Sustainable group practice growth with Danielle Hayes

Dan King: [0:00] Hello, everyone. So we have a return guest by popular demand, Danielle Hayes. She is very modest. So I'm going to toot her horn because she is too modest to toot her own horn, probably. She is the co-founder of Therapy Austin, which was a monster group practice, and which she exited from. Today, she's a consultant with Brexie. I'll disclose also she is an advisor and investor in Fireside. And we're going to delve right into the fact that she runs the Group Practice Owner Network, which is a free community for group practice owners. Danielle, you have many, many titles, but let's start with the Group Practice Owner Network. What is that? Danielle Hayes: [0:40] Yeah. Over the past couple of years, as I've emerged out of my own group practice here in Austin, Texas, sold and kind of started meeting people all over the country who are doing what I did for 10 years in today's environment, I started hearing the same conversations over and over again and finding myself wanting to connect this person here with that person there and feeling like there could be mutual benefit. So I ended up starting a free monthly group that group practice owners from across the country participate in. I meet everyone personally. So it's really, it's not a Facebook page. It's, you know, it's a relationally driven environment where people come, usually about 10 or 15 people come every month. We have about 60 members and some people come every time. Some come occasionally. After each meeting, I send out a recap and we end up talking a lot about industry trends, the ways people are trying to solve problems today. All the latest headlines, all the things that we're dealing with, being in isolation, trying to figure out how to navigate group practice leadership today. And it's just a lovely environment where people are very generous and share and are kind of lifting each other up. Dan King: [1:44] Fantastic. To be able to participate in a free group for, you know, to build community for a group of owners who are often so isolated in such a vulnerable time is really a beautiful service. So thank you for doing that. Danielle Hayes: [1:57] You're welcome. We meet once a month on Fridays. And if you're interested, you can email me at danielle, D-A-N-I-E-L-L-E, at hastetherapy.net. J-Y-E-S. Dan King: [2:08] We'll put that in the show notes so folks can, if you miss it here, you can just go click the link and email Danielle. Danielle Hayes: [2:15] Reach out to me. Dan King: [2:16] Exactly. What are some of the spiciest things that you're talking about right now in the Group Practice Owners Network? Let's dive right in. Danielle Hayes: [2:23] Clearly, this whole recent set of events with ALMA and the insurance rate reimbursement, everybody seeing basically that we're in a moment. And, you know, again, these are all new groups, new businesses that have emerged to serve us, but also end up controlling a lot of what happens to our businesses. And so people are talking about what does this mean? Like there's the immediate issues and then there's the long term. If we are, you know, if places like that are primary sources of referrals for our group practices and ways that we're handling insurance billing and all of that. What happens when they start to decrease billing rates when they're owned by insurance companies and consolidation, which is inevitable? Danielle Hayes: [3:08] Happens that suddenly our group practice is along for the ride with all of that. We don't have as much, we don't have independent leverage. There's pros and cons, right? But there's definitely a lot of conversation about what's happening with these rate cuts. How do we continue to adapt and evolve and manage some level of control of our business in a very difficult marketplace, right? People are also talking a lot about the administrative burdens that are on us today that are growing. It's some of the biggest, you know, technical and administrative responsibilities as rapid shifting environment, the rules, all of the things that are changing. And it's adapting to this environment means we all don't always know what is the best way to handle my problem at this scale. Like, do I hire somebody? Do I find a technology? And everything has its pros and cons. So there's a lot of people talking about what worked well for me, what didn't, and sharing those resources so you don't have to reinvent the wheel for your own practice. And I think that's really valuable to hear it straight from the users. There's just so much complexity, right? We're dealing with so much complexity in our credentialing, our billing, documentation, payroll, recruiting, all of it. And so sometimes it's so often this is not about the clinical work for us. That's where we have the expertise. It's about all these surrounding systems and then working in isolation around that. So we don't have these professional associations or places we're marketed to a lot today. Danielle Hayes: [4:33] And we are mostly interacting with our clinicians. We need other peers to help us sort this out. The other thing I'm hearing a lot is that not everybody wants to grow. There's a lot of people who are really starting to identify like, hey, what do I want this practice to be? And maybe it's not just about getting bigger, scaling all that. Maybe it's about quality of life. Maybe it's about getting back to the basics. Why did I do this in the first place? Really, what am I prioritizing? At what scale, what size do I need to be? What scale do I need to be to build the dream practice that's sustainable? You know, all of that, but not, but also it's not just about growing bigger. Those are some of the things that we're talking about and sharing resources around and trying to figure out how to talk to our employees about all of this, you know. They're navigating a lot of misinformation and confusion too. Dan King: [5:22] Let's start with the first one. We can go into any of those. But on the first one, I know your practice was a cash pay practice. And this insurance stuff is affecting the whole industry. So I'm curious sort of what you see as future trends here. Is your sense that in general, there's going to be consolidation and thus massive insurance rate reimbursement cuts across the board? Do you think that the parity laws could counteract that? Danielle Hayes: [5:49] Maybe. We're just starting to see some of those parity laws come out, right? And so that's possible, but it's going to be state by state and probably a difficult sell in states like Texas. I do think the insurance consolidation, they're buying up the clinicians and the practices and the service businesses, you know, the billing businesses, the whole nine. So, and I understand, you know, they have their agenda and all of that. But often we perceive that that agenda is at odds with our clinical agenda, and it can be frustrating when we don't have enough margin, especially to be group practice owners, where there's the direct private practice, direct billing. In that case, you don't have a lot of leverage. Or say you have a great practice and you can leverage your contracts a little bit. Danielle Hayes: [6:36] The insurance companies are moving towards measurement-based care and having some kind of proof of outcome, metrics, things like that. And for most of us, I'd say on the clinical side of the house, well, I can understand in theory why it's like, well, why wouldn't you want to show that you're doing good work? But we know it doesn't work that way. Tons of clients talk about this all the time. Oh, yeah, I get that, you know, you know, depression scale every time and I just fuck with them because I know they never read it and I just put whatever. Danielle Hayes: [7:02] The client is not really getting served by this. The clinician is not really using it. So it becomes kind of a meaningless set of data, but we're being evaluated on that data. And so then, you know, it's kind of like pressing for reviews all the time. It's just another burden that you have to kind of, you know, a hoop you have to get through to get to the care. I think, you know, again, typically every therapist would love to be able to let the clinical need drive the money, the care coverage. We know that that's not when there's a third party payer, that's not necessarily realistic all of the time. My guess is that also as we see, you know, the cuts to the Affordable Care Act and all of that, there is going to be, there are going to be more people needing to use cash whose insurance doesn't, you know, unless parity really happens at a large scale, it's still going to be difficult to access services and their services are controlled. So I think there will be some cash pay, hybrid, whatever, some people who prefer it for flexibility, whatever. But clearly, you know, the economic situation we're in, people would like to always start with their insurance. It's just I think that control factor is going to get harder and harder for both clients and clinicians to work with. And then it's hard for us to pay our clinicians reasonable rates if there's no margin there for us to run all the other aspects of the business. So, you know, we're in a tricky moment. Dan King: [8:24] I've been delving into parity laws more and more. And some states, I agree, it probably would be a tough sell in a place like Texas. Illinois, as an example, are really starting to take it very seriously. Dan King: [8:37] And it'd be interesting to see, especially since a lot of insurance companies like Blue Cross Blue Shield is regional or state by state based, right? It'd be interesting to see what the impact is on Blue Cross Blue Shield of Illinois versus Florida or Texas, right? So I think there's a lot of different possibilities. And those parity laws, if actually enforced, could be seriously, seriously powerful. And we might even see clinicians move, right? So there was talk around, you know, in Texas when laws like natal laws came out, which had significant impact on women's mental health. That's the sort of thing that can lead clinicians to move. So, you know, originally the founding fathers always saw the fact that we have so many different states as a laboratory for experiments. And so we may be in a moment where we can do some of those experiments and we can see whether states that actually take parity laws seriously and states that actually value clinicians are going to win in the end because I got to think if we're reimbursing clinicians, if we're reimbursing 90837 for $50, we're not going to get good outcomes. The best therapists are not going to do that work. And so at some point, something has to give. And I think in the middle of a mental health crisis, maybe it takes us all banding together and pushing back. But I'm not so downcast as to think that it's inevitable that insurance consolidation will destroy the industry. Danielle Hayes: [10:00] I think it just goes in cycles, right? There'll be a cycle where right now there's not a lot of checks and balances on corporations and the choices that are being made. And I think there will be a push in the other direction. Right now, I think there's a lot of push for access. So it's easy to demonstrate, like, we can serve more people. But what are you getting for it? And the measurement-based care model is not really going to show what you're getting for it. It'll become a mean, you know, tail wagging the dog. This also comes to the part about like multi-state licensure and interstate compacts. And there's a lot of places Texas isn't there yet. Right. But how does that change things when you can practice in all these states, but each state has its board, its own insurance companies, all of that. And so it does, in a sense, where, you know, the Alma Headways and all of that, they're the ones managing this interstate complexity, all the legal, having employees in different states. But when you think about it from the provider side, it's not the ideal job to be seeing too many clients and, you know, turning over and burning out. And so we've got some tension in our industry around. I also foresee a lot of young clinicians burning out in the next few years as they and they've taken on a lot of student debt. Danielle Hayes: [11:07] And they don't want to do this job after a couple of years because they're too tired. They haven't been given the nurturing support they need as emerging clinicians. We'll have shortages no matter what, right? So, and then things will be driven that way. But I don't know. When we saw Medicare Advantage, right, and all of a sudden there was more access and it was more robust. And very quickly, it seemed to me that the answer was, oh, people are using it more. We need to stop offering it. Even when you're solving the problem, it's not what they want, right? Dan King: [11:35] Maybe the access cry is not taken so seriously. Yeah. Danielle Hayes: [11:39] Or maybe there's some boards or governing entities that come together where there is a mixture of people represented and not just lobbyists for industry, but also professionals. You know, like this is an area where I think just like with physicians, we need the voice of physicians. We need the voice of practitioners involved in the decision making around this. And that it's complex because there's different sides pulling different parts. So my hope is that there will be more conversations that happen, not just how do we solve it algorithmically? How do we solve it? You know, from the insurance side, they're looking at it as a numbers game. They want to help their members theoretically, but it's not that they're all evil, but they don't view it from the same lens. And I think there's a lot of room for communication and interdisciplinary teams to come together and try and solve these problems. Dan King: [12:27] I definitely agree with you on the need for interdisciplinary teams here. And one possibility I see, I'm going to be somewhat self-interested in saying that, but it's the rise of multi-state group practices. So you know traditionally group practices emerge in one state and maybe they get to a certain size and then they are bought right but i think you want to you want to talk about interdisciplinary teams you know i'm a huge believer in everything i do in mental health that we need clinicians non-clinicians working together, and doing so in maybe almost mid-sized group practices where we're not public companies where there's no boards and there's no responsibility to make a quarterly, whatever to shareholders, but we're sizable enough where now we have leverage to deal with insurance companies. We maybe even have leverage to deal with governments and ask for things like the enforcement of parity law, ask for things like training more clinicians and making it easier to actually become a licensed clinician. And by the way, we pay people well, now they're not burning out as much. What a shock, right? I think midsize group practices have some potential to be a countervailing force. Danielle Hayes: [13:32] I do too. And the challenge is that there's going to be fewer of those that are, you know, built by clinicians because there are practices like that, but it takes so much out of that person than to add the lobbying, to add all of that stuff. And there are people doing it. There are definitely, I see, I know several clinicians who are moving into the advocacy realm. There's advocacy organizations coming together to make it easier for us. Danielle Hayes: [13:59] It requires, to a certain extent, bringing the collective together and having some leaders rise out of it that know our industry can speak for a larger group and have membership or whatever that they speak for, where it's coming from a place of authenticity and in a field that's traditionally been broken up by discipline, social work, counseling, you know, LMFT, where we all have in every state has different rules for each of these entities. And so we're all kind of fractioned. And I think that if there is some ways for us to come together as a group, And begin to and I don't I think of that less as unions and more as professional associations where, you know, I'm a member of NASW. It's starting to work on these problems, but it takes large institutions like that more time. And they're working on it legislatively, which I love. And they've taken a disciplinary approach. But people who aren't social workers might not be getting that information. Right. So I think it's going to take larger and psychology and psychiatry. frankly, we all have to get together because it's hitting them too. And that's, yeah. Dan King: [15:04] We need bridges, right, to bring clinicians and non-clinicians together because each have different skills to contribute to the greater whole. Danielle Hayes: [15:11] Yeah, different constraints in our field and different ways of looking at the world. And so we have to kind of come together and find this, what's the bottom line that makes sense? And how do we, I do think if the corporate practice of medicine stuff is a big deal in terms of even if it requires people to have clinicians actively involved in their upper leadership and not just in name, but, you know, I think the wise ones out there who are doing these things are bringing clinicians in to have these conversations and understand that you can go out and buy a group practice, but if you don't resonate with your clinicians and their way of communicating and the work they do, Danielle Hayes: [15:50] those clinicians are licensed and can leave and you don't have anything. Dan King: [15:54] You know, it's interesting. I really wonder, bigger picture, about how well-intentioned these sets of laws are. I think the CPOM laws are probably well-intentioned, and I can see how they diminish the potential for innovation. Ultimately, what we really want, we don't want investors to make decisions that are opposed to the interest of patients, right? We don't want profit to overcome patient care. And even as an investor, I agree with that. And laws are such a irritant to innovation. And so ultimately, what we want clinicians to have a major say in things, I think there's probably more direct ways to do it. And so, yeah, I'm not a fan of the CPOM, perhaps a fan of the intention involved, but I see, you know, how the years of effort involved in making transactions happen. For folks that aren't familiar with the CPOM laws, they basically say that you can't, as a non-clinician, you cannot directly own, you know, equity, in a therapy or other sort of professional health company unless you have the appropriate license type. And so what it means is non-clinicians can't have ownership in those entities. And the aim is to separate the interests of for-profit investors and clinical decision making. So it's a good intention, but it makes it very tricky to create partnerships of clinicians and non-clinicians. Danielle Hayes: [17:19] It does. And we do need those partnerships. And it doesn't seem to stop UnitedHealthcare from owning, you know, 75% of the clinicians in the country at one level or another. And so it is happening either way, regardless of the law. The laws are often in reaction to something and trying to fix something, but not necessarily. And that's how our system works. And we iterate and learn from each iteration. Right. But you can talk to people in the insurance industry and they will say they want to help people get care. And I talked to a lot of people who work in insurance and they really are invested in trying to get member benefits and get it working. It's just these are very large, complex institutions, things fall through the cracks. We know that in both physical health care and mental health care, right? All these complex rules and each plan has its own. Danielle Hayes: [18:09] So it's almost impossible when it comes down to it. We don't have any universal health care, which pros and cons of that, too. But we're all navigating within all these little worlds. And it is, I mean, what it comes down to is that's the administrative burden of it. Right. So it makes sense to want to offload that burden onto Alma Headway or someone else. Makes sense. But then what are the implications if they are purchased by an insurance industry, you know, company or they are now, right? And again, it's just another player and every player in every entity in between you and the client adds to the complexity, right? And that's what makes it hard when you drill back down to our level in private practice or small group practice ownership. The level of complexity is what's eating people up because it's exhausting. Danielle Hayes: [18:55] It's moving so fast. For most of the time in my career, I came in around the time that simple practice evolved. HIPAA came in, right? The switch from handwritten notes to digital records for everything. Danielle Hayes: [19:08] All of that, you know, each one was a lift, you know, RingCentral revolutionized things in the way you could hire people. Group practices emerged really around that time because it became cheaper and easier to create systems where you could have multiple employees and part-time employees. Yes. And that was all great, but I wasn't having to change. It was maybe every two to three years, something coming through that you have to adapt. And since the pandemic, it's like every week there's some new thing and everyone's trying to figure out, do I need to do something about this? Do I not need to do something about it? There's too many urgent things and it's hard to clear the noise and get clear about where do I apply my efforts? That's why I like these organizations that are coming up. One of them is cyan and then there's another coalition forming and they're working together so that you can have a place to go to get information when these news announcements come out and everybody on linkedin and facebook freaking out how do i know does this matter to me or not and then there's a lot of things you know that are happening where we have to adapt our practices around it like you know the health parity stuff informed consent all of that We're having to like follow all these rules We spend a lot of time doing all of that and it's all meant to be good, but they're just you know It's complicated Dan King: [20:26] Very complicated. You're bang on. And I got to think that one of the unintended consequences is it makes insurance takeover easier because they have the legal teams, they have the follow up, they have the organizational capacity to master it all so much faster, right? And I'm pretty confident, given the CPOM example that we talked about a few minutes ago, that actually makes it easier in a lot of ways in the market for buying businesses in this universe. Navigating that stuff is much easier for a large insurance company than it is for a smaller firm. Danielle Hayes: [20:59] And if you can get a hold of somebody at the insurance company and you can have an in-depth conversation, often it works out. But there's a phone number you can call, but you may give three days of your life to get a hold of somebody. And you may or may not get accurate information. And so there's also just like, it's the same thing, scale. And like when you're dealing with human beings and the nuance of it, you know, just like with the DSM, right? Those labels are there to help between clinicians communicate a set of symptoms so that accurate information is being conveyed, but they don't always tell the whole story, right? And people are more complicated than a label or a code. Yet we need those things for interdisciplinary communication, but we don't yet have systems that allow for the conversations. Some things are pretty cut and dry. It's just not always that way. And as you build a practice, more and more clients coming through, clinicians coming through, and you may be managing 10 clinicians and each one is paneled on different insurances. Danielle Hayes: [22:02] It becomes very complicated how do you maintain fair pay when one person is more cash oriented and they're bringing in cash but someone else can't seem to get off the insurance and they're on low pay contracts Dan King: [22:16] Let's tackle one last theme and then break into the day and that last theme is are you seeing more and more sort of hybrid practices emerge where they have both cash pay and in network are you seeing that and what do you think about that model. Danielle Hayes: [22:30] Yeah, I mean, I think when I started, it was much more you're one or the other. And, you know, if you could do cash pay, that was the preferred, right? Because you had less constraints and you could manage the clinical. And of course, you didn't have to hire a whole administrative team to run your business, right? Very simple. A lot of clients preferred it. But I'd say today, people just like with hybrid, right, with telehealth and in person, people want the best of both worlds. There are the new companies for out-of-network, like Mentaya, Thryser, all that, that allow for some quicker, faster reimbursement processing so it's less laborious. But I'd say in general, I think the hybrid, more people are aware of how their contracts are written, like when you don't want to be in violation of your insurance contract, right? So whether you're a group practice contract or individual. But the point of it is they're trying to help their clinicians. It's a way to help your clinician earn a little more because they are plateauing too. They can't see more and more clients. They can't earn any more money. There's no margins. Danielle Hayes: [23:30] They're stuck too. And there is a market for high levels of specialization, right, or things you can't access easily through insurance. In different markets, it varies. Some people prefer not to have all of this personal information through their insurer or just whatever, how they choose. But I do think that mix is making more sense to make group practices viable and to be able to pay seasoned people more so you can retain them. They don't necessarily want to go to private practice, but they're having a hard time. There's no growth there. You don't get more money from the insurance company because you have more experience or specialization. Danielle Hayes: [24:03] And so you kind of hit a level where either you do private practice or whatever. Danielle Hayes: [24:08] Now we're seeing the rise of therapy influencers. We are. You know, it makes sense. I mean, we season in this field. We learn a lot. And it does, there's a place where you're like, okay, what do I do with all of this? Or how do I, and it's just, that's complicated. Dan King: [24:23] I'm almost hearing in what you're saying, the possibility of in-network serving as a training ground and then clinicians graduating potentially to cash pay or even outside of the field, which is a whole other conversation, but potentially graduating from in-network to cash pay. So that's at least one form of advancement. Danielle Hayes: [24:41] It would be one way to advance, right? And yeah, and it might be that insurers want to look at, like, you know, in an ideal world, the less complex cases go to the younger emerging clinicians and they're working instead of in situations where they're asked to see 40 sessions a week with no consultation. That's kind of the Better Health model, right? Better Health model. When they're working in group practices like ours, they're getting a rich clinical educational experience. We're very much an apprenticeship field. And so they get all that training and learning experience. So they become those seasoned clinicians and they're in the field a long time, which is good win-win for the client, the insurer and us, right? That you've got seasoned people who can work with more complex people who, you know, maybe are carrying multiple diagnoses. That 10% of the population that uses the system the most, right? But often those people end up with the least experienced folks, Danielle Hayes: [25:35] and a lot of it's because of pay. And so again, another ideal, right? Dan King: [25:38] I wonder if perhaps it'd be interesting to see if we see the rise of more hybrid practices, whether there's some negotiating leverage vis-a-vis insurers, because if I know I have a solid cash pay practice, I may be empowered to be a bit more aggressive in my negotiations with insurers. I know that I have something to fall back on. If they don't treat me well, I have confidence that I can build revenue and margin in another way. Danielle Hayes: [26:03] Yeah. And I think the hardest thing about that that I'm seeing is that traditionally the way they were built is kind of two models. Like the insurance model was, you know, maybe historically a little more bare bones or whatever. And the cash pay model was a little more boutique. You could do more, you had more flexibility. So you could do more of the creative, you know, stuff, adding classes, mentoring, all the things that we did at Therapy Austin because we had the margin for it. And so I think one of the difficult things is when you're marketing, it's hard to market both, right? To explain to somebody all of that because it's a complicated narrative. So I think that's where it gets challenging. There's a lot of people who are saying, yeah, I'd love to add cash pay and I have it on my website, but nobody's coming. And it's because it's like a whole separate, I think of it as a seasoning thing and building as you build expertise and into something. Dan King: [26:52] And, you know, I've also seen other practices, large cash pay practices, where their intake percentage is pretty low because they aggressively run their Google ads, they have a lot of leads coming in, and some of those leads aren't sufficiently educated, so they say, hey, can I, you know, do you take my insurance, right? Danielle Hayes: [27:10] Yeah, and they become a referral service, right? Right. Dan King: [27:12] Exactly. Exactly. So there could also be a universe in which, you know, you market and you understand that you now have two nets and you can capture a lot of folks. Danielle Hayes: [27:21] Right. And you have to be able, in your intake then, to have a sophisticated conversation to figure out, right, what is the best match for you and your goals and your situation? Do we have some lower fee cash model that is maybe interns and people who are still under, you know, and all of that so that people, there's ways to do it, but then you can imagine how complex payroll gets and how complex, you know, all of that gets when you're, now everybody's 12 different ways to do things, right? Yeah. Danielle Hayes: [27:52] But these are, I mean, they're fun problems to solve. And there's definitely a lot of people out there trying to solve. And I'm really, the best part for me is that when I get to get together with other group practice owners, as I hear the ways people have solved them. And then also we get to compare, right? Like what's working in one state may not work in another state, but there's ideas around it. And there's always a moment where someone's like, oh, I could try that. And that's, you know, it gives you hope. And often when you hit your head against the same wall over and over, you start to give up. And when you hear someone say, well, here's how I addressed it. It can bring this moment where you're like, oh, great, let me just I can piggyback on that. I don't have to start over. And that's can be very relieving. So that's we're not going to solve me or you, you know, any of us, all of this large level stuff. But I do see a lot of light in people connecting and feeling less proprietary or protective and more like we're all in it together at this level. I call it a raft like we're building our raft that we can all get on together and there will be power in those numbers. Dan King: [28:53] Well, let's build the raft. Thank you for laying down a plank in this conversation. Always, always so good to see you in jam. Danielle Hayes: [29:01] Yeah, you too. Thank you, Dan.