What Lessons Can the Rehab Industry Learn From the ABA Industry?
Paul shares lessons from the Autism Investor Summit: deeper patient relationships, combining clinical and operational outcomes, understanding investors, and why preparation keeps deals from falling apart.
Full transcript
Generated from the episode audio and lightly edited for readability.
Hello and welcome to another episode of the Martin Rehab M&A advisory and Paul Martin's guide to finishing well. You know, last week I attended a conference. It was called the Autism Investor Summit. It was held in Hollywood, California. And I attended this conference because Martin Healthcare Advisors has now entered the ABA industry. And this was the first conference that we have attended. And it was interesting as I was talking to business owners as well as participating in their presentations. There seems to be a lot of overlap of areas of the business, the ABA business and the physical therapy business.
That ABA providers and the way in which they go about their business, I believe physical therapy could really benefit from. And so today, what I want to discuss are some business principles as well as clinical principles that I learned from attending the ABA industry. And for those of you who don't know, ABA is applied behavior analysis. And that is therapy that is provided to children that are on the autism spectrum. Children and adults, I should say. That starts really at 6 months to a year of age all the way up to folks that are in their 30s and 40s.
But again, I attended the ABA conference and I think there's a lot of things that I learned there that could be applied to the physical therapy industry that you could use today and run with and it will make you a better and more valuable practice. Now, first let's talk clinical. I learned that ABA patients are almost routinely not patients for 12 visits or in some cases six visits and then you have to go back and ask for more. ABA patients are typically patients and they call them clients for years.
While as we know physical therapy patients are typically only for a matter of months. However, I really believe that physical therapists could benefit from making a much deeper connection with their patients and considering them lifelong patients to the practice and to me as a physical therapist. And by really investing in those relationships with their patients, I really believe physical therapists can increase patient loyalty and retention and ultimately improve patient outcomes. And that's what we are all about as physical therapy providers, improving patient outcomes. You know, another thing that I also learned at the ABA industry, the industry has developed systems that can measure clinical outcomes.
We have that, right? But it also incorporates many solid superior operating performance measurements and outcomes as well. So, it really has taken clinical outcomes and operating procedures and outcomes and has molded them together and really is it's kind of the perfect recipe to getting to the patient to the best end result while making sure that you're doing everything for the practice that you should be doing fiscally for the practice. I thought this was really interesting because again in the in the physical therapy industry, we do tend to look at operational and financial over here, clinical results over here.
And I really think by adopting a similar system that would integrate both clinical and operations performance that physical therapy business could better monitor their success and make more informed decisions in order to improve their overall performance clinically, operationally and financially. You know, additionally, at the ABA conference, at this conference, it was called the Autism Investor Summit, again held in Hollywood, California, West Hollywood, California. There were actually financial investors that attended this conference. And when I say financial investors, these are private equity groups. And the people within these private equity groups.
I'm not talking about like acquirers in our industry, the strategic acquirers who are backed by private equity. ABA has the same strategic acquirers. But this conference there were many investors from those private equity groups that are now investing in ABA that were there and actually even spoke and it was very interesting them talking through the criteria by which they evaluate investment opportunities in the ABA industry. Even getting as far to what are they looking for in their investment opportunities from the professionals from what they call in this indry industry the BCBAS and really the PT assistants or kind of combined as techs are called RBTs what are they looking for from those people and that was just so interesting hearing that from an investor and again you know the industry has also made a very tight connection with strategic acquirers as well as the rehab industry.
But we really have not made that connection to those who are actually writing the checks for these businesses that are being sold in the rehabilitation industry and that are those investors. And I really believe that by connecting more with investors, understanding their criteria, that physical therapy owners could make much better decisions about their own business, especially as it relates to preparation for the biggest investment opportunity on their side. That will be opport financial opportunity from your side of your life. Another important lesson I learned at this conference was the importance of preparing your business for a sale.
And I know you have heard that before from me, but it came crashing through to me at this conference when one of the presenters who is currently an adviser like we are that has done work with ABA companies, he shared that six ABA deals fell apart at the end of 2022 and the beginning of 2023. And he related this primarily to the buyer decreasing the purchase price during due diligence, which you know we call that retrading the deal. And he also believed that it was due to the fact that now buyers who committed to these deals potentially many months ago, now they're seeing higher interest rates and so they're going to need to transact these deals at lower multiples.
So they basically tried to come back and retrade. None of these deals got done and they still are all now just sitting on the sidelines. Look, this is a lesson applicable to the physical therapy industry because it emphasizes the critical importance of preparation. Actually preparing your business clinically, operationally, financially as well as the people plan as we call it, which is your organizational chart and how your organization aligns with the goals that you have is so imperative to having success in this market. So in conclusion, you know, the ABA industry conference provided to me some valuable ints into the business principles that can be applied and of benefit to the physical therapy industry and physical therapy business owners.
And we will continue to find these little bits of information and strategies that are being used in now what is side by side the two industries that we are investing heavily in I think we'll be able to learn from each other and you all may know many there are a number of physical therapy occupational therapy and speech the practices that also have ABA as a part of their practices. So again from a business perspective by we as owners of physical therapy business integrating clinical and operational performance connecting with more investors preparing your business for a sale you can absolutely increase patient loyalty make more informed decisions and maximize the value of your business.
Hey, thank you for watching today. And if you have any questions or would like to have a discussion with me about the things that we talked about today, click below and let's talk. Thank you.
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