From Start To Sale: Nathan Shields’ PT Business Journey With Rafi Salazar

This podcast episode is taken from Nathan Shields’ guest appearance on Rafi Salazar’s “The Better Outcomes Show”. In it, Rafi asks Nathan to share his business journey as a PT owner, from start-up to sale, as well as the introduction of EMG and musculoskeletal ultrasound into his business. There’s plenty to learn from in this episode – Nathan’s hardships and successes – that will be of value to current PT clinic owners.

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In this episode, I’m going to share with you an episode in which I’m a guest on my friend Rafi Salazar’s podcast, The Better Outcomes Show . He asks me about my journey as a physical therapist, physical therapy clinic owner, an eventual sale of my clinics, and also my experience in diagnostics. We go through the range of my progression in physical therapy and physical therapy ownership , and what I’ve learned along the way. I thought that would be of value to you and I’ll share it with you on this episode of The Physical Therapy Owner’s Club.

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Welcome to the show , Nathan. How are you?

I’m doing great. Thanks for having me on, Rafi.

Thanks for being on. I’m excited to talk with you about all things PT business and then focus on this whole idea of EMGs. Before we do that, tell us a little bit about yourself, your PT journey, and then what led you to do what you’re doing now at Rise Diagnostics .

I’m Nathan Shields. I’ve been a physical therapist since 1999. I opened my first clinic in 2002 out in Arizona. I eventually expanded and opened up another clinic in a small town outside of Phoenix called Florence, Arizona. I brought on someone to manage that and run that for me. He eventually bought it from me, and then we opened up another clinic. Through all these little chess piece movements, we decided to emerge our clinics together. We had 4 and 5 clinics at one time come together in the southeast portion of Phoenix.

What’s interesting about our journey is we went about it on our own for a long time, longer than I should have, which is very comparable to a lot of PT owners out there who have suffered and struggled. If I were to talk to my younger self, I would definitely recommend getting some coaching or consulting earlier on in my business ownership journey.

Once we did get some coaching and consulting, we started seeing things change for the better, both in terms of personal life, business development, and the development of leaders within our company. Simply taking the time to work on our businesses resulted in making great progress. No longer was I waking up at 4:00 in the morning to get notes done before I saw my first patients at 6:30 or 7:00, and then get home at 7:00 or 8:00 at night, and thus miss my newborn baby being awake for 2 or 4 days at a time. Maybe some in the audience can relate to that. We’re going on vacation and getting phone calls in the middle of vacation 2 to 3 times a day because when you’re gone, that’s when things break. Just to see significant transformations in our business over that time. Stop me if I’m going too far into this.

No, this is all super helpful.

This is my journey as it relates to business ownership. I started to make a change when I started focusing on the business. It’s funny because I talk to owners now who come in to get a coaching with me. They say, “I just want a treat and I want to have a business that runs.” I didn’t understand the fact that once I opened up a clinic, I was no longer a physical therapist first. We tend to see ourselves as therapists who own a business when the narrative needs to immediately change as soon as you hang that shingle to “I’m a business owner who happens to be a physical therapist.” Even now, it still takes time for me to change that narrative in my head when people say, “What do you do?” I bumble around and say, “I’m a physical therapist by trade, but I haven’t treated a patient in many years.”

As clinicians, we go into healthcare from this sense of calling, mission, or vocation . Our identity is very much tied to this purpose of helping people. This is almost who we are. It’s very difficult to decouple yourself from that to “I’m not the guy treating patients anymore. I’m the guy managing a team or making sure the business metrics are where they need to be.”

We never had any training on that. We never got any business training on how to run a business. We continue to see ourselves as therapists first. What I see as I’m coaching patients or clients, PT owners specifically, and it’s a mindset I had to shift in myself as well. I had to recognize that I was no longer just a physical therapist who own a clinic, but I’m an owner and a physical therapist.

Once I made that transition, I started seeing changes in my business and started making business decisions that were in the best interest of the business. That ultimately helped me personally as an owner. In my personal life, I had more free time and more profits. My effect on the community and the number of patients that I was able to influence increased because I wasn’t treating them one-on-one.

Now, my influence could be greatly expanded simply by coaching the physical therapists that worked under me. If they’re doing better, getting better results, seeing more patients, selling better plans of care, and getting patients to come in at a greater frequency in their benefits to get greater results faster, then my influence and my effect in the community and my surroundings is greater.

Leaders can expand their influence by coaching the people working under them. As they do better and sell better, a leader’s impact to the community is greater.
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I definitely see as I’m coaching clients as they don’t make a lot of big changes in their businesses until they make that mindset shift. They need to make business decisions first that will better influence the clinic, and not let patient care to hold them back. Honestly, it is what it’s doing. I made some of those changes. Things went well. My business partner and I entertained a number of offers to sell over the years, which was a good experience. If anyone is coming at you to buy your business, I recommend doing a song and dancing with them for a little bit. Just go through the motions and understand what it’s like, even if you’re not planning on selling. I honestly wouldn’t accept your first offer because better offers come down the road.

Especially for someone who hasn’t even been thinking that way, just getting a request of bullet points of, “We need these metrics. We need your payer mix. We need all these forms and financials.” That in and of itself is enough to jar some people into, “I need to get my business button gear and get some of this stuff in order.”

In some of those things you’re thinking, “That’s not a big deal. Why should I have all my insurance contracts on file?” If someone who’s going to buy you wants to see your contracts, should you have a certificate of good standing? I never knew they existed, but there were certificates of good standing with the state of Arizona. I had to go through the Department of Commerce and find out. Also, taxes and financials, and all that stuff.

Nonetheless, we got a lot of that stuff together. We sold about 4.5 to 5 years ago. A friend approached us probably a year before that and said, “I’m selling some of my clinics and I have an offer on the table, but I know I could get more for my clinics if I grouped a number of other loosely held clinics together who presented themselves as one on the marketplace. We could get more for our clinics than if we sold them ourselves.” Not knowing who’s tuning in and if they understand, but many times you’ll get what’s called a multiple of your EBITDA when you go to sell. To make things a little bit easier, it could be a multiple of your bottom line profit, essentially.

It depends on what part of the country you’re in, but 3 to 4 times EBITDA is pretty standard.

I think even 5 or 6 years ago, I might have been talking 2 or 3, but 3 or 4 times, your bottom line profit would be a purchase price or a ballpark figure for what your purchase price would be. We knew if we got a number of clinics together, that could be 8, 9, and 10 times multiple of your purchase price. It’s a radical difference. We started calling friends and acquaintances who are interested in selling. We had this loosely held non-disclosure agreement between all of us that if we came to the market and achieved a double-digit multiple or a 10X multiple on our EBITDA, we would agree to sell.

We got sixteen clinics together between Southern California, Arizona, and Louisiana, of all places, and we decided to sell. We had entertained a number of offers before. We knew exactly what we wanted in terms of a dollar figure and what the exchange was like. We weren’t going to do any kind of payouts, we’re incentive-based payouts. No earnouts, none of that stuff. Don’t do that. It was strictly 80/20. You’re going to give us cash and some of us will agree to stay on to run the administrative part of it for a period of time, and the 20% will come in stock later on. We sold out to a private equity company in Arizona.

In the meantime, all this time and a little bit before we sold, my business partner and I decided to get into diagnostics. We had talked to a company called Hands-On Diagnostics out in New York. They trained us on EMGs and musculoskeletal ultrasounds. This was probably about eight years ago. It was prior to our sale. We were looking for other avenues of income and that kind of stuff. We considered the typical things, whether it was having a gym model or selling supplements.

Selling something clinic or having a program.

We liked this idea simply because it was within our scope of practice and could be integrated into patient care. We got into that. I took over the diagnostics portion of the business on an organizational chart. We had a separate organization altogether for the diagnostics business. I came over to the other side of that organization and ran the diagnostics side. Will handled some of the day-to-day stuff in our PT business. I was focused on developing that. Will had this bright idea of doing diagnostics in Alaska because they reimbursed me well.

We were sitting at a conference. We talked to a friend at lunchtime. He was from Alaska doing diagnostics and told us what they were getting reimbursed for. We’re like, “That’s crazy.” Will took it a step further and spent the rest of the afternoon writing down numbers, “How are we going to get to Alaska, write it off on the business, and maybe make some extra cash?”

Honestly, that’s where it started and we started working that way. I started coming up to Alaska once or twice a month from Arizona to do EMGs in an area where there was a huge demand for them. The business started getting busier. I hired someone to market for me, and it got started getting busier still. My wife one-time said, “Maybe we need to move up there. I’m sick of you commuting to Alaska a couple of times a month.” I was occasionally going to New York for training. It was a big decision. There was a lot that went into it. Eventually, we moved up to Alaska six years ago and we’ve been doing diagnostics up here since then. It’s not any PT actually. We just have a diagnostics clinic and a small office that does EMGs a couple of times a week for the local providers.

I and my family have been up here for six years. As I said, we sold our clinics about four and a half years ago. Since then, I’ve been doing a podcast like you. I do some business coaching and consulting. I do annual strategic planning sessions for business owners. I just did one for a nonprofit charity organization, and also getting into a lot of real estate investment stuff. It has been quite a journey because I was that physical therapist that wanted to get some coaching to improve my business so I could treat patients. I want to take all that stuff off my hands that’s the headache, and I’ll just treat patients.

Once I got into that stuff, now I’ve treated patients here and there over the past couple of years on and off. It’s not fulfilling anymore, honestly. I get more fulfillment teaching PT owners how to become profitable and change their lives. I know when I’m changing their lives and helping them become profitable, then their providers are providing better care. They’re being more productive. What I mean by more productive, they’re seeing their patients more frequently for the full plan of care and not discharging early. That gets me excited when I get to help other PT owners who are in the situation that I used to be in, with little free time, a lot of family demands, and no vacation time. Helping them free themselves from that gets me super pumped.

I bought a clinic a while back because I figured, “What else am I going to do? I’m going to buy a clinic.” Being a solo consultant for years like an independent healthcare consultancy, it’s a lot different. I was telling somebody the other day, I was used to kicking in the door in an organization and being like, “You’re screwing up this and that. I’ll be back in two weeks. Make sure that the numbers are right when I get back.” When you have a clinic and you’ve got these people that are coming to you, you’re like, “I’m the guy that’s fixing, I’m supposed to be fixing this.”

I talk to clinic owners all the time who want to keep doing their clinic thing . They want to treat all the patients and they want to let the team manage itself. At some level, you need to be a moral imperative. The highest use of your time is leading and developing the team. That shift is very hard for us that view ourselves as clinicians or our identity is tied up as almost healers. Not to sound chintzy or anything, but we went to school to help people and it’s hard not to want to do that.

When you say “went to school,” let’s be honest about it, you spent probably twenty years of your life, if not more, in order to obtain this pinnacle of being a physical therapist. That’s the ultimate goal of 25 years of training if you look back on it. I’m going to elementary school, junior high, high school, college, and graduate school so I could be a physical therapist. Now, I’m coming at you as a coach and you as a consultant as well saying, “You’re not a physical therapist anymore.” That’s a strike to your identity.

Your purpose, identity, and everything you’ve built up to are like, “What are you talking about? I’m a physical therapist. What else do I do if I’m not a physical therapist?” I think that’s where the mindset has a hard time shifting. It’s easy for me to say, “You’re not a physical therapist anymore. You’re a business owner who happens to own a physical therapy clinic. That mind shift isn’t easily accepted and understood. It takes some time.

I wonder how much of that is like, how many of us have spent our days in the clinic running around treating patients? What is a manager doing kicking his feet up in the office all day? We don’t want to be that. We want to be in there with everybody else treating and getting our hands dirty and all that camaraderie.

The funny thing is as I’m talking to owners, there is that fear every time, no matter what. “If I’m not treating patients with my team or if I’m not boots on the ground, what are they going to think of me?” That’s always a fear and it almost always never comes to pass. When the message is relayed appropriately and they come to understand it, it is, “I need to step back from treating in order to run a better business. When I do so, it will benefit everybody here in this room.” Typically, the people who are on board and value aligned with you will nod their heads and say, “That’s right. There is crap that’s going on in our business right now that you’re not taking care of because you’re treating patients.” They see it and they know it.

In whatever you do, there is always fear.
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When you tell them, “Here’s my solution. I’m not going to treat patients anymore, I’m going to fix the crap that’s going down.” Remember the qualifier. The people who are aligned are the ones who will say, “I get it.” The people who aren’t aligned are like, “You just want to kick your feet up in the office or whatnot.” They don’t usually last too long, honestly. When I started making changes for the better of my business, the people who weren’t aligned self-selected out.

I had to learn the hard way that you need to fire fast and hire slowly, but I should have fired them faster than I did. I never regretted firing anyone that I did. I wish I would’ve done it sooner, but I had to go through that process. They self-selected. I ended up having to let them go and found better replacements that were aligned. I then got better at interviewing and determining what my values were and what I was looking for in an employee or a team member. That’s a learning process.

During this entire time, the business got better, my life got better, and the opportunities for my employees got better. They now have leadership paths because I was pulling myself out of the clinic director position. Now, they had a way to grow into the clinic director position. I hated marketing. Now, as I’m working on the business, I had a PTA who loved marketing. I’m like, “You can PTA, but I’ll pay you to even go out and not PTA but market for me.” She was all aglow. She thought that was her dream job. Someone has to like marketing but it’s not me, so I’ll pay you to go do it.

All these opportunities arose. When we went to sell, of those 16 clinics, ours were 4 of them, and we had the highest profit margins of any of the other owners. Our team, our culture, and the leaders that went into the next organization that bought us came from our clinics. We were proud of what we developed over that time. It was because we decided to start working specifically on the business.

You mentioned it earlier, but let’s go back to that. What was the deciding factor that finally pushed you to make that call to a coach or a consultant and say, “I need some help outside of just treating more patients ?” When things are going wrong in the business , it’s like, “We’ll just treat more patients and we’ll be fine.”

We tried once the wrong way to hire an office manager over multiple clinics without giving her any training. She came with a good resume and we didn’t hold her accountable. We just did what we treated and she managed the office stuff. That didn’t go over well. One time, Will said, “I’m going to go to this training up in Seattle for business consulting.” I think he paid $1,000 or $2,000 for it. “I can bring someone else for free. Why don’t you come with me?”

We went up to this training and we got some nominal business training. It hit me there. You’d have to ask Will what his feelings were at the time, but he agreed. I remember sitting there and I had an opportunity from perspective to say, “I can’t keep doing this anymore. Whatever is happening now, I can’t keep going on.” I had said that in different ways over the years. I’d say that to patients that I knew well, and friends and family. I was like, “If I’m still doing this in another 5 to 10 years, I’m going to get burned out.”

When this consulting group gave me the proposal, which was tens of thousands of dollars to do business coaching with them, I looked at it like, “I’ve got to do something. I’m willing to pay the money to make the changes that I need to make so that my business runs better and becomes more of an ideal scene that I want.” We made that commitment financially. We started getting the training. We went to Seattle on a regular basis to get the consulting that we needed. We eventually paid for consulting for our leaders to get the same training that we did.

Once we did that, I wouldn’t say it wasn’t hands-off, but we were getting close. By the time we sold, we had a solid leadership team in place and things were going pretty well. It was a good situation. It was at that point that I finally understood something has got to change. You don’t do anything usually until the pain is so much that you have to do something. I guess I was at that point.

It’s always funny to hear what drives people’s decisions. Some people come in from different angles . I think a lot of people are in a position where they’re like, “I can’t keep doing this.” They realize something has to change. I’ve done this in my own career too. Something has to change. I don’t know what to do. What am I going to do? You got to find somebody who can get you there.

What’s funny is that I wasn’t having financial issues. Financially, we were doing fine. It’s not like we were living high on high, but we were doing fine. Financials weren’t the issue. My lifestyle and what I expected out of my life were not where I wanted them to be. A lot of that might have to do with the fact that I had six kids at the time, and now I had seven. There was a demand on my family time and stuff like that. That definitely was a part of it. I wasn’t experiencing what I wanted to experience, and what I dreamed a business owner would live like.

You did consulting. You got the business running well. You’ve talked a little bit about that involved leadership development on your team’s part and delegating on your part. When it came time to sell, you were doing the diagnostics before . I’m assuming you carved that out of the sale and whoever bought you didn’t purchase the diagnostics portion . Did you just go ahead and reconstitute in Alaska and keep trucking?

No. We set it up. Organizationally, we had our separate LLCs all set up. The diagnostics were a separate LLC. It had its own tax ID number. We also had an umbrella company at this time. There was this holding company at the top if you can imagine an organizational chart. That’s where Will and I lived. Our billing company was up in this umbrella company. This might be interesting to those who had multiple clinics, but the four clinics would all pay 15%, 18%, or even 20% of their revenues up to the umbrella company. Out of that umbrella company, we would pay our billers and our executive salaries. The other clinics would have their own financials outside of that that made money off of that. That’s how it ran.

Underneath that umbrella company were the four distinct clinics, a real estate holding company that owned one of our clinic’s office spaces, and the diagnostics company. When they bought the company, we carved out the real estate holding and the diagnostics. I don’t even think they took the umbrella company. They just bought those four LLCs. That’s a long-winded answer to your question.

It’s helpful. You just said it was more than you would’ve gotten normally. What made you decide, “I’m already up here in Alaska doing EMGs, so I’m going to keep doing that?” What made you decide to keep doing that after you sold?

I was headed down this path anyway, and that was to become board certified. In the PT realm, that’s to become ECS, Electromyography Certified Specialist. I was heading down that path already and I’m not one for change. The idea of stopping doing that probably never came to mind. I was headed down that path and I was going to keep going down that path because I was already on that path.

I simply continued to study. You have to hit so many EMGs, I can’t remember how many it is, 500 or something like that. You then have to submit for the exam and take the board exam. I was doing all this and getting ready to do this prior to the sale. I continued after the sale, and I was doing all those tests up here in Alaska. I kept going down that path, took the board exam, and eventually passed the board exam. Thank you very much.

Congratulations.

I can proudly say I’m the only Board-Certified Electromyography PT in the state of Alaska as of 2023. My team member has taken the board exam a few weeks ago. Hopefully, he’s the second. That’ll be great. I decided to keep it going. It was something that kept me busy and provided a little bit of cashflow. It was nice so I kept doing it.

I talked to a guy who’s on the health tech side of things. He did a startup and sold it for tens of millions of dollars, and he’s still cranking away on something else. I’m like, “What are you doing?” He’s like, “What am I going to do, sit and retire?” There are some people that are going to keep building, keep working, and keep doing something because it isn’t so much about the money. It’s like, “I’m already on the path to do this” or “I already had this idea . Now I’ve got the freedom to do it and not have to worry so much about it.” It’s interesting to hear that you sold it. Now, you’re doing an EMG company. You’re doing diagnostics.

You also hear the other side of the stories occasionally where people sell their companies, make a lot of money, and then blow all the cash within a couple of years, and have to find something else to do. I didn’t want to be that person. This is a real situation for people who are looking to sell. What are you going to do afterward? It’s a real existential question. This is almost five years now. It’s 2023, we sold it in 2018. I’m still looking for my next thing. I’m doing a lot of these things. I’m not busy with any of them.

I have the EMG clinic, but I’m not doing the EMGs myself. I have real estate and that’s relatively passive. I do business coaching and consulting, but I’m not going 40 hours a week, coaching people every week. It’s not something I look to scale up because the limitations are my time. I still want to maintain a certain lifestyle. It’s like, “What do I do next?” I’m still searching. For people who are looking to sell, it’s an important question. What are you going to do after you sell? You need to know that ahead of time because Will and myself have been running around looking for things to do. He’s been much busier than I am. He’s got a billing company now.

He’s running here, there, and everywhere. He was on the show a couple of months ago.

He got all kinds of stuff going on, but those weren’t things that he was expecting to do when we sold. He just fell into them. If you are the type of person who has had successful ownership in a company, you have the personality that you expect to produce. “I need to produce. If I’m not, then I question what I’m doing.” Honestly, on this earth, it’s like an existential question, “What am I doing if I’m not producing?” Also, the money can run out. I didn’t make that much money that I can live high on the hog for the rest of my life.

If you are someone who has had successful ownership in a company, you have the personality that you expect to produce.
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I’m not a billionaire over here.

I still want to fly first class and I don’t think I can afford it. I still have dreams of making more money so I can fly first class whenever I want. That’s my dream. That’s my next goal.

Those tickets to and from Alaska are a little expensive too.

Especially when you got seven kids and hauling them back and forth.

I’ve got five right now. My oldest is 8 and my youngest is 1. We’re in the thick of it.

You are. That’s exactly what I was dealing with when I’m talking about lifestyle was not fun. Between owning clinics full-time and having a bunch of young ones in the house, I totally feel your pain.

It’s fun though. It keeps us entertained if nothing else. You’ve laid out a little bit. You don’t need to be EMG board-certified to run EMGs . Do you need to practice under the supervision of somebody who is? How does that work? Maybe it’s different from state to state.

There is some of that. In most of the states, I want to say 48 out of the 50 states, are okay with PTs doing EMGs. Oklahoma is the only one that stands out that doesn’t allow it.

That’s probably because of lobbying by some other interests that don’t like it.

The physical therapy board is also under the medical board. The doctors get to decide what the PTs can do essentially. It’s not a separate board. In most states, you can do EMGs under the Practice Act. In California, in order to start billing insurance, you have to take a state board exam, which is a little bit different. Of course, you would expect that from California. It’s not as hard as the national exam. Here’s the thing, depending on the state, I will say this in general, Medicare won’t pay you full Medicare reimbursement rates until you are board certified.

There’s that reduction code involved.

You get the technical component, not the professional component. It ends up being $150 or $120 versus $400 and $500. You can only get the technical component for doing it. Depending on the state, Medicaid might not pay for it until you’re board-certified. If you do it, and this was what I was able to do, I found a nurse practitioner that was willing to supervise. We could bill under her and get full reimbursement. I could pay a flat rate to her for her supervision, insurance, and billing expenses to supervise my tests. That’s how we went about it in order to get more reimbursement. From state to state, it’s a fight. In some insurance companies like Blue Cross Blue Shield in Arizona, it will pay for it in Arizona and then they might not in Florida. It varies from state to state.

You’re going to do a lot of due diligence on that piece. From the standpoint of getting the business or getting that component of the practice up and running, you need obviously the training. You can’t just go out and buy an EMG machine. You need some training and ideally some supervision.

You can buy an EMG machine, but you won’t know how to use it.

Ethically, you should get some training before you start stabbing people. You get that piece from the marketing standpoint to the community to referral sources. Was there pushback from doctors or other organizations, maybe neurologists or something like that? I’m thinking of the people that we refer out for EMGs . Was there pushback from those other providers? Were you going directly to a DPC or something like a primary care provider and saying, “We can do these ?” You don’t have to wait three months to get them with a neurologist?

This is a good adjunct to the prior question. Let me add to this question, but answer your question first. Depending on where you are, you’ll get some pushback. Neurologists aren’t going to be happy with you. Some pain medicine docs might be 50/50 on it. I know in Idaho where my friend is and up here in Alaska, the local neurologists complained to the board and they had to do some “investigation” in order to confirm whether or not we could EMGs under the Practice Act. That delayed my payment from Medicaid for a year and a half. It was a fight. There are lots of PT members across the nation that will help you fight that kind of stuff.

If you’re into it, don’t be afraid. There are plenty of experienced people who know how to handle this kind of stuff that will help you fight that fight. You’ll get some pushback. When I did it in Arizona, the common comments were, “I didn’t know you guys could do that stuff.” They blew it off. They thought that maybe we were just introducing orthotics or dry needling in our clinic. They didn’t think we were very expert at it.

The people who loved us were the mid-level practitioners in rural settings. I saw that in Arizona. I see that up here in Alaska a lot. The PAs and the nurse practitioners, especially in rural settings, when they know that my patient is going to have to wait two months to get one, and then drive 1 to 2 hours to go get it, “You guys are already in town and I can get an EMG this week.” They absolutely loved us.

The primary care physicians as well in those rural settings loved us. Even up here in Alaska where our town is not totally rural. Most of my referrals come from 1 of 2 sources, the mid-level practitioners or an orthopedic group that doesn’t already have neurology on staff. Those orthopedic groups feed us a ton. Across the country, I know podiatrists favor EMGs a lot, so they like to work with PTs. I know plenty of PTs that work with podiatrists, ortho groups, and mid-level practitioners across the country.

It depends on where you’re at and how they look at you. To say all that, one way to get around the reimbursement issue is to do EMGs for those physicians on site. You can set it up like that and start doing tests. They fill your schedule with their clients, 5 to 6 EMGs in a day or more. You come in, you do the test, you leave, and then you bill them $150, $200, $250 per test to do those tests. That way, you get reimbursed.

They take care of all the billing. They take care of all the denials. If they come up, they’ll take care of all that stuff. You don’t have to necessarily do credentialing per se. You just have to show that you’re licensed as a PT in the state. If you’re contracted like that, I don’t know what they have to do regarding credentialing, but it’s usually not that difficult.

Everything is going under their NPIs, their business organization, and they’re taking it all.

That’s another way to do it. You can do it in-house. You can do it in your PT clinic and even test your patients with the physician’s approval. Typically, you want to have that communication. Anyone can do well with an EMG if they can’t tell if this is a carpal tunnel issue versus radiculopathy. They are wondering how much nerve damage is happening with this guy with leg pain, numbness, and tingling. I think they do well with an EMG. If they’re willing to sign off on it, then you can do the patient’s in-house, but you can also do it in the physician’s facility. Do it externally and make that a business as well.

I know there are plenty of people that have done that and done it very well. Profit margins are a lot better by the way than some of that diagnostic testing in physician’s offices. You get to set up in an ortho clinic or a podiatrist clinic once or twice a week. They’ll fill your schedule with EMGs. You just give them an invoice on a per-test basis and they do pretty well.

It takes away a lot of the headache. A buddy of mine owns a pediatric clinic. He’s a PA. He and his physician friend own a pediatric clinic. They’re getting somebody to do the same basic thing but for allergy testing. The guy or the group that’s doing the allergy testing is charging them a flat rate per test basically. They’re not dealing with any of the billing. They just give the pediatricians an invoice at the end of the month , and their headaches are basically done after they do the test. Setting up the same model for EMGs seems like an easier way to do it without having to deal with your own billing and your own denials in-house.

It takes a lot of work. That’s the biggest obstacle to getting into something like this. It’s not a weekend continuing education course, and then you’re off and running. I didn’t feel comfortable with my EMG tests and I had mentorship. I had a mentor that reviewed every one of my tests after I completed them and my reports. I didn’t feel comfortable until I got over 200 to 250 tests. I was starting to feel more comfortable in my skillset, but also in my impressions that were coming from the data that I received. That’s the one thing that’s difficult about it. It’s a little bit of a mountain to climb.

If somebody wants to do this and they own a PT clinic, “Maybe I’ll do EMGs. I’m interested in it.” What’s the first step? Are there certification courses or training courses out there that are more than just a weekend continuing ed? Are we talking about a series of weeks or months of training before you’re doing an EMG? How does that typically work?

I don’t know how many organizations are out there training right now. As I said, the one that I did was through Hands-On Diagnostics. They’re based out in New York. Their model is much more of a franchise model. It’s not just the training. You’re going to actually “own a territory” and that kind of stuff. There’s also the American Academy of Clinical Electrodiagnosis , AACE. I think they’re partners with Hands-On Diagnostics. Rocky Mountain University used to have a program. I don’t think it’s been going for a couple of years, but they’re talking about bringing it back up again. I know the founders were Electrophysiologist PTs of the university itself, and they used to train PTs and EMGs. They’re looking at bringing it back.

These organizations that I’m talking about are pretty much PT-specific. There are organizations that are outside of the PT scope that trains techs, PAs, MDs, DOs, and EMGs. I just don’t know what those organizations are. As I said, I did it through Hands-On Diagnostics. I don’t have a lot of exposure to others, but there are others. The price is very significant, but you’re also getting something very significant because you do want to have some mentorship. Someone who’s reviewing your reports, giving you feedback, and someone you can ask questions of.

From a business model, we’ve already discussed doing it in-house versus doing it in the clinic or the clinicians’, or the provider’s offices. Are there any concerns about kickbacks or self-referrals that you should be aware of when you’re starting this? You’re coming for a wrist sprain and maybe we’ll do an EMG to rule out carpal tunnel. I’m sure people are thinking of the ways that you can milk the system.

There could be, but I think it’s pretty easy to substantiate medical necessity. If you have someone with numbness and tingling, there is a question about nerve damage. I think that’s okay. That in and of itself would be enough to substantiate medical necessity to rule out what’s going on. For example, numbness and tingling in the hand. Where could numbness and the tingling in the hand come from? If you’re thinking of differential diagnoses, there are all kinds of stuff that could be happening. It could be the median nerve, ulnar nerve, radial nerve, brachial plexus thing, radiculopathy, or polyneuropathy from diabetes that they have. Even if I said ulnar nerve, is it a compression of the ulnar nerve at Guyon’s canal, or is it the cubital tunnel, or is it further up the arm? Who knows?

That alone, as an example, would be enough medical necessity to say, “If I’m going to treat this as a physical therapist, I need to know what I’m treating and where.” My approach is going to be different. My plan of care is going to be different. Depending on the diagnoses or what comes back on where the nerve damage is, and if there’s any nerve damage at all. Maybe this is a trigger point issue more so than any nerve damage at all.

It’s pretty easy typically to substantiate medical necessity in that regard. I have to put in a plug for musculoskeletal ultrasound as well. It’s one thing with an EMG to get information regards to the health of the nerves in the periphery. It’s another thing to get a picture of what’s happening. Musculoskeletal ultrasound is going to be taken up by the profession, in general, much more like dry needling has over the past ten years. I think it’s going to be pretty commonplace for physical therapists. I hope it is. I’m putting it out there into the universe.

I’m hoping musculoskeletal ultrasound becomes more ubiquitous because there’s so much we can do with it. Not just related to nerve injuries, but the pictures you can get of the rotator cuff to guide your treatment are so helpful to determine if you can make some significant difference or if they need to have surgery. If they have carpal tunnel symptoms, take a picture of the nerve as it passes through the carpal tunnel. Is it compressed? Is it inflamed? Is it scarred? What’s going on in there? Is there a Ganglion that could be impinging upon it? No matter how much physical therapy you do, nothing is going to change that Ganglion. They need to have surgery, and then they can come back.

It helps guide the treatment.

It’s that kind of stuff that these diagnostic tests will help our profession in a huge way. To become the gatekeepers that the APTA wants us to become or said that we should become by 2020 if we don’t have some diagnostic tools in our back pockets like these, then I don’t think that we’re truly becoming the musculoskeletal gatekeepers that we should be.

I’m glad to hear you plug the musculoskeletal ultrasound. I have a friend who it’s not workman’s comp, but she goes directly to employers and does that onsite with their people. Once a month, she comes and she screens everybody. We’ve got a chicken processing plant, so she’s checking everybody’s rotator cuff and carpal tunnels. She’s one of those people that has all the data, tracks it all, and has a spreadsheet. She’s able to show, “We came and we did these diagnostic ultrasounds in your clinic. We were able to catch fifteen of your people before they developed something that required surgery or more time out.” There’s a lot of value-add in being able to catch it early, and something like the musculoskeletal ultrasound lets you do that, which is cool.

I hadn’t heard of that before, but I have had a friend of mine, and who’s been on my podcast, Bart McDonald in Idaho. He uses musculoskeletal ultrasound or he trains all of his providers on it. Every shoulder that comes in is going to get an ultrasound, no matter what. He finds too often that there are issues or there aren’t issues that they thought might be there that allow them to look in other places. He said it becomes a filtering system for them that’s been too helpful to not do.

The cool thing is they’ll take the pictures at the initial evaluation. They’ll take another picture six weeks later and compare. What’s cool is you can see the impact of therapy on that patient’s rotator cuff tendon. “Here it was at this point. Here’s this sprain. There’s this much tear.” Six weeks later, “Some of that’s filled in. Look at that. It’s an improvement.” You can all see it visually. It makes a huge difference.

If there’s one thing you want someone to walk away with from the episode, maybe about using diagnostics or maybe about being a PT clinic owner in general, what would it be?

I’m assuming that your audience is similar to mine. These are typically clinic owners who are probably treating most of the time if not all the time, and running the business on the side.

A lot of the time, yeah.

My mantra is three things. Reach out, step out, and network. 1) Reach out. Get some help. If you’re an owner of a business, remember you’re an owner first and a technician or a physical therapist second. You need to learn how to become a business owner. Know your KPIs, take responsibility for all the crap that’s going on in your business, and learn how to be a better leader. Run it a real business/organization. If you’re wanting to make $1 million, run it like a million-dollar company, even if you’re making $200,000. People don’t start running a million-dollar company when they make a million dollars. They run it like a million-dollar company in order to get there. Reach out and get some help.

A business owner must learn how to reach out, step out, get some help, and build a network.
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2) Step out. Get out of patient care. It doesn’t have to be entirely but start with a minimum of 1 to 2 half days a week. I like to say that your business’ love language is quality time. If you’re not giving it quality time, it’s not going to pay you back. Give it some quality time to review your metrics, talk to your team, coach your team, hold your team accountable, look at your metrics, make marketing plans if that’s what you need to do, and make recruiting plans. That’s the big issue nowadays. We can’t find therapists.

Have a strategy for recruiting and work on that in those half days. Take two half days out of your work week to work on your business, not a Saturday and not a Sunday, during the week, and then network. You’re not alone. A lot of times you can be an owner, you feel like you’re on an island swimming up against the grain all by yourself. There are a ton of resources out there. It’s one thing to read the books and read the articles and get the emails. It’s another thing to interact with other small business owners one-on-one in person.

We’re doing it.

Do that. Join a local BNI , it’s a networking group. We were part of an entrepreneurs’ organization called Accelerator. We’re businesses that make less than $1 million. None of those people in my group were physical therapists. They were other small business owners. Surprisingly, we all have the same issues, just in different industries. They have some solutions for you in your industry, even though they’re not PTs. Usually, it’s about how you should act as an owner, not necessarily how you should run your business. That’s helpful to talk to other owners.

Even the American Physical Therapy Association or APTA has peer-to-peer networks where they will group PT owners from different parts of the country to become mastermind groups. They can determine how often and how frequently they need to meet. They’re able to collaborate with each other and network. That’s super helpful. Everyone’s businesses seem to improve as we work together on this thing. It’s the 1+1=3 type of situation. Reach out, step out, and network.

Where can people find you and find the podcast if they want to look up Rise Diagnostics?

The website is PTOClub.com. I’m on LinkedIn , of course. I’ve been doing podcasts for about four and a half years now. About the time that I sold, I started doing the podcast. What I do is, like you, I interview successful PT owners or people in the industry to share successful actions. What they think about what’s going on and how to improve as business owners. It has nothing to do with patient care. It’s all about business ownership.

I’ve been doing that for about four years. We probably have about 300 episodes out there. I think they’re pretty quality episodes if I do say so myself. You can check that out. That’s on Apple and Stitcher. It’s the Physical Therapy Owners Club. Just punch that into your podcast app and you should be able to find us pretty quickly. If you want to reach out to me directly, it’s Nathan@PTOClub.com.

Nathan, thanks so much for sharing your time.

Rafi, I am so excited that you asked me to come to your show. I don’t get to be a guest so often, so that’s cool.

The tables have turned.

I love what you’re doing.

Take it easy.

Thank you.

Let’s get real: Healthcare is broken. You know it. I know it. Every clinician who came into this field from a desire to care for others, knows this to be undeniably true. We feel it everyday when we enter our clinics, hospitals, and practices. We feel the burden of time-based productivity metrics, utilization rates, and the expectation to behave like cogs in a giant, soul-crushing machine aimed at extracting revenue from our patients in exchange for “units” of treatment.

Healthcare should be about one thing: PEOPLE! Yet how many clinics, organizations, or healthcare professionals live their lives by the numbers? Metrics & spreadsheets drive most of our healthcare decision makers and administrators. That leaves patients -the people we serve- lost in the mix. Patient’s feel lost, forgotten, and ignored by a system that prioritizes efficiency & productivity over their own personal experiences, priorities, or goals.

It’s time for clinicians to finally stand up and say what we’ve all been thinking for so long: enough is enough! It’s time for healthcare organizations to commit to serving the individual needs of each unique patient that they are charged with serving.

Join Rafael E. Salazar II, MHS, OTR/L (Rafi), principal of Rehab U Practice Solutions and host of The Better Outcomes Show as he explores the possibilities of a new healthcare. Guests range from clinicians trying new techniques and treatments to executives and entrepreneurs exploring new service delivery methods, business models, and organizational structures.

Love the show?  Subscribe, rate, review, and share! https://ptoclub.com/

The post From Start To Sale: Nathan Shields’ PT Business Journey With Rafi Salazar appeared first on Physical Therapy Owners Club.