Variable Compensation Models

In this episode of Agile&Me, guest expert Jason Wambold shares valuable insights on variable compensation models in outpatient physical therapy, exploring how these flexible pay structures can boost therapist satisfaction, support recruitment and retention, and benefit clinic owners. Tune in to learn practical strategies and real-world examples that highlight the advantages of offering compensation choices for therapists and fostering a supportive, thriving work environment. Contact Jason Wombold at jwambold@onus-one.com.

Alliance Physical Therapy Partners 

Physical therapy partners and Agile Virtual Physical Therapy proudly present Agile&Me, a Physical Therapy Leadership podcast devised to help emerging and experienced therapy leaders learn more about various topics relevant to outpatient therapy services. 

Richard Leaver 

Welcome back to Agile&Me, a Physical Therapy Leadership podcast series. Today, I am excited to speak to an industry expert on variable and alternate employee compensation models, Jason Wambold. So good morning, Jason. Great to chat with you. 

Jason Wambold 

Good morning, Richard. Thank you so much for having me and great to chat with you as well. 

Richard Leaver 

Absolutely. So before we get started, always get guests to introduce themselves. We’d love to know a little about yourself and you know about the the subject. But you know, I understand you’re a clinician at heart, is that right? 

Jason Wambold 

That is correct. Yes, I’ve been a Physical Therapist for 25 years. 

Richard Leaver 

Wow. Wow. So I’ve got a few years, but you’re definitely aging it better than me, so congratulations at the very least. So how did you move from being a clinician? Well, you even though you’re still a clinician, how did you move from a treatment role into exploring the world of compensation models? 

Jason Wambold 

Well, it was certainly not a straight line. It was. It was definitely a dotted line, that’s for sure. And it. It it it came out of my own experience as a young clinician back, as I said about 25 years ago, where I graduated from physical therapy school with quite a bit of debt and was pretty disappointed when I realized my economic reality as a young provider and I was looking for alternative options and there really weren’t any, and if we were to then fast forward my career, let’s say 15 years after that, I found myself in a position where I was leading Therapists. And was in a position to actually do something about it. So, at the time my business partner and I just started playing around with some different models and asking our therapists that worked for us what they thought about the different approaches. And we felt like we stumbled upon something, and we then took that information that ended up working very well for our practice to a software design company, it’s software design firm, and asked them to actually build a platform for us that would make it easier for us to administer. And so that’s really how we ended up getting to where we are today. It was almost by accident, but it was certainly a lot of trial and error. 

Richard Leaver 

Absolutely. So, what we’re going to talk about today, obviously is compensation models as it pertains to recruitment, retention tool. But before we dive into that. Obviously, we’ve got to understand truly what we’re talking about when we talk about, you know, compensation models, variable compensation models that is so can you help our listeners understand what we mean when we refer to variable compensation models? 

Jason Wambold 

Sure. So a variable compensation model is, as its name would imply, as a compensation model that has a number of variables tied to it. That impact the amount that an individual would be paid. So that’s really a core fundamental tenant of that and really the approach is modeled after other autonomous healthcare providers. If we look at the way physicians and dentists and chiropractors, for example, are typically compensated, those models are variable compensation models. It’s a relatively unique thing to the Physical Therapy space. That we tend, at least historically, to pay clinicians a full salary regardless of what they’re generating for the practice. So when we talk about variable compensation models, we’re talking about incorporating variables to the calculation of pay. But the other fundamental tenant is that we’re talking about, pay choice. So the idea of allowing a provider the opportunity to choose from a menu of compensation models, and so the choice that they make may very well impact the amount of compensation they receive based on the structure of the plan they’ve selected. 

Richard Leaver 

You bring up a really good point that variable compensation has been around forever as it pertains to non-healthcare positions, but also within healthcare. A lot of licensed practitioners outside of physical therapy have had that model, particularly surgeons and physicians where it’s, you know, I don’t think necessarily profit sharing, that’s a different structure again and a different issue, but certainly variable compensation. Very simply, in my naive, simplistic mind, it’s essentially to a large extent eat what you kill, correct? If you want to earn more, then essentially you have the opportunity if you. If that’s not a main motivating factor, then you can work as much or as little as you want, and you’ll be compensated fairly for that amount as well, correct? 

Jason Wambold 

Yes, that’s true. And I think the reason you know it’s very timely that the PT industry is moving in this direction because what therapists want. Can be pretty varied across a practice geographically from one therapist to the next. Some therapists are are are principally interested with increasing their income as much as they can. Other therapists are interested in maximizing their flexibility, their time off, their work life balance. So one of the challenges I think that we historically have as a profession have done is, we’ve instituted bonus models as a matter of routine. Here’s your full salary. Here’s a carrot dangled, and if you do more, we hope you do. We will pay you a little bit more, or perhaps a lot more. The challenge with that approach is what if an individual is comfortable not doing more? Or what if an individual is comfortable or would prefer to do less with a full salary bonus model, there really is no structure in place to accommodate for that. And the beauty of variable compensation models is there’s no hidden agenda. The models are not attempting to push or force someone to do more or reward them to do that. They’re also not designed to penalize someone for doing less. They’re designed to give someone the autonomy to decide how much they would like to contribute, what they’re comfortable contributing, and then their pay in full transparency would be commensurate with that relative level of contribution. 

Richard Leaver 

I think now as a leader, I’ve made an assumption. Obviously it’s incorrect because one has been successful and continues to, you know, to drive this model within our industry, outpatient industry. But I’d made the assumption as a leader that essentially people fundamentally wanted a set salary and you know from a, I’ve worked in a unionized environment for many years where essentially salary was dictated based upon seniority or number of years as well, which made absolutely no sense in many ways to me. But that’s just the model and traditional model that many entities have used, so I’m obviously incorrect in thinking that that employees are married to the idea of the kind of traditional base compensation with a, you know, bonus on top, correct? 

Jason Wambold 

Yes, and I would put an asterisk to that and say in many cases that is what an employee would prefer simply because they’re not aware that there’s another option. Once they become aware that there is another option or options, plural, typically over time therapists will come to prefer that approach because it gives them a lot more freedom and flexibility and autonomy, which is really what they’re looking for. The compensation structure in that case is actually encouraging and in alignment with what they’re looking for, as opposed to a full salary plus bonus model. So I do think the vast majority of, let’s say, new grad therapists coming out of school or thinking I’m going to be paid one of two ways, either by the hour or a salary. It’s going to be one of the one of those two and in many cases they’re not aware that there is another option. Obviously, we’re trying to change that. Now if they were to just go to their family physician or their dentist. And while they’re in the dental chair, getting their their teeth cleaned and they happen to ask the dentist, they, by the way, if you don’t mind sharing with me how you’re compensated, they would hear that different option because it certainly already exists in healthcare. But without asking that question, you know, a lot of times we don’t know what we don’t know. So I think that’s where the educational opportunity exists for us. 

Richard Leaver 

So obviously one size doesn’t fit all and I would imagine that you know, just like kind of traditional compensation models, there’s various different types of of variable compensation models as well. So can you touch upon a little bit about perhaps any nuances or differences in the variable compensation? 

Jason Wambold 

Sure. Well, the first thing that an owner would need to do is determine whether they’re interested in offering multiple models. Let’s assume for a minute that the answer is yes, they’re interested in that. They really then would have to make 2 primary decisions. The first would be what will the overarching structure of the models be? And let me just give you an example.  

Let’s say you have a therapist that right now is making an $80,000 salary and you wanted to offer a 50/50 model a 50/50 model would. The roughly 50% of that $80,000 is guaranteed. That would be 40, and the rest of that individuals pay comes from variables that you tie to the calculation of the rest of their pay. So the first decision you would need to make is the structure of the models. Are we going to offer A 100/0, a 70/30, and a 50/50? Or a 100/0 would be effectively just a full salary. A 50/50 would be a very risky plan where someone is willing to only accept a guarantee of $40,000. Very few therapists, by the way, will choose that right out of the gate, but many of them will move themselves in that direction over time as they gain confidence in in their clinical skills. So that’s the first decision.  

The second decision, then, is what variables are we going to tie to that second bucket of pay? If we think about variable comp as having two buckets, base pay in our example, $40,000, and performance pay. You can define what calculates the performance pay. That would be the second decision. Let me give you some examples you could go with a very historic, very classic, very clean visit based compensation model. X number of dollars per visit either on a flat scale or this where every visit is worth the same or on a sliding scale the more visits you capture, the more you’re paid per visit. That’s your second bucket that’s added to your base. That’s how you get paid on a weekly basis.  

Another option that is gaining a lot of traction is a unit based model. Same structure, but the the compensation is tied to each unit that is billed, rather than each visit that is seen. The advantage of that approach is it shifts the narrative for owners away from how many visits someone has to see, and shifts it instead to how many units did you bill. Now, there’s a fundamental, inherent challenge with that model, because all units are not created equal. It’s great that someone captures 200 units, but what if the majority of those units are poor paying or don’t pay anything at all? How do we solve for that? So that would require you to incorporate a revenue share model. Where the number of units billed would drive the percentage of the revenue share. And that’s a very popular model. Revenue share models can be built off of any number of things. Gross charges, for example. Actual cash collections by posting date, which eliminates the issue of solving for a waiting period from when services are rendered to when the dollars actually show up. And a third popular revenue approach is a predicted model, where we look back in time and see that a therapist has been averaging X dollars per visit. 

Alliance Physical Therapy Partners 

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Richard Leaver 

So you bring up various various models related to volume or revenue. Obviously volume translates into revenue one hopes, unless you’re working with some really pitiful payers, but won’t go down that road. Th,e what I’ve heard, and it’s only anecdotal, but I’m sure that there is, there are some parameters that we have to work within that there may be regulatory or legal risks or concerns. I won’t say risk concerns as it pertains to variable based compensation in healthcare because obviously you’re over utilization is a concern I would imagine and the concerns probably originate from that, whether they’re founded or unfounded, but I would imagine the the questions of regulation and legal issues, they’re complex in nature, but obviously you’ve looked at this, you’ve spent many years working with these types of models. What are actually the regulations and laws around the concept of variable compensation? If there are any. 

Jason Wambold 

Sure. So there are a couple of things to consider. The first is not necessarily a regulatory concern, but more a strategic concern, but it’s related to your question. So I think it’s worth mention. And that is one of the advantages of this approach. Well, let me back up one of the disadvantages of an approach where a practice establishes a productivity standard, a certain productivity standard is that some individuals would be able to do more than whatever that standard is, but they don’t need to, or there’s no incentive to. They’re hitting the standards, so they stop. Other individuals feel that that standard is too high and in order to hit that standard, they would have to deliver care that is of poor quality. That individual may be a very skilled, gifted therapist who can deliver high quality care. They just can’t quite deliver as much of it as the practice is requiring.  

With the traditional model that has a productivity standard, there’s not really a place for that individual in the practice, because if the metric is 12 patients a day, for example, and that person just simply can’t get higher than 10, that becomes a constant issue that the leadership team has to try to figure out how to address. That issue largely goes away with variable compensation models because that individual may say I’m perfectly comfortable being paid according to 10 visits. I’m just relieved that now my company is telling me that it’s OK for me to see 10 visits instead of 12, and the reason they’re OK with that is that my pay is being adjusted accordingly in full transparency. So that’s just something worth mentioning.  

But with regard to any ethical or legal ramifications. There are essentially 2 things that you would need to consider, and the first really has nothing to do with the compensation structure itself. And it’s something that we should always be measuring and that is of course key performance indicators and outcome measures. So one of the things that we always recommend with any practice that is choosing to go down this road is to look at the system that you currently have in place. To track and measure quality care and to make sure that you are reporting those measures to your providers. A lot of times we’ll hear that practices are tracking and measuring those things, but they are not reporting the measurements to their providers and that’s a miss because our providers really need to know what their scorecard looks like and how they fall relative to their peers geographically within the company and across the country. That needs to happen before you go down this road of introducing variable compensation models and it certainly needs to happen after.  So you’re going to continue to measure quality care pre and post introduction of these new these new models.  

The other thing you need to consider is something that the Department of Labor calls the White Collar Exemption. So if you have individuals that qualify under the white collar exemption, what that essentially means is that individual can be paid not according to the number of hours that they work. In other words, they’re not eligible for overtime. So they’re an exempt employee. If you choose to place someone in that category, certainly the Department of Labor and many states have minimum pay requirements that you need to ensure that you’re paying. So that’s the dollar amount that you need to guarantee to that provider. If they’re going to be classified as an exempt provider, so when you’re designing your plans and the size of your base, that’s something that you need to make sure that you’re following so that you can demonstrate that you’re guaranteeing that exact dollar amount that the Department of Labor or that your state is requiring. 

Richard Leaver 

Interesting. Now. Done a great job explaining, I think what variable compensation models look like that. Obviously there has to be in motivation to do it, you know and and ultimately it’s to benefit both the individual and also the business. And I think it, these types of models, I believe actually align both stakeholders, which not all models do. So how does the variable compensation really help clinicians you know, not just from a recruitment, retention perspective that we’ll talk about in a minute, but what are the other incentives or what are the other benefits of this type of model to be adopted by outpatient clinics. 

Jason Wambold 

Well, there were quite a few. The first is. Just a simple concept that everyone appreciates choices. In just about any situation in life, when we find that we don’t have any options or we only have one option, that tends to be perceived as a negative situation. When it comes to compensation, if you are not, if you are a practice owner who is not offering options, then you are definitely at a disadvantage when it comes to retention and recruitment. If you are offering a menu of options, even if one of those options, as I said earlier, is a full salary model, the fact that someone is being offered choices is something that just about anyone can appreciate.  

As far as ensuring that owners and employees alike are rowing in the same direction, this has been a challenge in our profession for so long. Where historically if you were to look at a financially successful practice, usually the reason that practice was financially successful is because they were underpaying their provider Conversely, if you had a group of providers that were very happy with their pay scale in many cases, that was at the expense of profitability of the practice. It was a one or the other scenario.  

What we’re attempting to create is a true genuine win-win situation where a therapist can decide, I’m a new grad. The going rate in my town for new grad therapist is $80,000. I have $200,000 in student debt from school. I need to make $95,000 in order to do that. Historically, I’d have to knock on doors until I found the practice owner who’s willing to just write me a check for $95,000. Now I can go into a practice that offers variable comp models. I can say I really need to make $95,000 and that practice owner can say great. Let’s look at our plan options and help you figure out what you would need to do to get there. And we will do everything we can to support you to, get to that point that you would like to be at. The beauty of this approach is the owner becomes a coach and a mentor and a cheerleader rather than a boss. And that is definitely a very significant benefit.And a sort of a culture shift that occurs when you introduce this approach. 

Richard Leaver 

Now I totally agree and understand that the idea that people want choice is, you know, ultimately it’s about controlling their own destiny, isn’t it? And having the ability to make decisions in an environment that perhaps traditionally has has not allowed that flexibility and decision making. So, based off this reasoning, it should actually help with retention. Sorry, recruitment. Can you tell me a little bit about that as it pertains to any experience you have or evidence or information with regards to the variable compensation model helping recruitment? 

Jason Wambold 

Yes, it is definitely a powerful recruitment tool for a number of reasons. The first I just mentioned a moment ago where if you are in a situation where you’re recruiting for a provider, recruiting a provider and that individual has a certain salary expectation or demand, that is no longer a yes, I can pay you that or no, I cannot situation. It becomes a now that I know what you’d like to make, let’s look that dollar amount up and show you the path to get there. So rather than a yes, we can do it, no, we can’t. It’s a let’s show you the path, our job is to show you the path your job is to walk down the path and we’ll do everything that we can to support you there. So that’s the first piece.  

The second piece that does need to be considered is if you are a practice. Who says I just simply can’t economically afford to offer full salary models anymore? I need to remove that from my menu of options and maybe my most conservative model is, say, a 90/10. So if we go back to our $80,000 example, maybe I’m offering $72,000 for a new grad and guaranteed base and the rest of their pay comes from performance. If that is a decision that you make, then you need to institute what we call a grace period.  

The grace period is a period of it’s a runway, so to speak, where that individual is in fact guaranteed just to stick with our example and $80,000 salary for a set period of time. At a certain point in time, they would then choose from one of your compensation models. And that’s where their pay the calculation of their pay would change. 

 So you would need to do that if you’re recruiting, you would also need to do that if you’re converting your existing staff into a different approach. The grace period is very important. For new grads, we recommend the longer grace period. For more experienced clinicians, we recommend a shorter grace period. But we also recommend two other things that will help with your recruitment strategies. One is an early enrollment option and we see this very often with new grad therapist they have let’s say, a 12 month grace period. But they’re looking at their plans. They’re tracking their data, and they’re realizing that they’re actually making $86,000 rather than being guaranteed 80. So that individual may very well choose to request to opt in early.  

The second strategy is an open enrollment period similar to healthcare open enrollment. You could allow, typically we recommend once a year your providers to switch plans. So once they’ve picked a plan then their life circumstances may change dramatically next year and what they thought they wanted may be different than what they want or need now. If you don’t have another option, you’ll lose that provider because they’re going elsewhere to get what they need. If you offer it within the four walls of your company, they can just switch plans to get what they need, and you don’t lose that provider. 

Alliance Physical Therapy Partners 

At Alliance, we believe that partnership means creating something greater than the sum of its parts. Our focus is finding physical therapy practices with a strong culture and thriving community and providing them with additional tools, resources and expertise to take their practice to the next level. To learn more about joining our nationwide community of outpatient physical therapy practices. Visit our website allianceptp.com. 

Richard Leaver 

Trust him. Yes, I love the idea of changing the narrative from no to yes essentially, isn’t it? No, we can’t offer that. So yes, of course we can. It just requires you to do why and really throws it back on  to the individual. It reminds me of the the question that r=every new graduate asks, and I’m sure his coach, to ask with regards to how much how many patients do I have to see? And my answer has always been, which as you throw them through the loop a little bit as you see, as many as it’s necessary to pay the bills, your salary, and have a little left over to pay them the mortgage on the business. And even that answer is kind of met with wide eyes occasionally.  

But I love the and really that that answer is really going down the path of variable compensation and the way the next step after that is well, you have to see as many as you want essentially which which I think is even more powerful than the answer or you have to see enough to pay the bills  So I love that obviously recruitment, I’m sure it requires a little bit of work to explain it because it is somewhat new within the profession and I would imagine as students they don’t necessarily they aren’t necessarily exposed to it during their training or even introduce the idea from the schools. So I would imagine there’s quite a lot of education around this that’s required, yes? 

Jason Wambold 

Yes, it is a significant strategic commitment. If you do choose to go this route as a business, you do need to get very well versed in how to explain it because you’re right, at least right now the likelihood that the person you’re attempting to recruit has heard of this concept before is probably zero. Or very close to it. They are only aware of two approaches, hourly pay and a salary, perhaps with the bonus. So you do need to spend some time educating them on that, but in particular not just educating them conceptually, but with actual numbers, something that they can actually see.  

So it is important to have that structure in place and to even include that structure in your offer letter. It will be very difficult to get a candidate to accept your offer based on theory or hypothesis of what the models will look like. They would need to see the actual structure of what the models would look like, and so you will need to spend time putting those models together. 

Richard Leaver 

Yeah, absolutely. So from a retention perspective, obviously there is always a degree of skepticism from people and changes tough regardless of whether it’s positive or negative change. And there is definitely a perception that if one, an employer is changing something that I’m sure there is a perception that it’s usually in the favor of the company and not the individual. So, tell me a little bit about how this can be used and introduced with regards to retention. We’ve talked a little bit about how you would perhaps introduce it, tTime frame wise, but I’m sure there’s a little bit more to it than that. 

Jason Wambold 

Yes, I think of when we when we think about retention, I think of really two categories, retention during your rollout of your new plans and retention in general, overtime of more experienced providers.  

So if we address the first, there are a number of strategies that you would want to utilize to guarantee that your providers are going to see this as an exciting change. Not as something that is designed to only benefit the practice at their expense. One of those is when you introduce your new compensation models to make sure that you are doing it against the backdrop of that individual’s personal historic data. So for example, when you show them their new models, we have these new models you can choose from, plan A, B, or C. You’re able to show them and they’re able to look back in time using their own data. Over the last six months, 12 months, 18 months of what their life would have looked like, had they been enrolled in model A/B? Or see that is a very powerful tool at addressing any concerns or anxieties that someone might have been. That’s the fear of the unknown is really where the unknown is, where this fear comes from. The models are unknown. What my life will look like is unknown on these models. Well, if I can look back in time at my own data. Now I’m addressing that unknown. Now I actually can see. Maybe I shouldn’t be so concerned about the ups and downs of volumes based on where we are in the year or maybe some sort of weather event because I can see that over time, those things work themselves out. So that thing that I’m worried about, maybe I shouldn’t be worried about.  

So that is definitely a powerful tool with regard to retention over time. I think we all would agree that in general therapists, when they think about their careers and the trajectory of their careers, many of them want to move into other things.  

They would like additional responsibilities, other roles that are not necessarily related to patient care. So many therapists as their career advances, tend to treat less. So we need to have a way to do one of two things, either A encourage them to be interested in continuing to treat. Or if they’re interested in a career trajectory that starts to bring them out of patient care to still have a way to tie their compensation to hands on patient care.  

The way we address the 1st is all the things really that we’ve been describing. Transparency and plan design, options and choices, the ability to switch to a different plan. All of those choices that someone has is going to result in an increased enthusiasm over treating patients for a longer period of time because they feel like they have more control.  

But if you have an individual that wants to become a clinic director, for example, and wants to maybe treat 80% of the time instead of 100%, a very effective tool is to set up a teen credit scenario. Where once you’ve built your models, that individual is responsible for overseeing, let’s say four people, so 4 FTE’s that individual is being compensated according to their personal performance. But they’re also being compensated based on a percentage of what those 4 individuals underneath them are producing. So there’s an inherent incentive for that person to really pour into and coach those 4 individuals so that they can be as successful as they’d like to be. And in turn, that clinic director will achieve success as well. 

Richard Leaver 

Absolutely. Have you seen obviously, if it works, which I am, I have no doubt that it have no doubt that it will work in the right environment with the right people positioned in the right way implemented in the right way, but for for benefiting financially. Either.. Rephrase that because it’s not about necessarily all about increasing dollars is essentially meeting people where they want to be. But from a financial perspective, I can understand it very clearly, but what other types of benefits have you seen as a direct result of implementing this variable compensation model? 

Jason Wambold 

It’s a very interesting question because the longer we do this, and I’ve been doing this now for a little over 10 years, the longer we do this, the more we realize that the reason a practice owner will be interested in going in this direction, may be very different than the reason another practice owner will choose to do it. Some of the common driving force driving forces behind and owner being interested in going in this direction would be monetary correction. from a profitability standpoint. So a practice that is simply not profitable may look at this and say, I need to implement these models so that I’m profitable. That’s one option.  

Another option is leadership fatigue. Where an owner says I’m just tired of the number of management touches that I’m having to do on a routine basis, I would like my providers to be a little bit more autonomous and to think just a little bit more like I do. Not exactly like I do, because they’re not the owner, that’s not realistic. But to take just a little bit of the burden off of my shoulders. I would like to introduce something like this for that reason.  

Another practice owner may choose to do it to retain or recruit talent, so I’ve seen owners say I’m willing to see an increase in my salary cost with this approach, as long as it means I can have more time away from the clinic and don’t have to micromanage so much. Other practice owners will say if I don’t introduce this approach, I think I’m going to go out of business in six months. So part of what we need to do is determine what is the goal. And then the strategy is tied directly to the goal, the design of compensation structure needs to reflect what the practice owner is looking for from an ROI standpoint? 

Richard Leaver 

Now, whilst it might not always be designed in this manner, I would imagine most of the time it’s designed in a manner where the the risk actually is or the degree of the risk is actually taken off the owner by doing this. So you mentioned the idea that it may help with with, if they’re unprofitable or not making normal profit as a business. I do love the idea that it might not actually reduce the compensation cost at all, but may help other components of the business, particularly with regards to lower turnover. And we know based on off what you read, a single clinician that turns over could potentially be $65,000 of cost to the business, so you don’t actually have to reduce turnover significantly, do you to pay for any potential, perhaps additional cost associated with this directly in wage bill that I’m sure that many have noticed a improvement in turnover. Do you have any information anecdotally or actual attaining specifically to turnover rates for entities, clinics that have embraced this type of model? 

Jason Wambold 

Yes, I do. I can give you some general statistics that we have across the country among practices that we that I can tell you that we have worked with directly and of course that’s the only data that we have. Among practices that we’ve worked with as long as the practice follows the best practice rollout strategy. And what we mean by that is multiple plan options, a grace period, historic data analysis, all of those things that we’ve talked about as long as that happens, the attrition rate associated with the change, tends to fall between 3 and 5%. Now that’s, there’s a caveat to that. That is among practices that do not offer A-100/0 model. If you’re offering a 100/0 model, your attrition rate should be 0, because if someone doesn’t want the new models, their life looks exactly the same. At least I should say the attrition rate associated with the introduction of your new models should be 0. Someone may leave for some other reason that might not be tied to the models themselves. But if one of your options is what they’re on now, there’s really no reason to fear that the introduction of new models will result in someone leaving. And the other thing I should say too about that Richard to that point, is one of the things that is very effective is taking the approach of introducing a bridge plan. For example for the first 18 months, we’re going to offer a 100/0 model. 

At the end of that 18 month period, we’re going to remove that 100/0 model and it will be replaced with a 90/10 and the other models that we’ve introduced will remain in place. That’s a very effective strategy that we’ve seen as well, that minimizes or even eliminates any sort of attrition associated with this change. 

Richard Leaver 

Apart from, obviously the fear of change and then the possibility of some turnover associated with it in the short term, and I would imagine to be honest to you, those that probably choose to leave may well be those people that you aren’t necessarily the saddest about leaving anyway, but I don’t think perhaps we’ll go there just in case it upsets a few listeners. 

But are there any other pitfalls that people have to be cognizant or careful of when it pertains to moving either moving into this type of compensation model or maintaining it? 

Jason Wambold 

Yes, the first would be, it is advisable when you decide to go this route. When you finally introduce your new models to your employees, that you let them know that you’re going to continue to monitor the practice environment, what’s happening with regard to your expected revenue per unit of production and all of those. Sorts of things, and that you of course reserve the right to adjust, or recalibrate your models if that is what is required in order to ensure an ongoing win win situation for the employees and the company.  

But if that needs to happen, you will be very transparent with your team as to why it needs to happen, what the change is when it’s going to occur and how you will support them through that adjustment? It is typical to find yourself in a position where you need to slightly not dramatically tweak your models, recalibrate your models, typically every one to two years. If you don’t make that announcement up front, then you may lose trust with your providers. If two years from now, they’re very much enjoying the comp structure and you decide that the business requires a small adjustment. If you didn’t tell them that in advance, of course, the next thing they’re going to think is well. When is the next change coming? You can get ahead of that by telling them in advance that that is a potential reality in the future. 

Richard Leaver 

It’s just over communicating. Absolutely. Now I would imagine this will spark some interest in various listeners and they would like to learn more. Obviously you’re the expert from owners, one which I believe now has partnered with Prompt. How might people contact you Jason with regards to learning more about this, and possibly it’s setting up this type of compensation model. 

Jason Wambold 

Sure. I’d be happy to speak with any of your listeners certainly about on this one and the platform that we use to manage and organize all of this. But I would also be happy to listen to chat with any of your listeners just based on the concepts themselves and some of the things that we’re seeing and learning about in the industry across the country.  

So they, can and any of your listeners can contact me directly to my e-mail which is jwambold@onus-one.com. So it’s jwambold@onus-one.com. 

Richard Leaver 

That’s great. And we’ll put the details in the in the links as well. So thank you so much. I’ve learned a lot myself and appreciate your time today Jason, and sharing information about what I believe is a very valuable tool that not only meets the needs of our employees but also safeguards the viability and and normal profit levels for outpatient therapy, so I appreciate it. 

Jason Wambold 

My pleasure, Richard. Thank you so much for having me. I enjoyed the conversation. 

Alliance Physical Therapy Partners 

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