Episode 5

The Story of Ivy Rehab for Kids

CEO of Ivy Rehab for Kids, Troy Bage, joins the show to talk about their inspiring story, mission, and culture. Some of what we talk about: The history of Ivy Rehab for Kids, and why Troy is passionate about this business Tips and tricks around growing a pediatric therapy provider How processes from the adult therapy business translates to the pediatric space
Published on 05/18/23
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Episode Transcript

Scott: Hey, good morning, good afternoon, and good evening, and welcome to the Therapy Matters podcast, your one-stop resource for expert insights and advice on everything therapy and rehab. I’m your host, Scott Rongo. Today, I’m joined by Troy Bage, CEO of Ivy Rehab for Kids. Troy, thanks for joining me today. I appreciate it. 

Troy: Hey, great, Scott. It’s good to be here and I’m excited to spend some time talking about our journey at Ivy Rehab for Kids, sharing our learnings, and where we’ve come from. So, great to be with you.

Scott: Yeah, no, that’s great. We appreciate it. Yeah, probably the best place to start is, maybe a little bit of background on Ivey Rehab for Kids and how it started up. 

Troy: Well, sure. You know, it’s an interesting story. Ivy Rehab for Kids is part of a larger organization, Ivy Rehab. I served for the last five and a half years as the Chief Operating Officer for Ivey Rehab. And we had initially a single pediatric therapy clinic in Cranford, New Jersey, since about 2015. That came on as part of an acquisition we had done.

Troy: That single site continued on. We partnered with another group down in Virginia that brought on an additional six sites. And what we found is we dug into pediatric therapies. We loved it. We loved the heart of what it serves, the population that it serves. We also found that, although it’s a challenging business, it’s one that we found a way to make it a good business and something we could grow. So, fast forward to 2022, we made this strategic decision to really commit all-in to pediatric therapy, and we had phenomenal growth last year. We sit today at about 118 sites across 11 different states, far and away the largest pediatric therapy provider in the country.

Scott: That’s awesome. I think there’s always something great to be said about businesses. And you can say this about therapy across the board, but businesses in general, where you’re doing good for people, but also able to make it economically viable for the investors and people involved. So it’s a win-win across the board. So when you expanded the business, what are two or three things you learned that you’d say are tips and tricks for our listeners who might be looking to do something similar.

Troy: Sure. Well, maybe I’ll give you a first, maybe broader learning. It’s that pediatric therapy is a tough business with a big heart. And the reason I say that is you think about a business model – it’s that your primary payor in pediatric therapy is usually Medicaid. So, think of low reimbursement and lower productivity. So, low reimbursement and low productivity – you say, “Boy, let’s do more of that.” It’s not the easiest from a business standpoint, but we found a way that we’re able to really marry the great parts about pediatric therapy, the incredible need that’s out there for children who need high-quality service like we provide. And we’ve been able to build what we think is a really special business. And then the support systems around that business – around clinical education, teammate development, and professional growth – that we think puts us in a different place than anybody else who does this service line across the country. So, we feel great about that. If we step back and we think about some of the learnings, the first one, and you start with the biggest one first, is that culture is king. And you know, the culture, I think, as most people know, really defines who your business is and what it feels like. And for Ivy Rehab for Kids, a lot of our growth has been through bringing on new partners. So, acquisitions, but we see that for us, they’re partners. They come in, they have their own culture of theirs, their sites. And we’ve got to find this balance of being able to allow them to continue to have a great culture that was something we wanted to partner up with, while also bringing them a little bit of Ivy’s culture that we think is pretty special. Also, so I think that’s, you know, a big challenge in making sure that whenever you’re thinking about either opening up new clinics or bringing in acquisitions, you’ve got to really think first: is it a cultural fit? Do you see a pathway where you all will sit together culturally and then make consistent investments in valuing what that partner brings to the table? Because I think when I say everything I learned about M&A, I learned from prior failures and watching it not go well. Probably 20 years back in my career, I was part of a company whose M&A strategy was, “We’re going to acquire you and we’re going to make you better and we’re going to make you like us because we’re way better than you are.” That’s why we’re acquiring you. I learned that that’s not how you want to build a culture and you want to build a place where people feel included and part of the solution and part of the future. So we strive to do that; we’re imperfect, certainly, but we’re getting it right a lot and we’re pretty proud that we went through a recapitalization of the business earlier in 22, and nearly all of our partners stayed on and said they wanted to continue forward with us. That was a real point of pride for the team at Ivey, because I think when you look at the overall therapy landscape as a whole, that’s not what you’ve seen at those junctures and with many other companies. So we feel great about that. So that’s one of the learnings: culture is king and you’ve got to make sure that you’re investing there and valuing the culture of any groups that you’re bringing on and that you’re infusing that across the company. The second, I’d say, is to understand the key drivers of your business. You can take a metrics dashboard and it can have 50 different items, 30 different items, but there’s probably a handful that really drive the economic engine of the business. You’ve got to get ultra clear on what that is and how you’re going to make sure that you balance those key economic drivers with the quality and service that you want to provide in your community. And what’s interesting is when you look at economic drivers and contrast them to clinical drivers, we’ve found that the most productive clinicians tend to get the best clinical outcomes, better quality scores, and better arrival rates. It’s not an inverse proportion of higher productivity and lower quality – there are limits to that. But more productive therapies generally produce better quality outcomes, better engagement from patients, and ultimately more repeat business and word of mouth – that’s how you can grow a business and expand the same stories over time. So you understand the key drivers and metrics, and then you really make sure you have the right training and education to help your directors and leaders grow. When I think about this idea of KPIs, you have to be able to put it in simple terms so your clinicians understand how to grab hold of it and apply it to what they do. It’s easy to say “units per visit” is something we should improve, but let’s understand what a care session looks like. We should value hands-on care, functional training, and other activities, and let’s ensure our coding and documentation includes that. So, it’s breaking down those points because most of us, as I said, I’m a physical therapist and have been for 30 years. We don’t get a lot of business training in school and we ask our directors and leaders, who are mostly clinicians, to be able to run a business and speak. We need to provide them with the tools, resources, and support to do that effectively.

Scott: I would guess, you know, just on those first two topics—the dynamic of your culture and bringing on clinicians that match the culture, and the dynamic of driving results on behalf of the patients—these two things go hand in hand. I would suspect they do. 

Troy: And we use an important word: intentionality. You’ve got great clinicians and great patients, but that doesn’t mean everything will run great. I wish it were that easy. If it were, everybody would be running pediatric therapy clinics. The reality is, there’s an intentionality that goes into how you create those interactions, how you measure the items behind that. We measure things like parent education sessions, to make sure we’re engaging parents and families, because that will lead to better care for the kids in the clinics. It’s sometimes easy to say and hard to do, but those who make the commitment to doing it are the ones who win out in the end.

Scott: Yeah, it makes sense. And you are about to reference a third one before I interjected. 

Troy: No, it’s and this goes from when you’re small, say one to two or three sites, to when you’re larger, and you go from 22 to 30. It’s building scalable processes, and it’s where most businesses break. We’ve watched a lot of single-site practices be able to happen because they’re there every day and onsite. But when you go to two, three, or four sites, it takes a totally different approach in the systems, processes, consistency, and the shared language used across different sites because you can’t will it at every site every day. Some people are pretty good at it, but eventually, being able to will it to happen breaks and you have to lean on processes and the way you communicate with the team. As we’ve grown, we look at every process and ask, “Is that scalable? Does that work?” And when we add the next 10 or 20 clinics, does it start to break down? We started last year at 30 sites, and finished the year with just over a hundred. A lot can break in going from 35 to 100 if you’re not constantly thinking of what this looks like at two, three, or 300 sites. If we think about it that way, then we’re not going to get it right all the time, but we’re getting a lot more of them right. When we find a process that isn’t scaling, then we’re able to reach back around and make the appropriate changes. I think that’s helped us do it in a quality way as we’ve grown.

Scott: Because pediatrics can be so different from the adult space, how much of the processes were you able to take from the adult business and replicate or use and leverage as you went to grow the pediatric business? Or were you really starting from scratch? 

Troy: You know, it’s a great question. And honestly, the majority of the processes we pulled over, but it might be 75%. So there was still quite a bit of build and customization to make sure we’re getting it right. Because, look at a typical outpatient therapy clinic, orthopedic therapy clinic. You have a physical therapist or a handful of physical therapists in pediatric therapy, you’ve got PTs, OTs, speech language pathologists. In many of our sites, we have behavioral technicians and board certified behavioral analysts doing ABA therapy with kids. The complexity goes up significantly. So each of those professions have their own nuances that make what they do really special. So it’s important for us to adjust our processes to each of the disciplines. And then you add in how these disciplines have to interact with each other because many kids get two or three services while they’re in our care. It’s great for the parents. They get more of a one-stop-shop process, but because of that, you’ve got to create communication channels between therapists so that we make sure we’re really rounding on the total care for the patient, not just each operating in a silo.

Scott: Yeah, makes sense. So I’m a sports guy and, you know, you go into a game with the best-laid plan; you do all your pre-work before you’re going in. Then all of a sudden, the defense throws something at you, good or bad, and you have to modify and adjust. As you were building up to these hundred clinics, was there a surprise? Was there something that got thrown at you, good or bad? What would you say was the biggest surprise you’ve had over the past few years?

Troy: Yeah, so I’ll give you a good and maybe a challenge that we had. So the good one is, I’m a physical therapist. I’ve worked with therapists for a lot of years. Pediatrics is just different. And so, what I was surprised and really humbled by was the passion and commitment of our pediatric clinicians and the office team too. It’s such a mission-based business and how much they care and how dedicated they are. And we had teammates who were coming to us saying, you know, we want to do hypnotherapy, which is a form of therapy on horseback and all the benefits that you get from that type of movement. They came with the best-built out plan and just this passion for why it was going to help, wasn’t necessarily the best business move, but it certainly was something that they really thought about and they found ways to make it work within our model. And that just warms your heart when you see people that passionate about what they do and what they’re willing to give and dedicate themselves to make it happen for the kids and their families. It wasn’t all joy. So, I think one of the challenging pieces that we’ve seen and I think it’s many of us in this profession, certainly across most professions, have experienced is the changing needs of our workforce. And the challenges with the desire for more schedule and workplace flexibility, you know, where you do your work. Now, that used to never be a question in therapy: will you do it in a clinic, of course, or you do home care. Now there’s digital mediums that we’re exploring to do better as we go forward. So, I think that’s led to a similar challenge we’ve always faced across the country: turnover and making sure we provide an environment where people feel included, special, and have a mission. We’re doing well and want to do better. We recently rolled out an initiative around workplace and schedule flexibility for therapists that I think will continue to help them create a work environment that’s conducive for them individually while still providing the right access for the kids and the right for the organization – because we all need to win together. We’re navigating that, but it’s definitely one of the biggest challenges when you’re growing fast. During the pandemic, we saw a significant drop-off in the number of clinicians – anywhere between 10-15% stopped practicing. So, when you’re seeing this high need for clinicians, that’s a big driver. We’re still in recovery but coming out of the other end in a positive way for 2022-23. I’ve talked with many practices of pediatric and orthopedic therapy and this seems to be a comeback year – January and February will tell.

Scott: Yeah, that’s great. And that’s I mean, to your point about the pandemic, what I find is an issue for every business. Right? And what I find interesting about it is it depends on the individual’s stage of life. Right. Like somebody right at school wants something very different than somebody, you know, middle-aged with children at home compared to somebody who’s an empty nester. Right. And so you throw that into the mix with what happened with the pandemic. And there’s just how do you solve that? Right? How do you build a cohesive team? How do you make sure everybody feels involved, but people have different perspectives and thoughts on how that should look and feel. Right? And their needs are different. So it’s an interesting dynamic that I think every business has to work through, through the pandemic. I think it has changed that for the foreseeable future, for the most part.

Troy: And you’re seeing some interesting shifts in the workforce overall. In essence, you’re seeing more therapists coming out of schools, new graduates asking, “How many hours do I need to work to be able to get benefits?” And so let’s say that’s 30. We talk about attrition from the profession and we say, “Well, what’s the attrition from going from 40 hours to 30?” It’s a 25% attrition in the profession. We didn’t lose anyone from the profession, but that’s 25 fewer hours that are there, creating functional attrition that we’re seeing. And so we’re navigating that. And I think one of the ways you navigate is you meet people where they are and you find ways that allow them to have the level of work and functionality that they want. The digital side is extremely intriguing because people do want to work from home more than they ever did before. And there’s a real avenue where you say, “Boy, can you actually do therapy from home?” Listen to what you can. It’s hard, but speech therapy translates well to the home setting. We have a robust amount of work going in, virtualizing some of what we do around speech therapy and speech language pathology. This will provide access for more kids and environmental flexibility for our clinicians, allowing them to be more where they are. In particular, when all three professions (PT, OT, and speech) are female-dominated fields, and in speech it’s probably north of 90%, you see a certain amount of attrition in the first 5-10 years as people start families. The digital piece might find a way to bring some of them back into the workforce on a part-time basis so they don’t have to leave their home and spend 8 hours in a clinic, but can see some patients from a distance. So there are lots of neat opportunities to continue exploring and honing as we go.

Scott: So yeah, and you touched on it as well, but for your patients, right, like just the ability for the parents to get their child access to care in a little bit of a simpler fashion that might be more conductive than getting them to a clinic on a routine basis. Sounds like a win-win. So you guys have built a great business over the past five years. I think if I think about it, you know, it was during a pandemic as well. So what’s next? Like, if you look at the last five years compared to the next five years of growth, what do you see having to do differently or much of the same? Obviously, the world is a different place at this stage. So what are your thoughts there about the next phase of growth?

Troy: Yeah, you know, we use an analogy from the Jim Collins book, Good to Great. Quite often we talk about the flywheel and you’ve got this giant cylinder that you’re pushing and it’s going really slow. And I think what we saw in 2022 was we had that flywheel rolling and we got it moving at a pace. That was a big part of our growth accelerating. What’s in the future for us? Look, we think there’s a lot more communities that need our services. We think there’s a big opportunity for us to continue to grow our eBay business. And so that’s an applied behavioral analysis business focused on children with autism. We have it in about 15 sites out of our 100 plus, and we’re going to have it on a lot more sites in the future because there’s such a phenomenal interaction between ABA therapy and our pediatric, particularly in speech with PTSD and speech, It’s interesting because that hasn’t been a model that’s been overly successful in other areas. There’s a lot of ABA companies, large ABA companies that have brought on OTs, speech language pathologists, and it’s gone okay, but it hasn’t been great. And it was interesting because we were talking to some ABA companies and they said, “Oh, yeah, our ancillary services.” They said, “What are your ancillary services?” “Oh, you know, PTO, speech…” and that’s the way they looked at it. And so it never integrated well into what they do. And we see ABA therapy and pediatric therapies as both core businesses for us that marry together really well. And our speech languages, OTs, BCBAs, and BCaAs are teaching our PTs, OTs, and speech language pathologists and we’re getting better together every day. The convenience it provides for the parents is unbelievable. These are parents that have a lot going on in their lives and they’re trying to manage all their schedules of kids’ appointments, and they can come into one clinic and get all their therapy needs met. It’s fantastic, and the reviews and comments back from the parents is really special. So we see that there’s good continued growth for us. Our de novo, or new site program continues to go well. We opened most of our new sites with a partner in the clinic; a clinician who might not normally go out and take all the risk to open a practice, but in partnering with us, we do that together. And so we think this is our way of helping budding entrepreneurs have success. It has been met incredibly well and we think it will be a key part of our growth in the future. In addition, outcomes is a big topic in the industry and, right now in pediatric therapy, there is no prevailing outcomes measure. So, when you consider one of the responsibilities of being the largest and leading company in the industry, we will work to define what outcomes are for pediatric therapy and collaborate with a few outside organizations to get the right tools in place. And we expect by the end of 2023 to, at minimum, be piloting, if not having those rolled out and be able to show objectively the great work we’re doing to payers, the community, and others, because we think it’s such a valuable service and having the data behind us that says what we’re doing is making a difference is really important. So, those are some areas we’re investing in: growth from a size standpoint, but also growth from infrastructure in support that will really help the community and certainly help the kiddos.

Scott: Yeah, and that’s where I was just going to say, ‘right?’ And ultimately having an impact on kids’ lives, which is pretty awesome business to be in, and it’s true. I think we’re about out of time today, but I really want to share with you that I appreciate you joining the show. I’m sure our listeners will also take a lot of nuggets out of the conversation today. Anything that you want to leave the folks with? 

Troy: No, listen, thanks for the time. I appreciate being able to be on here and talk a little bit about Ivy Rehab for kids. I think we’re doing something special with a big mission behind us. And I’m excited for what the future will bring. So thanks for the time and glad to be able to get the message out.

Scott: Awesome. Thanks, Troy. Well, audience, thank you for tuning in to the Therapy Matters Podcast. Your one-stop resource for expert insights and advice on everything related to therapy and rehab. We look forward to seeing you on the next episode. Take care.

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