your own data, where you can look and see what your earnings would be on different plans based on the data that you have historically gathered that's tied to your performance, tends to be a really effective strategy.

Marla: Great. So you're saying in this, people can come in as a regular salary import employee. They could see the different plans and I think of it as insurance. You know, um, when I build, when I choose my insurance model, is it a 50 50? Is it a 75, 15, or 90 10? And then they can actually see if they're on one model, what the other model would be doing in terms of their financials, comps, and revenue.

Jason: Yep, that's right.

Marla: Great, great. Um, and I think it's really important that both of you guys identified and shared that these models don't just impact the organization rolling them out, but they also impact the clinicians who experience them. And, you know, it could be, it's a change. So we wanna hear from the clinicians in this model and what that feels like.

So Sarah would love to hear from you. Um, when you first learned that your clinic was moving towards this type of a model, what was your initial reaction?

Sarah: My initial reaction when I heard it, I had heard kind of whispers of it for a couple months prior to us transitioning, and I had heard positive impacts from the providers who were testing it out.

And so I had a little bit of this positive sign on one side. And then we had heard rumors in school back in the day when, um, they would talk about variable compensation. Is it a good thing? Are they trying to make you work too hard? Are you going to get burnt out? And so I had this kind of like little red light on my other shoulder kind of telling me, uh, uh, other things.

So I got more excited when I got to crunch the numbers and actually see what my. Salary would then look like. Um, and that, that got me stoked.

Marla: Great. Thank you. And Derek, what have you, what about you? Have you heard about variable compensation before? What were your assumptions going in? Just what was your overall take?

Derreck: Yeah. Um, you know, I, I actually haven't heard of it before, you know, before, whether it was in school or, you know, when I was looking for my first job out of school. Um, you know, I, I, I heard, you know, I had a couple, uh, classmates who, who talked a little about it or they, they've had some experience, you know, with a company that's been going through that process.

Um, but that's all I had. And, you know, when I was looking at Spooner and they talked a lot about it and just understanding the, the idea that we could. You know, have a salary, but then there's a ramp up period to, to have beauty on one of these plans was something that really caught my interest. You know, obviously as I was going through it, I was like, oh, is it, I mean, am I gonna be working more or am I gonna be having to see more patients?

But when they broke it down and, um, kinda like what Sarah said, you, you actually see the numbers. Um, it made a lot more sense to me and, you know, it got me excited to, to kind of go forward in that.

Marla: Great. And did you, did you pick the less, uh, risk averse model at first, or did you go right for the riskier one?

Derreck: Um, yeah, so, so what, um, my company does is we have like a, a year grace period, um, for a ramp up. And as I was approaching that, that first year, just kind of looking at all the numbers it was, um, and seeing, you know, what I could have been making on every single one. I, I actually went up, uh, I went with the 50 50, um, model initially.

And, um, just seeing. What I could have been making, but then also knowing where I've been with my numbers and, and my patients and my caseload. And it would, it seemed like the right decision at the time. And, um, I kind of, I've stayed on it ever since.

Marla: Great, great. Um, and Sarah, what communication from leadership really helped the transition?

'cause like you said, you sort of had a little bit of rumbling before, but what would you say helped make you, um, understand what was going on and excited for it?

Sarah: One of the things that they sent us was a, just an Excel breakdown, and we could go in and plug in what our current payment per visit, um, would look like at what percentage of, uh, the contribution to your salary would be, and then how many patients.

So the way it was based, we could actually plug and chug the numbers and I could see at that time what I could be making. And that significant difference was a no brainer for me. So being very transparent with the provider with me, I think made the biggest difference.

Marla: Great. Great. Perfect. And was there any concerns about, you know, how this would change how you practiced or positive, negative concerns in general?

Just, um, how it would change you, the way you practiced

Sarah: Initially? I did have some concerns. I did feel, um, I didn't want to overdo it. I, I am the type of person that will kind of. Run myself a little ragged if, if needed, uh, but I, it really didn't in the long run. So that was my biggest concern, was keeping an eye on myself to not overdo my work-life balance.

Marla: Great. Great. Um, and overall, I think it's interesting that there's always a little bit of gap between what people expect. Um, even just owners going to this model, a lot of them fear that the therapists are not as risky and they're not gonna wanna choose the model, um, and what the clinicians actually experience and how transparent it is.

Like you said, you see everything in that ramp up period and you kind of know exactly what you're getting into and that helps Derek as you, as you mentioned, what you would choose, um, in terms of where you feel most comfortable with. Uh, but wanna, wanna hear a little bit more about what changed once you were in the model.

So, um, Derek, how do you feel this model influenced your day-to-day decisions and how you end up treating in the clinic or even getting notes done or anything of that nature?

Derreck: You know, I think, you know, knowing, you know, where I am with the model and, you know, the, the metrics or, or the, the numbers to hit, you know, throughout a week or a month to be successful in it, you know, that, that's helped me kind of understand, you know.

I might have a patient that, that I don't wanna get in or they can't get in and, you know, they're calling last minute and getting that patient in where, you know, I might have to schedule around it and, and see that okay, you know, kinda the bigger picture of the patient needs to get better, get in, you know, I'd rather than just waiting for another day or next week.

And, and seeing, you know, kind of keeping up with my schedule, knowing that there's flexibility with it. Um, and it's not just kind of a set stone where, you know, I could, you know, I have that autonomy to, to schedule my patients when and how and, and whatnot. I, I think that's a big, big part of my day-to-day decisions on, on my schedule and, and, and how I like to see my schedule.

Marla: Great. Great. Um, and Sarah, once you had been practicing under it for a little bit, what surprised you most about the upside or the benefits that you maybe didn't realize would be there?

Sarah: I think what surprised me most was the. Probably the flexibility with in the schedule and my autonomy with the schedule, I was able to, like Derek said, kind of add or subtract the hours that I needed if, if needing to extend for one person, I was more open to being available for an extra 30 minutes.

Um, it really was a quick change in my brain to be like, oh no, well let's, let's get that patient helped with, you know, I'm gonna get reimbursed for it. It's, it's all going in the right direction. Um, that kind of surprised me as far as that goes.

Marla: And Larry, you talk a lot about autonomy and a lot of the, the, um, pieces that you put out online.

So would love to hear your perspective on how important that autonomy is in the practice of physical therapy and MSK.

Larry: Yeah, so I oftentimes we hear the words control and that kind of relates to autonomy. And so physical therapist, in a true doctoring profession. Wants to hit upon the three dynamics.

Autonomy, mastery, purpose, and autonomy really means that you're in control of your own destiny in a large, big picture way. But the way it manifests itself is that you have some element or control of your scheduling. And if you are in fact paid or compensated according to your production or in terms of your own practice within a practice, then you are completely by design aligning the autonomy.

What we see now happen is companies invest in schedule optimization or various techniques, technology and otherwise to maximize the physical therapy widget makers ability to see more and more patients. And all this does is reinforce a mechanism that in part contributes to burnout. But the other two components are equally is, is, is fair, um, mastery and purpose.

Well, purpose by design and physical therapy, we do meaningful, purposeful work. That's what we do. We impact lives. Um, and, uh, we need to be constantly reminded of it because we tend to habituate and get used to doing it so much and we forget about the miracles that we create every day. And then the mastery component is truly built around becoming a clinical master.

Um, whether that's manifest itself in board certification or master clinician through other credentials or training or mentorship or training others once they get into the craftsman's role. Um, but all three are, are important, but where compensation, uh, models really, really help is to trigger and set you up for success in all three, but particularly autonomy.

Um, if you think burnout is bad. Now in physical therapy, the one place you can't blame is compensation models around, uh, revenue because there are very few as a percentage that exist. And so it's another indicator for this really time for a change.

Marla: Yeah. And I, I think one of the questions that come up a lot too is, well, how does that change the actual outcomes of the patient?

So Sarah, I'd love to hear your feedback on the impact it had on patient outcomes or care quality changing to this model.

Sarah: Of course. So when I changed to this model, I noticed we started seeing a change in our patient retention in my visit retention. Um, and I think part of that was I was more driven to get them in and keep them going and make sure that our care was improving.

Um, I found myself finding new ways to implement more neuromuscular reeducation or different therapeutic activities so I could bill for the higher, uh, uh, reimbursement. So, which in turn is the better of the two? Uh, um. You know, what we're giving our patients is it's more, uh, uh, clinically appropriate in the long run as opposed to just certain hands on activities.

So manual therapies. So I found myself kind of manipulating the system in a way to where it actually bettered the patient and I saw better outcomes and my patient retention grew and my caseload grew.

Marla: That's fantastic. Um, Derek, what about your perspectives of how you actually changed or how your, how you ended up treating a little differently in this terms of model?

Derreck: Yeah. You know, similar to, to Sarah, knowing. Um, you know, with our coding and billing and, you know, whether it's neuromuscular, therapeutic exercise activity, you know, knowing, you know, when I'm treating a patient, you know, am I really thinking or am I having that thought process of, okay, is this just, you know, man therapy or is this, you know, can this be therapeutic exercise compared to the activity?

Knowing that all those codes have different, you know, reimbursements rates and, and, and kinda like with Sarah saying, you know, not manipulating the system a little bit in a sense where, you know, the patient's getting better, you know, I'm getting reimbursed more. Um, and having that, that control of it and that, that's kind of, it changed my way of thinking on, on the clinic a clinical aspect of, you know, how can I get this patient better, but then how can I also, you know, um, be successful in, in this model.

Marla: That's great. And I, I love that it puts the patient at the center of it because it's true. I, and I've always said this, that if you focus on the patient, the business metrics follow and you can really see, well, like Sarah said, well, if I'm getting them to come back and making sure they're, they're finishing their plan of care, I'm doing better.

And so is the patient. Right. So I think that's a, a really great way to look at it. Um, and Sarah, I know you're a clinic director, and Larry just talked a lot about autonomy. So how do you feel this also created more flexibility with clinicians that were working in your clinic and maybe allowing them to do part-time work or, you know, somebody didn't want to be that full-time clinician?

How that changed the way you would recruit people or manage people in your clinic?

Sarah: Definitely. So I currently have, um, one full-time therapist who is on the, we call it revenue share, so our prompt comp model. Um, and she has. She loves it as far as she can control her schedule. She knows if she's going on vacation, um, and has to leave for Friday, she is going to extend her earlier week, um, to make sure she makes up for those hours.

And she will also get her PTO and a little boost. So not only does that help her, that's gonna help the clinic maintain her productivity, maintain her income. Um, and then my patient, my, my therapist gets paid a little extra and gets to go on vacation. So I feel like that helps quite a bit in my, uh, I would say the happiness of my staff and retention of my staff.

Marla: And Jason, I'll, I'll ask you this question 'cause it's coming through in the chat as well, but, um, in terms of, I think people who wanted to be more flexible back in the day would do per visit model. And how does this variable compensation model actually allow that to happen better than a per visit model?

Jason: Yeah, so a a per visit model is certainly a version of a variable compensation model, in which case the variable is visits, how many visits you're actually capturing. So it's not that far off from the types of models that, uh, uh, that we're referring to. But I think one of the things that I saw came through in the chat was what types of models, uh, are we talking about?

So let me just give everybody a little bit of clarity on what that would look like. Um, I mentioned a minute ago that the, these types of models that we typically build are models that are comprised of two buckets, but so lemme give a little more detail on that second bucket and what that might typically look, look like.

Certainly visits could be what that second bucket would look like, how many visits you're actually capturing. There are some inherent challenges associated with that approach. What you, what you heard Sarah and Derek talk about is an increased, uh, attention or an increased focus on appropriate billing methodology.

Obviously we know as an industry we are pretty notorious for under billing. In many cases, we're helping the insurance companies prove their point that the value of our services should be lower. That's something that we want to try to, uh, try to reverse. And so one way to do that is to make sure that we are billing appropriately for what we do.

No less and no more. If you're on a visit model, uh, there's really no aspect of a visit model that incorporates that variable versus a revenue share model, which does, so a revenue share model by virtue of its name, is paying your providers a percentage of the revenue that they're generating. You could also incorporate another metrics such as build units into that if you choose to do that.

So a visit model is within the realm of what we're discuss. Uh, if your ultimate goal is to have your therapists, um, focus on the things that Sarah and Derek were describing, then a revenue share model would be the way to go.

Marla: And that tends to be a, a win-win because if the therapist is bringing in a lot of great revenue and great quality care, then the business is also bringing in great revenue.

So it's, it's both. Um, and I, I'd love to know, again, this is a question everyone's gonna ask. Well, what's that financial set of look like for you at the end of the day? So, um, many clinicians worry that the variable compensation model would create financial uncertainty. So Sarah, um, what did it do for you once you turned over into that financial bus, uh, model?

Sarah: So I was in a little bit of a unique situation where when I was hired our new grads, um, they were making about 63,000 a year. Um, which, you know, I was like, well, we gotta start somewhere. And, you know, with my student loan debt, rising cost of housing, all of that was a little bit, you know, sorry for an, uh, a salary to go in on.

But, um, when this came out, we crunched the numbers and it looked like I could move up pretty quickly. Um, within the first year, I was able to increase my salary by about $30,000 a year. Um, so it was a significant improvement, which led to opening the door. I, I would've never gotten that many raises, that percentage of a raise in a year.

And being a, a, a year two out, you know, year two PT outside of PT school, that would, that would never been seen. So it, it really did help me quite a bit.

Marla: Great. Uh, and I, I think that's, that's nice to know that, you know, you were able to even see that before jumping in. 'cause you could see how you would've been doing on the different types of models.

Um, we did have a question coming in just talking about like, the competitiveness between therapists rather than it being a comradery type of relationship. Um, Derek, I already feel that there's any now being in this model. Any difference with that? Did you feel competitive against each other?

Sarah: I would say, I would say no.

There was that fear in the beginning. 'cause when we, when I switched, um, my coworker, my colleague was also switching to this at the same time and we found that. Just keeping an open line of communication was the, was key with our, um, patient care coordinator upfront scheduling our visits. She would make sure that she was doing an equal distribution as much as possible.

And honestly, whoever had the first open time slot was kind of where we were going for scheduling evaluations. And then we grew together. So as I learned and adapted, he was also learning and adapting. And so both of our schedules actually, they filled quite, uh, a synonymously, maybe, is that the way to put it?

But they, they grew together, um, and it wasn't combative at all. Great.

Derreck: Yeah, just to add to that a little bit too, you know, I think in my experience, you know, the, the other therapists or clinicians at, at my clinic, it's, it's more we're here for support. You know, I, I think in my situation, I walked in and there's, there's been other therapists who's been on the model for 2, 3, 4 years, and they've been, you know, supportive and helpful to, to understand, you know, how to, you know, navigate around it or how to be successful in it.

And that's kind of been passed along with, you know, even myself with some of our new grads coming in, you know, they're asking questions, you know, they're concerned about it, but then talking through them and how, how we can help them be successful. I, I think there's, yeah, there's not necessarily a competition or anything like that.

Marla: Great. And I, I think too, a lot of times clinic directors or regional directors and beyond actually have to be the, the babysitters in a way and say, oh, have you hit this? Have you hit that? Um, Sarah, from your perspective, do you feel like you have to do as much babysitting to people on this model, or do they tend to embody more of their own business and doctoring as we call it in this model?

Sarah: I, I find that it is the latter of the two that you were giving me. So I don't baby my therapist that is on this model, she is in charge of her schedule. And if she is not seeing patients, she is aware of that and she knows, and she's fighting to get those in. Um, one thing that I, I did personally and that I coached her on is that when we're slow.

We're out there marketing, we want that business because that's directly linked to our, our pay and, you know, our livelihood. So that's something that it, it kind of grew with her going into this program is that she has a better relationship with the doctors. They send her more patients and she is easier to, uh, convince me like, Hey, can you stop by this doctor's office and drop this off for me really quick?

And she's more apt to helping me out in that, in those type of situations.

Marla: That's great. Um, and Larry and Jason, feel free to put any input in how you feel. This really helps with that shift we're trying to make, having clinicians be more of their own doctors and really run their own business like we, like we've been trained to do.

Um, and Larry, I'll let you start there.

Larry: Yeah. So I think, I think a couple different elements always come to mind. You know, all of this is about managing change. And managing change is its own core competency that every, you know, powerful organization needs to develop, how they introduce it, how they get buy-in, how they, um, you know, understand pe the cycle, you know, kinda like the, the stages of death and dying, right?

Denial, anger, bargaining, depression, acceptance and change. It's very much managing, depending on whether it's perceived as a positive change or not. So you have to have a change management philosophy or system to do this effectively. Um, I think the other other part of this is, is that, you know, part of the responsibility is not, you know, when, when therapists here going into their own business or generating their own revenue, a lot of times their reaction is, why didn't get into this to make a lot of money?

Or, I didn't, you know, the compensation's not my number one driver. All of those things, I understand that. And for those, I really try to appeal to them on the professional side of things, this is how professionals generate. Their occupation, whether you're a lawyer, an accountant, um, all of those kinds of things are, are generally like that in the physician circles.

It is the dominant way, the dominant compensation way for specialist physicians. And in dentistry it is the only way, you know, the best example I like to give is general dentists, because general dentists went from making X to about two X as they shifted to this model. Gosh, now probably 15 to 20 years ago, well before COVID.

And what did that force 'em to do? It forced 'em to upskill, get better skills where they could do high, you know, higher price procedures. Same thing happens in physical therapy. The better skills pay, better manual therapy pays better than, uh, you know, a modality. Therapeutic exercise, neuromuscular facilitate, you know, those things pay better.

So you need more training to do it the right way. And you care more about your patients because you're generating true feedback. Will they come back? Will they send their friends, their family, their loved ones to you? So all of these present a series of what I call upwards, you know, spirals that really, you know, generate a lot of good and a lot of good will, but it's not easy.

And it does take a managing change transition to put you in the right frame of mind and to do it the right way. Like it sounds like Spooner and, and, and, and mountain, uh, uh, land of Dunn.

Marla: And Jason, from your perspective, how do you coach clinics entering into this model and organizations on just that and the way to do it best and how recommending the different types and the transition?

Jason: Yeah, I, I mean, and Larry's a hundred percent right. A lot of this is about, uh, it really is about change management. Uh, and, and, and the change management has to start with us as a profession because it's interesting, you know. Um, we've been working very hard as a profession to get to the point where we're at right now, where we have credibility.

And Utah is a great example of this as autonomous primary care providers. And yet for some reason that most of us struggle to describe or to, uh, identify, certainly myself included, the vast majority of therapists that are graduating from PT school view their professional employment from an hourly mentality, which is in stark contrast to their level of autonomy.

So we can certainly have a debate about where that came from, but ultimately what we need to do is we need to look at how do we shift the pendulum in our industry in the direction of a higher adoption rate. And that's why I was very happy to see when you did this poll that we have roughly 43% of those that are on the call right now that have adopted this approach.

That means we're making some, some headway. But to answer your question, you can't rush change management. Somebody asked in the chat, should we require our therapists to choose this model? I think it's really important to understand that, um, we tried that historically. We tried to create an environment where we required therapists to jump into this approach.

They did not have a choice. That's a very difficult thing to introduce. What we realized is the vast majority of therapists will get there anyway on their own time and making a data-driven decision. So to answer the question specifically in the chat, we would not recommend that you require your therapist to do this.

What we would recommend doing is giving them the data. Giving them open enrollment periods. And then over time, what you typically would see is what our data shows. Let's say you offer the three most popular models. Typically we're looking at 90 10, 70 30, or 50 50 to put some numbers to that quickly. An $80,000 salary on a 50 50 model might have half of that 50% guaranteed, so that would be 40,000.

The rest of that person's earning potential comes from whatever variables you establish. Most therapists upfront are gonna choose the most conservative model, but interestingly, if you fast forward two years, the vast majority of them will have self-selected out of the most conservative model into one of the other models like what Derek selected, the 50 50 model.

So therapists will get there eventually on their own, making data-driven decisions rather than us as a profession, forcing them to do so.

Marla: And I, I do find that the ones that are doing just that productivity visit based. Bonus, right? Which you see out there, a lot of times nobody even hits that. Like they're not, yes.

It's not an incentive enough to hit it. And then the organization is trying to push more patients and their therapists aren't even hitting it. But in this model, there's really aligned incentives for both to and to do the revenue part and to bill better to finish your notes on time and to strive for that quality care.

Somebody asked in here, well, what about no shows? How do you treat no shows? And I'll just turn that back to, you know, Sarah, you, um, do you feel people are different in this model with no shows and cancellations?

Sarah: I think it is kind of tricky with no shows, same day cancellations. Um, we learned early on that you have to kind of learn how to a, maintain and, and hopefully keep your patients on the schedule.

Now that's not necessarily gonna be the case every day. Um, we had to implement a very, you know, kind of quick and active wait list, um, that our front end is constantly working on. And then prompt as well, has a great option with that for, you know, reaching out to patients on the wait list automatically, and then also implementing a cancellation fee, um, for same day and no shows.

And that could open up a whole nother can of worms. But, um, we found that having those set in place can then help the therapist on the rep or on the, on the prompt comp to ideally keep their schedule full. And we align our front end with, okay, your main job is keeping this schedule full. And then we have varying compensation options for them as well, if that's the case.

'cause it's a win-win for everybody going up the chain if the patients are showing up.

Marla: Yeah. And it's therapeutic alliance, they're showing up because they have such a good therapeutic alliance with you. Mm-hmm. So if you guys do better at that, then overall, you know, you are gonna see the patient get better.

So it's, it's a win-win both ways. Um, and Derek, I'll, I'll punt the question to you is, because I think you said you kind of when to this model, it wasn't like you, you guys chose a clinic on this model. If you were now switching and going to another clinic, would you want to go back to a salary model or would you be opting to find a group with this type of a model?

Derreck: Yeah, no, that's, that's a good question. I, I think, you know, knowing, knowing what else is out there and knowing what I have, you know, with this, this model, I think it, it has to be, it, it would be a very hard decision to, to transition over to, to kind of a Sally based model compared to this knowing, you know, right now where, you know, average salaries are, um, you know, plus bonuses a little bit, but then knowing, you know, where I'm at right now and what I've seen the last couple years on my potentials for earning, where, you know, it's not like I am, you know, stressed about, you know, getting my patients in or, um, you know, overwork myself.

But knowing that I, I'm at a very good place and I'm seeing, you know, the benefits both, you know, in my, in personally, professionally, and also financially. Um, so I think it would, it would be a very hard transition or switch if I were to. To, you know, jump to another system or a company that, that is not on this model.

Marla: And Sarah, what about you?

Sarah: So, I would say very similar. I was looking around not too long ago at postings, 'cause we were hiring a new therapist in my clinic and I wanted to see what other companies were offering and the time, the energy, the productivity, all of that was the same. The big thing is that compensation for the therapist and like, it can't be matched if you still have to work this hard, see this much, this many patients, make sure your skills are good.

Go out marketing, why not get paid for it. So me personally, I wouldn't want to go back to an hourly or a salary based payment structure. Um.

Marla: Great. Thank you. Appreciate that. Um, and I know we've got a ton of questions coming in, so I do wanna get some of these answered. Um, one is how do clinics with PT and PTAs manage this effectively?

And um, Jason, maybe you can answer that for us.

Jason: Sure. One of the very effective strategies, and it's a good question because theoretically if you did not address this, you could have a scenario where a PT that was otherwise referring patients to the PTA may be reluctant to do so. And I'm guessing that's where the question came from.

A simple solution there is to create a credit scenario where the PT is receiving a, a percentage credit of the revenue that the PTA is generating added on top of what the PT is generating. And that ensures that, that, uh, there's alignment there from an incentive. Standpoint, that's a very effective strategy that we've used.

Marla: And in this model, if you see more evals, you actually obviously make more revenue because evals are higher value. Um, so if you are doing that sharing with the PTA and, and therefore making sure you're, you're sharing and seeing more evals as well, you're probably gonna make a better comp. Is that correct, Jason?

Jason: Yes. Yep. That's right.

Marla: Great. Um, and

Larry: we're happy to ha, happy to take a couple of questions here that were pointed at at us if you like. Uh, one was from Lynn who says, our model is based on revenue money that actually comes in. So clinicians have to pay attention to billing. Agree a hundred percent. And I should have been clear on that.

I think the best ones are those that relate to overall collections versus net revenue, which could be an accrual accounting. I don't want to get too technical, but yes, collection cash, uh, is the way, second is the perspective of on autonomy. And, you know, converting from a salary to a variable model. I wanna stop on that point 'cause that is the point.

And, and, and obviously I didn't mention it, but in this concept of, you know, all the pressures that are on clinics, the headwinds around margin, you have to shift the most expensive cost, which is your people. The cost in a service business of people is 67% of the overall cost. The cost of your rehab group is about 50 to 60% of your collections, of your net revenue.

So yes, converting it to variable is the most effective means of staying viable. And that's what I was referring to and I was talking about the existential crisis that we're in on viability and then the, the idea of, um, autonomy. And they mentioned a visit model. Now I'll defer part of this to Jason 'cause he is had more experience than I had, but I generally don't like visit models because sometimes they don't align the moons correctly unless you have an expectation.

That a visit is approximately 45 plus minutes. Um, a certain number of units or a certain net revenue per visit. If you do that though, you're adding more and more criteria and more and more rules. And PTs, we don't like our rules, so I generally don't like visits. I'm not saying it can't work, but I would rather just tie it to something that aligns things all the way aligned with the, the type of procedure, the type of, uh, expertise that goes into those procedures.

And the overall, uh, alignment of compensation in the highest, uh, value visits.

Jason: Yeah, I'll add to that, Larry. The advantage of a visit based model, and the reason it may be attractive is that it's very clean. It's very easy for therapists to understand if I see the patient, then I'm getting paid. Um, and that is certainly an option.

The, there, there isn't a perfect option. There isn't a perfect model. But one of the challenges with the visit based model is what you just described, Larry, and that's absolutely correct. There isn't any inherent protection financially for the business with a visit based model because a, a therapist could see a patient and build one unit for two units, and if they do that over time, and you've guaranteed by virtue of the model that you've designed, that you're gonna pay the therapist x amount of dollars per visit, well, what if the value of the visit isn't enough to warrant being able to afford that model?

Now you have to start layering on variables. X number of units X, uh, dollar amount of value per unit. In which case, what you're effectively doing there is designing a revenue share model. So if that's the direction that you're going, if you're looking for maximum protection for your practice, the revenue share model is a better option versus the visits based model.

Marla: I truly believe the revenue based model alludes from equality because honestly, you can be seeing a patient for longer, but billing appropriately for your services versus just seeing a ton of patients and you can get better quality care. So I mean, from my perspective, I've always really opted more towards that.

I think clinicians are able to be a specialist and do well in the revenue based model, um, because a lot of those specialty ones you do have to spend more time with. You can't just do a, a 15, 30 minute, uh, over scheduling with them. Um, and I know that that was a question in the chat too. Brian asked, have you noticed that the clinic becomes more profitable for the owner or less profitable for the owner as the therapist may earn, earn a higher income from the variable comp model?

Jason: I can take that one quickly, Marla. Uh, it really boils down to plan design and it boils down to what you want the earnings trajectory to be because some practices are willing to disproportionately weigh the upside of a certain amount of revenue being generated in the, in favor of the therapists. Other practices do not want to do that.

Other practices would rather weigh the disproportionate benefit in the direction of the practice. There's definitely a fine line to walk there, uh, because in either direction there are inherent challenges, but the point is you can design these models in such a way that they will mathematically accomplish what you're looking to accomplish.

If your goal is to ensure that your therapists have maximum earning potential, which is obviously something we would recommend, then you're gonna wanna factor that into your plan design. If your goal is to ensure that you are increasing your profitability as providers. Exceed a certain threshold that can be built in as well.

What I can say is mathematically both are possible. It is possible to accomplish both at the same time, and that's really the best place to be.

Marla: Great. Um, and Jason, some people asked about a fairly new clinic and they're really just only a year and a half in. Do you feel like this model still works when everything is tight for a bus business own business owner who's still growing?

Jason: I think that's actually a great time to introduce it. Yes. Uh, because ultimately what you're doing is you're aligning your largest expense with your revenues. And so that is a, a much more attractive option when you are a relatively new clinic that's trying to grow its roots than guaranteeing a certain dollar amount independent of the amount of revenues that are or are not coming in the door.

Marla: Great. Um, and actually this is one about somebody I think who is actually trying to get buy-in for this model, and they wanna know what the best practices are to getting therapists comfortable with this. Um, and just in general, that delayed component. So, Sarah, I know you, you talked about just getting really comfortable with it right from the start, and if you can elaborate on some of those best practices that your organization did.

Sarah: I think having the. Like the spreadsheet, that ramp up period that we talked about, letting them be able to see what they could be making versus what they're making now for the actions that they're doing. For however long, I believe Mountainland has a six month wait period that you have to meet certain metrics.

So we're already looking at your benchmarks, we're looking at your, uh, stats before we transition you into, um, a, a prompt comp model. So as far as that goes, I really do feel like having the ability to look at it ahead of time and see what life could be versus what life is currently. Because if you're working hard already, it's an easy adaptation.

But if there are some areas that maybe you could grow, maybe that is the way you're building, maybe that is how you keep and retain your patients, then you're able to clean that up before you get into the model, and then it's success from there.

Marla: Great. Um, that's really helpful. And Derek, what about you?

Any ways that you felt your organization did a good job, that you felt comfortable?

Derreck: Yeah, I kind of, um, similar to what Sarah said, I, I think, you know, seeing the numbers and seeing, you know, with with my company, we, we did like a a year, year ramp up period. And, you know, each, each kind of, as you ramp up towards it, you see your numbers, what you could be making.

And you know, it's kind of one where if you, you're happy with your numbers, you know, you could just kind of keep going. Or if, if you could see, if you need to work a little bit harder, you know, a few months, then you could see, oh, the, the benefits for it. So I think, um, kind of like what Jason was saying, you know, making that data-driven decision, um, is huge.

And, and knowing, you know, what I could be making if I just kind of kept doing what I was doing was. Huge for me. So, no, I think objectively the, the numbers and, and the, you know, chart scraps, excel sheets are, are huge on what my decision was.

Marla: Great. Um, and taking another question from the crowd, uh, a lot has come in about just PTs, OTs and SLPs and the same practice.

So Jason would love to know your feedback on that and how that works.

Jason: Sure, yes. A revenue share model can be designed for really any practitioner. We just need to factor in the, uh, unique characteristics of that type of clinical practice. So if the reimbursement per visit or per unit is different than the plans, of course need to be calibrated and designed as such.

But, um, yes, we have lots of practices that we've worked with where, uh, they are multidisciplinary practices and the approach works the same, uh, and works quite well across the board regardless of clinical discipline.

Marla: Great. And cash based.

Jason: Cash based as well. Yeah, I mean, you can certainly do a revenue share model, uh, off of cash based services.

It's still revenue coming in the door. The only difference is who's paying it, it's being paid over the counter or it's being paid from a third party payer. Either way, you can certainly do a revenue share model.

Marla: Right. Um, and I did have somebody ask about insurance and how you don't necessarily know how much you're getting from that insurance until delayed.

So can we, can you address that issue of, um, the actual insurance taking some time to get the payment in?

Jason: Yes. And then I'll defer to Sarah on this because I know, uh, where you're working, you have a little bit of a different approach to this. But typically, practices are going to go with actual collections by posting date.

That's the bucket of revenue that will be used to pay the provider as a revenue share independent of the date of service, which is why you need a ramp up period. Because if you're billing some units as a new grad or a new hire. There's typically a 30 to 45 day delay for that revenue to show up associated with those units.

So you need to have that delay in place. Most of the models that we've seen, revenue share models are based off of that dollars that came in that week with my name on it, regardless of the date of service. But then let me defer to Sarah, 'cause I know you have a little bit of a different approach.

Sarah: Yes. So our approach, we will do a 13 week look back on our, we call it payment per visit.

So we accept almost all major insurances in the state of Utah. And then Montana and Idaho have a little different one on that as that, uh, in that as well. So I won't go on those, but, um, we take that average. So if your average is, say, $107 per patient is what you are generating as your average, uh, uh, reimburse reimbursement, excuse me.

Uh, you get 27% of that lump sum and then that times however many patients you saw in the day. So it is very variable and every 13 weeks that can change. So if you say you changed your billing and you're doing better, and that 1 0 7 is now 1 0 9, you're pay and you're seeing the same patients, your pay I.

So it, it is, uh, maybe a little different from what you were talking about.

Marla: Great. Thank you. Um, and then I've got a question about ethics. They say some PTs are resistance because they don't necessarily feel comfortable having compensation tied to volume or financial metrics. Uh, how does this model include positive patient outcomes as a metric and how to under owners understand all of that?

And, um, actually I think anyone could take this question, but Larry, do you wanna take this question?

Larry: Well, you know, the, sure. The ethical dilemma exists under any compensation arrangement. Um, it exists if a therapist doesn't follow the eight minute rule, for example, on certain payers or Medicare supervision requirements.

And we've seen, uh, elements of fines from CMS and Medicare around, uh, physical therapists. It happens relatively. Um, and frequently, but it does happen. You'll read about these about a half a dozen times a year. And so this ethical dilemma is not further enhanced through a compensation model any more than it would be, um, without a compensation model where we already have therapists who get in trouble.

Um, so, um, I think you have to get classified under professionalism. And we have a code of ethics, uh, both in our state practice Act and through our A PTA code of ethics. We have, uh, compliance rules, and none of us are suggesting in any way that you violate those. Fortunately, a lot of compliance now is handled through AI and just built in the EMRs.

That's a great thing, but at this end of the day, you should still have some aspect of peer review and do all those professional things that, um, you need to, but I don't believe that there's, at all any ethical dilemma. If there was, we, we would routinely and daily see physicians and dentists and surgeons, uh, names on the headlines and the newspapers, and it just doesn't occur.

And that is the dominant way that they're, uh, paid.

Jason: Marlo, if I can add to something that quickly that Larry just said, I think it's an important point. Variable compensation models, one of the nice things about them is that they have no hidden agenda. These, these models are not designed to encourage or force therapists to see more patients than they're comfortable, comfortable seeing.

They're designed to give therapists the data that they need to understand the economics of healthcare delivery, which is something, by the way, that historically we have shielded therapists from. We thought they couldn't handle it. I think that's been a mistake for us as an industry. They're smart people.

If we invite them into the conversation, they'll really appreciate that. Ultimately, what we're doing is arming them with information and then letting them decide whether at some point they want to throttle up or throttle down their volumes. This is how a surgeon functions. This is how a family doctor functions or a dentist functions.

If they would like to make more money, they increase their caseload. If there's a period of time where for whatever reason they don't wanna do that within reason, of course they can decrease that. So we're actually giving autonomy rather than taking it away. A salary model by definition typically requires a set productivity expectation across the board, universally applied to everyone, in which case the leadership constantly has to figure out why people aren't hitting that expectation and what to do to get them there.

So this approach actually enhances flexibility with regard to that rather than diminishes it.

Marla: That's a great point. Um, and I do think that on a salary model, a really great clinician who patients are not canceling, their patients, are completing their plan of care, they're getting new evals in all the time, is still paid the exact same as the person next to them who is not doing that.

So I think that comes to an ethical dilemma of sometimes them saying, I'm doing such great work, why is it no different compared to that person? And their boss could say, well, you all make the same from insurance. Well, if you look at the, the revenue that that one brings in versus the other, the one who's actually giving the best outcomes and getting the most compliance is, is definitely doing better, but they aren't personally doing better.

So I think that's a, a great way to think of it. Um, and I know we,

Larry: Maria, lemme, lemme add, add one other little nugget to that. I mean, you're, you're, you're spot on. I think the other thing is, do you have a business, have an ethical dilemma? If you have a therapist that's producing 30 to 40% more revenue than another therapist, but you're paying them the same.

Marla: Yeah, that's a great point, Larry. Um, and I know we're, we're kind of up to time and so I'm just gonna put a quick poll up there. If you guys do wanna learn more, um, about prompt, prompt compensation. Uh, if you wanna learn or connect more with Larry or Derek or Sarah, please indicate that in here as we will make sure to follow up.

Like I said, any questions that were not answered today, we will follow up on. We will send this recording out and just if there's one takeaway from today's conversation, it's that compensation models. These variable types don't just change how clinicians are paid, but they also change how the care is delivered and how clinicians are experiencing their work with that autonomy, with that ability to, um, build your caseload better, be your own doctor and business, uh, and really get paid for the value and impact you're bringing into the clinic versus just being paid the same number of everybody else's.

And I think that's actually something inspiring in the field and hopefully that we'll get to see more of, um, as we really start to continue to be measured on the value we bring in. So thank you all for joining today. We really appreciate you in this conversation. Uh, and look forward to the next one.

Thank you.

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