Dr. Jeremy Sharp (00:00)
Hey folks, welcome back. We’re here. We’re talking about scaling and growth part two. This is a little mini series. If you didn’t catch part one, it’s not absolutely necessary, but I think it helps a lot. So you might go back and check out the first episode, which came out, I think just a week ago. So today, ⁓ let’s see, we’re talking about more tactical decisions. So last time we talked about the big picture decision of growing or holding steady, but today we’re going to
get into the details a bit and answer this question that if you do want to grow, what is the smarter move for you? Do you want to hire new people or do you want to make the most of the team and the systems that you already have? So if that sounds interesting to you, stick around. We’re going to dive deep.
Dr. Jeremy Sharp (00:46)
All right. All right. We are back and we are talking about tactical decisions. So growth, it’s interesting. When you talk about growth, most people think hiring, right? But growth is, to me, growing revenue, growing profit, ⁓ growing your business as a functioning, sustainable entity. Now, hiring is a way to do that, but you can also grow all of those things by optimizing the team that you
currently have. And so I think that just big picture, this is a really important question to answer because most of the folks that I consult with and are thinking about growing are equating growing with hiring. And that is not always the case. Sometimes it’s the case, but not always. And that’s the reason for the episode today. So you’ve decided that you want to grow. What is the more tactical decision within that larger decision?
Do we want to hire or do we want to optimize? So I’m going to talk about both of those things here today. And as always, so much of this content just comes from my own experience and, of course, talking with folks around the country and around the world in consulting meetings. So they’re informed by a little bit of research, a little bit of experience, and hopefully all that comes together to be helpful for you. So let’s start. When does hiring make sense?
When does actually hiring make sense? Now we talked last time about ⁓ demand consistently exceeding your current clinical capacity. We focus mainly on the clinical side, but there’s also an administrative side here too. I think it’s a little trickier to calculate administrative capacity. I mean, you do have hard metrics like amount of time that they spend in phone calls each week, and you can ballpark the amount of follow up for each phone call, ⁓ email.
other tasks. You can you can ballpark those things, but I think it is slightly tougher than ballparking clinical capacity, which is driven pretty directly by number of hours billed and spent on the evaluations. But I think this is important to just throw that in there that, you know, we do need to have some sense of capacity for our administrative teams as well. ⁓ Largely in the past, I have
done exactly what I’m talking about where, you know, it’s a combination of just knowing how many phone calls we need to be able to field each week, how long each phone call takes. And then outside of that, we take a guess when we write job descriptions for the admin team at how many hours they may spend on other tasks. And then we adjust as we go along. So we do a little bit of time tracking. The admin team keeps track of how much time they’re spending in emails and other administrative tasks.
and we shape it over time and that will help for future hires. Getting back to the point at hand though, when demand consistently exceeds your current capacity, this is when you are really thinking about hiring. There’s a personal component too though for you as the director or owner of a practice. ⁓ This is when you want to step out of the day to day testing and maybe focus more on leadership or other projects. This is
valid reason to hire. So bringing folks on to replace you, so to speak, or replace some of your income. The third component is that your financials show that a new hire will be, get this, profitable and not just busy. So I’m going to say that one more time. Your financials show that a new hire will actually be profitable, not just busy. This is such an important point because
I work with a lot of practice owners who have very busy employees and contractors, but they aren’t necessarily profitable employees or contractors. And there’s a lot that underlies that, of course. A lot of math, a lot of financial modeling, a lot of budgeting. ⁓ But just to put this in your mind, that your financials should be pretty solid, and you should have ⁓ pretty high confidence that this person will actually be profitable, and not just barely profitable, where we’re
you know, getting two to three percent on the hour. But, you know, this person is really maxing out profit for the practice, of course, in a sustainable way, in a way that allows them to be compensated appropriately as well. So as I putting this together, I was thinking about, my very first hire, which is wild to think about. So this is, gosh, over 15 years ago at this point. ⁓ So my very first hire was a graduate student
Ticometrist. ⁓ This is, you that’s the model that I experienced in grad school. And when I got super busy with evaluations and what felt like overnight, I took the leap. just booked all of these evaluations that came in and said I would figure out how to, how to complete them ASAP. But I just said yes to this business opportunity. I don’t know that I would do that now by the way, but
I was young and dumb. ⁓ So I took on all these evaluations and figured I had to find a way to make this work. So I hired a grad student psychometrist. ⁓ It worked fantastically. This person freed up all the time that I would have been spending on the testing process. And let me get experience with supervision. I really loved that. So the first couple of hires for me were psychometrists. And it worked out really well.
The financials were less of an issue because compensation for a psychometrist is ⁓ honestly just pretty low relative to ⁓ hourly reimbursement. So even if I messed it up really bad and overpaid them, there’s still plenty of room for that psychometrist to be profitable. So that worked out. But it has not always been that simple. As I talked about in the last episode, ⁓ we grew
Quite large, I think we peaked around 45 employees about a year and a half ago. you know, I think I’ve been pretty transparent. Over the course of growing, I did not run the numbers as carefully as I should have. I did a lot of reactionary hiring. I did a lot of ⁓ ballparking compensation based on, you know, industry standard, quote unquote, and not what was actually proven to be profitable for our practice.
And so what ended up happening is, you we ended up with a lot of ⁓ paid leadership and supervisory positions that just weren’t generating revenue. And this is a classic example of folks being busy, but not profitable. Now, were they 100 % valuable and needed in the practice? Yes, absolutely. And it was the right thing at the right time, at least from a personnel standpoint. But
from a financial standpoint, looking back, should have been more deliberate with running the numbers and figuring out how to balance leadership positions that were not generating revenue with the actual revenue generating positions. So financially, that just ended up not being sustainable. And it was a really hard lesson just in the importance of kind of running the math before every single hire. And these days, I have
a really nice financial model that ⁓ maps out all the expenses and employee costs and weaves that into the overall budget and operating expenses. And so I know exactly what percentage of ⁓ each employee is dedicated to covering overhead versus profit, so to speak. OK, so hiring makes sense when you have consistent demand that exceeds your capacity.
You want to step out of the day to day and you need some help and the financials line up. So let’s go to the flip side and make the case for optimizing first. So this is a real very reasonable question to ask before you hire. You should ask yourself are you truly maxing out your existing resources? Now when I say resources this could be employees on clinical and admin sides. This could be software. This could be
even schedules. This could be office space. mean, it’s any number of things, but it’s really this idea. Are you optimizing and kind of maxing out what you currently have? ⁓ Just as an example of how to not optimize, if you have a multi-office suite, let’s say you have a two-office suite and you’re in the office, one office three days a week and somebody else is in the other office ⁓ four days a week, ⁓ that
gives you like a full seven days of office space that you could fill with someone versus taking on another more expensive lease and ⁓ running non-optimized offices, for example. So over the course of our practice, I have been honestly amazed at what optimization can do. OK, so these are just a few examples that I thought of off the top of my head when I was planning this episode.
⁓ Big one, hot topic right now of course is AI report writing software. So we use Reverb. I’m a co-founder of Reverb. I think most of y’all know that by this point. So that absolutely increased our capacity for evaluations without having to add staff. And it also has sort of improved the mindset and lower the burnout risk for our staff as well, because I think they’re able to.
save some of their brain power for the parts of the report that actually matter. So there’s both an emotional and a practical component in terms of increasing capacity there. Continuing on the AI thread, we recently had a really wonderful surprise where one of our major insurance payers decided to start requiring pre-auth for all of the testing cases for the first time ever. And so we had to scramble and figure out how to generate these pre-authorization requests
quickly, efficiently, and effectively because as those of you know who take insurance, it’s really easy for insurance panels to deny pre-auths. So I was able to cobble together some of my rudimentary coding skills and built an AI app that generates pre-auth requests automatically by scanning the files and ⁓ generating these pre-auths. So that is saving probably five hours a week for our admin team at this point.
Other things that are not AI involved, we discovered that, you know, just like sending paperwork reminders automatically through the EHR, ⁓ emailing and texting our clients in bulk rather than one at a time, batching questionnaires, like all this shaved off ⁓ small but I would say meaningful chunks of time from the admin team’s task list and the clinical team’s task list. There are little things like, you know, using email templates for common replies.
can save a lot of time, you know, it adds up over the course of the month. And then just old school time management has gone a long way as well, especially, I was gonna say especially on the admin team, but this works for the clinical team as well. You know, we’ve seen a lot of success from just like coaching our team members on how to engage in time blocking and day theming so that they aren’t tasks switching all over the place.
And this is something, especially on the admin team, that seemed counterintuitive back when we implemented it, you know, because people think multitasking, quote unquote, is super productive and the way to go, but it’s actually way less efficient. And we know that when we are switching tasks quickly, there’s this concept of attention residue, and it ⁓ makes us way less efficient. So even simple things like time blocking and day theming.
So it’s surprising when we really looked at things like how often the real bottleneck is more like inefficiency versus head count. So there’s also a third option. So we talked about hiring. We talked about optimizing. The third option is, I guess, the middle path. And the middle path is expanding capacity without locking into full-time employees.
This is particularly helpful on the admin team. But again, it applies to the clinical team. And so this is where cross-training has really come in handy for us. So on the administrative side, we typically have had, we have like pretty well-defined roles for our folks. You know, we have schedulers, ⁓ we have billing folks, we have a receptionist, right? But all of them are cross-trained to a degree so that they can step in for other team members if needed.
So we just make sure that they can flex between these roles to, you know, again, to a degree so that if one person gets overwhelmed for whatever reason, for a week or two or three at a time, ⁓ someone else can step in and take some of those tasks off of that person’s plate. And that just helps us resist, I think, the knee-jerk reaction of hiring every time someone’s workload spikes, right? Like that used to be my response is, you know,
the admin team will come and they’re like, my gosh, I can’t handle this. Like we have this influx of calls or documentation or claims or whatever it may be. like, do we need to hire another person? Is this a 10 hour week? Is this a 20 hour week? And so having people cross-trained has really helped in being able to, yeah, just flex folks back and forth. And it’s pretty rare that like every team member is maxed out at the same time. And so,
Different folks can step in and help one another just based on their workload that week. So kind of a simple but powerful little mindset shift, I suppose, is that ⁓ not every problem or short term being overwhelmed requires a new person or increased head count to solve that problem. So same as last week, I am going to end on a bit of a practical exercise for y’all.
And what I’m going to do is prompt you to do a little bit of a capacity audit. So I talked about capacity a lot over these past couple of episodes. So here’s what I want you to do. I want you to look at the number of clinical hours per staff member that you have and get a good sense of your capacity. You can do the same on the administrative team if you haven’t already.
And then you can go through and really do a close look at the bottlenecks. OK, so where is the time being lost? Where do you think there are inefficiencies? Where might people be burning time rather than utilizing it?
And this should give you a decent running list and good sense, again, of folks’ capacity. Then you can really check out what’s on this list that really doesn’t need to be done by you specifically, or perhaps even by a licensed person. And should open up some ideas in terms of software or systems or things to optimize a bit. ⁓ And as always, hiring is an option if you want to go down that path.
I think it just makes sense to do a little audit first before jumping to the hiring decision. So I do this kind of thing relatively regularly. And it always surprises me. just the opportunities to kind of free up capacity are almost always there. We just have to look a little bit closer. So here’s a takeaway. We’ve done a little two-part mini series here. ⁓ There’s no, I would say, universal answer here.
There’s no right size for a practice. totally aligns with, it has to align with your goals, your lifestyle, your capacity, your own capacity for clinical work and leadership and management and so forth. So I’ll come back to that mindset component and how important it is to truly know yourself and what you are capable of.
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