Broadcasting way too early from three
separate Wi-Fi connections.
It's PT Breakfast Club with Tony Meritato,
Dave Kittle, and Jimmy McKay.
All right.
Happy Thursday,
July ninth for PT Breakfast Club.
I'm Jimmy McKay.
That's Dave Kittle.
Tony Meritato is holding down the fort.
Didn't he have some people out on
vacation?
He's holding down the fort.
Um,
today I want to talk about a text
exchange that you shared in the group
chat.
And I don't think there's anything special
about it.
And I think that's why I want to
share it is there's nothing special about
it,
except I think sometimes people over
complicate this exchange where I think
your exchange was just simple and basic
and nothing flashy about it.
So like set the stage, who was this?
And like, just like, you know,
paint the picture.
Yeah,
prospective client that was reaching out.
And if someone is not always,
but it doesn't matter the age always,
but someone who reached out that's like
twenty or thirty,
like they're typically they're like a
little bit more in tune.
So they're usually saying things like,
do you take my insurance?
But then they'll double down.
They'll say, like,
are you guys in network?
Because they probably got burned or they
got surprised elsewhere recently or before
with like.
and we never want that we never want
someone to like come to our office and
then find out that we're out of network
right so we are like over we want
to over communicate up front it reduces
conversion rates but it also results in
like no poor online reviews about billing
or you know nefarious activity or secret
you know like um bait and switch whatever
type of stuff so it was a prospective
client that had reached out um obviously
in this example like the diagnosis is
irrelevant so
they were in a text exchange.
We were in a text exchange and they
said, hey,
would this be in-network or
out-of-network?
And then we said, we're out-of-network,
are you only looking for the lowest cost
slash in-network, question mark,
or fastest results, question mark.
Now,
the in-network practice owners out there
will not like that because I'm kind of
framing us as faster results,
but arguably,
if you had more one-on-one time with more
patients,
I believe you can get results faster.
Now, of course,
in-network practice owners that have
twenty, thirty years of experience,
they can probably get faster results than
I can, even if they're treating, you know,
three patients or four patients at the
same time.
Right.
Because they're just so experienced and
they're way more efficient and all that.
But I'm talking about like staff P.T.
compared to staff P.T.
across the country.
anyway so that's how i wrote it then
this person wrote back in network so i
i asked hey are you only looking for
the lowest cost slash in network question
mark or fastest results question mark they
replied in network my out of network
deductible is super high so that's this is
totally fine but we want to like flush
this out like we want to make sure
um
we want to communicate and get clarity on
like the person and there's nothing wrong
with this like they're just a little more
cost conscious like if i was i think
this i think this person reaching out was
like in their twenties right so if you
don't have your parents paying for
everything and you live in new york city
and you're and you're in your twenties i
totally get it if you have out of
network uh and not a network deductible
that was like i forget what it was
for him but it was um
It was probably I think it was closer
to ten grand.
Right.
So it's like you got to pay ten
grand out of pocket before you're out of
network will cover at eighty or seventy or
one hundred percent or whatever.
Right.
So when I moved to New York City
in twenty twenty in twenty fourteen,
I I could put myself in these shoes.
I totally get it.
Right.
So.
this this individual had you know said
that they're specifically looking for in
network now at that point um we're not
going to book them or anything like that
because we know that we are not in
network and we want to be completely clear
so then i wrote totally understand within
network the therapist is usually treating
two or three or four plus patients at
the same time if you ever get frustrated
with that model and want more time and
attention
feel free to reach back out to Concierge
Pain Relief.
And I was actually,
one of the reasons why I shared this
with you and Tony in the chat privately
is because they replied thank you with an
exclamation point.
I mean, that's great.
I feel like, hey,
we've established some communication where
this person is budget constrained and
that's totally fine.
We don't want to make people feel bad
if they can't afford us or they don't
want to pay out of pocket more to
work with us.
That's totally fine.
Even the in-network places,
we've talked about this before,
even the in-network places are now
stopping to take,
they're not taking some insurances, right?
So they're not taking GHIs and they're not
taking some of the lower paying.
a lot of them are dropping
UnitedHealthcare.
So the beneficiaries of those plans across
the country,
even in New York and New York State,
New York City,
but also across the country,
all those practices can't serve everyone
either.
They are choosing not to serve everyone
because the plans are just lower.
They're just so low that it doesn't even
cover their costs to deliver a visit.
So I liked that this person wrote back,
texted back, thank you, excellent point.
And now...
i've also foreshadowed by the way like
they could they could go somewhere and
have an amazing experience at some of the
other network practices in the in the city
where they go for they have thirty minutes
one-on-one with the pt then the next
thirty minutes is like
some of the therapeutic exercise with like
a tech or an aid which obviously is
not not really legal but like and they
still bill they still bill for that's
another conversation but i planted a seed
in this person's head this is this is
obviously on purpose i planted the seed
and i said hey you know when that's
totally cool and i don't want to make
someone feel bad but if you're going to
go in network that's totally fine get it
but
But that model is going to be typically
the therapist treating two, three,
four patients at the same time.
And what I oftentimes hear now recently
is,
patient will go and have an amazing first
visit.
And they'll be like, oh,
the first visit was like one on one
for like a whole hour with the therapist.
And then I went back and then it
was twenty seven minutes with the first
therapist.
Then I went back for visit number three
and it was a different therapist.
And that was also thirty minutes only
total or whatever.
Or or or they say I went back
for visit number three and my therapist
was treating for four people at the same
time.
So that, unfortunately,
because of the crunch in payment
reimbursement,
a lot of these practices have to make
it up on volume.
You know that.
Everyone that's watching or listening
knows that.
And therefore,
they're delivering sometimes, oftentimes,
not always, but oftentimes,
the network practices have to deliver more
on volume.
And when it's more about volume,
then you can't deliver a consistent
product or service.
meaning the services, the product.
You can't deliver something that's
consistent.
And when it's not consistent,
you get people that say,
the first visit was amazing.
It was one hour with Dr. Tom.
Whole hour, one-on-one.
I couldn't believe it.
It was amazing.
I'm going to stay forever.
Visit number two.
Oh, now it's like,
thirty minutes and it was like a little
rushed or a little busy, but like,
it was good.
It was good enough.
It was decent or whatever.
It was cool.
It was good.
It's fine.
And then visit number three,
it's a different person.
Now the second therapist, Dr. Mary,
is asking me all these questions that I
already told Tom twice,
and they're in the medical record,
in the EMR.
Dr.
Mary is asking me all these questions as
if they didn't talk and didn't
communicate, or it's like new exercises,
or it's redundant stuff.
And so now it's like, oh, that's like...
So now the person that's going to book,
the patient that's going to book visit
number four and five and six or seven,
or if they're making them book all the
visits up front or multiple weeks up front
before they leave,
now there's doubt in their head.
And they're like, I mean,
is this going to be like a wild
card every time I come in?
I want it to be consistent.
And that, unfortunately,
is in a nutshell why...
What's the stat like?
Ninety one percent of people don't finish
their plan of care.
I mean, that's part of it.
There's a lot of other things.
But let's let's let's banter.
Let's go back and forth on this text
and this whole kind of like scenario.
Well, I mean, Larry,
I just had a conversation with Larry Benz
not long ago,
and he talked about that that.
Visit three drop off,
which you just sort of what everybody
says, oh, it's visit three.
Why is it visit three?
Walk me through that.
And that's one example.
And but that is the prevailing example.
I, of course,
like to break everything down or boil
everything down.
Let's go back to what you did.
You didn't frame in or out of network.
You framed quality versus question mark.
That's even better.
Or I just...
Because I want to be nice to the
in-network practice owners out there.
I respect them.
So I'm framing it as...
different experiences so i don't i don't
want to i don't want to i don't
want to i don't want to say that
we're elevated and i don't want to prove
that so like what you did was you're
like hey that's great totally understand
that in your brain you're like i was
twenty as well if that was the choice
i'd probably be making that one just so
you know and so you're foreshadowing which
is a great line too which is like
if you haven't done this it's also great
too because they might be like yeah i
don't think so and then when they get
there they're like oh
this is exactly what he said.
And that's like exception-y.
And some patients reach back out in two
weeks, two months, whatever.
And they're like, oh, like I...
it started off good or,
and obviously I'm not going to mention any
names or practices, but like they'll,
they'll reach back out and be like,
Oh my gosh, like you, like it was,
it was,
it was better than I thought it was
going to be then.
And then it turned into exactly what you
said.
And it's not even always practices.
Sometimes it's like you have great
therapists working in a model that there's
no possible way that they could do that
because their hands are tied.
so what you what we're really doing or
what we're really talking about is
expectations versus reality if you've
never been to pt and you've only seen
it on tv or heard it from a
friend you're sort of expecting something
like that you've heard and then when you
get there if it isn't like that you
might give it another chance or two but
then we're humans and then we're gonna go
i'm not feeling better and i've already
invested time and effort and money
And my expectation does not match my
reality.
Therefore, I leave.
And that is such a human response.
I was reading something yesterday where
they said,
if you launched a video game where seventy
percent of the people played the game
three times and then never played it
again, would you blame the player?
No, you blame the game.
You'd say the game shocks have redesigned
the game.
But we love to go,
no one does their home exercise plan.
And I'm like, okay, same thing.
If you developed a service,
you sell pizzas and people try you three
times and then they ghost you.
I would start changing up who's cooking
the pizzas or something or start looking
at yourself a lot.
And we in healthcare don't do that for
some reason.
I don't know why.
obviously like it this is so we've talked
about this a million times and it's like
so challenging because a lot of this in
my opinion goes back to payment
reimbursement but it's also like let's do
a quick exercise right so if you're in
that busy type of a clinic and the
patient you know jimmy's the patient and
we're at upstate physical therapy just a
fake you know acme physical therapy place
up there and it's a network and jimmy
has that experience like good like great
first visit
Second visit, good.
Third visit, like below expectations.
And now questioning, like,
does this even make sense to continue to
pay?
And why would I drive here and park
and pay a twenty to fifty dollar copay
when I don't know what to expect?
Take time out of work,
get babysitting for the kids,
whatever it is.
Right now.
Now, Jimmy, the patient is questioning,
like, does this even make sense?
And.
yeah so it's it's a little bit on
the therapist but they were hired and
coached and trained or should have been on
how to navigate whatever model they might
be in
So it's like part of the health insurance,
you know, third party payers.
But again, we know that's not changing.
But right.
Maybe it's also it's.
Yeah.
Well, no.
Right.
But then then you can say, OK, well,
part of it is the payment reimbursement,
which is like kind of one of like
one or the main root causes of all
this, this whole situation.
But in like the day to day reality,
it's like, OK,
some blame maybe goes towards the
a staff physical therapist or the front
desk that's now on Jimmy's visit number
three, it's a different therapist.
And now Jimmy's got to explain everything
all over again to a new therapist because
they don't communicate because they're so
busy,
because there's so many patients per day
and so many notes.
So then you just like, OK,
so there's a little maybe there's a little
blame for the therapist.
Maybe there's a little blame for the
admin,
the front desk or the clinic director,
which is typically a physical therapist.
But then for us,
so I'm a practice owner, obviously.
And like the buck stops with me.
Like ultimately it's,
if I own that upstate physical therapy
practice that Jimmy's coming to,
it's my fault.
It's my fault because I am like,
participating in that model I didn't uh
coach or train my therapist well enough to
navigate like the switching or the front
desk and they didn't communicate it I mean
where my first job dude in New Jersey
sometimes like patients would be switched
patients would get a confirmation over
text or email about hey you're going to
be seeing Dr Dave tomorrow and then they
come and uh
I was never sick, but like if I,
if I got too busy or whatever,
like sometimes it would be like moving
patients off my schedule to like Nick,
the PTA.
And it's like,
of course people don't like that.
Like they got a notification that says it
was going to be with Dave.
Now the show of,
and now it's with Nick that they don't
know as much or don't know as well.
Sure.
I mean,
no wonder that we have this chronic issue
in like crappy, uh,
delivery of the service like the product
of physical therapy this is where and
there's multiple arguments that happen
we've seen them a hundred times they
happen they go round and round in circles
they go nowhere this is where people
comparing pt to personal training it's
where personal training like kind of gets
it right a lot that's your trainer forever
like how often does a personal trainer
switch a client maybe in extreme
circumstances i don't know i've never used
a trainer i've used a coach before
And I'm not re-explaining the last six
months of what we've been doing or my
weird isms that maybe my coach has never
even explained to me before.
Maybe he's just like, oh, I get Jimmy.
I understand how he works.
I pay the coach.
I get the coach.
But in healthcare, in PT specifically,
that's not the case.
I don't know the percentages of how often
you see a different...
That'd be a good stat to have if
you had a large enough data set.
How can, what's your, what's your,
what's your clinician patient batting
average?
Like how often is it bang?
You know,
in baseball pitchers have a catcher.
That catcher might not be a great hitter.
Pitcher's like, I don't care.
I like how he catches the game.
So I'm out there for seven innings,
maybe more,
hopefully that's who's catching.
And that's why,
because we know each other.
We understand.
I don't have to say anything.
I give him a look and he's like,
don't wave me off.
Why do you think in the in-network PT
world, there's that switching?
Oh, it's just, like you said,
you have to pull the volume lever,
or you've got three clinicians,
thirty-three clinicians.
Yes, and?
Oh, am I missing something?
I don't know.
So, also, like, okay, Jimmy,
if you're paying a twenty dollar copay,
Like,
I feel like there's some what's the word?
I feel like there's some I don't want
to say disrespect,
but I feel like there's like we know,
like if you're paying a twenty dollar
copay and we're going to move you around
to a different clinician on your way into
the clinic,
like you don't even know what's happening.
All right.
or that morning or whatever and you're
busy so like you don't see the update
or whatever and you're so you're still
going to come and then you're like oh
i thought i was with dave and now
i'm with nick or mary or whatever i
haven't met them before so now and now
i got to explain everything again because
you guys don't communicate because you're
so busy um it happens way more in
in network and it's like okay would you
be just paying like a twenty dollar copay
now can you imagine if we did that
where someone's paying three fifty a visit
right what's the difference expectation
I paid for this and got that,
and I don't like that.
I feel flim-flammed.
But it's like in these in network world,
these front desks or this therapist or
whoever are like, ah,
we're just like moving around or whatever.
Cause it's almost like, well,
it's so you're paying so low out of
pocket.
You have minimal skin in the game.
So it's kind of like,
I'll just move them around wherever.
And it's kind of,
it's kind of disrespectful.
Yeah.
I have to solve a problem,
which is like slots and providers, right?
Like I, you know, this person's out.
So I've got to do this today.
It's not an easy problem.
It's a volume problem because you've
chosen volume.
You've chosen volume as the thing that you
have to do.
Based on this thing, and again,
I'm not trying to pimp it too hard,
but Larry Benz is writing about this
stuff.
This invisible...
The article he had this week was about
this.
Who's in the room with you when it's
like clinician, patient, payer.
They're in the room.
They're in your brain.
They're on your shoulder going,
we're not going to reimburse for that.
And then you change your...
I want Larry to do a video set
where there's a devil and an angel.
The devil's like,
we're not going to reimburse for that.
So do you think it is some disrespect
of or like the because the because the
person is indirectly they're paying for it
through their insurance premium.
But in terms of that thing,
I think it's I have if I'm a
clinic director and I've got ten
clinicians, why do I juggle people?
Because I'm when I'm given a hammer,
the world is full of nails.
I have to move people around.
What would the other option be?
Cause my goal is I need to stay
above water.
So that person's got a slot for an
eval or to see Jimmy again.
Yeah.
Yes.
It's about volume.
My point is, okay.
So, so, um, Ben Boggy has a practice,
a big location in San Diego.
I think they have like eight or something
therapists there.
So probably, I mean, it's bigger and any,
and they're doing really well.
He's got multiple locations and it's all
cash.
It's like,
I think they're charging around two fifty,
three fifty per visit.
They sell packages, whatever.
If you were in San Diego,
if you were a client, Jimmy,
of this practice,
they're not going to just switch providers
on you in the five hours leading up
to your visit and not tell you.
And you come into the office and you're
like surprised.
And because part of it is you...
Are more,
I think part of it is you're more
valuable because you ponied up a lot of
this money out of pocket directly and they
want to over,
they want to over communicate like, Hey,
listen, so-and-so is not available today.
Do you want to just reschedule this for
a different day?
Or do you want to try a coverage
visit with one of our other therapists?
And here's their name, here's,
here's their bio, all that.
Because they make more per person so they
can be... Right.
So Ben's place,
if you can use that example,
is like I'm seeing eight a day versus
another place I'm seeing sixteen.
I'm just making those numbers up, right?
It's not as easy to find a new
slot when you're seeing sixteen,
especially if that person's like,
I need to be seen today.
So there it is.
It's you've chosen time or volume.
And when you choose volume,
there's less room because you've sold more
of your time in smaller increments.
So the volume part and then through
in-network insurance,
the practice is going to make less per
visit and less per plan of care.
So they're just forced.
Their hands are tied.
Right.
And they...
Also know that there's it's just easier to
fill that.
Like,
let's say Jimmy gets pissed off on that
third visit and he's like, you know,
I can't.
And then he drops off,
which happens all the time.
I mean, it happens.
We get some drop offs and we're not
the right fit for everyone.
But obviously it's way more in the network
world.
So then now Jimmy,
the patient drops off visit number three
in the network world.
They don't care as much.
Why do they not care as much?
Thirty eight people behind me.
Exactly.
Because it's a low barrier to entry.
It's in network.
They accept a ton of insurances.
There's always going to be the next
person.
All right, next person, step right up.
You know, like McDonald's.
Whereas a cash practice,
it's like for us to convert somebody to
then pay two fifty,
three fifty per visit out of pocket or
for the eval and then sell a package,
whatever.
Like the stakes are a little bit higher.
I don't know how much higher,
but they're higher.
Do you estimate your customer acquisition
costs?
Yeah, I haven't updated it in a while.
I would love to see yours.
We can use AI.
What would be average cash pay clinics
customer acquisition cost versus an
in-network customer acquisition cost?
I would love to see the difference in
that.
I mean,
my expectation is yours is way higher.
Yeah, of course.
So round figures,
it used to be like a hundred dollars
and sometimes it goes to above a hundred
dollars and sometimes it goes down to like
twenty six dollars.
But in general,
it's like it's like a hundred dollars cost
per lead for someone to like either call
in or write into our Web site.
which is the lead just to get their
contact information,
not then the time and effort to call
them and then convert them and then book
them and then make sure that they show
up or home visit or office visit or
whatever.
So acquisition cost is probably closer to
like two hundred bucks.
So you're breaking even,
you're at least in the black on the
first visit because you're like,
I know what I charge,
I know what it costs to get a
patient
Well, still a loss because of labor,
right?
So if you take away the acquisition costs
and labor, then, but yeah,
by visit two or three, there's profit,
right?
But the point is to be like
over-delivering.
That's why it's not falling off.
Exactly.
You just lost money on this experience.
Yeah.
That would be a great start to see.
um okay so that was good that we
talked about that i thought that one
little screenshot says a lot and i think
there's a lesson in there for people
whether they want to learn it or not
and i don't remember hearing that at all
i'm not saying it doesn't happen but in
pt school i don't it's not really the
place for it but uh yeah now just
just to close the loop on this if
you're a cash practice owner out of
network owner and you have people that
balk at your pricing
and they want to go in network or
they want to go somewhere cheaper or
whatever, feel free to take that text.
You need to be texting or emailing that
or saying it to them over the phone
and then putting it in text or email
so they have it digitally so that they
can refer back to it later.
Yeah.
you absolutely need to be saying something
like that because why are you different,
right?
You're going to say, oh, well,
priority scheduling and all you have to do
is text me to schedule.
And if you want to go to upstate
New York PT that takes your network
insurance, that's fine.
But then you got to like call in,
you know, press one, press two,
get the person on the phone.
They're going to put you on hold, right?
So it's just,
there's just more resistance to the volume
game and that's fine.
But so you got to call out the
things that you personally
We talked about it before,
like features and benefits.
You got to call out the things of
like what they get with you or the
challenging potentially issue type things
that they might experience if they go to
one of your competitors.
So you could say it in like a
nice playing field kind of way,
but call it out.
I'm in upstate New York.
I got one nice restaurant in my town.
One.
If I call and I go, hey, man,
you got a reservation?
And they're like, yeah.
And I'm like,
what's average cost of dinner?
And they're like,
eighty three dollars a person.
I'm like, my man,
I got McDonald's down the road.
Why wouldn't I go there?
They're going to go have at it and
hang up because they understand what they
provide.
I need you to start thinking about that.
It's McDonald's isn't bad.
It's just different.
Because after I play a beer league hockey
game and we get out at midnight or
one in the morning,
that nice restaurant ain't open.
And what am I doing?
But I know what I'm getting.
So understand that you know what you're
getting.
I want to change topics, but not really.
This is another screenshot that you
shared.
So I'll put the stat on there.
Gyms have a new third place.
And I brought this up a couple weeks
ago where I said,
if I were opening a gym now and
I gave the things that I would do
outside of squat racks, dumbbells,
treadmills,
I would also have some things to make
it a third place.
And just for context, again,
the third place is...
The first place is home.
Second place is work.
And this is where you spend time or
where you seek out.
Bars used to be the third place.
Still are, probably, right?
And then which big company was trying to
be the third place, let's say,
in the last twenty years?
Like a brick-and-mortar place?
Which company was trying to be... No,
that's digital.
Which company was trying to be the third
place?
Do I know it?
Is it a bar?
No, it can't be a bar.
Oh, Starbucks.
Coffee shops.
And that's the non-alcoholic
open your laptop i remember in the
beginning of like wi-fi in like businesses
they'd never tell you the password or you
have to buy something and now they're like
it's like the bathroom code you gotta buy
something for the bathroom the large
cities don't understand the stress of the
bathroom code you do you know that there's
a secret you can go to like yelp
if you ever want to get a bathroom
code there will be heroes that will do
yelp reviews and they'll put it
in the in the album that's that's an
aside so anyway this is the this is
a graph showing and i gotta zoom in
here number of us locations indexed from
i'm trying to figure this graph out anyway
it's showing gyms and studios fitness
studios outpacing bars and nightclubs uh
social clubs bowling alleys and movie
theaters
Bowling Alley says come hang out,
but every minute you're there,
you're paying.
Like every game, you know what I mean?
The meter is running, right?
There's no one purchase.
Unless you're the weird person who's
hanging out at the Bowling Alley bar,
but that's on you.
Unless Bowling Alleys have a monthly
membership.
If they do, kudos to you guys.
Which would be a killer idea, right?
Movie, it's a transaction,
and then get the hell out.
Although when I was in high school or
middle school, we'd pay for a movie.
Yeah.
It's not a small difference in terms of
how many gyms and studios.
So I wanted to talk about this because
we also just announced that Orange Theory
was closing locations.
Nike tried to jump into the space and
open their own gyms.
And that was all pomp and no circumstance
in less than a year.
I think they're closing all of them.
Essentially, it was a franchise model.
Take our logo,
build our own Nike version of Orange
Theory or whatever.
And it didn't work out.
Why?
We can get into that.
I've got a friend who...
Did you ever meet Megan Brown?
I can introduce you to her.
You guys would get along famously.
Megan Brown is a PT.
She owns a fitness studio.
She owns a Pilates and yoga business in
Alexandria.
So expensive zip code.
Shadow of Washington, D.C.
Three locations.
She does four...
I asked her three times if I had
this number right.
Four hundred classes a week across three
locations.
That's wild.
Are you doing math?
Because the math is wild.
She's got multiple rooms at each location.
Let's go.
Four hundred divided by three locations
would be one hundred and thirty three on
average per week.
She's open seven days or what?
Seven days.
Yeah, baby.
How's that possible?
Nineteen classes because she's got
multiple she's got multiple rooms in each
place.
Well, and what's the class size?
Do you know three to five or what?
No, very.
I mean, her class is like twenty thirty.
Like she's got a frickin beast of a
student.
And it's Pilates class yoga so that you
figure they're an hour.
three locations,
but do you know what she charges for
classes?
I'd be curious,
but it's a membership model.
And then you vie for, you've got a,
Oh, you want to get in on this?
Got it.
Or this, I mean, it's the model,
the difference between Megan and it's
called it's a mind, mind to the mat.
The difference between Megan and Nike,
you would have said if you pit Nike
against Megan Brown,
this woman you've never heard of,
you're like, well, Nike is going to win.
Megan understands what business she's in,
which is community.
She walks in on a random Saturday dressed
as Beyonce because it's Beyonce's
birthday.
And now you don't forget that for the
rest of the week.
She sells...
community.
So these two things sound like I'm just
changing topics,
but I'm really not because the question
is,
are you the third place and what are
you offering?
So Equinox isn't Nike,
but they're kind of the Nike of gyms,
or at least they're like the Goliath,
right?
They're trying to be the big highest end.
If someone raised their prices,
I bet you Equinox would raise their prices
again just to be more expensive.
But Equinox and the video that you shared
as well that we found on Instagram was
showing that people were spending...
Is this an additional four thousand
dollars a year on top of dues?
Or is this total?
No, it says total here.
So, four K.
Seventy percent of the four thousand per
year is the dues.
And then the thirty percent,
it says personal training, spa services,
which I guess are upsells, smoothies,
you know, protein smoothies, whatever,
snacks, whatever, other purchases.
So, whatever, like T-shirts, towels,
bottles,
whatever merch or like protein bars.
So, this is a good breakdown.
See, the funny thing is,
if you asked me before we put this
stat on the screen,
how expensive equinox was i would have
been like really expensive but if you
pushed me for a number per month i
don't know i would have said i don't
know eight hundred dollars six hundred
dollars but when you say four thousand
dollars a year and that's only seventy
percent that number feels more palatable
if i know i'm going to go
Do you know what I mean?
The X number of dollars a month feels
like a poke in my ribs.
But if you're like, four grand,
you can come to Equinox,
three hundred and sixty-five times,
use everything you want,
up to and including this,
that number doesn't look ridiculous now to
me.
Especially if you live in New York or
Chicago or LA.
Yeah,
it comes out to three hundred and
thirty-three bucks a month.
Seventy percent of four thousand?
Obviously...
No, no.
I'm sorry.
Four thousand total.
So four thousand divided by twelve months.
That's not even a lot.
Three hundred and thirty three bucks a
month.
That's not a lot.
It's less than a hundred bucks a week.
Well, there's other people that are like,
that's expensive, right?
And it's like that's because there's
different consumers out there.
There's people that want to just spend
like, you know,
a hundred dollars a month or eighty
dollars a month.
And by the way,
let me just shout out Tony Maritato
because he's not here right now.
But this is something that he would say.
And he has said this a lot about
physical therapy pricing, that it makes...
It only makes sense to go one way
or the other,
meaning you take all the insurances the
way that he does.
He takes Medicare.
He takes a lot of the network insurances.
So this bell curve,
he's on one side of the bell curve.
I'm on the other side of the bell
curve.
And if you're in the middle trying to
charge, you know,
one twenty five per visit out of pocket
and not take any insurances,
you don't have the extra money for
marketing and hiring and all that.
But you have the sales resistance and the
hurdle of
trying to get yourself or others busy so
he takes all the insurances uh and he's
a little bit more volume based and we
don't and so we're more boutique but we
have higher margin and this same example
for gyms or any health and wellness
service right it only makes sense to be
the planet the planet fitness that it's so
cheap that people don't come and if they
do come it's pizza fridays or whatever you
know eat a bagel while you're doing it
like press like
whatever, like they spit, you know,
the lunk alarm.
They got rid of like the heavier weights.
They don't want any bodybuilders there.
Like it's a genius model of ninety two
percent of people at Planet Fitness do not
come.
They pay ten,
twenty whatever dollars a month.
And they don't use it in general because
they knew that the bodybuilders and the
people that exercise a lot wear out the
equipment faster and then they have to pay
for more equipment.
Take up room.
And so they got rid of the people
that they literally made a model to get
rid of the people that actually use the
gym, which is insane.
So now Equinox is the opposite.
So it's like they know their people are
going to use the equipment.
They got to keep the facility clean
because it's premium.
So they got to charge a premium rate.
The floor is premium.
The
The equipment is premium, the locker room,
the amenities, all that type of stuff.
And so you got to go one way
or the other.
So it makes no sense to have a
gym that charges a hundred dollars a month
or whatever, you know,
it's like a one fifty or something like
you got to be like low end or
high end.
Otherwise you're going to get squeezed.
Yep.
Tony, you brought up Tony.
He then...
So his brick and mortar business model is
more probably aligned to Planet Fitness.
But then while he's there, he's like,
I'm going to be the high end of
my clinical brain.
And he goes,
if you're an equipment company,
I'll make a video for you.
Five hundred bucks.
And he's like,
I'm going to make five hundred bucks in
twenty two minutes stitching together a
video.
And that transaction is done.
he's on a different side of the bell
curve for different audiences.
Yep.
And we in healthcare can't get away with
that.
We're like, I need to be cheap.
So I'm available to everybody.
Okay.
But then you're cheap and you can't offer
some of those things.
You can be different things to different
audiences.
Look at car companies, right?
Scion, Toyota, Lexus.
I got a buddy who's a former Toyota
mechanic.
He's like,
there are differences between the Scion
and the Lexus.
But he's like,
a lot of the parts are interchangeable.
You're buying... Yeah, the leather seats.
You don't have a...
They don't even make Scion anymore.
You don't even have... I don't know.
You don't have the leather in the low
end.
You have it in the high end.
But you're paying for that difference.
But there is some crossover.
So you can do that.
So I do like this graphic too.
So the first one was...
Equinox member spending,
average Equinox members dropping four
grand a year.
Again, as I say that,
that does not feel a lot because I
like to move and I would appreciate that.
This is the extra one.
In five years,
they don't need to get more people per
location.
They're expected to now net in five years,
six thousand dollars per member per year.
How do you think they'll do that?
Just offer different things or raise their
rates?
I mean,
the dollar is also losing value every day,
so.
I mean,
raising their rates is going to be the
biggest thing.
I'm sure they're going to add other
things, too.
And if you got to think about it,
they had also recently added some forty
thousand dollar.
And then this is only for like executives
or people that can afford it.
But Equinox added recently like a forty
thousand dollar, like longevity,
something, you know,
they'll take your blood and, you know,
get a physician to look at it or
like a nurse or something up your butt.
Look at this.
Look at your butt.
Look at this.
yeah so so if they made projections based
off of that so like the people that
spend forty K plus the four grand for
so they're playing they're paying forty
four grand a year and if you take
enough of those people but you divide it
over all your members does that result in
the boost to go you know faster route
to go from four thousand per year spend
to six thousand per year spend maybe um
So what's the difference between to go
from four grand a year to six grand
a year?
Am I doing this properly?
Is it like a sixty-seven percent increase
in five years?
It's a third.
it's a third sort of thirty three percent
increase because you're doing two with two
math geniuses doing it today oh yeah so
so two two back yeah two x would
be eight two x would be eight thousand
dollars per year so six grand per year
so how yeah how else i mean the
easiest lever is to raise rates but again
you typically need to offer sometimes
offer more or something different to
justify why you're raising rates but cam
needed
You never, you never know.
I mean, I was going to say,
you never know what we're going to say.
You never know.
You never know what Jimmy's going to say
here live.
But Cam, um,
this is where I like Alex Hormozy.
Some of his stuff gets a little too
flippant, but like, he's like,
there's three ways to make money.
Let me see if I can not screw
this up.
Find more people.
Get more people to come to your business.
So Equinox is like,
we don't want more people because then we
got to do more stuff.
So find more people.
Get those people who pay you to come
back more often.
A gym model,
you actually don't want them to come back
more often,
but you want them to buy more things
or sell them different things.
Those are the three things.
Those are the three ways.
And if you can come up with a
fourth way,
you're going to be a bajillionaire.
But those are the three ways.
And we do pay attention to that,
but we like to just sell people more
visits.
And I'm like, visits ain't it.
That's a race to the bottom.
Or that's the model you want to be
in.
That's fine.
That is fine.
I think I started by saying that if
that is your model,
that is one hundred percent OK.
But just understand what game you're
gaming, what game you're in.
So Iron Man.
Not the comic book character,
the corporation that is around triathlon.
They did something similar.
Like where Equinox has like an executive
program,
Ironman started doing this about ten years
ago, which is like, we'll give you...
Are you a CEO making more than two
hundred grand a year that wants to be
an Ironman?
And everybody's like, yes.
Then you do Ironman Elite.
And you got, for more money per race,
you got into races that were closed.
Access.
You start closer to the front.
Access.
Status.
You have a different badge or whatever.
Or if you complete three executive races,
you get an extra badge.
Badge value.
You become triple exec.
Triple Iron Man.
You're a war machine, right?
But they understood what they were selling
because what Iron Man realized was
If we do Ironman,
they have done Ironman in New York City,
which was, I heard, a debacle.
We can only put about three thousand
athletes and make it a good experience,
safe experience.
For a race.
Well, how can we make more money?
Do more races?
Those are logistically nightmares.
So they're just like,
how do we get more money out of
each athlete?
They understood what game they were in.
Now,
they faced a lot of backlash because the
true,
the middle of the bell curve triathletes
were looking at the executives and they
were like, who are these rich douchebags?
The thing I used to have to... Oh,
you could buy your way into certain races
that you used to have to earn your
way into.
Yeah.
And people were like, dude,
I just busted my ass for a decade
becoming a great athlete.
But Johnny's CEO could pay for it.
It's like, well, they're the company.
Yeah,
they let people buy their way into it.
Will there be a healthcare company who
understands this?
Let's screw healthcare.
Will there be a PT organization that
understands this in the next five years
and does more Equinox?
Do you think they will?
I would love for someone to do it.
Do you think someone will?
Well, when you say do what,
you mean have that type of a spend
per person?
Or what do you mean specifically?
Yeah, that's probably good.
That wasn't a good question.
It was in my head.
What I mean is,
will there be an organization,
a physical therapy first organization,
who will lean into the membership model
and offer, we are the third place?
Because that's how we started this
conversation.
I feel like PT or a PT first
organ... Megan Brown is a PT clinic,
but she's not.
She's smart enough to not put PT on
her sign because she knows what she sells.
Community, third place.
People die to get into her clinic, right?
Is it possible for a physical therapy
organization to do that model and survive?
With program packages of like,
I've heard more and more PTs talking about
like, they'll do an evaluation.
They charge you whatever,
two hundred bucks, three hundred bucks,
whatever, hundred fifty, whatever.
And then they sell you like a three
month program for your
issue but that's still the one-on-one
treatment so it's not and that's just you
come a third place as i show up
whenever i'm lonely teresa's saying she
will at wish clinic soon that's her goal
good wish clinic is a killer name by
the way like genius i do i teresa
do you have wishclinic.com or is it like
she's gonna have to pay she's got to
buy it for me in a minute because
i'm gonna
Or she's like,
I wish I could get it.
I wish.
I used to have wish sandwiches when I
was younger.
You just wish there was some stuff between
the bread.
That was me in college.
Because a package is not Equinox.
Think about that.
Would you ever go to Equinox and buy
ten walk-ins?
No.
Equinox probably wouldn't let you do it.
What they would do is run a credit
check, see what you make, and go,
we'll let you come for free today because
we know what we are.
Here's a good comparison, right?
So
Even in the cash physical therapy world,
so there's the one-on-one treatment.
That resembles the Equinox personal
training offering.
Correct.
You're asking,
will people pay a membership to go to
a physical therapy practice like...
megan brown's place so she she sounds like
she had she had she has the infrastructure
to sell the membership but then the if
someone had wants the one-on-one attention
and time or has an issue now it's
one-on-one physical therapy she's going in
a different direction so like the pt
clinic it's a transaction you come in you
go into a small room or you walk
into our gym but there's it's a guided
megan's like you come in megan treats
twenty-eight people at the at a time that
math
And no one's mad about it because it's
a class.
But you get her eyes only when she
needs you or you're like, hey,
look at my downward dog.
How's that doing?
And she's like, move your butt,
move your leg.
The expectation walking in is not Megan
and you for an hour.
It's I'm part of this.
So Megan goes in a different direction
that we go.
We said on our previous episode,
the three things that we would do if
we opened a gym tomorrow is you would
have a gym, walk in, use the equipment.
It's Disney World.
Also in that facility is a room with
the Norma Tech boots and a cold plunge
and the weird masks that people put on
their face to blast their face with
infrared.
That's like use your own recovery.
And then the third option would be
food, smoothies, places to chill.
It's before, during, after.
And PT clinics want to get you out
the door as soon as you're done.
Like they look like PTs will literally
walk you to the front desk, right?
They're like, okay, and you're out.
They quite literally are the anti this.
It's an assembly line that you ride versus
you come in and you go anywhere you
want.
I don't see anybody doing that anytime
soon.
Maybe like a rehab to perform.
No, because they're a network.
But you could do both.
You could do a membership or Tony does
that.
We would have to get Josh Funk here,
the CEO,
on a call here on an episode because
the model of what they do is all
mapped out in terms of spacing and square
footage and he knows how many billable
units and once they get a therapist up
and running and how many therapists in
terms of breaking even and then
like that's,
that's hard to change that model, man.
Like once you're in that model,
like it's hard to, it's about spacing.
Right.
So like his spacing is some open gym.
Yes.
He has a lot of places.
His places have like the, the turf and,
you know, pushing the sleds and there's,
there's room for sprinting and running and
stuff.
But also some of that space is treatment
tables, like out in the gym,
like a bunch of treatment tables next to
each other, which is,
In the Equinox example is there's like two
to five or six treatment tables because
the people stretch on them or the trainers
sometimes for better or for worse.
I don't like it, but stretch people,
stretch their members out.
But most of the facility is the gym
equipment.
Right.
Does that make sense?
So like our our our setup is,
you know,
the space is utilized differently.
I mean,
if you watch a bar rescue like John
Taffer knows what.
A chair.
This fascinated me.
I never thought about it like that.
He's like, well,
we can get six more chairs in here.
I'm like, why do you care about chairs?
Like every chair brings in seventy eight
dollars a day.
And I'm like, really?
Yeah, they're full.
But even if they're not full,
then the average cost per chair goes down.
So he's like, I get it.
I need to I need to be good.
Know your customer acquisition cost,
knowing what it costs to get someone in
the door.
Yeah.
This is where people get mad at Lifetime
Fitness.
Was it Lifetime Fitness that was writing
DPT?
Yeah, they were.
Across their chest.
Yeah.
And I just go like,
are you mad they're doing it?
Or are you mad they're doing it and
you're not?
Like, are you mad about the letters?
I need you to get past that and
ignore that.
Someone is suing someone on that.
That's not your worry.
Your worry is their model is eating your
lunch, not the letters.
That's not what you should be defending.
Talking about people suing people and
people defending.
I am going to an APTA event.
Dave is not.
Are you an APTA member?
You don't care.
I mean, you care, but you're like,
you like show me a better ROI.
I am going because I am a joiner.
I just like groups of people and I
hope for the better.
They are having here.
And here's what I wanted to say,
which might make people like Dave do a
little eyebrow raise.
They are having this weekend,
their APTA payment summit.
And I think if they held this ten
years ago,
they would have called it the
reimbursement summit.
But they are not.
They're calling it the payment summit.
Yes, that's true.
That's true.
It's back to back in Portland.
I got to fly all the way to
Portland tomorrow morning at zero dark
thirty House of Delegates,
which is like the APTA's version of
Congress where like rules get made.
That stuff is over my head.
I need people to I'm like,
I don't know what you're saying.
They're banging gavels and doing Robert's
rules.
I do like the idea of payment and
what they're doing there.
I know advocacy needs to happen and move
slowly.
I'm not the guy to do advocacy.
I'm the guy that talks to the people
who do advocacy because they got to do
meetings and write a lot of strongly
worded emails.
Are you at least excited that someone's
doing it, but you're not?
No, no, it's never.
Reimbursement will never change.
I don't care.
Well, it will change.
It's just going to go down.
Well, yeah,
it's definitely going to go down.
But with all this effort,
it's crazy that they can't even get a
three or five percent increase every year.
They can't even do that.
I will say this.
If you look at other professions,
it's the same.
So it's not like APTA is inefficient.
It's like the system is designed.
What was the line?
The system is designed to get the result,
the exact result it gets.
It's like the system's broken.
Are we shocked about it?
I will say this.
It's impossible to know.
what the world would look like if you
didn't have your APTA or AOTA or ASHA.
It could be worse.
That's not a great business model.
Hey, without us, it could be worse.
It could be worse.
Yeah, I mean...
I also say this isn't the main value
if you're an APTA member or not.
I stood in front of students at Keene
University in New Jersey and a student
asked,
should I join APTA right out of school?
And Ben Aguila, do you know Ben Aguila?
Great guy, New Jersey.
He was like, of course, this, this, this.
And I said, Ben,
I'm going to offer a counterpoint.
And Ben was like,
what are you doing here, buddy?
We're on stage.
We're pushing.
I said, don't join APTA.
And the room went quiet.
And then I said,
until you understand what you're looking
for and what APTA actually provides.
If you're looking for a community,
APTA provides that, a network, right?
If that's what you're looking for,
what I'm trying to do is have nobody
in the comments section a year later
going,
I paid APTA five hundred bucks and I
didn't get anything.
Make sure you have expectations in
reality.
If you think you're going to pay APTA
five hundred bucks and payments going to
turn around tomorrow,
you will be disappointed and then you'll
leave and you'll never come back.
I don't want that.
It's four hundred people out in Portland.
I'll report back what actually is done.
I hope it's good.
But I thought all three of the topics
today were all about money,
expectation matching reality and
understand what game you're playing.
And for me,
I can't outsource that to Jimmy and Tony.
I can't outsource that to the APTA.
Structuring a model that's profitable.
Here's your decision tree.
What should you do?
Join APTA.
What should you do after that?
Immediately continue to work on your own
problems.
Because they're going to be background
stuff.
It's too big to move.
So you'll notice...
The stuff that APTA or large organizations
do, it's moving like a, you know,
you time it like a sundial.
It's moving.
It's just super slow.
It's like, all right, well,
that's out of my arena.
But I am going there this weekend.
I'll be doing some short interviews too.
I'm doing more of those,
just like three question interviews.
Those turn out well.
As well as,
did you see the video I shared yesterday?
Do you know those reaction videos?
where it's a guy, he's really funny.
He's got a beard and he'll have just
a bunch of like videos from people like
hurting themselves on job sites.
Like a guy shoots himself with a nail
gun or a guy falls off a ladder.
And the video is weird clip.
And then the guy's like looking at it.
It's like him just like straight.
And then he looks over here.
So I was like,
I'm going to steal that format.
And I did that.
And I went on Instagram and I found
a bunch of weird rehab stuff,
guy with a flamethrower,
a guy with a Milwaukee buffer.
And I'm like,
I'm going to be the weird face between
that video blew up.
This just tells you.
How many views right now?
Because it looks like it got a bunch
of comments and likes and reactions.
It got a bunch of comments,
a bunch of likes.
I'm looking up.
Is that like five or ten K already?
It's already five.
It was five K this morning.
Wow.
Nice.
Actually, that's where it went down.
It can't go down.
It's not how views work.
for for credit for k right now that's
lower than i thought it would be i
thought that would have been like a ten
k in twenty four hours but we still
got some time that is also funny how
videos work though could do nothing
nothing nothing pop so you never know um
so that's the lesson there is take a
format that's that's already working and
then just how do i do my spin
on it bow dr bow out in colorado
says brilliant borrow yeah i just stole it
i didn't borrow it i just stole it
i was like i can do this
Yeah,
APT is a great community if you like
that.
Anyway, all right, parting shots.
What do you got for us, Dave?
Just for us continuing to focus on
over-delivering value to our patients and
clients.
And when we do that,
then we can easily map out projections of,
hey,
we got people paying four K per year.
And here's how we could get them to
pay six K per year.
But it's not salesy.
It's not pressuring.
It's not...
anything nefarious it's like can we unlock
more value can we help them with more
things get more referrals uh and that like
i shared that with you guys because i
was like that's always on my head which
is like how can we obviously we want
to grow and and get more patients and
clients but one of the easiest levers for
us is having the same patients and clients
that were recently with us or even years
ago continue to work with us and without
that new customer acquisition cost
They're a text message away, guys.
They're an email away.
I have them nearby somewhere.
Send them handwritten thank you notes.
Send them handwritten letters.
Hey, hope you're having a great summer.
Happy birthday.
I mean,
one of my patients that's been with me
for two years,
it was just his birthday like a week
or two ago.
and i was like i bought him a
mini massage gun because he loves the
massage guns i'm like you could travel
with it you could do it when i'm
not here uh yep jimmy's got this is
this is uh sponsored here we go um
so so i got this i got this
guy a one of those heichi massage guns
they're like fifty bucks and then i said
i'm also gonna get you uh a fifty
five minute in-home massage from this
other company this other person now i'm
i'm giving this massage therapist a
referral
And the patient is beyond impressed and
was super surprised.
But this guy has spent forty five thousand
dollars with us in two years.
He bought himself the massage gun.
It's already baked into the profit, baby.
So anyway, for it.
Oh, long thing for Matt.
Matt's saying what we're saying.
People need to stop looking for a potato
to solve their problems.
They're not a marketing agency.
They're not.
It's in the name.
They're a professional association.
They're where professionals associate.
That is a place.
That is a community.
Not a marketing agency.
I'm very sorry.
They're not built for that.
That's brilliant.
In your brain, do you have...
hey,
when a patient has netted me or grossed,
no, netted, netted me ten K,
I should get them a dinner at like
four seasons or something.
Yeah, yeah.
Dude, if someone netted us ten K,
why would I not spend a thousand dollars
on them?
Stop being cheap.
Come on.
But never say spend ten K and get
the tote bag.
Just...
Send them a thing like I have a
reservation for you standing at Smith and
Walensky's.
What's Peter Luger, right?
That's the big one.
Was that Brooklyn?
Peter Luger.
Your name, whatever you want.
The bill comes to me.
Thank you.
And that feels gangster.
That feels like Goodfellas,
which is worth way more than a thousand
bucks.
And it's got to be something that it's
not a branded t-shirt from us.
That's not a birthday gift.
that's about us it's got to be something
that they care about that would benefit
them that does not have your logo on
it and then when their friends come over
they want to show their friends and tell
their friends about their physical
therapist that got them this gift or
whatever so you know cutting knives like
whatever it is yeah knives would be cool
If they cook,
if they prepare their own food,
you got to know their thing.
And when they're spending four to six
grand with you per year,
you better know their thing.
And time.
That has probably come up.
Oh my God,
I've always wanted to take my kid to
a Yankee game and sit in a box.
And you're like, mental note, got it.
Don't worry about it.
And you go on eBay and you get
whatever.
That carries weight.
My parting shot would be
expectation for reality,
make sure they match.
And if they don't,
that's why people are pissed.
And again, to reiterate,
it's not really Alex Ramos's thing,
but he does hammer it a lot.
There's only three ways to not even make
more money, serve people better,
get more people to come to your thing
or buy your thing.
Get those people to come back more often.
Those are different.
And get those people who come back to
spend or do more.
Those are the only three ways.
I'll report back after I'm back from APTA.
We'll see how that goes.
We'll see if we've changed the world in
Portland this weekend.
Dave, have a good weekend.
Yeah, fingers crossed.
That's it.
We're out.
Boys, what the hell are you doing?
Follow Tony Meritato on YouTube at Total
Therapy Solution.
Find Dave Kittle at
ConciergePainRelief.com and on YouTube at
The Dave Kittle Show.
And follow Jimmy McKay at PT Podcasts on
YouTube, the socials,
and wherever you binge podcasts you
pretend are for CEUs.
And hey, just a reminder,
none of this was for advice.
This was for entertainment only.
Our lawyers say that counts.
Thanks, Keith.