131: Stuck on PVA

131 TRANSCRIPT: ARE YOU STUCK ON PVA Are you stuck on PVA? Hi everybody. Welcome to the KC CHIROpulse podcast, brought to you by Katz Consultants, helping doctors keep their pulse on success. I'm Dr. Michael Perusich, and I'm joined by Dr. Troy Fox. We are your host for today's podcast. Troy, you and I have talked about this for years - getting stuck on PVA. Does it make sense? Yes. Or is it on shaky ground? Yeah. Yeah I think it's on shaky ground, and you and I have talked about it. I'm not gonna, I'm not gonna spoil the big one here, but it's a, it's a manipulative, it's a manipulative number. It's not what I would call a statistically sound number, let's put it that way. Yeah. It's been used in some nefarious ways to Identify and to really probably pigeonhole some practices. So maybe it has by maybe talk a little bit how, yeah, how, how can we, how can we pigeonhole a practice using PVA and why, why is that a manipulative term? Why do you think. Well, I think it, I think it can be if you're using it to say there's a certain p v a number you should be at or above, right? So if I say you should be at 25 PVA or above, or you're not successful, that's kind of ludicrous. When you really think about what makes PVA, for those of you that don't know, is your total patient visits divided by your new patients? That was, that was, that was really a coin term from back in the, back in the nineties, early two thousands is when that was really big, big, and it just has never left the statistics numbers. And people still talk about it, but it was really big back then. But go back to that again, you said. It is. It's patient visits, patient visits, divided by what new patients. And it's supposed to give you a relativity of how often your new patients are coming in the door. But in reality, those two numbers actually have no direct relationship to each other. No, they don't. And so that creates some real issues with that number. It can and mm-hmm. You know, I get it. We still track it for clients. Sure. We haven't eliminated it from the statistical models, but you have to realize that that was a, uh, a statistic that was used as a standard that mm-hmm. It really wasn't measuring anything other than how do you stand up next to other practices. Mm-hmm. It doesn't define success. Uh, you know, and Troy, when you talk about manipulative, here's how it's manipulative, let's say. Mm-hmm. Let's say, uh, well here, let's just do a little math. Okay. Okay. I’ve got my calculator right here. Let's do some math. You got your calculator? Yeah. Let's, let's say you're a practice that sees 200 patients a week, so that's 800 patient visits for the month, and mm-hmm. Tr just, just pick a new patient number. How many new patients are we seeing? Well, we'll make this one a real rounded number. They're seeing 20 new patients a month. Okay. 20. So we can do that in our head. So your PVA is 40. Mm-hmm. Now that sounds fantastic, but let's look at it one other way. Let's take the same 800 patient visits and instead of seeing 20. We're shooting the lights out, bringing new patients in the door. We can't beat 'em off of a stick. We're bringing in 40 a month. Mm-hmm. Mm-hmm. All of a sudden, my PVA just went from 40 to 20. Did I become a bad practice? What changed? No. So that number doesn't really mean anything. And you can flip it around the other way. If you're a high volume practice, seeing 1200 patient visits, and let's say you are a. Just a really fast paced wellness practice. Mm-hmm. And you're seeing 300 patient visits a week, which is pretty doable. Mm-hmm. And you have high retention. And let's say you only see five new patients a month, cuz that's all you need to replace. Mm-hmm. Your PVA is two 40. Yeah. It, it, it's a superfluous number. So if I'm trying to catch up with you and your practice, or you're trying to catch up with me, I have to either do one of two things to bump my PVA up. I either A, have to get a bunch more patient visits, right, or you can reduce the number of new patients, which is counterintuitive. But I will tell you that in my practice, I don't really care what my PVA is, nor do I care what my new patients are because it is kind of a, it's kind of a nonsense number. What I care about is how many patients I'm servicing and what my retention rate is. That's what I care about, is retention of patients, because I want patients to get well and stay well. So for me it's kind of a nonsense number and that's why I wanted to talk about this today because it really can get you bogged down in the mire when you start looking at PBA and somebody tells you, well, gee, your PVA should be above 50. And you're like, my PVA is like 18 right now. Okay, how do I get there? Reduce your new patient numbers. I could tell you that as a consultant, would I ever tell you that, Hey, don't take any new patients this month and your PVA will go up. Yeah, go through the roof. Yeah. Yeah. So it'll, so it's a really, yeah. It'll be 100% the same number as your patient visits if you don't see any. Exactly. And we're not trying to step on any toes here necessarily. I know. No, I know. It's a statistic that's been used for ever and ever. Mm-hmm. It's probably been around as long as Har Harvey Little bit. It's a trending number that we can look at to see if your practice is healthy or not. But I'm gonna look at how many new patients you have and how many visits you have, and then your PVA. I'm gonna look at all three of those together and go, okay, you have a pretty healthy practice, or, wow, you are literally cranking out. Wellness adjustments, you're not seeing a lot of new patients. It kind of gives me an idea what kind of practice you're running. Sure. And what's happening in a month's time in your practice. So it's not a horrible statistic. I just don't think it's one that's a gold standard that has a set number that you should be at. No, it really doesn't tell you anything about success. No, neither do your new patient numbers. Really, none of those numbers individually do. So why are we in practice? Well, unless you're a 501C3, you're in practice to turn a profit, right? So how do we get to profit? Well, we get to profit by creating enough collectible services and making sure that those collectible services are enough above our expenses. To cover our cost per patient visit and leave behind a profit. And, and far too often we're, we're trying to drive those new patient numbers up, so we change our PVA trying to drive those new patient numbers up. So we in theory, try to inject a lot more, uh, patient visits into the practice, which is the hardest way to grow your practice. We need to be looking more as a profession at the retention side of the practice. Mm-hmm. And the profit side of the practice. Right. That's where the true, the, the true success of the practice is. You know what, I'm getting the, I'm getting the stick. We need to take a pause for a word from our sponsor, so hang on everybody. We'll be right back. (SPONSOR AD) All right everybody, we are back and we are talking about the value of PVA and whether or not that really says what, what it says about your success is really what we're talking about. And Troy, I think we've kind of come to the conclusion as you and I have had this conversation probably 8,000 times. Mm-hmm. Over, I'm not gonna say how long we've known each other because it's forever, but make us seem old. Yeah. Yeah. It's a good industry standard, but it doesn't say anything about your success. Because again, those two numbers just are not, are not related enough to each other. I don't wanna say they're inversely related because I would suggest a relationship, they really have nothing to do with each other. No, I think what you said makes the most sense though, and it really follows business practices and models so. You know, you, you, you don't really hear the Ford dealership trying to get new clients. New client, let, let's get 60 new people coming in, buying a car. What do they want? They want, they want return clients. They want clients that are happy and that they're returning back to that same dealership or that same brand of car over and over again. So what do they have? They have a retention model, right? So that's number one they're trying to retain. And number two, they wanna make sure that they generate enough income that they're. Their margin is decent. And that's what every great business book talks about because what do they talk about? How expensive it is to bring in a new client, a new customer, a new patient, as opposed to what it costs to retain that patient. So the retention model is all over business, and it makes sense to do that. And so the, the, PVA, you, you don't ever hear that. You don't hear that outside of chiropractic and really it's kind of a, you know, I, I'm not gonna call 'em a nonsense number, but it's a number that has its place, but it's not the be all, end all number. I think we need to look at, like you said, retention and profit margin. Those are the things we need to look at in practice. And quite frankly, folks, when we look at your practices, those are the things that we look at cuz we can tell a healthy practice by retention and profit margin. All day long. All day long. Yep. Yeah. All day long. And the practices that call us that feel like they're kind of in trouble, it's because mm-hmm. They've gotten focused on the wrong things and, and it's okay. Yeah. Call us, let us help you turn that ship around. That's what we do. One of the Yep. Great things that we do with, we're talking about stats. In my opinion is the 32 point statistical analysis and trending analysis that we do on practices. I mean, we take such a deep dive on your practice. Here's why that's important, becasue those analyses help us see key indicators in your practice where problems may be starting to arise. Just like a meteorologist watches the radar to see where the storms are gonna develop and can tell where in six hours a tornado was gonna hit, for example. We can tell that same kind of information from your statistics if we model it correctly. So we spend a great deal of time really diving deep, deep, deep into your practices. I don't Necessarily care, at least in the beginning, what your new patient numbers are. That's not the value of your practice right off the bat. Let's figure out how to create. A profitable process in your practice that meets your vision that you want to practice in every day. So it works for you for the long term, and that's when you love practice, because that's when practice is making you a great living. And I believe that right now today, there's never been a better time to be a profitable chiropractic clinic. I would agree. I just got on my soapbox. Yeah, I would agree. Like I agree. Do with you a thousand percent. So if you're not familiar with our statistical analysis, give us a holler, let's show you what we do. Because it is very comprehensive. It's industry leading. Um, you're not gonna see this anywhere else because it was developed specifically for our clients. Um, it was, and I, you know, I think that's something too unique about Detroit is that we're, we're chiropractors. We're also business people and we have business degrees and, and we've been in business other than just chiropractic. So we have a deep understanding of how business really works. Yeah, so. Yeah, and it's fun if you're, if you're an entrepreneur and you're interested in that stuff, it's fun. And it's fun to share the secrets to success, because there are some keys there. So if you're in practice and you think that you're just a chiropractor, you're not a business person, talk to us because I think we can help you right off the bat if we teach you that you actually are running a business. Here's a few simple little things. Being in business is not a dirty word. Correct. Everybody on the street that comes to see, you knows, even as a doctor, you're running a business. Correct. It doesn't matter what business you're running. And here's an easy way to get a glimpse of what we do. Go to our website, cats consultants.com, scroll all the way down. Well be sure you read everything, but scroll all the way down to the bottom of the homepage. Download our annual mid-year review. Where in there we talk about some ways that you can insulate your practice from. The economic trends that we're having right now. Some things that you can do in your practice to build your profits up and some other great, just easy tidbits of information that you can add to your practice immediately. So go download that right now. Yeah. All right, everybody. You got anything else? Nope. I think we've covered everything. We've solved all the world's problems today. Um, and we did it without a cocktail napkin. We did it. Yeah. All right everybody. Thanks for listening to the KC CHIROpulse Podcast, brought to you by Kats Consultants. We're always here. We're always available to help. Give us a shout. We'll see you guys next time. See ya.