One of the hardest things to do is move forward with certainty in new and scary situations. It’s a feeling many experienced firsthand in 2020, but some leaders have been dealing with massive disruption for years.
Nancy Ham, CEO of WebPT, runs an organization providing end-to-end business solutions to the physical therapy industry. Over the last decade, the industry has transformed from one populated by individual clinics and providers to one filled with enterprise organizations, created by continuous PE activity in the space.
As the industry has consolidated, WebPT has had to transform its approach. Though it once provided services exclusively to SMB, the business has built out an entire suite of products and services to serve the enterprise market and now regularly onboards clients with hundreds of PT clinics to their names.
This is just one of the many examples of massive disruption in the PT industry. COVID provided another when in-person visits shut down and clinics had to pivot to telehealth services almost overnight.
Fortunately, Nancy and her team’s confidence and know-how empowered them to roll out a new telehealth platform to customers in just seven days at the start of the pandemic.
WebPT is an agile company, and in this case, “agile” is not just a label. The organization is truly positioned to make big changes very quickly.
What’s their secret?
Nancy shares that, when it comes to assessing new initiatives and ideas, everything is tested rigorously against the company’s mission and top strategic objectives. Any ideas that don’t move the needle on these priorities are pushed aside.
WebPT is also dedicated to listening closely to its customers. From customer surveys to individual meetings to intel from the team’s success managers who are constantly gathering direct feedback from enterprise clients, there is always data coming in about what customers want and need.
Although the team does ascribe to agile methods, they also develop a 12-month roadmap and hold themselves accountable. Nancy shares that the team typically delivers 95 percent of their roadmap each year. (2020 was an exception to that rule for obvious reasons.)
Nancy places great emphasis on the importance of moving quickly on ideas. She firmly believes that the ability to think and move fast is a core competency required of a modern company.
While some organizations are fearful of moving too fast, Nancy reminds us that we live in an age of data. It’s possible to get bogged down in the data, but data also presents an opportunity. We can move quickly based on data we have on hand, and as more data comes in, it will show us when and where we need to course-correct.
“Your customers are waiting! They want you to act,” Nancy says.
When you listen closely to your data, it’s nearly impossible to make a catastrophic error. Make sure that your data is strong and your team is equipped to spot warning signs in the numbers. Then make bold and decisive decisions, and watch your company grow.
Rob Ristagno: The world of physical therapy is changing rapidly. And that means companies serving PT providers need to move more quickly to meet new customer needs. Today’s guest runs one of those companies, and she has lots of valuable advice on how to lead through disruption and forge ahead on bold new ideas without hesitation.
Announcer: This is the CEO Campfire Chat with your host, Rob Ristagno. Taped in front of a live studio audience, join us to hear successful growth stories from middle market companies, just like yours. Sponsored by the Sterling Woods Group.
Rob Ristagno: Welcome to the CEO Campfire Chat, recorded live in front of a studio audience of senior executives. I’m your host, Rob Ristagno and I have the privilege of introducing you to Nancy Ham, the CEO of WebPT, which is a rehab therapy platform. Nancy has a lot of experience running healthcare information technology companies, both private and public, companies such as Healthagen Population Health Services, Medicity, MedVentive, that’s just to name a few. Welcome, Nancy.
Nancy Ham: Thanks, it’s great to be here.
Rob Ristagno: Well, I’m totally impressed by your track record, but I want to hear the backstory. What got you interested in becoming a CEO of a healthcare technology company in the first place?
Nancy Ham: Well there was no master plan, whatsoever. So I started my first real job within investment banking with GE Capital and I was in the Atlanta, Georgia office. And just by the circumstances of the geography we serve, we ended up doing more and more healthcare deals, taking HCA private, for example, spinning out HealthTrust. And so a few years later, we had a billion dollars invested in healthcare, and I just got more and more interested in our customers. Investment banking is great. It’s intellectual, it’s fast. You learn a lot. You can make a lot of money, but there’s no real mission to it.
Nancy Ham: And so I just decided I wanted to get on the other side of the table. I went to work for a company for a year, and then I got a completely random chance to join a startup healthcare IT company as their founding CFO. Well, if they’re dumb enough to offer me the job, okay, let’s go!
Nancy Ham: And then we failed first. We lost all of our Series A money, and then we rallied and raised Series B and C. We started to prosper. We were going public. And I said, “Well, I am not a public company CFO. We should get one of those, and I’ll do something else.” So I moved over to M&A, and then one day we bought something that didn’t have a leader. And I said, “Well, I’ve been working on this deal for 14 months. Why don’t you let me run it?” And I’ve been in operations ever since.
Rob Ristagno: All right. All right. And I like the story you have to lose out on all your round A money at some point to be considered a successful entrepreneur, right?
Nancy Ham: Exactly.
Rob Ristagno: So, all right. So now you’re at the helm of WebPT, just for those unfamiliar with the company, could you give us a little bit of an overview of your business model?
Nancy Ham: Yeah, so we serve the outpatient physical therapy industry, $38 billion industry. And we are very privileged to provide technology and services to 20,000, which is 40% of the market. Our business model is primarily SaaS software, so subscription by provider by clinic by month. And then we also provide revenue cycle management services where we help them collect their cash from insurance companies and patients. And we get paid a percent of revenue for that.
Rob Ristagno: All right. So your pay for performance on the revenue cycle management, side of things?
Nancy Ham: Exactly. Our interests 100% align, which I like about that business model.
Rob Ristagno: And are these things that the company wouldn’t be doing on their own anyways, or this is just extra found money for them, or what’s the value proposition to the client?
Nancy Ham: Well, we really have an expertise and a scale that they perhaps do not. So in that part of our business, we collect about $1.4 billion a year. So we know the payers, we know the denials, we know the workflows. We’re just able to bring a lot of technology and experience and scale that’s greater than what they could do themselves. The other reason, frankly, is at the high end of the market, people who are growing very rapidly by M&A, they’re able to entrust that part of the business to us while they’re focused on integrating the clinics and the clinical operations and the clinicians themselves. And so it just lets them focus on really the key part of their growth and we can partner with them on the back office.
Rob Ristagno: Gotcha, gotcha. And on the SaaS side, could you say a little bit more about who’s your ideal customer and how you’re serving them the best?
Nancy Ham: Well, outpatient physical therapy clinics are our ideal customer and they might be a single clinic where the physical therapist is the owner and the operator and the practitioner, or it might be a group of hundreds of clinics, but our best customers just in that very focused vertical, as opposed to so much a size, for example.
Rob Ristagno: Okay. So you’ve carved out, I see, an industry vertical more so than a company size. Now, I understand WebPT was founded proverbially on the back of a napkin inside of a coffee shop one day. It started off really focused on small and medium sized businesses. Now you’re in the enterprise space. Can you help us understand the journey that the company had to take to go from selling to SMB, to selling to a huge, large global companies?
Nancy Ham: Two different companies in some ways. So when the company was founded, the industry we served was SMB. And so there were not any clinic companies of scale. But now, 12 years later, private equity is very active in our industry. There are about 27 private equity investors buying clinics, and rolling them up and creating companies at scale. So about 40% of our market now is in these large companies. So we needed to evolve with the industry and keep up with them.
Nancy Ham: The other reason that’s so important for us is when we looked at our SMB churn, 50% of it was what we deemed uncontrollable. And it’s because they either went out of business or they were bought. And so we said, “Well, we’re going to have to go end to end.” When I came to the company, all of my experience was enterprise. So it was great fun to learn SMB, but I was really brought on to help us serve now, this really changing dynamic in our industry. And it is really a different business, I’ve called it building an enterprise lane through the company. So the teams that do SMB are not the team that do enterprise.
Rob Ristagno: Totally different skill sets. What are some of the things that you need to have to be on the enterprise side versus skill sets you need to be successful in SMB side?
Nancy Ham: Well, SMB is a lot about process. So in SMB, we have a lot of people who are very automation- and process-oriented because they need to do things thousands of times a day, tens of thousands of times a day. So it’s all about volume and velocity. Enterprise is more bespoke. And so that’s just two different mindsets.
Nancy Ham: So just to quickly run some sub departments, we had to create outbound marketing, we never had such a thing. We had to create a dedicated sales team, a dedicated onboarding team, because it’s a lot different to bring on one clinic versus 268 clinics. We had to stand up success managers, not account managers, success managers who really can engage strategically with these large customers.
Nancy Ham: Our smaller customers tend to buy one product. Our larger customers tend to buy seven or eight or nine. So you also have that multi-product complexity. You have to have executive sponsors, you have to engage with them much more on product. They want to push your product roadmap around and have a lot of influence. And they want to be on product councils and get early release. You need a lot more analytics. You even need better invoices. But the biggest difference I always like to say is every one of my enterprise customers has my cell phone.
Rob Ristagno: Cool, need to have the personal touch there. Is there a huge difference in margins between the two different lines of business or roughly to things net out so you’re indifferent between taking on a new SMB client versus a new enterprise client?
Nancy Ham: That’s a really good question. And if you built your operations correctly, the answer should be the margins are the same, and that you are indifferent. It doesn’t usually start out that way. If you start out as an SMB company, you’re doing pretty well. When you do your first enterprise deals, you’re over-investing. You’re having to build the whole infrastructure, even though you only have one or two or three enterprise customers. So you’re really betting on the future profitability of that book of business. It’s not there day one, but as I said, even though they certainly get better pricing because they’re enterprise and they negotiate, they also buy more products. And so that really helps your margin as they stack multiple products on top of the core product.
Rob Ristagno: And you say a lot of the industry has been consolidating through private equity. Is this whole SPAC trend, everyone’s talking about SPACs, and that could be attacking private equity, has that entered your market yet? Or it’s still too early to tell?
Nancy Ham: No, one of the largest companies in the industry has just filed their SPAC. And so that will create the second public company in our industry. And we expect that a few more will follow over the next couple of years. And I’d say, overall, we do think that having more public companies is a good, good thing for the industry. Having more larger companies is helpful for the industry because the industry needs scale so they can advocate for themselves and their value proposition, I’ll say with the people who pay for their services.
Nancy Ham: So if you’re a single clinic, you’re not going to knock on the door of a big payer and have much of a dialogue, but if you have a lot of clinics in that same geography, you eliminate that asymmetry of information and negotiating power, and it becomes a more balanced equation, which actually then benefits the whole industry. So by and large, we think it’s good. As long as that chance to start your own clinic and stay proudly independent always remains a great, viable choice. And a big part of WebPT’s mission is making sure that that’s still true.
Rob Ristagno: Being sure that there can be some competition and some innovation and some new blood into the market, I like it. Let’s pause here and turn things over to the audience questions for Nancy about her business model, her strategy. Fred?
Fred: I’ve got a question. Do you outsource your software development and how much focus do you put on developing intellectual property to differentiate yourself?
Nancy Ham: So we have a very large percentage of our team, probably too many my board occasionally says, invested in innovation. So while we do leverage nearshore and offshore resources, all the intellectual property is ours, and I really wouldn’t imagine ever doing it any other way.
Audience Member: Nancy, when you’re thinking about CapEx and where your technology’s going to come from, you’ve got currently 11 products that you’re serving up to your customers, sort of stem to stern. Do you think about “I need to expand the product line? Do I need to onboard people who are buying three products into 10 to 11 or–” right? Are you, in terms of your product buildup, how do you think about that large enterprise, smaller mom-and-pops overall, and what kind of functionality needs to be built for you to capture the remaining share market?
Nancy Ham: We have a long list of future products. So I don’t know if we’ll ever stop creating the next product and the next and the next, because there are so many problems that we’re not helping our customers with, currently. So we started as the electronic medical record, which is the core workflow product, where they document the encounters with the patients. We do practice management, scheduling and billing, but then we started to say, “Well, how else can we help you?” Well, we can measure clinical outcomes, that’s a product. We can automate how you communicate with your patients through patient relationship management. We can help you automate and how you engage with other parts of the healthcare system to get more referrals coming to physical therapy. Oh, you’re a bigger company now, you need website services. So on and on and on, I don’t think we’ll ever run out of new problems that we can help solve for our customers.
Nancy Ham: And there’s a real joy in that, when you can show up one day and say, “Here, like wow, I can’t even fully understand that I had that problem. And look at this beautiful solution you brought, this could help me.” So for example, during COVID, we had record sales of our patient relationship management software, because you had suddenly a crucial need to communicate with your patients, tell them that you’re still open, what your COVID protocols, it’s still safe to come in. We had to invent a new product. Physical therapy was never reimbursed to do telehealth and all of a sudden it was all telehealth. So we invented a new product in seven days called Virtual Visits and got it out to market. So yeah, never a dull day, for sure.
Rob Ristagno: It sounds like you have a never-ending product backlog. What criteria are you using to prioritize things? Because I’m sure different parts of your company want to advocate for getting the resources sooner rather than later. How do you think about priority order?
Nancy Ham: That’s always such an interesting question for a software company, and we just try to start every year by reviewing what is our mission of the company, what is our BHAG, what are our top strategic objectives. And then make sure everything is tested rigorously against that framework, because there’s a million things you can do, but you really only have time to be successful at a few. We’re also very engaged with our customer base in terms of regular surveys and conversations and input. So I think it’s pretty easy to get a good shot of what needs to be next. And then the hardest thing is just when you say no to for sure, we all have lots of magnificent ideas that are currently unfunded.
Rob Ristagno: And what about, does it ever happen that you’re your midway, your mid-flight on one initiative and then priorities change and you have to ice a project and park it and focus on something else or once something’s committed and you go for it?
Nancy Ham: We’re an agile company. And so, one of the great things about agile is that you have the flexibility to pivot very quickly, but one of the knocks against agile companies is they’re never predictable. You can’t really rely on them. So we try to fuse the best of agile with the concept of an actual committed roadmap. So we set our roadmap 12 months ahead and we hold ourselves accountable. So in pre-COVID years, we generally delivered about 95% of our roadmap and we delivered it something like 90% of our major features come in within five days of their original estimate. So I think that’s one of the things we’re uniquely good at. The biggest culprit is usually the CEO, by the way, who thinks she or he has that brilliant idea that’s worth disrupting the entire roadmap. But my team’s very good at holding me accountable to our plan and not letting me be that disruptive CEO that I certainly could be.
Rob Ristagno: Kudos for having that self-awareness there to know that CEOs like to have more ideas than we have the time to implement, but great. You have the word “web” in your company name so I imagine that when COVID hit, there was a lot more virtual telehealth sessions and you’re helped. Would you say that it was right place right time and you got a little lucky or did you also, you already mentioned you had a launch a new product within seven days, but it sounds like you had to actually do some things to take advantage of this luck–it didn’t just fall in your lap?
Nancy Ham: In terms of being lucky, I’ve said many times, thank goodness that we had spent the prior two years investing heavily what we call our tech touch program. So we had made it possible for customers to onboard themselves using our technology. We had invested very heavily in rebuilding our learning management system. And so thank goodness because we haven’t been on-site to a client in a year and previously, especially for larger clients, we would have gone on-site for big go lives. So we brought live our largest customer ever 100% virtual. So thank goodness we had made those infrastructure investments, which by the way, when you fight for roadmap dollars are usually the ones that get squeezed out. So I’ll give us some kudos for having prioritized making those investments. We did have to pivot and launch virtual visits, but otherwise we were there with these tools like patient relationship management that helped our customers stay on track. And because we’re a software company, it wasn’t that hard to go home. Everyone picked up their laptop and their monitor and broke down their IKEA standup desk and went home.
Rob Ristagno: You told me when we were preparing for this conversation that your NPS, net promoter score, from your employees doubled, and people were twice as satisfied, twice as likely to recommend working at WebPT to a friend. Tell us a little bit about how you achieve that, that’s amazing.
Nancy Ham: I think the first thing is we said from the moment we sent everybody home, which was pretty early, we said, “Our mission is to protect everyone’s jobs here at WebPT. We are not going to do layoffs. We’re not going to do furloughs. We’re not going to do pay reductions.” And we challenged the company to help us make that a true statement. So we had a lot of initiatives under the hashtag #HugOurCash. So people got very creative because everything was through the lens of, will doing this serve the customer in a meaningful way, or is it a nice to have? And so we came through it as a family. We amped up communication dramatically. So we do many, many, many more stand-ups, which Zoom makes super easy. Of course you can have the whole company together, but we shared a lot more data.
Nancy Ham: So our industry was in free-fall, visits fell 80% in the first two weeks of last March. And so we showed week after week after week, here’s what’s happening in the industry. Here are our internal KPIs. Here’s what we’ve done to preserve cash, here what we need of you. And we started just using a more emotional language. We’ve talked a lot about family and about love and about mental health and about stress. And I think by permissioning everyone to say, “I’m not okay. I need help.” That’s also brought us closer together.
Nancy Ham: We didn’t have Slack 100% of the company before, and we just moved the whole company into Slack in a more vibrant way than we had been using it. And it’s just lots of little things, too. Like, where typically, like many of your companies, we go to a lot of trade shows and we have a world-class event team who suddenly had no events to go to. And I say, “Great, you’re now the internal event team. So pull together every resource for online happy hours and bingo and karaoke and painting classes and cooking classes. And you’re now in charge of planning internal events.” And so we have had a ridiculous amount of online fun. So I think it’s just been all those things, but mostly I think people feel safe. They feel our intention about them in our care for them.
Rob Ristagno: It’s all comes back to empathy it sounds like, impressive.
Nancy Ham: One of the coolest things is we have a full-time, two full-time videographers who normally go to trade shows and do customer testimonials and things like that. On their own, they created two internal TV series. The first one runs every Friday, it’s called #WhereWeWork, and through the camera, they interview someone and see their workplace and their children and their pets and music. And we’re getting to know one another really well. The other, which is periodic is called The Kindness Files. And it’s people sharing very honestly, like what’s not going well because, again, I think by permissioning people to say, I’m not okay, one way is to see a leader talk about how they’re struggling and how they’re struggling with their mental health.
Nancy Ham: The last thing I think that’s made a huge difference, because we’re very young person company, is we’ve been all about DEI this year and very scary, open, raw conversations with one another. And we have, I think 12 new employee groups ranging from veterans to people of faith to people of color. And I think that people feel they can really, truly bring their authentic self to work. It’s been a big part of it as well.
Audience Member: Nancy, how large is your company? How many employees do you have?
Nancy Ham: We have 650 employees, and then we have another 350 partners, nearshore and offshore.
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Audience Member: Nancy, you mentioned that, it’s funny, Rob said, “Well, you have web and your name isn’t that great.” And I’m thinking they have P in their name, which is not so great under COVID, right? And you mentioned that, volume visits fell 80%. And I imagine that, obviously, if your customers are barely hanging on, they’re barely paying you and anything like pay cycle, that’s directly tied, is going to take a huge hit. I’m curious, kind of, where’s the industry now and how much has it been able to claw back some of that 80%? And what’s the trajectory look like?
Nancy Ham: So the physical therapy industry crashed very hard in March, but pretty quickly figured out how to do telehealth, not reimbursed at the same level. And certainly it’s not physical therapy, but they were able to serve their patients. And so visits made a gradual recovery really by September.
Nancy Ham: I’ll say people were in pretty decent shape. Some people are over their pre-COVID highs. Others are working 10% below them, but it caused a lot of reinvention in the industry. So as their businesses went under stress, I think you saw a lot more adoption of technology, a lot more streamlining efficiency. They adopted new compensation models for example, where their physical therapists are incentivized more pay for performance than just straight salary. So they’re doing fine now. We helped, we turned our marketing department into a newsroom. We had 40,000 people come to webinars last March, and they were on everything from what’s a PPP loan and how do I get it to what’s this telehealth thing. And what’s the law around laying off employees. And so I’d like to think we played a role in helping people understand quickly what to do, because as you all know, speed is of the essence when a crisis hits. You need to be deciding that very first day what you’re doing and get it done.
Audience Member: Nancy, I think Warburg Pincus acquired the business maybe a year and a half ago. Is that right? Maybe a year and a half ago. So do they have kind of an investment thesis that you can talk about at all in terms of growth organically, or is there acquisitive growth as well in your plans that you can speak to?
Nancy Ham: Well, first of all, Warburg likes especially EMR companies. They’re invested in four of us in very different verticals. And I think for all of us, it’s a pretty straightforward plan. One, continued organic growth, bringing new clinics into the family. As I’ve mentioned, we serve 20,000 clinics now. Two is cross-selling all the new products we’ve invented because most of them are new, new within the past three years. So we have a lot of opportunity to drive more adoption of this product and help our customers solve more problems. M&A’s part of any piggyback company’s playbook. We’ve made four acquisitions prior to Warburg. Three were products, we invented some products we acquired, one was of a competitor. And if you think more broadly, physical therapy is a big industry today, but it only reaches 10% of the patients who could benefit from it.
Nancy Ham: And so the TAM, itself, is expanding and I’d like to think our thought leadership is having some role in helping it expand. So if we can help the industry double, well, then obviously all of our growth strategies double, and then physical therapy is just one part of the muscular skeletal continuum, which is one of the top cost drivers in the US. So many of our customers provide other services. They provide occupational therapy, speech therapy, pediatric therapy, cancer therapy, chiropractic therapy, massage therapy. So while we’re pretty much a PT company, our customers are expanding in to more along that continuum and we will follow them and support them and all those endeavors. So the one thing we don’t have to worry about is TAM, is sort of infinite. It’s back to that roadmap question picking, where do we focus intelligently?
Audience Member: Just one follow up. I’ve had every sort of joint replaced as an athlete. There seems to be no loyalty between orthopedics with these HSS, Essex, ONS and physical therapy practices, right? And there seemed to be no, again, here’s a list on three pages of all of the practitioners in your market between New York and Fairfield County. That’s a problem, right? Just in terms of physical therapists, trying to get loyal orthopedics practices to push customers their direction?
Nancy Ham: WebPT for many, many years has been a vocal supporter of the needs of the industry to adopt outcomes measurement. Unlike other parts of healthcare, where there’s many paper performance programs, you don’t really see those in physical therapy. So even government programs, very few people are mandated. So there’s not been that, I’ll say stick, to get people to measure their outcomes. We have software, but others do as well. So the industry needs to measure itself and then use that data to drive improvements because we see it with customers who use our software.
Nancy Ham: You know, John, we might see for example, that you are fantastic with arms and shoulders, but turns out are not so good at ankles and feet. So that would be an opportunity either for you to become more specialized or to invest more in your clinical education in those other conditions, because it is challenging being a PT. You’re treating the full body, every possible thing that can happen. And that’s hard to stay really current and excellent every single condition from a baby to an 85-year-old skier in every age and sports injury in between. So I do think there’s a lot of opportunity for the industry to continue to improve. And you see that more at these larger companies, they’re able to invest in outcomes programs, they partner in research programs, they staff offices of clinical excellence. It is something they bring to the industry because they want to take their outcomes and go market them and get that loyalty.
Audience Member: Yeah. Thanks
Rob Ristagno: Nancy, there’s something you said in a response earlier, I want to come back to. You alluded to the power of doing something now. And can you speak a little bit more about the power of now, how it’s led to your success and any advice you might have for people who like to analyze and think and let things play out before they make any sort of major decisions?
Nancy Ham: I think the ability to move fast and think fast is pretty much the core competency required of a modern company. And we have so much coming at us and we have so much data. I just say, have a bias to making a decision. And if we need to make a better decision later, we’ll do that. But I think generally you have enough data to just decide. Now I’m a little prejudiced. There’s a personality system called DISC, D-I-S-C. So my company uses DISC, our entire management team where all Ds, which they don’t really recommend. And yet we all seem to get along just fine.
Nancy Ham: So yes, make a decision already. Move on. I think the art is just knowing when you’re making a big enough decision, but it won’t be fatal if you’re a little wrong about it, versus there are some decisions around company culture, where we take a lot of time. We’re taking a lot of time thinking about being a digital-first company. Are we going to go all in or all out with the offices? Things that affect people we’ll spend a lot of time thinking about, but things affecting the operations, like what should we do? We try to be pretty fast about those.
Rob Ristagno: Yeah. Hearing your answer, that reminded me of some advice I got once when, when you’re faced with a decision, ask yourself three questions, what’s the upside, what’s the downside and can I live with the downside? And I think that’s what you’re saying there is, if it’s not catastrophic to the business if you make the wrong decision, move quickly and confidently, and you can always correct course.
Nancy Ham: Your customers are waiting. And so decisions that are around customers are the ones we try to make the fastest because they don’t want to wait for a month for you to sit around and think about it. They want you to act.
Rob Ristagno: Now as we go back to more in-person living, as the vaccines are being rolled out, what do you think is here to stay? And what do you think is going to go back to the way it used to be or where maybe there’ll be something in between, both from a workplace standpoint and also, for you, a product standpoint?
Nancy Ham: Well, if you think of healthcare more broadly, telehealth is clearly here to stay. Only 11% of consumers used telehealth in 2019, 76% now are interested in using it. Providers saw their televisits grow from 50 to 175 times and 64% are now comfortable using it. And CMS approved the reimbursement for 80 new telehealth services. Now that’s during the public health emergency, which they’ve extended for this year. We’ll see what happens, but telehealth is here to stay because for so many conditions, it’s awesome for the consumer. Consumers want access, convenience, and price. Access is perfect from your sofa. Convenience, perfect from your cell phone. Price, it’s a pretty competitive. We’ll see how it sticks in physical therapy. To somebody’s point earlier, there is a P there called physical. It is a hands-on therapeutic treatment, but I think people are seeing it can be a good adjunct to your in-clinic visits.
Nancy Ham: So if you need a course of care that’s 20 visits, maybe you alternate, you do two in clinic and one at home, two in clinic, one at home that might help with compliance, because patients who drop out of physical therapy, I mentioned PTs only reaching 10% of the patients it could. And I personally think telehealth is a great way to start to penetrate into that 90%. Do free screenings, do wellness check ups, help people understand your services. So I do think reimbursement needs to come along, which will take quite a while, but I think you’ll see more and more of it.
Rob Ristagno: What about reaching to more rural areas? Is there also some sort of geographic diversification that’s been helped by telemedicine?
Nancy Ham: That’s a great question. So we know socioeconomic determinants of health. So the factor that is most important, most predictive of your risk of premature death is not the actual healthcare you get. That’s only 10% of it, which is very discouraging for people who provide healthcare. In order, the bigger factors are your genetic code, your zip code, and your lifestyle. And so PT is a predominantly white profession. So there’s a lot of good things that have come out of this crisis to focus on making the profession more diverse, but COVID deaths have been significantly more prevalent in minority communities, death rates, among Blacks and Latinos, for example. And so to use telehealth, whether it’s PT or another part to project the resources of the system more effectively into rural areas, into urban areas, into the areas where people just don’t have access, I think it’s a huge opportunity.
Nancy Ham: So there’s a lot of conversation around how PT can be more present in every nook and cranny of the country. And I think that’s a huge opportunity and here’s another part that’s really important. So when you think about opioids and the opioid crisis in this country, you think about where that is geographically. Well, a major study was done that says, in short strokes, the number one cause for opioid prescriptions is low back pain. And yet patients who go to PT three times will never get an opioid. So the single best thing we can do for the opioid crisis, seriously, the data’s there, is to make sure people with low back pain get PT first.
Nancy Ham: And so by making PT more present and available in every nook and cranny, we could actually do something about opioids.
Audience Member: I’m sorry, what was the stat used?
Nancy Ham: So 75% of all opioids are prescribed for musculoskeletal pain, which makes sense. The vast majority of those are prescribed for low back pain, which again makes sense. It’s a nagging, chronic–it’s very painful–but if people with low back pain go first to PT and go to at least three visits, they’re never going to get an opioid.
Rob Ristagno: I like that solution that gets right at the root cause there. That’s amazing.
Nancy Ham: Yes. But being more present in every nook and cranny from rural to urban, to your question, is really a key ingredient.
Rob Ristagno: All right, we have time for one more question from the audience.
Audience Member: I’m just curious, this one shouldn’t take long, is how you see once everybody’s vaccinated and everything is back to at least being able to do things in-person, how do you view going back to an office? Has that changed dramatically in your view? Or do you plan to just go right back in?
Nancy Ham: I think it’s the most profound question affecting every business. And we have made our decision, which is we are going digital-first, meaning that our first emphasis is we will hire you anywhere and you will work from that anywhere. And that everyone in our company will have the equal opportunity to knowledge and career advancement. We’ve virtualized a number of our smaller offices already. Our two larger offices will shrink and become collaboration centers for people to come periodically for us to house customers. So we already made that decision and it was hard for me because I love being in our warehouse, because we’re in a big funky warehouse, like a lot of software companies.
Nancy Ham: And I love the energy and seeing everybody, but the ability to hire anywhere and to ensure that everyone has equal opportunity, that they’re not, as Rob described, that person on the bad phone line straining to hear the conversation, those were the tipping factors for me. And it’s worked great for a year and our employees could not be more clear: People are happy and productive and able to serve our customers just fine at home. And that’s where they want to be.
Rob Ristagno: Nancy, this has been so helpful. We’ve learned a lot and taken away a lot of lessons here. What can we do to be helpful to you?
Nancy Ham: Well, I think it’s just the questions we’re discussing. How are we thinking about our workforces, which is, I think the number one thing CEOs need to think about. If you don’t have great employees, you won’t have a great anything. The questions have been interesting because they always poke at your brain in a different way and you go in and start thinking about it. So you’ve asked some very good questions today that I need to think more about. So that’s super helpful.
Rob Ristagno: All right. Thank you, Nancy Ham of WebPT. This has been the CEO Campfire Chat with your host, Rob Ristagno. To listen to more episodes, sign up for bonus content or take a two-minute business growth assessment, visit ceocampfirechat.com. See you next time around the fire.
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