I could probably write a small book about all the things I learned at the Private Practice Section 2012 annual conference, so I’ll at least have to do a three-part series on my highlights.
Performance-Based Pay for PT
Mike Danford PT, OCS, MTC presented on “performance-based pay” for Physical Therapy businesses. I obviously can’t cover all the details of his presentation, but his PTs (and he himself as well as the other practice partners) get paid based on their performance and work output. They have a base hourly rate that is a little below the area norm, and that hourly rate can increase based on a large number of factors (% of time billed per patient treatment time, certifications/fellow credentials, having a DPT or tDPT, participation in specialty programs, and the list goes on.)
There is a belief among most people that the longer you work in a job, the more you should be paid. I can understand this sentiment, but only to a point.
Having more experience should make you a more productive and valuable employee, in which case it makes sense that you would earn more than someone with less experience and/or time in that position. However, we all know that it isn’t always the case that more-experienced employees produce more for a company than less-experienced ones do.
Mike’s practice does give a small hourly rate increase each time they accrue a certain amount of hours worked in their clinics, but there isn’t a “since you’ve been a PT for 25 years, you start out this job getting paid more than the new grads” component. If his clinic were to hire someone with 20 years as a PT, and in that time they have acquired certifications and a DPT, then they would start out making more per hour than a new grad hire. It’s the same system for everyone. If you want to make more per hour, then get a good certification (higher level ones like MTC, SCS, etc), make sure you’re billing for all the time you’re spending with patients, get your tDPT, etc. There is also a profit sharing component designed to further motivate high performance both as an individual and as a team of practitioners at each clinic.
It’s a transparent and highly motivating system that drives employees and owners alike to be their best and continually strive to improve. No “coasting” allowed unless you’re okay with making less money. There are a number of other important details of their system that I can’t cover here, but you get the general idea.
At the conference closing dinner/party (which was at an incredible club – “Surrender” at Encore), Mike was kind enough to spend a good amount of time speaking with me about his presentation and a number of other topics. He had really great advice about planning for the long-term and considering a number of things when analyzing decisions of whether or not to hire PTs or bring on a partner. I’ll be forever grateful for his time and generosity.
If I decide to add staff PTs in the future, we will undoubtedly be on a performance-based/commission pay scale system; and call me crazy, but I imagine that if this were how most PT clinics went about compensation, our profession as a whole would greatly benefit … there would be so much more motivation to continually improve your skills and produce great results, which would inevitably improve the average experience that people have with PT and the average public opinion of our profession and services.
Hiring considerations
Looking at the topic of adding staff in my clinic, he also made me realize that when I’m so happy with the current set up and headache-free status of my business, “what’s the rush?” I think a lot of people, myself included, have a tendency to think that small businesses should be consistently growing. This of course is not the case, and many factors need to be carefully considered when analyzing expansion and adding staff. These factors are not simply financial ones, but also lifestyle considerations and answering the question “will this change be in line with what I want my average day to be like?”
Do you have staff at your clinic? What are some of the things you had to consider (or wished you had considered) during the hiring process? Also, what do you think about the performance-based pay model? Let us know in the comments below and share this post with your colleagues to get them in on the conversation.
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Jarod, Great post. This is an important topic, I think the most important aspect is to get the employee to feel invested in the company so that they work harder than just an employee, and incentives like this are more along the line of what the person who owns the practice faces. As well, “you’ll never replace yourself” is what one of my clinical instructors/mentors has advised me. Your most important point is “will this change be in line with what I want my average day to be like?” I like my easy days, so I’m not in a rush to add anymore either. I did find a therapist to rent a room, that’s low on the hassle, and good for the bottom line and lifestyle.
I’m interested to hear what others have to say and for part 2.
“improve the average experience that people have with PT ”
How are you measuring patient experience?
Hi Lee,
I don’t have a formal feedback or data collection system set up for this. Since it’s just me interacting with my patients, I can get a good idea of how each of them perceives the service they are receiving. However, if I were to add staff in the future, this would obviously not work as well and I’d probably need to get something like that in place. Thanks for the question.
I’d challenge the “average day” perspective a little and open up the thinking to assess a longer timeframe — “will doing business this way today help move you toward your long-term goals?”
I agree that it can be seductive in the cash-pay realm to want to keep up with the Joneses and continue to think growth = expansion, but if we can separate the ego from the decision-making process we have a better chance of seeing how growth can = depth + diversity. We can go deeper into domains of our lives that a non-cash-pay practice may not be amenable to, such as service projects, personal and family goals, mentorship and education, etc.
Regarding hiring staff I have to say that the compensation strategy one chooses may be less important in the long-run than the leadership model you employ. Simon Sinek has now famously brought together the paradigm for this in his “Start With Why” book and TED talk. Understanding the WHY behind a potential employee is critical to helping lead them through their career choices. They don’t only come to you and to your business for a paycheck. In a service industry like PT they come with a WHY. It’s best to uncover that as soon as possible, and then the productivity and incentives can fill in the holes and take care of themselves.
Thanx for the post Jarod!
I work as a community based private entrepreneur utilizing mobile physical therapy model. By travelling to work with patients in their HOME, I am able to tailor neurorehab to meet the needs of my patients and their location. I am not ready to change my days and add staff) You are absolutely right that “many factors need to be carefully considered when analyzing expansion and adding staff”.
Jarod, thanks again for your time and energy spent researching our field. I have often wondered if my, or my workmates, treatment would change if we were on a performance based pay system. I have worked for companies where you were highly praised for your productivity, got your name at the top of a board, maybe employee of the month for productivity. When I brought up we should be rewarded for quality of work for pt improvement my bosses were confused thinking productivity and quality were one in the same, and often they are not. I know you went into PP, and cash pay, so you could spend more time with your patient, do better quality work. Being perfromance based brings in alot of dangers: will every PT do what is best for the pt. or best for his/her bottom line, will appropriate time be kept and met, will we get back to multiple pts at a time. This is not a concern for good ethical therapist but when money becomes the bottom line and not pt care the saying “pursiut of money is the root of all evil” may be too pwerful to overcome.
On your other issue, years in practice. I would much rather hire the me now than the new grad of 18 years ago. I have not achieved all the advancements I should have, something I am trying to rectify currently so as to better treat pts. But my skill, knowledge base and ability to work with people is hard to learn in a classroom, CEU course. Though I respect and believe you deserve financial compenasation for time you spent and knowledge you possess the more letters following PT. does not always equal better tx. Thanks Dan
Just want to say ‘thank you’ to all for your comments and insights on this topic so far.
I agree with most of what you shared. But, do all therapists need to have a DPT or tDPT to be eligible for incentives? I have worked in New Zealand with therapists that had a BS in Physical Therapy, additional credentialed specialties, and experience in a true direct access practice. Those therapists felt our entry level masters and doctorate programs did not gain us any more knowledge or respect than their combination of education, credentials and experience.
Hi Curt,
I was just passing on the system that they use at this particular practice. There are obviously a number of PTs out there with a Bachelor’s or Master’s degree who could run circles around most DPTs or tDPTs in the clinic. Having the DPT/tDPT is just one of the ways employees at that clinic can raise their hourly rate. And I think that one of the reasons they have this component of the pay system is to support the APTA’s 2020 vision of all practicing PTs having a Doctoral degree.
Jarod,
Sounds like PPS was great – wish I was there!
I often think about these things too – there are at least two competing thoughts that I have on the topic!
One is something that one of my mentors recently said to me, “You have to build a business and not a job. A business has a plan, and systems. When you have a business, you can go on vacation for 2 weeks and things run just as well when you’re away as they do when you’re there.” Obviously, this line of thinking leads to hiring staff, so that you can actually go on vacation and still have a business running, making you money while you aren’t treating.
The second, conflicting thought, is just what you mentioned – I really, really like having it just be me! I ran a busy ortho clinic and managed a staff of 9, and I hated it! Granted, it wasn’t my practice, and I would have done things differently, so maybe it would be better having my own clinic/staff. But I really disliked the distractions of managing staff. My business is so simple right now – just me!
It’s an interesting topic to explore, though. If you don’t have staff, you are always “getting paid by the hour” and limited in what you can make by how many hours you want to treat patients in a week. Both options have advantages and disadvantages…
Ann
Much better time is spent pursuing specialties or certifications through post grad education instead of wasting money on a bloated overpriced University. Going back to school for a DPT when you have been practicing as long as I have is laughable.
The DPT has only enriched the school systems, contributed to shortages, and little has been accomplished towards the big promises of “direct access”.
Reimbursement hasn’t increased and I feel sad for the huge student loans that new grads are saddled with.