E886 | The 80/20 Clinic Growth Strategy

The 80/20 Principle of Running a Cash-Based PT Clinic

If you own a clinic, your time matters. Your staff clinicians’ time matters too.

Danny opens with a straightforward math case for why documentation is not just annoying, it is expensive.

PT Biz has found their AI scribe, Claire, saves staff clinicians about six hours per week on average. Even if you only reclaim half of that and put it back into patient care, that is about three extra one-hour visits per week.

If your average visit is $200, that is $600 more per week per clinician, which works out to roughly $30,000 per year.

That is the point. Use technology to remove the documentation burden so you can increase capacity without adding burnout.

Try Claire free for 7 days here:
https://meetclaire.ai 

The 80/20 Lens

The 80/20 principle is simple.

A small set of actions drives most results.

In clinics, owners often track too many metrics and stay busy doing things that do not move revenue. Danny argues you should narrow focus to the “dollar productive” activities, the ones that actually fill schedules and create predictable income.

The Goal: Get Providers to 80–90 Visits Fast

Danny uses a benchmark he likes for staff clinicians.

Once a provider reaches around 80 to 90 visits per month, it often snowballs to 100+ quickly. The problem is some clinics take a year or more to get a new hire to that point.

If you can do it in six months, growth compounds. In the same year, you might hire two people instead of one, because each provider becomes productive faster.

The Three KPIs That Drive Most Growth

Danny says there are three “drop-off points” that matter most.

If these three are strong, your business grows. If any of them are weak, your growth stalls.

1. Discovery call conversion (lead to eval)
The first bottleneck is not evals. It is how many leads actually book an evaluation.

He wants you aiming for:

• 8 to 10 new patients per provider per month during growth

• 70%+ conversion from discovery call to evaluation

He also suggests owners handle discovery calls during growth phases.

If an admin converts at 45% to 50% and the owner converts at 80% to 90%, that gap can be the difference between your provider getting busy or staying empty.

It can feel like a step backward for the owner, but the time is not huge. Twenty calls at about 20 minutes each is under 10 hours a month and it can change everything.

2. Eval to plan-of-care conversion
If patients do not commit to a plan of care, Danny says they often still come in around three times, feel better, and disappear.

That makes schedules unpredictable.

If they commit, your volume and revenue become predictable.

Benchmarks he shares:

• Owner: 70% conversion from eval to plan of care

• Staff providers: 60% conversion is strong at scale

This requires training and quality control so staff can confidently discuss diagnosis, prognosis, and the plan.

3. Plan-of-care to recurring services conversion
This is the “sneaky” one that people forget.

Recurring services stabilize schedules. They create predictability. They reduce the pressure on new patient volume.

Danny’s target is that about 40% of plan-of-care patients transition into recurring services afterward.

This is also where many staff clinicians struggle.

They may feel uncomfortable selling something ongoing and they may not know what to do clinically once the plan of care ends. So you need both clinical education and sales training.

When you get this right, the schedule compounds. Recurring visits fill a chunk of the calendar every month, which makes it far easier for that provider to reach the 80 to 90 visits per month range quickly.

The Real Message

You do not need 25 KPIs.

If you want to simplify the business and grow faster, focus on these three:

• Discovery call conversion

• Plan-of-care conversion

• Recurring conversion

When those are strong, provider schedules ramp faster, clinic growth compounds, and you get to decide what you want the business to become instead of being stuck trying to “stay busy.”

Links mentioned

Try Claire free for 7 days:
https://meetclaire.ai 

Book a call with a PT Biz advisor:
https://vip.physicaltherapybiz.com/discovery-call 

Join the free 5-Day Challenge:
https://physicaltherapybiz.com/challenge 

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Podcast Transcript

[00:00:00] Hey, what's going on, doc Danny here with the PT Entrepreneur Podcast, and today we're talking [00:00:05] about the 80 20 principle of running a cash-based clinic and with the goal of really helping you [00:00:10] simplify the things you're tracking down to the most important. Variables. [00:00:15] The 80 20 principle is the concept that you're gonna get 20% of the benefit, [00:00:20] uh, or 20% of the activities you do lead to 80% of the gains you're gonna see in [00:00:25] basically anything, right?

So you could take this in context for health and wellness. So, you know, [00:00:30] 20% of the things that we do lead to 80% of the benefit in business. Same thing. Typically there's [00:00:35] 20% of the activities that we're doing that are gonna lead to 80% of the gain that we wanna see. [00:00:40] And it's really important that we focus on that because that helps us be efficient with our time.

One [00:00:45] of the, one of the things that I had a, a mentorship group that I was a part of that was really big on this [00:00:50] idea of, they call it dollar productive activities. So what activities are you doing [00:00:55] that are leading to the most revenue generation in your business? And when I think [00:01:00] about. This through the lens of a cash-based clinic and what you should focus on, you know, [00:01:05] what are the most dollar productive KPIs or, or metrics that you need to be aware of [00:01:10] and really focused on.

And there, and there's really three, there's three main ones. And, and essentially I'm gonna talk about [00:01:15] these, uh, in, in the concept of two things. Number one is getting your own schedule busy enough [00:01:20] to where you can hire somebody else. But if you do this correctly and whoever you [00:01:25] hire, uh, focuses on the same things and has the same sort of trajectory.[00:01:30]

We're gonna see that they can get their schedule busy to, to essentially full. And for us, what we [00:01:35] wanna see is once a provider can get to like 80, 90 visits a month, [00:01:40] um, you know, like that snowballs to where they're at, a hundred plus pretty quickly. [00:01:45] But getting to that point can be very hard for people.

In fact, they can take some [00:01:50] people well over a year, uh, in order to build somebody else's schedule up to that [00:01:55] point. Um. If you can do it in six months, the amount of [00:02:00] growth you're gonna see is exponential in comparison. Like, think about that in, in one year, you could [00:02:05] hire two people versus one person, right?

So you're, you're essentially doubling your [00:02:10] clinic growth, uh, each and every time that you bring somebody on because it's twice as fast. [00:02:15] So there's three variables, uh, that, that we want you to focus on. So number one is new patient volume. [00:02:20] And there's a couple drop off points here that I think you should be incredibly aware [00:02:25] of and focused on.

Oftentimes people think that it's like just focusing on how many [00:02:30] evals do they have. I think that you need to take a step back even further and [00:02:35] see what is your conversion percentage. Two people. Uh, moving into an [00:02:40] evaluation. And oftentimes when we do this and we look at the number of leads and [00:02:45] conversations that people are having, um, there's a big drop off between someone being a [00:02:50] lead to somebody coming in for an evaluation.

So the very first bottleneck really [00:02:55] is new patient volume. We wanna shoot for eight to 10 new patients [00:03:00] per provider. As we're growing their schedule, and that can drop to [00:03:05] as low as five. Once they've had schedule stability, um, you know, move into [00:03:10] place and I'll talk about what that looks like. But eight to 10 from a growth cycle, obviously if you have [00:03:15] more than that, they can grow faster.

Assuming you're doing these other things, you're focused on these other things, and I'm gonna talk about as [00:03:20] well. But what we wanna see is that there's not a big drop off between the leads. And oftentimes this is, this is [00:03:25] what we call the discovery call portion. It's where you're talking to somebody about.

Being a, you know, at the time [00:03:30] being a perspective new patient to then actually moving into an evaluation. [00:03:35] And that metric right there, you know, we want you, the discussions you're having with [00:03:40] people about potentially being, um, uh, uh, becoming a patient. You want to be at 70% [00:03:45] plus, uh, conversion of this in fact.

Last year we [00:03:50] made a, a strong suggestion and shift for the clients that we work with, that the [00:03:55] owners of the businesses should move back to taking all of these sort of, [00:04:00] um, discovery call conversations and doing it themself versus having their [00:04:05] administrative staff do it or another provider. And it in some ways can feel like a step backwards for [00:04:10] business owners, but what we saw was a dramatic increase in closed percentage, [00:04:15] meaning.

If they had 20 conversations, the [00:04:20] owner was gonna get, you know, 80 to 90% of those people to move into an evaluation, [00:04:25] which means they're giving their staff more chances for new patient evaluations than if somebody else was doing it. And [00:04:30] maybe they're converting at 50%, like that'll crush your ability to [00:04:35] scale new patient volume.

So we want to have eight to 10 new people, but you have to look at [00:04:40] where's the drop off for them to get there. And if you're not tracking your [00:04:45] discovery call close percentage, or if you have somebody else doing this that's not you, you might wanna take a really hard look at [00:04:50] what those actual numbers are.

And, um, they may, they, they may be way lower than you think and [00:04:55] it can make you feel terrible about your business in the short term. They, because you're essentially bleeding out new patient [00:05:00] volume because you're, you're, you're letting somebody else do this. That is [00:05:05] not as good at the conversion as you are.

And, and if you think about the difference, let's say you have 20 [00:05:10] conversations, um, and you're converting at 50%, somebody else is converting at 50%. That's 10 people that are [00:05:15] coming through for new evaluations. If it's you and you're the owner and you're really good at discovery [00:05:20] calls, you understand how to have these conversations and how to handle objections and to pace it.

And, and, and you [00:05:25] can convert at 80, 90%. Now all of a sudden you have 16 to 18 coming in [00:05:30] versus 10. That's a difference of an entire another provider, basically, so [00:05:35] that, that's why this is such an important drop off point and metric to track. So we look at 80 20 principle. [00:05:40] This is one of those things that, you know, 20% of the activities is gonna get you 80% of the benefit.

[00:05:45] This is a huge one. The second thing is gonna be your close percentage from [00:05:50] evaluation to plan of care. Now, people that don't do a plan of care, we typically see that they're gonna end [00:05:55] up coming in for around three visits. Um, so it's not that they drop off completely, they do one [00:06:00] visit and they never come back.

Uh, that's typically not the case. Usually what happens is we end up seeing them around [00:06:05] three times. 'cause that's roughly when we started to see like symptomatic. You know, change and drop off and [00:06:10] people, they, they, they're kind of done after that. Um, if they're not committing to a plan of care. So, [00:06:15] you know, you will have some amount of snowball from that.

But if you'll commit to a plan of care, now all of a sudden we can have a lot more [00:06:20] predictable volume and revenue associated with that. So, you know, if the goal is that we're trying to build somebody's [00:06:25] volume up to where they're at, 80, 90 patient visits, in order to do that, it's way [00:06:30] harder if they're converting, you know.

40, 50% of people, uh, into a plan of [00:06:35] care versus if they're con, con, uh, converting 60 to 70% of people into a plan of care. Our [00:06:40] benchmark, if it's not the owner, is for it to be 60%. [00:06:45] If it's an owner, they should be converting at 70%. Um, they just [00:06:50] carry more authority. It's obviously, it means more to them.

They're gonna, they're, they're, they're gonna obviously, [00:06:55] like, you know, do a better job than somebody that is, um, a staff provider. Historically, uh, as you [00:07:00] scale past yourself, 60% is a great place to be as far as scale in your business, uh, to, to have multiple [00:07:05] providers. And, and the more you have, obviously the harder it is to have quality control with these conversations and the, [00:07:10] and the close percentage.

But being at 60% at scale is really a very good spot to be [00:07:15] 70% if it's just you. Um, and then the last thing is people moving over to recurring services. [00:07:20] And this is a sneaky variable that people forget about all the time, and it honestly [00:07:25] makes the biggest difference out of all of these things. And it's because [00:07:30] if we're, we're trying to get somebody's schedule to where they're, they're busy and they're a, uh, [00:07:35] they're, they're a productive asset in the business.

'cause when we hire somebody in a service-based business like this for the [00:07:40] first few months, they're, they're a net negative on the business typically. Like they're actually costing us, [00:07:45] we're training them up. It's a lot of time, but, but they're actually costing us money 'cause we're paying them a salary, but they're not [00:07:50] producing, uh, the, the revenue to even offset that and the taxes and benefits associated with that [00:07:55] person.

So. You know, as they get to this sort of 80, 90 benchmark range, and it kind of, [00:08:00] and oftentimes it depends on your average visit rate as well. This is just sort of like a, a range you can think about trying to get your [00:08:05] staff to, but you know, as, as you work towards that, the thing that really, really [00:08:10] stabilizes their schedule and allows it to compound and grow is the recurring volume that [00:08:15] comes in on their schedule.

So the goal should be that, that you have [00:08:20] 40% of people that, um, move to a plan of care that are coming in. [00:08:25] Uh, in a recurring, in a recurring visit after that. So, you know, if you have [00:08:30] six people out of 10 that are converting to a plan of care, that's, you know, 2.4 people at the [00:08:35] end that are gonna move to a recurring service.

So if you snowball that, if you imagine like you do that every single [00:08:40] month, you know you're gonna, you're gonna end up with, um, you know, 30 people basically by the [00:08:45] end of the, uh, or 30 people that are coming in on a recurring basis by the end of the year. So that's, let's call that just [00:08:50] like 30 visits, basically, that's going to snowball on their schedule and take up a big chunk.

If they need to [00:08:55] get to 80 and 30 are coming in, no matter what, then now you don't have to make up 50 through new [00:09:00] volume. That's a much easier place to be. Uh, just to get to the point where that is a, that is a, [00:09:05] um, you know, a, a, a valuable asset in the business and not a liability as you're, you're, you know, [00:09:10] offsetting what you're paying them.

So when you look at these three things, [00:09:15] the goal should be to build a, a provider schedule [00:09:20] up. In six months to where they are, um, functional, they're at a, a [00:09:25] higher utilization percentage. And that sort of 80, 90 range is where we start to see that. Ideally we want them, you know, [00:09:30] around a hundred. And, and again, it depends on how your sales volume is set up and how your, your average visit is set up.[00:09:35]

'cause it could be lower than that. It could be higher. Just depends because, um, but, but, you know, ballpark, roughly [00:09:40] somewhere in that range, 80 to 90. And in order to get there. The three drop off points, the three KPIs in this [00:09:45] 80 20 principle that you need to focus on. Number one, your conversion on discovery calls.

That's you as an owner and make [00:09:50] sure that you're doing a really good job of, you know, not, um, crushing the top of your [00:09:55] funnel, which is where you're having these conversations with people. 'cause I get this all the time where people are like, I need more new patients. And then we start to look [00:10:00] at it. It's like you need more new patients, but you have your admin handling all of the discovery calls [00:10:05] and that person is converting it like 45%.

You're killing yourself. Why are you doing [00:10:10] that? Like, switch it over to the owner. And I know maybe you don't wanna do that, you feel like you've worked your way out of it. But I'm [00:10:15] telling you, it makes a massive difference for the sales into your business. And it's honestly not that much time. [00:10:20] If you have 20 conversations that take you, you know, 20 minutes each, [00:10:25] it's, you're, you're talking about, you know, less than 10 hours in a month.

Is what that's gonna take [00:10:30] you. Okay? Not that much time, uh, you know, for, for something that literally can, uh, [00:10:35] help you double your business on the, the, the next, uh, phases to your evaluation. So this is where you have to sit in and make [00:10:40] sure you're doing quality control with your staff. You know, you have to make sure that they're, they're comfortable with talking [00:10:45] about the diagnosis and prognosis.

People have the plans of care that you have, um, and that they're doing a good [00:10:50] job of actually like. You know, running your play. And then the last thing is make sure they understand what to do [00:10:55] with people whenever they have, you know, gotten to the end of their plan of care. This is a twofold problem [00:11:00] actually.

Number one, they may feel uncomfortable with selling something ongoing. They've probably never [00:11:05] done that before. Uh, because it doesn't happen in traditional insurance based clinics. Two, they may not [00:11:10] know what to do with somebody. This is something that I actually took for granted because I worked [00:11:15] with a lot of people in a sort of continuity, ongoing manner.

Um. But I would do lots of [00:11:20] things like pull blood panels and I would talk to 'em about sleep and nutrition and we would do breath work and, [00:11:25] you know, I would like work with them on movement patterns that they were trying to get back into. We would help make sure that we were, you know, [00:11:30] building, uh, corrective exercise programming, mobility work around whatever they were doing for training.

[00:11:35] Um, and then we would do, you know, we, things that were sort of like little nagging things that were bugging [00:11:40] them. We would work on those when they would come back in. And I just assumed everybody. Would know how to work [00:11:45] with people like this because I didn't, you know, know any different. I, I just assume this is what we, what we do in [00:11:50] clinics.

Um, but it's not what we do in clinics. In fact, most of your providers don't know anything about that. [00:11:55] So they can feel uncomfortable, uh, around what do I do with people whenever I've, uh, you know, gotta the end of [00:12:00] their plan of care. And that takes some education on your part, uh, as well. So there's, it's a twofold issue.

[00:12:05] Number one, they may not feel comfortable selling it. You have to talk about that process. And two, they may not know what to do. So there's a, [00:12:10] there's a clinical education component. And there's an actual sales component, but that is the biggest variable [00:12:15] of all of 'em for snowballing a schedule. Getting their schedule to where it is consistent [00:12:20] and they have an opportunity to work with people that they enjoy working with long-term.

It is a, [00:12:25] uh, it's an easier visit for them to fulfill than like an evaluation administratively, mentally, it's [00:12:30] easier. Uh, and it's fun to have these ongoing relationships with people where you can really be a part of their, their health and wellness [00:12:35] journey, uh, you know, and be a, be a mentor to them and, and really support them in that.

So, [00:12:40] you know. Keep these three things in mind. These are the main focuses that I would say if you are, [00:12:45] you know, really taking a step back and it's like, alright, I'm doing all this stuff. What real, what's really important? What matters? [00:12:50] These are the three things that matter the most. If you focus on these three things, you're gonna see your business progress grow.

You're [00:12:55] gonna be able to hire that next provider. They're gonna get busier faster, and then you're gonna be able to decide, alright. What do I wanna [00:13:00] do next? How big do I want this to be? You know, what do I wanna focus on? What are your goals? And work towards that. But at the end of the [00:13:05] day, you can really, really like, uh, streamline this down to three main [00:13:10] areas that you need to focus on that are KPIs.

There's lots of other things in the business that are important, but [00:13:15] these three will not change. You need to get these [00:13:20] right.