.jpg)
.png)
Transcript
Marla: [00:00:00] Welcome to the Practice Growth Podcast, Eric. It's such a pleasure to have you here today.
Eric: Yeah, it's wonderful to be here. What a, what a incredible organization, a really cool spot. I love being here. Thank you.
Marla: And we have really big history together. I've worked with you for a long time, and I've gotten to see your incredible change from you started as a clinician all the way to a health tech care leader.
Um, you built an enterprise organization. You sold an enterprise organization, and now you're starting it all over again from scratch.
Eric: Yeah. I've a glutton for punishment.
Marla: Well, tell me a little bit about, uh, why you decided to start over, a little bit about your story, and why you decided to start from the beginning.
Eric: That is a great question. Uh, I truly believe that pressure is a privilege, and gr- growth requires being uncomfortable, and I'm just-- I starve for growth and, and that uncomfortable. That's the opportunity once, um, the fin- fiscal relationship and, and financial transaction occurred at my previous organization out in California provided the opportunity to look for other scalable o- uh, organizations, positions.
Had a variety of folks reach out. We, we had a very successful financial transaction out in California, and it was opportunistic to be able to talk with recruiters, uh, other CEOs, private equity firms, venture capitalists. I- there were probably a dozen different conversations, all of them very interesting.
All of them had [00:01:30] ups and downs and, and, and opportunities. The one that stood out was the opportunity to be the CEO of a new physical therapy organization that provided the opportunity to grow from the ground up, completely from the ground up. That's different than stepping into an enterprise-established role with clear expectations, clear history, clear pathway, a variety of people on the team, and just a budget that you need to execute on.
Having been a private practice owner in my career as a practitioner, understand the complexities and the upside and, and value of being able to start from the ground up and literally start a company. I started the name, Arete Health, started the, the logo, started all of the legal structure, decided where we were gonna operate from, able to choose and handpick my entire team, which is really the most important part for me, and team matters, and the people on our team it's, is really important to me.
So I was also looking for growth, looking for new opportunity, have an incredible private equity firm, NBF Healthcare Partners out of Miami. They've been super supportive. They had a vision. They've been in healthcare operations and investments for over 20 years, and they, they wanted to get into physical therapy, and they see the value in it.
They see the opportunity for creating a legacy, uh, being able to have great outcomes and a great experience for patients. Having been in healthcare in a variety of different areas, they'd never invested in the physical therapy space but see the, the importance of physical therapy as musculoskeletal providers, and they see the need and the [00:03:00] demand and the services, and so they wanted to do something, um, spectacular.
Marla: Yeah, and they definitely chose the right person. Uh, I'd love to know- Thanks ... for our listeners, tell them a little bit about your pathway that you have taken so far up before starting Arete, Arete Health.
Eric: Yeah. So, uh, man, I've been an occupational therapist and have a doctorate in natural medicine. I started in acute care and patient healthcare almost 30 years ago now.
Uh, was worked in trauma, worked specialty, was in hands Claim to fame, um, only-- the only claim to fame is I treated the first hand transplant patient in the United States, which was super cool. Surgery was done by Dr. Rodenbach at the Kleinert Kutz Hand Institute in Louisville, Kentucky. It got really technical in my skill set, and I loved that part of my career is the technicalities.
Got recruited to HealthSouth to run outpatient therapy services. Never did that before. Took the challenge. Thought it was a great, um, opportunity for me to expand my career and to create access to care in a different way. Specialized in industrial medicine, became the national director of onsite physical therapy, uh, for fifty states and six hundred clinics for HealthSouth.
Um, there was a transition at HealthSouth and had a, a chance to, to grow into outpatient as a private practice owner. So I left HealthSouth, went into private practice, owned a practice in-- for thirteen years in Louisville, Kentucky. Went through several iterations, went through the fiscal downturn of the United [00:04:30] States in 2008 through 2010.
The resilience, um, perseverance, I learned all about that early in, in private practice, which I think relates to the folks that I have conversations with today, and to be able to not just sympathize with the downturn and understand how the hardships are of private practice, but really empathize from my own personal experience Went into, um, a financial transaction of my own.
It was time to do something different. Moved to Florida for a short amount of time, was in operations, got recruited back to, to, uh, the Kentucky market for Physiotherapy Associates, an incredible organization. Um, m- many people that you and I know have, have come from, from the physiotherapy days and have grown into CEOs, COOs, executives, financial, uh, investors.
Really a great group of folks. We got, um, purchased by and acquired by Select Medical, and did a short stint there back in occupational rehab and industrial rehab, and then went in a totally different direction and decided that I wanted to go into tech. And so I was doing some consulting for some outpatient organizations, and we were building therapy inside of assisted living and independent living communities.
Really enjoy doing scalable organizations, so my partner and I at the time, we grew 78 outpatient centers in a 24-month period. Wow. All in senior care.
Marla: Wow.
Eric: Totally outside my comfort zone, but I think borrowing from on-site physical therapy and industrial rehab was an easy transition [00:06:00] to the same business model but a different clientele, which is, was on-site inside assisted living communities.
So the number one driver of premature early death in seniors is falls. We don't do a very good job in this country of, one, assessing it, being able to measure it, or doing anything about it, 'cause it's still the number-one cause of early death over the age of 65 for seniors. And my partner and I were r- really curious, like, how do we solve for this?
So we started looking at technology as a tool to be able to drive value and understand where balance issues are for seniors. So we came across a company called Traeger Technologies. Unfortunately no longer in, in business, uh, but they created, uh, a, an entire industry of technology through human performance measurements with wireless technology.
And so there's a lot of wire technology, and it's all really great stuff. This was the first. The founder, um, Barry French Sr., created really free-space movement analysis and being able to capture that in, in camera technology. Kinect would be a term, uh, you know, a technology brand that you would be familiar with.
Um, and so we were able to measure free space movement of seniors in multi-directional movement patterns. It wasn't just forward and back or side to side. It was in all the different directions that you move functionally in life, and we were able to quantify that, and we made significant impacts to seniors by engaging them in a fun, experiential, um, gamified environment through this technology, and so it was fun.
I was not hired by them to build more technology but to create a operational foundation and do what I [00:07:30] love to do, which is scale a business. So the founders came to me. They said, "Look, you're the number-one customer in our space. You have more Traegers and more outpatient than MPT than anybody else. Would, would you come on board as an operator and be our COO and president?"
And so again, looking for a challenge, looking for growth. It was a new opportunity. I'd never raised money before I didn't have to in my private practice. I started my private practice with two weeks of paid vacation, and I just went hope into the wind and, and created a business. So this is an opportunity to, to look for investments, um, investors.
We re- redid the entire technology, user experience, rewrote the entire platform, added new games, brought on a operations team, created a foundation to scale it, um, raised a considerable amount of money. 300 conversations is a lot of conversations to get investors. Wow. Uh, and those founders and early VC folks that understand how to raise money understand the complexities of that.
Would I wanna do that again? Probably not. That was probably the hardest part about my career is raising money, asking people for money. I don't want to do that. But we had a successful transaction, brought in a great operating team. They revolutionized the product again, and, um, I had a chance to go back in healthcare operations, which I love.
And that's... I think we met when I was at Traeger, I think.
Marla: Yeah, yeah.
Eric: You were at BetterPT at the
Marla: time. Yeah.
Eric: And then when that sold, I went back into operations, went to Ivy, where we again got the chance to work together, which was exciting. Great organization, doing amazing work. Uh, I think [00:09:00] when I think back about influential people in my life, there was a couple folks that were there at Ivy in my career that really set the stage for where I am today.
And I had great mentors, and I had great founders and, and coaches along the way, but there was a couple of people at, at, at Ivy that I thought, um, were influential in my career, and I'm thankful for that, and I'm thankful for the experience. So there was an- another opportunity to grow again, and a prior relationship, mentor, friend, someone that I had worked for in my past, called and said, "Hey, I n- I need to scale this company and get it ready for sale.
The founders wanna go to market, and I ne- I need a strong operator to come in. I need a COO." It was a big challenge to go from the East Coast all the way to the West Coast every week for a couple of years, but, but I did it, and I'm thankful for it. And that pressure and that privilege and that growth was phenomenal.
The ability to sit at the table with investment firms, with private equity partners, with private equity, uh, buyers, with other platform strategic physical therapy CEOs, and to be able to really be proud of the work that was accomplished at, uh, Select, uh, Sp- Spine and Sport Physical Therapy was a, was an incredible experience.
There's not an MBA program that gives you that level of experience unless you're at that table and you're in that room and you're having those conversations and you're listening and you're learning and you're being very intentional, and that was a huge, huge, huge benefit for me. It really prepared me for the opportunity to have the [00:10:30] confidence to say, "I can do this private practice model over again, and I can do it with a different perspective and I can do it with these new partners."
And it's not two weeks of paid vacation. No, it's really sophisticated, and it's got financial modeling, and it's got this history and experience in starting over. It wasn't really scary because I was starting over with n- with experience, right? Yeah. Which is different than when you jump into it the first time and just you fail so many times.
And I encourage people to fail. Fail often, but you gotta learn from it and, and you gotta be able to grow from it. And so that brings me to where I am today, CEO of RHA Health. Um, exciting journey. Uh, we've got a five-year Vision ahead of us right now in our current investment, uh, thesis, and continue to drive forward every day
Marla: Yeah.
And, I mean, you had that vast experience where you brought companies and sold them, and you brought them to the level of some of the highest multiples, and now you're going back in. So, you have all that growth and experience to say, "I know what it was like when I started it the first time, but now I'm starting a company with this knowledge, um, what I liked about enterprises, what I didn't like about enterprises, and I get to create my own from the ground up."
Eric: Yes.
Marla: Um, and I think that's gonna be so valuable for us to talk about today- Yeah ... 'cause a lot of people starting out, they don't know what infrastructure to use, what metrics to measure. Um, like you said, you, you fail, you learn, you fail. But you're able to really share all of that information 'cause you've seen it, um, you've seen other people lead it, you've led it, and now you're, you're starting from the ground up to lead it.
Eric: For sure.
Marla: So, would love to know from your perspective, [00:12:00] what is it about some of the enterprise organizations that you, um, see potential, let's call it pain points, that when you now are starting, you know what to put in an infrastructure so that doesn't happen when you get big?
Eric: Yeah, I think the last word that you just used is the, is the word that comes to mind, infrastructure.
I've seen s- organizations that wanna grow quickly, that wanna scale, that they have opportunities in front of them, and, and they, they act on them. What they didn't do is they didn't have early investments in infrastructure. They didn't set up their technology solutions early. They didn't set up their EMR for scale.
They didn't... They, they only took advantage of what the immediate opportunity was right in front of them, and they didn't think about the impact downrange and what that was gonna look like. So, with Arete, what I learned over my experience and time is that you have to start with the end in mind I'm in private equity space, which I love far more than I enjoyed public, publicly traded organizations.
It's a different mindset. As an entrepreneur, I wanna be nimble, I wanna move quickly, and I wanna be able to be creative and have this autonomous thought process. And when you're a publicly traded, it's about stock, and it's about consistency, and it's about status quo, and just all the great things that occurred in the businesses there.
But that nimbleness and, and that entrepreneur minded gets a little bit dampened, in my experience. Other people might feel differently. But at Arete, the opportunity to take that experience, look at our infrastructure early, I started with tech first. Having been in tech, saw what [00:13:30] tech limitations were and, and worked with organizations that were limiting in that.
So tech was where I started, and, uh, being an early adopter of technology, it's not scary for me. I see the value in it and the purpose of it. But I, I needed a, um, an IT infrastructure that allowed me to scale, that had the right... You could be in Google, you could be in Microsoft, you could be in a variety of different types of, um, technologies.
What I found was that Microsoft and my partners at Novus Tech scaled the vision forward five years. We looked at cyber, protection of health information, protection of financial information. Previous organizations got caught up in cyber intrusions. Um, it cost them three quarters of a million dollars and more.
Um, put patient health information at risk, put financial information at risk. And so it was super important for me that cyber be part of the foundation of, of Arete Health. And we knew that we were gonna scale, and we were gonna scale thoughtfully and scale quickly, and we knew that our target market was gonna be a large majority of Medicare and, um, government-funded programs, and we needed to be protective of that information and be able to set ourselves up for success.
Interestingly enough, one of the factors that made the multiple difference at a previous exit Feedback was our IT infrastructure was greater than the buyer's IT infrastructure, and they saw a multiple value, uh, in paying more for the infrastructure that, that was established in the [00:15:00] previous organization that was gonna help platform them to the next level and, and help them grow even faster and be able to do the things they weren't able to do before.
So technology was a big multiplier for us, and so I saw that. So IT infrastructure. Number two is you gotta have a scalable EMR platform, um, and then you have to protect your revenue. And so those were the three things that I looked at, was IT infrastructure, your EMR, and then your revenue protection. And so those are the three things that I invested in early that I see other enterprises delay their investment in, and they have too many different products over too many different brands, and they have a difficult time of being able to get their arms around it, and they're not able to protect the, the, the revenue and the cash that comes from that because they're, they're paying for all these different systems, they're losing control and efficiency, and they're not able to, um, bring information together quickly so that they can make operational decisions effectively.
Marla: Well, that is unique that you started with IT infrastructure and technology because most people are afraid to invest in that and don't add that on until later. But again, your experience led you to, as you said, you sold a company for one of the highest multiples in the industry. You understood that why.
So what is the IT infrastructure? Can you walk us through, you know, as much as you can share of what you've set up to really be that foundation to catapult you quickly?
Eric: Yeah. So we're a young company, seven months in, so we're still growing. So I'll tell you what we're doing today, and I'll tell you where we're trying to get to.
Marla: Great.
Eric: So for us, it was setting up, um, systems. And so y- volume and [00:16:30] new patients and adding clinics is not scale. That's not... That... You can say you're growing, but it's not repeatable, it's not consistent, it's not efficient, and it doesn't create the best margins. So we needed to set up a systems integrities to be able to say that, "This is the way we do X, Y, and Z.
This is how we always do X, Y, and Z. These are the partners that are gonna be connected to our business. We're gonna create systems integrities. We're gonna s- create consistency of measurements, and we're going to hold ourselves accountable to the same outcomes and repeatable processes." That was number one And so we partner with Microsoft.
That's our largest investment when we do acquisitions. Most of the acquis- all of the acquisitions actually, that's our largest spend, is IT infrastructure. Okay. Um, outdated licensures, um, huge risks on cyber intrusion. No, no, no boundaries whatsoever, no systems set up, uh, no data warehouse, no storage of information, hard servers, not cloud-based servers, uh, no redundancies for backups.
There's no fail-safes. We set up all of that upfront knowing that that's where the pain points were and all the weak points are when we go into acquisitions. So we set up our off- our cloud-based services. We're s- we're scaling and creating more efficiencies on our data warehouse. We know that we want to have data integrity, we want to have consistency in data.
We want to be able to measure data over, over every single platform, um, and we want to be able to aggregate that data down to finite components so that we can make [00:18:00] operational decisions consistently. So we also then set up all the vendors where you start to lose... You have leakage in your business from a margin perspective, and that is in paper.
Paper is a huge waste of money, right? So copy, copy partners are a huge waste of money. Uh, number one lifeblood of every PT practice is your referral. How does that come in most of the time? Fax systems. So how do we set that up? Um, are we capturing all the revenue that's owed to us from vendors and from our patients?
And so we have to have card capture and the ability to make that easy and user-friendly and it from an experiential perspective. So we're setting up all these different types of systems, and we try to be as consistently plugging those systems into our primary portal. So one of the reasons that I started with Prompt out of the gate as a non-negotiable really for our partnerships is you have the ability to plug and play each one of these vendors and in the same system.
That's the uniqueness of the solution that I find within the Prompt relationship is that all of those primary points that are customer-driven also then are plugged right into our Prompt solutions, and we're able to pull information consistently out of that same Prompt solution.
Marla: Now, you mentioned a little bit earlier that all of those little areas are leakage that you saw- Mm-hmm
at a big enterprise scale when you were at different companies. So what would you say, you know, give me an example of how much leakage or how much revenue you would have lost, is it that if you have all these different separated systems that you now are setting an infrastructure up that you can, you can eliminate?
Well,
Eric: from a cyber, just [00:19:30] cyber intrusion alone, I remember, um, at least a quarter to a million dollars of cash siphoned from the organization because of a ransomware.
Marla: Wow.
Eric: So that's just, that's just from a intrusion perspective. Another organization, large enterprise, great organization, but the trust and verify process broke down.
Storage, a storage facility housed a hard server plugged into the primary wall. storage facility-
Marla: Wow ...
Eric: where you would put your couch and your boxes when you move. Wow.
Marla: Yeah.
Eric: Yeah. Not temperature controlled. Oh,
Marla: no.
Eric: Not secure. Oh, my goodness. Plugged into a regular- Yeah ... plug, right? Um, all of that was in, was a- another cyber intrusion.
That organization lost seven years of data.
Marla: Wow.
Eric: Seven years of patient information, seven years of financial information, seven years of patient, um, revenue, revenue cycle, all of it lost over seven, seven years because there was no infrastructure designed to be able to house that information securely, properly, in the right environment, and no redundancy, so there was no backup to that.
So that was m- millions and millions and millions of dollars of lost-
Marla: Wow ...
Eric: lost revenue, right? Yeah. And I, I think it took us almost two years to rebound from that from a financial perspective, and to be able to rebuild all that information and to get back to a level set. And there was n- no ability to measure the data, and so our operational metrics, [00:21:00] financial metrics, we're rebuilding that.
So I don't know what the multiple is on that, but if you, if you, if your enterprise value transacts at 12X, every dollar is $12. You could do the math backwards on two years of data loss- Yeah ... two years of, of information, right? Um, simple things. We had a transaction with an organization that didn't have the right partner in technology for f- simple faxes.
When we partnered with Prompt, we went to SR Fax and we were able to then open up the doorway. We were losing 10 evals on average a day per clinic-
Marla: Oh my goodness ...
Eric: that we think went back at least 21 to 24 months based on the historical information from pre-acquisition, to be able to look at the leakage of those faxes.
We were then able to go back and reproduce the fax information in the storage after we bought the business and after we were able to put in our systems technologies and our infrastructure, and we could go back and then find information and find the faxes. We found over 200 referrals-
Marla: Wow.
Eric: Just sitting there
in a 12-week process, sitting there, didn't go anywhere. So your internet service provider matters, your technology matters, and how you move information through your system and how you capture that matters. Uh, and then you have a place to store it so that you can go back and find it in case something goes down, which is the only way we were able to find those 200.
Now, it was weeks later, so my [00:22:30] ability to go back and find those 200 referrals and do something with it, that's lost revenue. Right. So if you take 200 referrals at an average net rate, call it $1,500, over the lifespan of that, that patient, and that's just a small number, right?
Marla: Yep.
Eric: That's a lot of revenue right there.
Marla: Yep. Yep. That's a lot of leakage, as you said. A lot of leakage. A
Eric: lot of
Marla: leakage. All right. So we've got your Microsoft, and you've got your infrastructure with, um, Prompt and SR Fax. What other IT and technologies do you feel like you've been setting up to catapult your business?
Eric: Revenue cycle. Revenue cycle is so digital these days.
Everything goes through electronic clearing house. Everything, you know, 90-plus percent of your billing comes from your patients or your therapist closing out their notes and going to that clearing house, and then the clean claims going out the door. The ability to follow that claim, to be able to manage the denials, the downstream effect of not capturing information upfront from an intake perspective, um, all of that's digital.
All of that's electronically controlled. Having the visibility to that and understanding where our claims are, understanding what went out the door, what didn't go out the door, why didn't it go out the door, what is the net revenue on that, all determines the value of your practice. And one of our biggest drivers of, of KPIs at is, number one, blood health.
The vital sign of your private practice is your net rate per visit. So not knowing how much you're getting paid on each claim, not understanding the, the, the value of the codes that your therapists are billing and understanding what your contracts are matching up, all of a [00:24:00] sudden digitally these, these days, I think from a infrastructural perspective, partnering with Prompt Revenue Cycle gave us visibility, gave us confidence, gave us data management, gave us the ability to record, to be able to go back and have the confidence to not only measure it, but actually do something about it.
And the reporting features are all, again, electronically defined. And to be able to move data and aggregate it and then sp- splice it down into usable parts that therapists can use it was super important for us to be able to drive value in our business.
Marla: Wow. Wow, that's, that's impressive and, um, great to hear, you know, that you're so keenly tied into the data.
Uh, and you said that's really what you feel has helped grow wherever you are. So what are the data points that you consistently look at, that you evaluate, and that you really feel determines the health of your business?
Eric: Right. I've been in organizations where it's overly complexed, right? And there's so many different ways that you want to measure information.
On just a finite level, we try to stick to the basics. We talk about basics all day long. What are the basics of your business? Can you manage and own and be disciplined to manage your basics? And so for us, there's, there's two really critically important metrics that we look at, and this is our North Star for 2026, s- um, is differentiated or diversified coding, so net rate per visit, um, and then productivity and efficiency.
It's, it's important to understand that because there's gonna be clinicians that are like, "Oh, he only cares about productivity." No, we care about creating access to [00:25:30] care. So our, our- we have three, three focus points at RTA Health: creating access to care in the communities that we serve. It's, it's important to be able to open up your schedule and have the right capacity, so when you have patients who call you in the moment because they're in acute pain or the surgeon calls from a post-op and needs to get somebody in quickly, that you understand your capacity utilization, you understand what's available for your therapist caseload today and where you're gonna work people in because you can't give them two and three and four weeks out.
That's not fair to the patient. So we, we focus on creating access to care and the immediacy of access to care, and that's important, and we talk about this as a part of our culture every single day. So it's not about productivity per se, but it is about capacity and creating access to care, and that's an important understanding for private practice owners today.
So we look at creating access to care. So what's the metric? Visits per therapist per day And then we look at, um, our net revenue per visit, right? And that's really the lifeblood of your organization, and it drives all the decisions that you can make. So for instance, therapists don't want to see 14, 15, 16, 17 patients a day, right?
That... You can argue quality of care all day long, or you can argue compliance. I hear it every day. I hear it every day. We hold ourselves to 10 to 12 a day. That's our standard operating model. 10 to 12 a day, we think that's reasonable. Yep. We know that the, the days of six to eight to nine visits per day per clinician, that quote-unquote [00:27:00] one-on-one model that's one per hour, those are the number one practices that are for sale today.
Those are the ones that are struggling to scale. Those are the ones that are having efficiency issues. Those are the ones that are not having any profit margins. Those are the ones whose hard conversation is, "I've been in practice for 30 years, and I'm willing to walk away if you'll just take over my lease and take on my payroll."
Marla: God, that's sad.
Eric: That's awful, right? Like, I was in private practice. I don't want to walk away for take over my lease, right? I... That's probably the hardest conversation I have with practice owners on a weekly basis is, "Man, you've been in practice for 20, 30, 40 years, and you think $75,000 or $100,000 is gonna, is gonna work for you?
Or you're just gonna walk away? Or what if you don't get that?" "Well, I'm just gonna close the doors." "So you have 10 employees. They've been with you for 10 to 20 years, great loyalty. You're just gonna close the doors?" "Yeah. I just can't do this anymore." These are real conversations, Marla.
Marla: Wow. Wow.
Eric: Those are the hardest conversations I have all week.
Talking about finance, talking about metrics, talking about profitability, I don't really enjoy those conversations, but they're, they're just the reality. Having hard conversations with another colleague in my profession who's put their blood, sweat, and tears into their business, that skipped their own payroll, didn't pay their mortgages, didn't get to pay their car payment for whatever reason.
They paid for the employees, right? And they paid for the rent, and they paid for the benefits. They covered their taxes, but they were the last ones to eat. [00:28:30] And they're willing to walk away for takeover my rent. So but they had a great heart and they had great intentions. So one-on-one practice model, eight patients a day, really hard to do it in an insurance-based- Right
practice.
Marla: Cash pay.
Eric: Cash-based- Yeah ... you might be able to make that work. Hard to scale. Not seen anybody do that yet. Love to learn. Trying to learn every day. Cash is a valuable option for us as practitioners. It's hard to scale a private practice at eight patients a day, only do it cash. So net rate per visit and visits per day per FTE.
And then what's, what's the health of your business? How are you gonna invest in the cost of living increases that you want to give to your therapists, your employees every day? So you gotta have EBITDA. You gotta have profit margin that's gotta be healthy enough that you can cover the medical benefits that are gonna go up 10, 15, 20, 30-plus percent a year.
Marla: Yeah.
Eric: Depending on the size of your company, the age of your workforce, man, that's no joke. That's tough stuff.
Marla: Yeah.
Eric: That's tough stuff. How are you gonna give more than 1% raises to your employees on a regular basis? I want to give everybody 5, 6, 10. I'd love to. It's not realistic. Not gonna happen. And you don't wanna a- ask your therapist to see 14, 15, 16 and mandate it, right?
So if you could keep it at 10 to 12. But net rate per visit matters. Profit margin matters. Y'all getting $74 net rate per visit, you're gonna have to see more than 12 in a day for me to cover your expenses.
Marla: So what is the net rate per visit you like to be at comfortably for your practices?
Eric: I, I'd say anywhere between, uh, 90 [00:30:00] and 110, it can be realistic depending on what part of the country that you're in, depending on what your payer mix is, depending on what your contracts look like.
Um, there's a lot of different levers that, that drive that. Most of the practices that I'm having conversations with right now, so Mid-Atlantic, Southeast territory, those are a primary focus. They're in the 70 to low 80s, and they're struggling, right? They're for sale. They, they can't grow. Maybe e- maybe, you know, COVID was a problem and they had to close clinics, and now they've got a lot of overhead that's eating into their margin.
They don't want to let anybody go because they love the people who stayed with them. Loyalists. Love it. It's important. But $74 isn't helping them get to the next level on their net rate per visit, especially when, you know, new grads are asking for 90 to $120 out of school.
Marla: Yep So what are you doing to help increase the net rate per visit when you take- Yeah
these groups over?
Eric: So we really focused in on, um, what are the operational levers, the metrics that you can manage today that doesn't add more cost to your business, and the industry is already telling you what they're willing to pay for, right? So if you just understand and study the industry, the insurance company tells you.
They tell you what they're willing to pay- Right ... for the codes that you bill.
Marla: Right.
Eric: And they're, they're, they're telling us that function matters. They're willing to pay us more value for functional coding, functional delivery of care, which I would say probably nets out higher outcomes.
Marla: Yeah.
Eric: You could probably do the math on that.
The days of ice [00:31:30] packs and cold pa- um, hot packs, important, I'm not saying they're not important, but to be truthful, they don't even get reimbursed anymore. So you're billing a $35 code, and you're billing three codes in, in your, your visit, three to four codes. The insurance company is saying, "We don't value ice packs and hot packs," because they can do that at home.
Marla: Right.
Eric: Exercise physiologists can give that to them. Um, techs can apply it. It's not skilled, so they don't pay us anything. So you, you deliver three or four codes. You only got credit for two or three codes. You lost $35 on that code. So and then the whole thing with PTAs I'm an advocate for PTAs and codas.
Taught coda schools, uh, been in organizations where I've led the company in the most PTAs, and I love having PTAs that drive clinics, right? And I love to see them grow in their career. But the industry says you're gonna get a 15% to 20% haircut every time you deliver care on a federal payer. And then they deliver that care, and it's critical care, and they get the immediate cut, which the industry said they're gonna give us, and then they only deliver soft codes, modalities.
So they got a haircut, then they got $0. Now their net rate is $68 to $74. But, but they're seeing 12 to 15 patients a day, and they're wondering why their margins are so low, and they're wondering why they're having to have hard conversations with operators. The industry is telling us they're not seeing the value in that service delivery.
So the, the opportunity for us is to coach them. The opportunity is to sit down with them and give [00:33:00] them the metrics that they've probably never seen before. In fact, I know some of the acquisitions I've done, they've never seen a P&L. They don't even know what P&L stands for. I've had clinicians ask me, "What does EBITDA mean?
I don't even know what that means." Right? It's not taught in school. It's not part of our business today. Founders don't care about it. They just want to see how many patients they can get on their schedule and give great care and get good feedback, right? And can they pay their bills? So I think educating them on what is a KPI, what are the financial levers, why is it important to look at the vital signs of your business.
We look at vital signs of health all day long as clinicians. Yeah. We should look at the vital signs of our business, and those, those metrics matter. So net, net rate per visit, how efficient are we operating, and are we profitable? Those are the three. There's two other ones that I look at that I think if you're listening and you're thinking about going to market from a private equity perspective or you're gonna be a, a seller, um, two other things are important.
Same-store growth. Can you take the practice that you have today and grow it year over year? Can you continue to add value to it? So we have maturity metrics that we look at, and we hold ourselves accountable to it. And the other is can you do new growth? It can't always be about acquisition. Can you take a gr- a, a clinic from the ground up and make it successful year over year over year over year?
Can you ramp it effectively? Can you get to break even quickly? Can you make it profitable with consistency? So those are the things that private equity is looking for. Those are the things that other platforms are looking for if they're coming to you for a purchase or, you know, are you efficient? Are [00:34:30] you driving great net rate per visit and value in the care that you're delivering?
Do you have good profit margins? Uh, is it scalable? Is it repeatable? Is it, um, consistent? Can you do it over and over, and can you do it without a whole bunch of M&A? If you can do that, those five metrics, you probably have successful healthy practice. You'll probably get a pretty good multiple on it. If you don't do that, your expectation of multiple's gonna go- needs to go way down.
Marla: Yep. Yep, and that's, I mean, that's, it's really good advice because people have no idea, right? They
Eric: don't
Marla: know. They don't know of when they do get to that retirement age or, or whatnot. Mm-hmm. Um, so you so far have grown in the last eight months to 13 clinics. Yes. I wanna make sure everybody knows- That's right
just started eight months ago, and you are already at 13 clinics.
Eric: That's correct.
Marla: So was most of that de novos, M&As? How did you do that growth plan so quickly?
Eric: Yeah. So to go into the outpatient Part B therapy, you gotta have insurance contracts so that you can start billing the care that you're- on the care that you're delivering, and you start to generate cash flow.
So acquisition is, is a primary opportunity for that, right? So we, we went to market with an acquisition first, found a, a platform of clinics, uh, was a, a therapist who'd been in the business for a long time, wanted to retire. He was looking for a succession plan. We were a good partner for him to call his practice.
It was only four clinics. The rest of that was, um, an additional M&A opportunity. Again, three partners. Two are ready to retire, move on. One's still hungry, wants to stay in the business. The [00:36:00] clinicians stayed in the business. The two non-clinicians exited, um, picked up, uh, seven more clinics, and now we do de novos off of them.
So our de novo is operating partners, so they have a minority interest. Have 13, uh, 13 clinics today. We open up, uh, our next one on Monday in North Carolina, and we have 12 more operator, operator-led partnership de novos already plotted out for 2026. So we'll add another 12 this year without doing any other M&A.
Um, 83% of our target market are one to two clinic operators, so not big platforms. So we talk about base hits. Uh, the more base hits you get, the more opportunity to get to a home run. We're not looking to buy businesses, and I tell founders this all the time. I'm here to invest in people You can have all the great business in the world, but if you don't meet my three non-negotiables, we can't do business together.
And I won't be a good partner. We don't want them to be a good partner. And this is how we hire too, and this is how we look at our vendor relationships. So these three things are really critical to the foundation of Arete, which Arete is a Greek term that means excellence and virtue. Our mantra and our mission is to get 1% better every day in all that we do.
We hold ourselves accountable to that as leaders, and we ask our team a- and our vendors to, to work towards that goal as well. So three non-negotiables. So I don't buy businesses, I invest in people. Number one, you have to have humility. Leave the ego at the door. We don't have time for that. I've been doing this too long, I don't wanna deal with that.
Humility. Number two, um, just [00:37:30] because you always did it that way doesn't mean that's how we're always gonna do it. And if you're going through an acquisition, you should be coachable. You should understand that there's other things, other ways to learn, and be open to collaboration and to have conversations with your partners and your teammates and your new teammates.
So are you coachable? Humility and coachability. And lastly, I ask all of our leaders to come to work every day with the mindset of being servant leaders. So I tell people every day, "I'm here for, for you. You are not here for me." So those three things matter, and those are the conversations I have right up front with founders.
Are- do you have humility? Are you coachable? And can you be a servant leader? And if, if that's the foundation, then, then we can be successful. We can figure out the math that goes into the back end of every deal, right? So it's just math at the end of the day. Those three things are super important to me.
Marla: And a lot of people are looking for mentors and growth opportunities- Mm-hmm ... and you're basically saying, "Can we be in this partnership relationship where we're giving that to each other?" Correct. I'm your servant leader and helping you grow and, and helping you learn the new skills that you may have never learned before.
Eric: That's right.
Marla: So what changes for them, and what doesn't change for them?
Eric: Yeah. It's a great question. Um, and every acquisition is a little bit different, and different organizations manage their acquisition relationships differently, so this is just our model. Um, uh, to the best of our ability, our goal is to keep as many people on the team as possible.
We're a people industry. I, I say all the time, we deliver exceptional PT and OT care, but we're really a human [00:39:00] performance and, and people development company. And, and so we're looking for people who wanna grow in their careers. So for us, we wanna keep people on the team, and we wanna help them grow. Maybe it's not in their singular brand where they've been for 15 years, because we're a growing organization, and we have other needs that we want to grow to.
So you might get a chance to grow into a different role at the RHA level over a different brand. So if we can keep you on the team, keep you in the role that you're in or broaden your career, that's our number one goal. Um, number two, y- your brand is likely not gonna change. W- we would like to keep your brand.
We'd like to keep your legacy. It has brand value. It has market value. It has history behind it. It's your culture. We're investing in that. I think the thing I've found over the years is enterprises that invest in and acquire a business, and they tear it apart. They rip out the people. They change the brand.
They rip the Band-Aid off. Everything is different. You don't even look- it doesn't even look like the same company in a year. H- I would- I'm always asking, "What did you invest in? What did you see value in? Why don't we keep that alive?" I wanna keep it alive to the best of our ability. If there are people on the team who are gonna choose differently, I'm okay with that.
I'm okay with that. I want people to be satisfied in their career. If it's with us, awesome. If it's somewhere else, awesome. So it's okay Um, what does change? Your EMR is gonna be Prompt with us. It's, it's Prompt. Your revenue cycle, it's gonna be Prompt Revenue Cycle with us. Um, your IT infrastructure, it's gonna change.
If you're a Google company, you're gonna be a Microsoft company. If you're a Microsoft company, we're gonna change out your laptops, your hardware. We're gonna change out your [00:40:30] vendors. We're gonna centralize that because it- there's synergies to it. It's gonna create efficiencies. It's gonna be a cost savings for you.
It's gonna help your margins as an invested partner who rolled equity. Like, all those things we're being thoughtful of, again, the end in mind. Mm-hmm. How do we package this into a pretty bow? How does everybody get value from it? If you rolled equity and you have an earn-out, maybe you have accretive exit on the, on the second turn.
We wanna think about all those things. So those things will change, uh, because it matters. Um, there will probably be points in the business to begin with. Again, not a lot of early or late, um, investments in some of those things from a technology perspective, so that's all gonna change.
Marla: Yeah. That's, that's great 'cause I think that, you know, people wanna know what-- if I go into this, what is, what's the same- Yeah
and what changes? Um, and I love that you said you really are thinking with the end in mind- Mm-hmm ... and that you are setting yourself up for that potential acquisition in the future. Um, and a lot of people are sometimes afraid to go with a different EMR than the, the big enterprises currently 'cause they think that they can't be acquired by them.
But so I'd love to hear your feedback on that, why you feel that changing to the infrastructure you have is such a strong play for the future.
Eric: For sure. I'm gonna answer that a couple different ways. Um- Change is terrifying for some people. Change is invigorating for other people like myself and my operators.
We love change. We, we invest in it every day, and we'd run for it. We love it. So [00:42:00] it's important to have clear expectations up front. So in my early conversations, that's the, that's the first part of the c- that's the first introduction. There's three non-negotiables, and these are things that will change. If that's uncomfortable-
Marla: Conversation ends
Eric: for the seller, then we're not a good partner. Yeah. And I'm okay with that. And I, I tell people all the time, "Look, we may not do business together. There may not be a financial transaction in our future, but I'm a colleague. My team are colleagues. We're all clinician-led, um, and we're clinical servant leaders.
We'll always extend ourselves to those that we choose not to do business with, and that's okay. They may choose not to do business with us, and we may choose not to do business with them. Perfectly okay. But we want people to win. And it is really us against the industry, right? So to speak. So we're in this together as an opportunity to help one another."
So that's always first, I think, to be clear is to be kind, set expectations early, hold yourselves accountable to your mission and your standards. That's all up front. So that's already the first hurdle. Once we get into due diligence, after we have a signed LOI, you know what we're gunning for as far as a close date, we've already mapped that out, so that's not the hurdle that we have to overcome.
The next hurdle is your team doesn't know that you've already agreed to all of this. So how do we thoughtfully and intentionally disclose this, that at the transaction time point that makes sense for the founders, um, to their team? So for me, it's what are the pain points of clinicians? One is [00:43:30] documentation.
It's easy for me to go to a clinician and say, as a clinician, as someone who's done private practice, I understand what your pain points are. It's not that you don't want to see patients. Your number one reason you went to PT or OT school is you want to help people, but you don't want to do the documentation that goes along with it.
Uh, thus Prompt. So why did I choose Prompt? Because I've been able to experience at least about a 75% reduction in the amount of documentation time required historically and traditionally in patient care and delivery. Number one, therapists tell me, "I haven't taken my laptop home in two weeks." Two- That's amazing
the first time I heard that, I was like, "What? Say that again. What did you say?" "I haven't taken my laptop home in two weeks. I'm able to get my notes done." We're closing notes at .63 days.
Marla: That's amazing.
Eric: It's incredible, right? You're doing, you're doing evaluations in minutes. You're doing follow-up visits in seconds.
Marla: Yep.
Eric: We're invested in the full suite of Prompt, including ambient listening and Sidekick, right? So the ability to have technology listen in, to be able to help craft and construct and to lead documentation so that the therapist is really intentional with their patient, giving great care, creating access to that care.
Therapists are innately seeing more patients because they're not burdened by documentation. So it's important. So when I have that conversation with therapists, like, you can all of a sudden see the, the anxiety level go [00:45:00] down, the high fives and the big smiles. So that becomes the, the easy conversation. So I think from a, an acquisition transaction perspective, Prompt has been a great partner for us so that it's an easy sell to clinicians.
I've not had anybody say, "Oh, no, we won't do that." More times than not, "Oh, I've looked at Prompt." O- Oh, or, "I've not heard of Prompt. That's exciting. Tell me more about it. I want to go research it." By the second call, they're like, "I can't wait to get into this partnership and go to Prompt."
Marla: That's awesome.
Right? That's really great.
Eric: Um, the other is front desk, right? I think there's a version of our history as clinicians in a private practice space where we think technology's gonna take over and we're not gonna have people at the front desk anymore.
Marla: That's not a vision for me
Eric: My mom was in healthcare. She started in administration.
She worked her way up to the assistant to the CEO of a very large corporation, retired very happily. She was proof that, that administrative teammates are super important. They're the first connection with your people, with your patients. They're the front end and back end listeners for your clinicians.
Uh, and they really are the driver of three really critical things for me: patient experience, schedule and refill, the prescription of care and creating access to care, um, and just collecting on patient owner responsibility and helping the patient navigate a complex system of they don't understand what authorization and verification, they don't understand what responsibility is, they don't understand what co-pay, deductible or coinsurance, they don't understand.
So they're the educator of that, and they have- they collect it. [00:46:30] So the other thing that we talk about from an acquisition perspective is that integration of, of your EMR transition is the 85% unburdening of your administrative tasks at the front desk when you go with Prompt for us. Maybe other EMR systems have similar, but for us, Prompt has been an easy solution.
And so now I've covered all the clinicians because I need them and want them to stay. They're the drivers of care. They're really who's servicing our customer. I've reduced their stress that they have to go through integration. And then our teammates at the front desk, I don't want them to leave either.
Scary for them. Oh my gosh, you gotta learn something new. There are some folks who are slow to, um, adopt to technology. They may not choose to stay through a large integration when you're partnering with a company that's tech responsible and tech sophisticated. I get it. I, I do get it. Um, RHA is not for everybody.
We understand that. We invite everybody to be a part of the team. We invite people to learn. With Prompt, there's tons of training. You guys are super good at that, and the videos are awesome, and they're fun. Um, but you got- it's a commitment. It's a commitment. You have to take the time, and you have to be intentional, and you have to create space for your teammates to be able to learn and take advantage of
Marla: Yeah.
And I, I think you're, you know, you're great by showing that and being clear, as you said, clear is kind, in saying, "This is, this is what we're doing." Um, and it sounds great that the people are excited and- Yeah ... they tend to be staying, so- Yeah ... uh, that doesn't always happen through acquisitions, so that's, that's great news for this thing.
Eric: Yeah. I think the one teammate [00:48:00] who gets scared the most is when I say, "Your billing is gonna change." We use RevenueCycle or Prompt. And so, uh, almost every practice has a biller, and whether they do it in-house or they outsource or they have a liaison. So our goal is to, you know, express to them one of the things that RevenueCycle does at Prompt and what are the things we still need to own in-house, 'cause there's still things you need to own.
It's not, it's not 100%. Um, so again, those are the folks we have to have different conversations with and help them through it. Uh, but when they get to see where they pre- become very focused in the RevenueCycle and, and revenue protection, that it's, uh, a... We encourage our employees to think at a higher level and to use their brain from a different perspective.
It's not about task management and paperwork and manual entries. We're trying not to make that part of the future. So unburdening that and really allowing them to operate at a really higher level cognitively is our mission. And most of the time, those folks start to, again, reduce their anxiety. They're like, "Oh, there's a role for me.
They're being thoughtful in that position. Prompt is a great partner, and they're doing all these things, and I get to do all these other things I really love doing more," and that becomes a good partnership.
Marla: Great. And how quickly does it take to take that practice, buy it, and turn it around?
Eric: Um, from what perspective?
Marla: Um, from, let's call it financial process procedure, onboarding, you know, end end, where you're now in a way better [00:49:30] spot for the whole team and you from when the first- Yeah ... purchase happened.
Eric: So I would say the first 100 days are, are our measuring stick for success. And so that's IT infrastructure. That's, um, financial stability.
It's revenue integrity. Uh, it's we don't miss any payrolls. We don't miss any benefits. My goal is always same or better. For those employees, they should get something out of this. Like, they always wonder, "What's in it for me?" Well, our goal is same or better. Um, and then there's the 60, call it 60 to 90 days before we go into full, um, Prompt integration, and that's a thoughtful process.
One, it's the structured timeline for you guys, and two, it's do we have the right people on our team to help us go through that integration successfully? Um, and then there's timing, right? Your financial folks are always gonna say, "I wanna do it at the beginning of the month. Don't do it in the middle of the month.
Don't do it at the end of the month. You're gonna screw up my finances." So just trying to be thoughtful about those things, so, so measuring that out. So the first 100, 100 days, that's really our, our timeframe to make sure all those foundational principles are stabilized and we have an integration process for EMR and RevenueCycle.
After that W- we don't usually change people's operating model. So if they see 30 pa- 30-minute appointments or 45-minute appointments or hourly evals, I'm not too interested in that. I'm not interested in the amount of hours. I'm interested in the quality of the product. I'm interested in the creating access to care.
I'm interested, um, are you delivering care at the top of your license, right? So we don't change that, so that's pretty consistent. What we do is take the [00:51:00] integrity of the data that we're now able to mine and measure and sit thoughtfully with those individuals to show them where there's upside and value in the, in the care that they're delivering from an outcomes and clinical perspective, and then from a financial fiscal responsibility perspective.
One of our five, um, pillars at Arete Health is we, we want our teammates at all levels to have a better financial knowledge of their own finances and the finances of the organization. We don't sway away from that. We don't hide behind it, and we encourage people to really understand their own financials.
When we offer them 401with a financial partner who can they have conversations with. We offer them HSA. We offer them incentive programs. We offer them investment potentials. But we also need them to be smart about how they're operating their business with us as well. So we, we do ask them to understand all that.
So once we get that information out in front of them and we can sit thoughtfully with them and educate them, then it's just about holding ourselves accountable to the outcome. So from beginning to end, it's 100 days matters. We were able to take a practice, uh, from $74 net rate per visit to almost $90 net rate per visit in about two quarters.
Marla: Wow. That's great. That's a b- that's a huge change. Um- It's
Eric: 15 to 20% just in financial growth
Marla: Wow. Yeah. I think a, a lot of people strive their whole, their whole professional career to get that. So that's, that's really impressive to do that
Eric: Well, we did it without extra expense, and we did it without changing our payer mix, and we [00:52:30] did it without any negotiating of new contracts.
Just simply the answers are in the business today. Can you figure out where the solutions are? Can you read the tea leaves? And can you get people who are coachable t- to listen and to learn, to be able to grab the tea?
Marla: And that's what happens when you have good data, you have access, everything is interoperable, so it's all in one spot, and you have really bright people who understand the data to teach everybody else.
Eric: Listen, I think the practices of the future, if you don't understand your data, you're not gonna be successful, and you're gonna end up selling to people who do understand their data
Marla: Yeah
Eric: And then they're gonna be held accountable to the data because it matters.
Marla: Yeah.
Eric: And I, I think as clinicians, it's important that we start to think about our business in a more sophisticated and even financially operationally driven business.
We can still be compassionate, and we can still be passionate, we can still deliver amazing care, and we should. But at the end of the day, we are really the brokers of two currencies Right, we have the bur- the, the currency of the patient care and our teammates in the field level, and then we have the currency of investors or loans or debt or whatever is helping drive the value of your business today.
And you have to be r- responsible and thoughtful about that. Right.
Marla: And how many clinics do you plan or intend to grow to, and where do you see a good EBITDA at?
Eric: Yeah. So, uh, over the next five years, 55 to 75 clinics is reasonable for us from a strategic perspective. Could we do 100? We could. Um, our goal is growth [00:54:00] strategically and smartly with the right people, not just putting dots on the map.
So 55 to 75 between our de novo strategy and our pipeline of M&A opportunities, I think is realistic in our current financial turn with my current investment partners. They could choose to do longer investment. Typical PE is three to five years, so I think that's reasonable to do that. We, we benchmark ourselves to a standard of maturity.
We know by square footage how many clinicians that can fit in that space, what our creating access to care model looks like so that it's quality care delivery and it's not, quote-unquote, "burnout of clinicians." Um, we could debate that term all day long, but I think that's a reasonable opportunity for them.
So we know that clinics that are doing, uh, 700,000 a year in revenue can comfortably and strategically get to about 250K in EBITDA. So if they're doing a million in revenue, they're probably only gonna get to about 300K in EBITDA. Seems to be the sweet spot in the industry, 250 to 300K of EBITDA. We know that we wanna be around 2,000 to 4,000 square feet in our model, and that allows us to get to our maturity in our practice.
Um, then we're, we're just sub 100 on our budgeting for net rate per visit. So if we go higher than that, then that's just more on our profit margin.
Marla: And people probably listen to this and say, "This is, this is amazing that he can do all this. He knows all this." How would you guide them to learn all of this information?
I mean, you did it through years of- Yeah ... experience.
Eric: Yeah. First, first off, um, be [00:55:30] okay with failing. Give yourself permission to fail. Try a bunch of things. Number two, stop listening to the people who are never gonna get to the level of success that you wanna get to. They've never done it. Why would you listen to them?
Why would you listen to people who have never achieved the things that you wanna achieve? They don't have any experience whatsoever. Stop listening to them. The model is clear. There's case example after case example. There's history, 40 to 50 years of clinical history that shows that these things are consistent.
Here's an example. I had a board member share with me, um, a story about something that we experienced in 2016 Operational metrics, KPI performance. What was the vision? What, what was the strategy? What did the business look like in 2016? It's exactly the same as 2026. It didn't change. We're still, we're still delivering care.
We're still seeing patients. We're still counting volume. We're still billing insurance companies. We're still collecting. We still have the same at, at NRPB issues. We still have the same margin goals. Clinicians are st- practices are still transacting at the same multiples, plus or minus a couple depending on their, your practice.
It's, it's doable. Stop listening to people who have never achieved it. Fail. Stop listening. Go out there and try it. You need three people in your life. All right? So these are the three people in my life that helped me get to where I am. These are the [00:57:00] three things that I tell people all the time. You need three people.
One, you need a coach. You need somebody to tell you the hard things that you don't want to hear, but they know how you're gonna get to the goal that you want to achieve. So get a coach and be coachable. Number two, you need a mentor. You need somebody who's already done what you're trying to get to- Yeah
because they'll shortcut your learning, and they'll take away some of that pain. You still need to have pain, but they're gonna take away a lot of that pain, and they're gonna help paint the, the picture for you so long as you're willing to do the work and you're disciplined to get there. And number three, you need a voice You need a voice to put you at the table in a room you've never been in.
Marla: Mm-hmm. That's a good one. I don't hear that one often. A
Eric: lot of people put you in the room. Right? So how do you get there? One, you have to have the right mindset. You have to be coachable. You have to be disciplined. You have to be willing to grind it out, and you have to be willing to do the work that other people aren't willing to do.
Marla: Yep. And I would have one more, 'cause I know you do this very well. You have to be an amazing leader that people wanna follow- Mm ... because I think especially in this business, it starts from the top down and culture, and I know, I know you personally, and that's something that when you start a company, you've got 10 people asking to be part of it.
Eric: Mm.
Marla: So I think that's a testament to leadership and to how you always treat others and be a servant leader.
Eric: So I'm terrible at accepting a compliment, but thank you. I'm [00:58:30] blessed to have a rich, broad, and deep network of incredible servant leaders who are not only talented clinicians but really smart financial people, bankers, FPNA, investors, PE, um, business owners and leaders.
I, I want to learn and I want to grow, so I'm, I'm, I'm good at listening, but I want people to win, right? I want people to win. I want them to grow. I'm blessed to have people on my team today. We've worked together in multiple organizations. I'm blessed to have a, a pipeline of talent who wants to come and work for us.
I just can't get there big enough, fast enough, um, which is, you know, a good and a bad problem. But I'm also really happy that if I don't have a position for you today, I'm gonna reach out and make a phone call to somebody that maybe can help you get there in the direction that you wanna go. So yes, for us it's about people, and people drive culture.
Um, systems don't drive culture. Processes don't drive culture. Politics and finances don't drive culture. People drive culture. And in your clinic, you have- might have a different clinic culture than your complementary partner down the road who has another clinic who has a different culture, but you have consistencies within that culture.
I'm proud to say that in our short duration, we have 99% retention.
Marla: That is a phenomenal number. It's
Eric: almost a year into ATI. It's almost a year. We have 99% retention. [01:00:00] That s- tells me volumes about the quality of the operations and leadership and the people that are at our clinic level every day delivering care to our customers.
Volumes. We have better than 90 on our NPS scores in all of our clinics. Tells me about the quality and the character and the enthusiasm and the, the culture of the clinicians that are driving care every single day at our, at our practices. Not a big company. We don't need to be the largest company in, in America, but, but we're really proud of retention, um, NPS scores, and the people that are on our team
Marla: Well, it sounds like you're on your way in that sense of you really are being thoughtful intentionally for the way you started it, the way you set it up, the way you put culture in place, the way you acquire and bring everybody into your ecosystem, um, and then create good leaders and, and grows and mentors.
So I think that really, for me, is one of the, the biggest onlookers and observers. Uh, a lot of people, y- they just strive to have one clinic, uh, and they don't think beyond that, or then they accidentally get to five, or they start to get to more. You're very intentional about it, and I think it gives hope to others that you can actually start with the end in mind of being a large organization and culturally great large organization, you know, um, being able to spread that throughout.
Eric: Yeah. I think 10 years from now, if people look at RTA Health on its trajectory, and they still have better than 90% retention, they still have better than 90 NPS scores, um, and they continue to, to operate in a [01:01:30] fic- e- efficient and, and profitable, then, then we were successful. And more importantly, if someone else in our business today is the next CEO, I know that I won 'cause in 10 years I don't need to be the CEO.
If I- I'm great, awesome. If I am, people thought- think enough of me and I'm still driving value, I think that's great. But if somebody in my team today or tomorrow grows their career and that's their aspirations and they get there, man, I won.
Marla: That's richness.
Eric: Uh-huh.
Marla: Well, thank you so much. I can't tell you, this is so valuable.
The nuggets that you just gave today are ones that people would have to learn over a lifetime. For sure. So really appreciate all your insight, all your thought, um, and your ability to think big and really start, start over, but start right and start small and grow quickly.
Eric: Yeah. Thanks. It's been incredible.
It's been a great journey. I appreciate the conversation, as always, and I look forward to the, the next, uh, journey with Prompt.
Marla: Yes, and we'll have to have you back on when you're at the 50 and say, "Okay, well, what's, what's it now-" Yeah, 50. Yeah ... feeling like to 100, to 20, to 200?
Eric: For your listeners, I got a tour of Prompt today, and, uh, they have a gong.
And so my- at 75, Marla, I'm gonna come back here and ring the gong.
Marla: Ring the gong. 75. Next podcast. 75