Kim Valva (Host): Hi, everyone, and welcome to Discover USPh, the podcast where we dive deep into the world of physical therapy and the successful partnerships within U.S. Physical therapy. I'm Kim Valva, Associate Vice President of Business Development and Marketing. And I'm here to bring you stories, insights, and strategies from some of the most successful collaborations in the industry.

We're going to be talking with industry leaders, hearing real-world experiences, and answering your questions to find out if a partnership is right for you. Let's jump right in and discover how the power of a partnership can transform your physical therapy business. This is Discover USPh. I am so excited today to have Chris Reading, PT, CEO, with us. Chris, how are you?

Chris Reading, PT: Hey, Kim. How are you? 

Host: Good. Let's get started with a little bit of background information.

Chris Reading, PT: Good morning, everybody. Good afternoon. Chris Reading here from U.S. Physical Therapy. Background information. So, I had a long career in Sports Medicine as a practicing clinician back in Virginia. We developed a network of facilities kind of throughout the state and in the mid-Atlantic region. I worked for another large company at that time. In 2003, Sherry and I moved our family to Houston, and I took over as Chief Operating Officer at U.S. Physical Therapy.

In 2004, I took over as CEO. I'm surrounded by a wonderful group of people, as you know all too well, yourself included. You know, we love what we do every day, so it's been a great blessing.

Host: Absolutely. And let's talk a little bit about the growth of USPh over the recent years. How many locations are we? How many states?

Chris Reading, PT: Yeah. Forty-three states. Locations change weekly, daily. We're a little under 800, so 770 approximately last count. We'll be over 800 this year, and the growth has been terrific. We opened 70 new clinics in the fourth quarter of last year.

Host: Wow. It's amazing and it's been so excited for me to witness. And so, when we talk about a partnership, let's kind of explain that a little bit to anybody who's listening. What exactly does a partnership mean within U.S. physical therapy?

Chris Reading, PT: Sure. It's kind of our foundational element. And so, what it means to be a partner. So typically, in today's world, we will seek out and try to connect with and find people who are like-minded in the business, people who love what they do, the fact that this impacts patients' lives, they've developed on their own, group of facilities, and they're looking for additional resources to help them grow and scale the business.

And so, what we do is we buy a majority share of the company. We created a new partnership, and that's just some legal work in the background. It enables however us to use our better reimbursement contracts when we do that among other things. And then, we add gas to the engine and us and our partner own that business together. It's separate and apart from any of the other partnerships in the company. Separate P and L, separate bank accounts, separate cash. We distribute cash available in the partnership every month to us and to our partners. And then, we guarantee that over the years, as we grow the business together and that monthly cashflow grows, of course, the partner has a salary of his or her choosing at the time of the transaction. But when they retire, we guarantee to buy that business, buy their equity back at the updated EBITDA and the business, you know, whatever it's grown to. And we have aligned incentive to grow together, at the same multiple that we bought it at the front end. And so, it really gives a lot of control to the partner, a lot of security, but with a backing of a big, very capable company.

Host: I love that. And how do we kind of decide who would make a great partner with USPh?

Chris Reading, PT: I'm involved in that process, really across the board with everybody, because the cultural part for me is very, very important. We want to make sure this is a good match. And so, we network with people. We meet people, we don't dial for dollars, which is my way of saying we don't just pick people and call them up without knowing them at all and say, "Hey, we want to buy your business." And there are a lot of other companies that do that right now because they're trying to add EBITDA in order to sell that EBITDA very shortly thereafter to a different buyer. And we're a forever company. And so, we're really trying to find people who we think we would enjoy working with, who we can make a difference with, and who want to do the best right thing for their community and their employees by adding the right partner, not just any partner. And so, we try to get to know people.

Host: I think that's so important. And sometimes, we joke about it a little bit that it's a little bit like dating because we're kind of going to get married with these partners.

Chris Reading, PT: Yeah. Not kind of, we do get married and it lasts a long time.

Host: Absolutely. I think we have partners now who've been with us for 30, 33, 34 years at this point.

Chris Reading, PT: Everybody's getting old like me. So, yeah, we have newer partners, we have young partners. The other unique thing that we do is we have transparency around when they're going to retire. And as those dates get closer, we're constantly looking for young partners to bring into that partnership to keep it vigorous and to keep that legacy going forward.

Host: I love that. I think that's so important. I do feel as though we are, you know, not only just securing their legacy, but protecting that brand and the local community. So, let's talk a little bit about what happens to their brand when they become a part of USPh.

Chris Reading, PT: Yeah. So, nothing happens. I mean, we operate around the country under probably 150 different brands. So, the brand stays the same. USPh is in background generally, unless the partner wishes it to be different. But none of our clinics are branded USPh. They keep their brand, they keep their identity, they'll keep all their people, which again, is different from any other acquirer in the space, most of whom centralized back office functions and other things, which means people go away. And unfortunately, that scares the clinicians. And clinicians then look for a job. And we don't lose anybody in a transaction. We keep everybody we know we're going to grow. And so, we use that stable staff point as a launch point to accelerate growth.

Host: That's so important because when we talk to people, they're most concerned about two things, their patients and their staff. What happens if we do a transaction together?

Chris Reading, PT: Right. And they should be the two most concerning things, at least to the people that we're attracted to. Look, we're going to be very, very competitive on price. We'll be right there with anybody else. And so, there really isn't much of a price difference among buyers. There's a massive difference among buyers in terms of what life after looks like and feels like on a real basis.

And so, that's really where the difference comes in, and that's where we look for the people who put value on their team and value the care that's given and want to do it the right way.

Host: Absolutely. So, many times we talk to people and they say they're in the growth phase of their business. Maybe they have six or seven locations. Why would it benefit them now to become a partner as opposed to waiting until they have 10, 11, 12 locations?

Chris Reading, PT: First of all, let me just say this and I'll get it out of the road, we're not here to tell anybody when it's the exact right time for them to do something. It's up to them and their family and their team. I think it's natural for people to want to wait until they're at what they think is the very peak. Peaks are really hard to predict. And most people, you know, if you look at stock market timing, most people can't do it. And there's a reason. You're emotionally attached and it becomes almost impossible.

And so, what we encourage people to do is figure out what your pain points are. If you could eliminate those things that are kind of necessary, but dragging you down, how much faster could you go, and if you have a partner to shoulder those things reliably. And in today's world, everything from compliance to cybersecurity to just simple business operations or financing, in some cases, those things slow almost everybody down. So if you can eliminate those, just think about what you can do with the right resources. So, we encourage people to look at the big picture, the long run. This isn't a one-year, two-year kind of thing. This is the rest of your career, choose wisely. But some people wait until it's too late, until they're ready to retire, or they're really near retirement. And then, quite frankly, the business doesn't have as much value because that person has value inside the business. And when they leave, there's disruption that occurs. And so, having a much longer runway is easier to land and take off planes safely. So, the same's true in this as well.

Host: That's so important, like you said. And also, that we have so many resources behind the scenes that can really help somebody if they come to us and say, "Okay, I'm ready to really grow and I have these ideas of where I want to go." And what does that conversation look like once they're a partner with USPh and how can we help them do that?

Chris Reading, PT: That's exactly right. I mean, so many resources, people don't have any perspective, but we've got 200 people who are experts in every part of this business, from leasing and cybersecurity complicated things, legal issues, even simple things like logistics. We have the best logistics guy in the world who everybody loves, meets him. When we open a clinic, he puts it all together, all the equipment, everything, fax machine all the way through in a day and blows out of town. And it's white glove service. And there are a lot of things people don't think about that just are unfortunate. Time sucks that in a family business or a closely held business have to be done, but are being done by a very limited number of people who potentially aren't trained in all those things.

Host: Absolutely. And I imagine that's music to so many people's ears, knowing that they have that support and that they can open up these locations and they have someone who will come and put things together. And knowing with construction, there's issues that come up. You know, you've got landlord stuff, you have local issues, whatever it may be. And just having that added support just means so much.

Chris Reading, PT: It makes everything easier. Our partners aren't on the hook for loans or leases anymore. They no longer have to mortgage house or property. We handle all that. And so, it's really the most secure way that you could ever want to be in this business with a partner.

Host: That's amazing. So, I want to switch gears real quick and talk a little bit about new grads and physical therapists. Right now, everybody knows it's so hard to recruit and there's so much competition and there's sign-on bonuses, and all these different things getting thrown at PTs coming out of school. What advice would you have for new PTs?

Chris Reading, PT: I spoke at a conference recently and there were some young people who spoke. And it was interesting, it changed my perspective a little bit. Culture was really important to them. That wasn't a surprise, but how they determine culture was interesting. You know, they go to somebody's Facebook page, they look at community events and community plugin, and the closeness of the staff. And when you have a group like we do that's anchored by our forever partner or partners, most of the time plural, that anchor in the community is very, very stable. That connectivity is very, very stable. And so, all the things that typically I think new grads want is present in our model that's not necessarily present in what I refer to as a more corporate top-down structure where you have all these layers of people. We don't have that because we have our partner as the anchor. We don't need it. it's much more stable model that's evident by our market position and how well we've done over the years and our lack of debt. It's just all those things, I think, resonate with the young person.

The other thing they mentioned also little bit of a surprise was they said, "Beware of sign-on bonuses." Beware of big carrots out there because to them demonstrated maybe somebody that was a little bit desperate to hire and maybe that was a red flag. You know, this is a fantastic career. It could be and should be a very long career for most people. This isn't a one year and out kind of thing that's make or break. The best opportunity you could have would be an opportunity where you could eventually grow into leadership and ownership roles. And we have that. And really, that's kind of unheard of anymore unless you go to the bank and you hang a shingle and you go through the meat grinder to do it yourself.

Host: Yeah, absolutely. It's such an opportunity for so many people that are coming out of school right now. You did mention something, two things I want to touch on. You said corporate, and we're kind of unique because we don't exactly call ourselves corporate. So, what do we call ourselves?

Chris Reading, PT: We're a company. Just like anybody has a company, we talk about our home support office. In our office, Kim, you know, you work there every day. You've seen it. In the central upstairs, we have this tall, winding staircase. It goes to the upper level of our home office. And across now, it's bled into some adjacent rooms. We have these high-walled areas that are wall to wall kind of headshots of all of our partners around the country. So, it's probably 10 or 12 picture high and 50 pictures wide on each wall. And that really is the central focus for everybody in our office who are there in service, not in charge of, but in service to our partners.

And so, that's really the reminder that we all get every day, who are the important people in our equation? Certainly, they're patients. We can't have all our patients pictures up because we see millions, but we center and we focus on support of our partners.

Host: Absolutely. And you can just tell that I think when you look at our office and we say home office or we say Houston office or whatever it would be, just we shy away from that, that C word. Everybody there truly loves our partners. And everything that they do, whether it's accounting, whether it's marketing, whatever it may be, it's for our partners . Like you said, we are there to support them and serve them, and it's so important.

Chris Reading, PT: We're in a service profession. And to me, it was always interesting that you could be in a service profession, but have this group of people who acted and felt like they were over you, not to serve, but to tell you everything. And the next thing in terms of what to do, it's not that we don't have opinions, it's not that we don't have a voice, we do, and we use it. Just in any partnership or any marriage, that perspective and alternative perspective's important. But, you know, it's not a top-down kind of environment. It's a very service-focused environment. So, I think that makes a difference.

Host: It truly does. And I want to talk real quick about being clinician-led. That's obviously so important to us at the Houston office, to other PTs within the company. Just if you could touch on that a little bit, what that means.

Chris Reading, PT: Yeah. It's probably self-serving for me to say, because I had a long career as a clinician, as a physical therapist in Sports Medicine and Orthopedic Rehab. Most of the companies now aren't led by people who've been their whole career in the Physical Therapy world or who've been a clinician.

I think it matters from a number of different perspectives, and not just me, but at our regional operator level, most are clinicians and the couple who aren't physical therapists have been in Rehab for their whole career, long career, decades. So, I think, one, to know what it's like to actually treat a patient, to treat a full caseload, to treat more than a full caseload, to do documentation, to put a knee or shoulder back together again and understand the surgical involvement and the trauma around that and how afraid in some cases patients are or their families, how thankful they are when we take good care of them, which we strive to do, you know, with every encounter.

I think those things matter. If you strip all of that away and you don't understand any of those elements fundamentally, then you're kind of left with nuts and bolts. And so, the nuts and bolts are the business and metrics and other things which are also important guideposts, but it's not the whole story. And I think to have the whole picture is important. I think it's probably important to our partners that at least some of us, you know, have been there, done that. We didn't start out being unique that way. But, you know, where the professions migrated to, we've ended up being unique in that regard.

Host: Absolutely. And it does stand out so much. So, not just you being a clinician, Graham Reeve, our COO, also a clinician, our team of regional presidents, directors of operations, our compliance team, and my absolute favorite, one of our attorneys is also a clinician.

Chris Reading, PT: That's correct. Right.

Host: So, let's talk a little bit about the opportunities that physical therapists have within our company. What type of trainings do they get? Either at the local level or with us at the Houston office?

Chris Reading, PT: Yeah. So, there's a lot obviously that happens at the local level with and through our partners, varies by partnership. We have a standard very generous benefit for continuing education, and those happen seamlessly within and around our partnerships. Then separate from that, as you know, and you're a big key in the training program that we offer, one of the big ones that we offer in Houston called Masters, which is really, I think, an elite program to help younger therapists or therapists who haven't led before, become leaders and managers and give them an opportunity to shoulder their own clinic and to grow and to take on more responsibility. And it's very multifaceted. You guys make it so supremely fun. It's a joy for me. One of my favorite things is to speak to that group on a Friday after they're here with us for a few days and just listen to the feedback, which is really incredible and very uplifting and inspiring for me that people come out of that just so fired up and with so many more tools. But there are a lot of things that we do, like that partner meetings, Masters program, regular trainings through learning management tools that we're able to do efficiently over the internet through somebody's computer. We use technology, obviously, as does everybody, but it's abundant here that that's important.

Host: Absolutely. And I'm going to tell you a funny story that I don't know if you know, Chris. So, I was a Masters participant 13 years ago. This month will be 13 years. I can tell you the exact table I was sitting at, and I remember looking at Erin and Kristen and Margaret and thinking, "I think I know what I want to be when I grow up."

Chris Reading, PT: That's funny. So when you were at Desert Hand, you came through 13 years ago. And I probably met with your group. You know, I'd love to say I remember exactly where you sat, but I'm not going to lie, I don't. But yeah, it is great. We encourage people, I encourage people, not just to be comfortable, but to think about possibilities that are uncomfortable. And that's, I think, where we all grow as people and leaders and human beings and therapists, is to do things that make you a little bit uncomfortable, obviously taking the right way, but to be over your head a little bit and to stretch. And that's where we learn, and that's what we try to do, is give people the encouragement to pursue cool possibilities.

Host: Yeah. And I've been lucky enough to be on the receiving end of that and can speak to how wonderful that is at this company.

Chris Reading, PT: And you've done a wonderful job as somebody who's just been promoted. So, congratulations.

Host: Thank you so much. I don't know if you saw the smile when I said my title. I couldn't bring the smile down.

Chris Reading, PT: Yeah. That's right. We're excited for you.

Host: Thank you, Chris. I just want people to know that the learning opportunities don't stop at the Houston level or through any of our other training seminars that we have set up. There's so many things our partnerships offer at the local level too, and whether that's mentorship opportunities and residency programs that we have some of our partners doing, there's really no limit.

Chris Reading, PT: Absolutely. The residency is a great thing to mention. So, we've got one of the top residencies in the country. The pass rate is extraordinary, almost a hundred percent. We're able to do that remotely and connect to all of our partnerships, whoever wants to participate. So, our Jackson Clinic partners in Northern Virginia, we have other residencies as well. We have obviously elite people who treat and who publish and who do great things. And, you know, we just have a lot of resources at hand, really because of our structure and because people want to come and stay.

Host: Yeah, absolutely. So lastly, I'd like to talk about some industry updates. You are heavily involved in advocating for our profession. Can you touch on that a little bit?

Chris Reading, PT: Sure. For the past, I think, it's 10 years now, Luke Drayer and I and some other CEO friends got together 10 years ago. And ultimately, out of that, we created a 501(c)(3) whose work is focused solely on advancing physical therapy and the causes that are important in the outpatient physical therapy world. That alliance is called the Alliance for Physical Therapy Quality and Innovation. It's a mouthful for sure, APTQI. And we now represent thousands and thousands-- I don't have the number at the tip of my tongue-- but several thousand physical therapy clinics. Many thousand, I think we're over 6,000. We're tens of thousands of employees and thousands upon thousands of clinicians represented by our alliance members, who represent the largest companies in the space in a lot of regional companies and now even vendors who care and whose business touches or surrounds physical therapy in some way.

And so, you know, I serve as president of that group. I have really from the beginning, Nick Patel, who's one of our key employees on the clinical services side. We loan Nick out halftime for his work as Executive Director at APTQI, and we're involved in everything from creating new legislation to lobbying in D.C. We have a PAC at U.S. Physical Therapy and a pac at APTQI. You know, Nick and I are headed along with some of our other executives, from our member companies to D.C. here in just two more weeks. You know, the work is important. The reimbursement hasn't been representative of the impact that we make on people's lives. We need to change that. We need to work with alongside, and occasionally apart from the APTA, depending upon our needs and their directives. But there's a lot to get done. It's important for our patients to have access. Medicare beneficiaries count on it, and yet there've been some wrong-headed policies and some reimbursement decisions, some of which were done on a mistake or an erroneous basis, which have negatively impacted not only us, but our patients. We've got to have a better unified voice so that we can cut through the noise in D.C. and get some things done. And so, that's a lot of what we spend time on and we put our money towards that's important.

Host: It's so important. And how can somebody get involved or what do you recommend that they do to help everything that you're fighting for within our industry?

Chris Reading, PT: First of all, if you own your own company, and even if you're a small company, we've got a membership that fits you. We've got very, very involved members who are excellent spokespeople for the profession. We'd love to have you. So, you can call Nick or I, or get a hold of Kim, and she can connect you with one of us, and we're happy to talk to you about how you can plug in. That's one way.

At the APTQI website, we have an action center with all of the things that we're working on. And literally, within 30 seconds, all you have to do is put in your ZIP code and your address, and it will connect you with your particular lawmakers in D.C. around a particular subject that is going to be important to you and to us as a profession.

We have a SAFE Act right now, which involves fall prevention for seniors. We're working hard on some of the reimbursement issues. Some of the other issues we're going to tackle, credentialing, I think, here in the very near future that's been weaponized by large commercial insurance payers against providers. So, it's just so important to have a voice, and you don't have to be a clinician to do it. All of your people can go to the site, can go to the APTA site too. But APTQI, easy, easy and simple way to communicate with your lawmakers. And we want you to have a voice, even if you don't entirely agree, you can send your own letter, but it makes it very simple.

Host: And I will say I do enjoy sending those letters. You get confirmation when your letter is sent, and they send you regular emails to help you stay on top of all the changes. And let you know what's going on within our industry. So, again, so important. Definitely check out APTQI. My last question for you, Chris, is any technology in the PT space right now that you're especially excited about?

Chris Reading, PT: Yeah, there's a number of things. And I'm a little reluctant to mention company names, but I'll tell you the type of things that we're really excited about right now. There's a new company, it's led by a great guy. And we're able to get actual, on a market-specific basis, insurance reimbursement rates to every provider in any market that we choose in the country. We can tell what they pay everybody. We can tell what they pay hospitals. We can tell what they pay, rehab hospitals, what they pay all of the outpatient providers in that market so that we know where we are in the scheme of things and where we can afford or should push forward. And we think most of the markets, we should be and we are pushing forward. So, that's a company I'm very excited about with new technology.

I'm not the tech guy in our group. Thankfully, we have other people that are much more gifted in that than I am, but I'm going to be using AI to streamline documentation and other things for our clinicians that's being rolled out right now, going to have a component that allows for an element of what I'll call virtual check in. Not to completely replace the front office interaction, but to augment it so that we can scale in a little bit more efficient way. I mean, there are a number of things out there that are going to help us stay ahead of the curve a little bit or catch back up to the curve. We've had a pretty big curve the last few years, but that's just a few.

Host: That's great. Thank you for sharing, Chris. And it's an exciting time in the industry. I, definitely can feel that. Well, thank you so much for spending some time with us. I enjoyed speaking with you as always. And thank you for your contributions to the profession and your expertise and, really, for allowing the next generation of PTs to continue to grow and supporting small business owners that wouldn't really have a chance to do it without USPh. So again, thank you so much, Chris. Look forward to talking to you probably in another hour or so.

Chris Reading, PT: It's a busy day.

Host: It is a busy day. Thank you, Chris.