Why Bonuses Fail To Keep Your Best Therapists, With Jason Wambold Of Prompt Compensation

---

Listen to the Podcast here

Why Bonuses Fail To Keep Your Best Therapists, With Jason Wambold Of Prompt Compensation

High Performance Practice Conference Overview

Quick heads-up for all the private practice owners who are tuning in. If you've been tuning in to the show for a while, you know that it took me at least ten years of grinding in my own clinics before I finally figured out how to scale and sell my four practices for seven figures and about three times the national average. The biggest shift wasn't some secret marketing hack. It was how I thought about profit, systems, and actually my role as the owner.

That's exactly what we're going to be working on together with you at the High Performance Practice Conference this fall in San Antonio, Texas. From October 15th through 17th, 2026, Adam Robin and I are hosting a three-day hands-on event for PT, OT, speech, mental health, PEDS, pelvic floor, and medical practice owners who want to build clinics that are profitable, scalable, and best of all, do not depend on them 24/7.

We'll dig into simple profit and KPI frameworks, real leadership and culture work, and practical systems you can take home and plug in with your team. If you're doing roughly 6 to 7 low figures a year and you want your clinic to feel more like a real business and less like a job/cage, I'd love to see you there. Frankly, I'd love to see you bring your leadership teams as well because we will have breakout sessions for them too. You can get all the details and grab your seat at the link in the show notes. Let's get into this episode.

---

Welcome to the show. I've got a returning guest, Jason Wambold. He is one of the co-founders of OnusOne. You might have heard his episode from back in June of 2021, right in the smack dab middle of COVID. Jason, with OnusOne, came on and talked to us about variable compensation models. Since that time, his company has been acquired by Prompt. He is now the vice president of Prompt Compensation. Did I get that right, Jason?

You sure did, Nathan. Cool.

Thanks for joining me again. It's good to have you because now that you've been in the game, not just five years since we had the show in 2021, you were working on this model and bringing it to the owner's attention for years prior to that. You're in a position now where you've got five more years of experience behind you. You can tell us how some of your ideas about the variable compensation models have changed and what impact that has on both retention and recruitment of providers to keep them engaged in clinical care.

I'm excited to bring people up to speed. If they had tuned in to that one back then, if they hadn't, go back and tune in to it, and this would be a good tie-in to what we talked about the first time. I'll let you start here. Talk to us a little bit about what you mean by variable compensation models for people who aren't accustomed to hearing that. What you've started to learn over the last number of years.

Defining Variable Compensation Models For Physical Therapy Clinics

Sure. Happy to do that. First of all, thanks for having me, Nathan. It's a pleasure to connect with you again, and always excited to have a conversation with you and with the broader industry at large, because obviously we're all talking about retention and recruitment and how to attract and retain top talent. To answer your question, we'll start with this concept of variable compensation.

I know you and I were just chatting a few minutes ago about what the best way is to actually define these models. What do you call it? Some of the things that you'll hear, some of which I'm more comfortable with than others, would be things like shared risk models. That's an example. That's a label that I used to utilize fairly frequently, and I never use that now. What I've learned is that it does not land very effectively with therapists when we're introducing the model.

I noticed that therapists want to avoid risk. That word in and of itself. I do not know if that was the word you were landing on, but risk, they are averse to risk.

We do not want to lead with the word risk when introducing these models. By definition, variable comp models, as I think of them, are models where at least a portion of the therapist compensation is tied to one or more variables. That's why we've landed on variable compensation as what we believe is really the best way to describe these models. For your audiences who maybe are not familiar with what we're referring to there, let me just give everybody a couple of quick examples. 



Let's take a therapist right now where you're paying the therapist an $80,000 salary. That would obviously be a salary-based model. What we're typically recommending and introducing are variable compensation models that compensate therapists from two buckets. Bucket one would be what we call their base pay. That's the portion of their pay that's just tied to the fact that they're showing up for work and that they're part of the team and carrying a caseload.

Bucket two, then, is their variable pay. I should mention that neither one of those buckets is a bonus. That's a really important distinction. Variable comp models are not bonus models. They're not incentive models. Incentive models, by definition, which is another word that I've stopped using, like introducing this to therapists, incentive models, by definition, are incentivizing the therapist to do something. That implies direction. There's a directional component. Usually the direction is up. More units build more volume, more revenue.

If we're introducing models, we want to be really clear that we're not utilizing the word incentive. Instead, we're simply defining the models as a calculation of compensation that's coming from two buckets. The sum of those buckets is how your pay is calculated on a weekly basis. Let's give you an example. Let's take a very risky model. I'll use that word for your listeners. A very risky model, which is one that very few therapists will choose up front. Interestingly, over time, many of them will land on it, which we can talk about later if we have time.

Let's call it a 50/50 model. For a therapist who, right now, you're paying $80,000, their base portion, their bucket one portion, would be 50% of $80,000, which is $40,000. Of course, they would have bucket number two. That would be their variable bucket. The sum of those two buckets would be the amount that the employee is going to be paid for that particular week or for that particular payroll cycle. When we refer to variable compensation models, that would be an example of what we're referring to.

List some of the variables that might determine the second bucket.

That's another thing I've learned. What are the variables that work well? What are the variables that do not work well? Some of the variables would be that the traditional model is a visit-based model. We're not seeing too many of those, quite honestly, because there are other models that I think work a lot more effectively. Part of that is that therapists do not really, in my experience and observation, like to talk about how many visits they have to see. It's not a conversation that many therapists really enjoy.

If you're working at our clinic, you need to see 55 visits a week or 48 visits a week or whatever that number is. That's not really a value that resonates with them. What we're seeing much more frequently would be units-based models, where at the end of the week, what matters is not so much how many visits you captured, because you can see a lot of patients in one unit, or you can see a lot of patients in two units, and both of them are 97110, for example.

The units-based model is definitely gaining popularity. That's a very popular approach. The advantage of that, in my mind and what I've seen, is that it shifts the narrative away from the conversation of how many visits you're seeing and instead focuses the narrative on what, at the end of the week, ultimately matters, which we know is true, is how many units did you actually bill out? That seems to land more effectively with therapists. There are some other variables, but those are probably the two that we run into most frequently.



Comparing Units-Based Vs. Visit-Based Pay Structures

In both situations, I'm assuming that if you pay that in that second bucket by visits, there's like a flat rate per visit that you are throwing into that second bucket. That could be, I'll just throw some. I do not know what those numbers are, so forgive me, but say that's $35 or $40 a visit. I'm throwing into that second bucket for every visit that they see. Is it the same thing with units?

There's maybe a flat rate that they're paying for every unit that they bill in that second bucket. You're nodding your head. That sounds about and I do not know the numbers, what that would be, but what I like about the units thing is there could be a narrative behind either one, which is you're just paying me to push through a bunch of patients, or I get, for lack of a better word, I'm incentivized by getting paid more in that second bucket by seeing more visits or by billing more units.

When it is the unit's conversation, I think it's easy to switch that to be, no, I'm billing you to provide the most care to every patient that comes. If they're going to come and you only see them for one unit, and you're telling me that you only saw them for fifteen minutes, and that the maximum amount of care you could provide them was that 15 to 22 minutes. You could only bill that one unit.

That's what you'll get compensated for, but our goal and our purpose as an organization is to provide the most amount of care that we can ethically do and get the most money for it. Frankly, I'm like, we deserve to get paid the most that we can for the services that we provide. I guess for me, I can see how that unit's conversation might land a little bit better if you framed it that way.

Yes, that's true. Also, I think anytime you introduce variable compensation models in any practice, the easy part is designing the models mathematically. The hard part, and the part that really takes a lot of skill, is introducing the models and delivering the message in such a way that therapists get the right idea and the right impression, not the wrong impression. The wrong impression would be what you just described. “I see what you're doing, owner X.

You're just trying to get me to see more patients, or you're just trying to get me to build more units.” Nothing could be further from the truth. In fact, that's why I said a minute ago, we need to make it clear to therapists that these are not bonus models or incentive models. These models have no hidden agenda. They're going to compensate you for your relative contribution to the company. You get to decide what that contribution to the company is.

This approach is modeled after how physicians are compensated and have been for decades, by the way. It's just new to us as therapists. We have a lot of preconceived notions about that. One of the things that we do with every practice that I've worked with is that we always ensure that they are objectively measuring quality care prior to going in this direction. They continue to do that after they've gone in this direction.

When, not if, but when the question of ethics comes up, which it always does, the best way to address that is to remind therapists that we are currently objectively measuring quality care, and we're going to continue to do that on the back end. It's a privilege to have options. It's a privilege to have access to these types of models. You can lose that privilege. The way you could lose that privilege is by purposefully sacrificing quality of care for the benefit of quantity of care. We have a structure, a place to measure that and make sure that does not happen. That seems to resonate very effectively with therapists when that person invariably asks that ethics question.



I love that approach. We are measuring quality of care, and we're going to continue to, and if that by chance happens to get sacrificed by the work you do on this model, then we're going to have to have another conversation. That's not what we're trying to do. For those who are tuning in, that might not be clear. What do you mean? What are some examples of measuring quality care that you either have come across or recommend?

Some examples would be, of course, a net promoter score. Satisfaction surveys, certainly outcome measures, your Oswestry, your LEFS, your GASH, those sorts of things. If those numbers are all of a sudden going in the wrong direction, alarm bells should be going off. That doesn't mean to say that you should let that therapist go immediately on the spot. Obviously, we wouldn't suggest that. I do think it resonates with therapists when they understand that you're keeping a very close eye.

What I will tell you, based on the data that we have, Nathan, and this is pretty exciting and fulfilling and rewarding for me, quite honestly, is that objective quality of care metrics invariably go up when you introduce these models versus down. Part of that is because therapists have a little skin in the game. They actually care if patients are showing up or not, and the fundamental question is, when a patient cancels, does the therapist high-five their coworker because somebody canceled?

They probably have a break. Do they get on the phone and say, “Mrs. Jones, why are you not coming in? Let's make sure that you're getting in here.” They're brought into the conversation more and more likely to participate in those things that we've been talking with them about for decades and staff meetings that we want them to be able to do and that we think they should be doing. This aligns their behaviors and actions with those conversations that we've been having.

Number one, you brought it up that this is a model that is pretty ubiquitous across medical practices, the physician world. It's very normal to have this. Most things in the physical therapy industry were about a decade or two behind the rest of the world. This follows suit. I'm glad you're getting some traction on it, but what changes do you see? Some people might consider this model, or they haven't considered this model, and they're thinking, “I was thinking about some bonus program anyways.”

Why Traditional Bonus Programs Fail And How Variable Pay Drives KPIs

What are some of the results that you see in terms of, I do not know, some of the KPIs that we'd measure on a regular basis? Does it improve production? Does it improve KPIs? As you said, they're sharing, we're not using the word, but they are sharing some risk when that person cancels. They are taking some of that responsibility and not just having an extra free hour to spend. What are some of the consequences, positive consequences, that come from models like these?

Just about every metric that you're measuring is going to move in the right direction with this approach. Once you get through the process of introducing these models, just to give you some examples, cancellation rates naturally go down, arrival rates go up, visits per referral are going to go up, units per visit are going to go up. Again, some of that depends on the structure of the models, and which variables you're choosing to incorporate into the models. One thing I will say is, if you're listening to our conversation and you've considered bonusing your therapists. The one thing I will say is you cannot bonus your way into the behaviors that you're looking for.

The data is very clear on that. All you need to do is spend five minutes Googling, do bonus models work? Invariably, you're going to see an overwhelming response. An overwhelming response. “No, they do not work.” I'll just give you a quick example. If you're trying to be generous one year and, at the end of the year, the holiday season, you want to give back to your provider. You give everybody a $1,000 bonus. Maybe you get a couple of thank-yous. The following year, maybe it wasn't quite as good of a year. You still give out holiday bonuses, but maybe those bonuses are $750. 



You know what's coming. Not a thing. It's, “Wait a minute. Last year it was $1,000. I've been gypped. Now I'm demotivated because of this bonus that I received.” The literature is pretty clear on that. That's why it's such an important distinction. For us, when we're introducing these models to help therapists understand that these are not designed to dangle a carrot to try to get them to do more, it's designed to treat them like a doctor of physical therapy and give them the autonomy and control that they're actually looking for in their professional lives.

For example, a friend of mine did this model in New Mexico, and like you said, the reason it triggers in my mind is that you talked about autonomy and flexibility. Maybe you did not use the word flexibility, but that's the word I came up with because all of a sudden now, if someone wants to take a day off, say they need to go to the dentist, the doctor, want to see family, you name it, be with family for a single day, they're going to maybe expand their schedules a little bit before and after that to make up for that day that they missed.

That gives them the flexibility to do so and gives them control to say, “You can do that. Of course, there's going to be some oversight. If you take advantage and sacrifice patient care. With this flexibility that you're wanting, then we're going to have to have conversations.” Ultimately, it's up to you to have some autonomy to do what's best for you and your patient. That allows you to have some control over your schedule, which is that, I do not know if that's a big thing that comes up in your conversations, but is that a consequence that you see, another positive consequence for the providers themselves out of these models?

It's not only a consequence, but it's also something that the owner has to be prepared for and embrace. I can tell you what we run into a lot is frustrated owners who say, “I do not understand why my therapist doesn't think with greater autonomy.” Yes. At the same time, if the therapist wants to extend their lunch by an hour to have lunch with a friend, they have to request time off to do it. We cannot have it both ways. If we want therapists to truly function like doctors of physical therapy, we have to create a framework.

Certainly, we have to have a framework, but we have to give them freedom within that framework to function independently as an autonomous healthcare provider. Too many times we send, as owners, mixed signals to our therapists about what we expect out of them. I do think that's an important point. An example is what you described. If a therapist would like to adjust their schedule in a given week, the first question the therapist has to ask is, will adjusting my schedule in the way that I'm considering doing negatively impact my ability to serve my patients? If the answer is yes, do not do it. If the answer is no, great.

There's no reason why an owner shouldn't allow that to happen. Now, that probably requires some flexibility and some planning. For example, they might want to have a coworker cover for a couple of those patients, or maybe they unplug a few hours on Tuesday and plug in a few more hours on Thursday. There's not necessarily a one-size-fits-all approach, but I do think we have a lot of practices across the country frustrated with how therapists are approaching their professional lives, but not giving them the freedom to operate otherwise.

Are you seeing, with these models compared to your standard salary model, are you seeing a trend or overall data set that shows they are generating more compensation on their own behalf by switching over to models like this?

Yes. Some statistics that we pretty routinely quote, based on the data that we have, are that after twelve months, and that is an important caveat because it does take about twelve months for a therapist to wrap their head around this concept and truly understand, “If I do this in the clinic, it causes this in my paycheck.” There's a process there, and we cannot rush that process. They do have to go through that process. Once they have, the average therapist increases their productivity and their income typically by 5% to 8%.

As I'm saying that, some folks that are tuning in might say, “I'm struggling to make payroll right now. You're telling me that I'm going to increase the opportunity for my therapists to earn what they're currently earning by 5% to 8%.” First of all, what I'm saying is it could be a lot more than that because 5% to 8% is the average. The other piece that's really important to understand is that models need to be designed in such a way that you're very carefully monitoring compensation as a percentage of revenue.

For every dollar that the therapist is generating, how much are you paying the therapist? It is mathematically possible to build models that pay therapists more as a therapist's productivity rises and the practice disproportionately keeps more, so it's truly a win-win situation. That's sometimes a miss when practices try to do this on their own. They might mess up the math. It looks great for the therapist, but then the owner struggles to make payroll, as the therapist is doing the very thing that you were hoping they would do.



I'm thinking, if you take the standard metric, the standard ratios that a therapist should generate 2.5 to 3.5 times their compensation, a 5% to 8% bump in salary. Maybe I'm just picking numbers out of the air, but using the 2.5x to 3.5x number, you're talking about a 12% to 18% increase in overall revenue for that one individual annually. If you're going to do that, if, provider, are you going to increase your production by 12% to 18%, I'm okay with you generating 5% to 8% more salary in that situation.

That’s correct.

Navigating Owner Fears And Provider Objections During Implementation

I like that. Tell me a little bit about why there's going to be friction on some of these conversations. Tell me first, what are some of the questions or concerns that you hear from owners about these models? You can maybe address those here, and what can you predict, because of your experience, some of the questions and concerns that providers would have as you start rolling these out?

Let's start with the owner's perspective. The owner's perspective is going to be three things. Number one is fear. What happens if my therapist doesn't like it? Number two is knowledge. I like the concept, but I do not even know where to start or how to design these models. Number three is time poverty, which is a real thing for practice owners. I love the concept. I could probably figure it out mathematically, but I'm just trying to get through the day as it is, let alone overhaul my entire compensation.

I do not have the time.

Those are the three that we hear from owners. As far as therapists are concerned, it's typically three things. Number one, “What about my PTO?” Therapists are understandably very concerned about making sure that they're not losing their PTO, both the value of their PTO and the amount that they have. The second thing is, “Is this ethical to get paid this way?”

Interestingly, some therapists have told me that their professor in PT school told them never to get paid this way, which is a whole other conversation, but I've heard that more than once. That's certainly a consideration. The third thing is, “It's not my fault that my schedule isn't full.” Those are the three things that we typically hear when we introduce this. There are ways to address all three of those, but those are almost invariably the ones that you can guarantee you're going to hear from your therapist when you introduce this approach.

Break it down for us really quickly. If you can summarize, let's start with the owner's concerns. How do you address those concerns that they might have regarding their fears and whatnot?

The first one is fear on the part of the owners. The way to address that would be a couple of things. A lot of this is based on what I've learned over the years. When I started doing this, I was trying to convince as many practices as I could to move away from salary models, to not even offer those anymore, to require therapists to choose at least a 90-to-10 model, which, if we go back to our $80,000 therapist, would be guaranteeing them 90% of $80,000, which is $72,000. What I've learned is two things. One, you cannot do that.

Therapists are not going to wrap their heads around that. Two, perhaps more interestingly, you do not need to do that. What we're doing now is we're leaving the salary model on the table. We're not taking it away. We're just introducing other models. Invariably, when you introduce these models, 85% of your providers are going to choose initially whatever the most conservative model is. I do not think anybody would be surprised to hear that. This is an interesting piece.

If you fast-forward two years, more than 50% of that original 85% will no longer be on the salary model. They will walk themselves over, and so what I was trying to force therapists to do initially, I realized there's no point in trying to force that because they're going to do it themselves anyway. The difference is they're going to do it with data, and they're going to do it when they're ready, not when I think they should. That's the biggest piece in terms of fear. The other piece is to introduce the models and show historical data to your therapist when you introduce the models.

You introduce the models and show them we've pulled six months' worth of data into these models, and we can show you if you had chosen plan A, B, C, or D, this is exactly how much you would have earned. Those two pieces significantly address the fear factor that practice owners have. That's the first thing. The second thing is time. It is a lot of time to do that. That's why I developed the whole program that I did develop, because I tried to do it myself, and it took forever.

Even when I did, my therapist did not understand what I was talking about. I realize we have to have some platform that makes it easy for them to understand and compare plans. We've got to streamline this somehow because this is one of 50 things that I, as an owner, have to deal with. I cannot just focus on all of this. That's the timepiece. It is a real concern. There's no question about that.

As far as the knowledge base is concerned, one of the things that we're trying to do is to put as much information out there into our community as much as we possibly can. If you Google this, thankfully, now at this point, you will start to see some information that will come up. You'll see articles and podcasts and presentations that we've done at PPS. We're trying to get that information out as much as we can. If somebody wants to try this on their own, they have the information to be able to try it.



The concerns that the providers might have, I'm assuming that the way that you roll it out can offset some of those concerns right off the bat. What do you say to someone who says, "My schedule is not full now. I'm going to take a huge hit.” If I switch over to something like this. To me, that sounds like it's a deeper conversation. You need to actually take control over your productivity. How do you see that?

That's where the full salary model, or what we call a 100-0 model, is so important. Because if you do not put that on the table, the therapist is going to have an emotional reaction to these models. They're really going to lose their ability to think logically about this. They're going to have a, I cannot control cancellations. Every time I have a cancellation, I'm going to then be making less money. Which, by the way, is an argument for RTM, which is a whole other conversation. That's something that we need to anticipate that therapists are going to bring up.

That's why we need to do a couple of things. Number one, show them their historical data to help them understand it's probably not as bad as they think it might be. Number two, give them a grace period or an introductory period where you give them access to their models, but you do not require them to choose one. Typically recommend twelve months. If a therapist says, “I've got $200,000 in student loans, and I need to make $100,000 a year to make this work.”

Without this approach to compensation, the owner only has two choices in that case. Yes, I'll pay you $100,000, or no, that's outside of what we're able to do. With this approach, you have a third option. Now you can say, “Great, you'd like to make $100,000. Every one of the plans that we offer gives you a path to or past $100,000. We're going to give you twelve months of a runway, and we're going to come alongside you and give you all the coaching and mentorship and resources you need to get to or past whatever level of income you'd like to get to.”

In that example, everybody's rowing together versus historically what's happened, where we have increasingly therapists coming to practice owners asking for higher and higher raises. They know they've got you against the ropes because there aren't enough therapists to go around, so this is a truly win-win situation. That's something you'd want to be prepared for, that your therapist would bring up.

Rolling Out Variable Pay To New Graduates And Unlocking Growth

For sure. I love that you brought up RTM because that's something that wasn't around when we were talking in 2021.

No, it was not. It's true.

If you are going to, if that second bucket of compensation has to do with units billed, then RTM units count in those situations as well. I know you did not like the word, but it incentivizes them to use the RTM when you have a cancellation and whatnot. Do you recommend this model with new grads? How do you approach new grads with a model like this?

Yes, as long as you're giving them a rather lengthy grace period. An option to enroll early. Here's another thing that I learned. If you try to introduce these models to a new grad therapist, you're going to overwhelm them at first. It's going to be hard for them to understand. You have to be patient. Help them understand this is how doctors get paid. You're a doctor. That's why we're offering this to you. We do not even want you worrying about this for the first twelve months.

We're going to invest in you to make sure that we get you to the point where you are a master clinician, where you feel very comfortable managing a full caseload, you've effectively made the professional transition out of school and out of academia, where you're getting three weeks of vacation around the holidays, into the real world, where it looks a little bit different. That's what we're gonna focus on for you. At the end of that twelve-month period, when we both mutually determine that you've gotten to the point where you're a master clinician, the good news is that it unlocks options for you.

Now you have multiple plans that you can choose from, and so interestingly, that resonates very well with therapists. The other thing that happens is when you tell therapists that they do not need to worry about these models for twelve months, after four months, many of them are asking, “Can I get on one of these models?” We see that all the time. If we required them up front to do it, they wouldn't want to do it. If we give them twelve months and do not require them to do it, then they want to self-select on their own. No one wants to be told what to do.

That goes to a basic human reaction. If I'm enrolling myself, that's one thing. If you're telling me that's how it's going to be, then I'm going to kick back and naturally push back. Enrolling in it and doing it myself is a much easier path for the owners, for sure. I was going to ask, because we talked a little bit at the beginning, how have you seen models like this improve recruitment and retention of providers? We've taken a long time to get to this point, but I think we laid a really solid groundwork of what the model is and the benefits of it. Now on the back end, what are you seeing the impact on recruiting and retention with these models?

We touched on this a little bit earlier, and I'll just bring it up again. Part of the value, or the primary value in this approach as it relates to recruitment, is when somebody introduces a number that they would like to get paid. It gives you that third option. It's no longer a yes, I'll pay you that, or no, I will not propose. Now you have a third option where you can help that person, that candidate, get to or pass whatever the level of income is that they're looking for, so that's the first piece.

The second piece is that we have across the country right now a lot of inequity in compensation models because we have therapists that were with the company for 5 or 6 years, and maybe they got some raises. They probably did. Now we're trying to hire a new therapist, and our backs are against the wall. We're throwing a lot of money at these candidates. In some cases, practice owners are feeling like they have to go back and make adjustments to the existing staff to bring their pay up, but in other cases they cannot afford to do that.

The point is, we have very little standardization right now across the country. Everything is customized, and that's a real problem because the younger generation of therapists and the workforce in general are very comfortable sharing how much they're earning with anybody that's interested in hearing it. You spend a few minutes on LinkedIn, and you'll see therapists posting, I make $100,000. The whole world knows how much they're earning. Historically, that would not be the case. Practice owners get uncomfortable with that, but it's a reality. We need to embrace that reality. 



Standardizing Compensation To Boost Recruitment And Provider Retention

How do we do that? The way we do that's we standardize our approach to compensation. We standardize it across the board. I offer, in my practice, for example, let's say four plans. Everyone has access to four plans. The plans are structured exactly the same way. Now, there might be some nuance where the plan is structured differently for a clinic director versus a PT versus a PTA. Within that role, the models are the same. The increased opportunity can also be standardized.

You can build in a $2,000 bump every year, for example, up to 10 or 12 years of service, or whatever that is that tends to resonate very effectively with therapists. When they come to you and ask for a raise, your response can be, “You can give yourself a raise anytime you want.” You can start right now. I want to help you do it. If you want to meet with me on a weekly basis to figure out how to make $15,000 more, I would love to take that meeting. It really flips the narrative. That's the recruiting piece.

As far as retention is concerned, therapists typically leave an organization and go to another organization because they're going to get a different pay structure. They think the grass is greener. They have a friend who works at Clinic X. They work at Clinic Y. They heard things are a little bit different, so that's why they leave. If you're offering multiple models within the four walls of your company, they do not have to leave to get a different structure. They can just change their structure, which we recommend allowing them to do every year on a rolling basis, like open enrollment.

That's the primary reason why it helps with retention. The other reason is transparency. If a therapist wants to know, "What do I have to do to make $10,000 more?” Without these models, it's fairly ambiguous. Most owners do not even know how to answer that question. They're not even really sure what to tell the therapist. In this case, it's very cut and dry, very objective. Do this, and you will make $10,000 more. Again, it goes back to empowering therapists to be doctors.

I like it. The companies that you're working with, do you have some data, or have you seen how that has affected their ability to recruit and retain because they've implemented models like this?

Yes. I will say there's no question that this approach increases and enhances your recruitment efforts. However, it is not a fix-all solution to your recruitment challenges, because at the end of the day, this is simply a supply and demand issue that we're dealing with. In addition to that, twenty years ago, therapists had just a few options in what they could do professionally. Now they have almost infinite options. Many of those options are not in clinical care or even in the clinic at all. Not only do we have fewer therapists available, but we also lost a lot of therapists during COVID. We also have fewer therapists.

The statistic that I saw was that one or three out of every four licensed therapists in the US are not treating patients. A very small percentage of licensed therapists are actually delivering care on a full-time basis. Of course, it begs the question, “What's everybody else doing? What are the other therapists doing?” The answer is that there are a lot of other things that they could be doing. To answer your question, what is your alternative?

Your alternative is trying to come up with some magic formula or some magic number or throwing sign-on bonuses. You see this happening all the time. Practices throw sign-on bonuses at a candidate. What happens in six months? They leave anyway. I do not think it's a number issue. If we just get the right number, our recruitment will go up. What moves the needle is the transparency and the options and the ability to change options over time and creating a practice culture that gives the therapist more freedom and autonomy than they would have elsewhere. In my mind, that's what moves the needle.

As an owner who's considering a model like this, whether it's this or bonus structures, some incentive, whatnot, my recommendation is always to do some projection/pro forma of how this impacts you financially, what it does to the bottom line, how it affects salaries in this case, or compensation in this case.

I'm assuming that's part of what you do with owners, as you're working with them is like, "Let's get your financials, let's put them in the system.” We can now see that changing over to this model will impact it this way. I want to say, number one, if anyone's considering this, make sure you do that. If they consider joining with you and looking at what prompt compensation has, I'm assuming that's something that you walk through with them.

The Financial Pro Forma And Best-Practice Rollout Strategy

It is. We have a six-step implementation process. What you're describing is the 4 of 6 steps. We do that before we introduce the models to therapists. I made that mistake once with my company. I was all excited. I introduced the models. Therapists outperformed what I thought they would do. We couldn't make payroll. We had to go back and say, “Great job, guys, but we're going to have to roll the models back because we made them too lucrative.”

You can imagine how that went over, not very well. We've never made that mistake again. Yes, what we do is we design the models, then we pull the historic data, we run it through the models, and we do a data analysis. Now, I will say it depends on how the owner feels about the analysis. Some owners will say, “I'm more than happy to pay my therapist disproportionately more than they're bringing in if it helps me with retention and recruitment, which is so expensive, the turnover.”

Other owners will say, “I'm more than happy to pay therapists more, but only if disproportionately I'm harvesting more of that income.” I do not think either way is right or wrong. It's just a function of what we do. We have to get to the bottom of how the therapist, or excuse me, how the owner feels about this concept. Our recommendations are tailored to how the owner feels about the concept.

I got you. If someone wants to work with you at this point, you are the VP of Prompt Compensation. Do they have to be a prompt client, or can they work with you outside of the Prompt?

We have a tier structure in place where larger practices do not. Larger organizations do not necessarily need to be Prompt customers. The threshold typically is around 40 providers. If you have less than 40 providers, you do need to be a Prompt customer. If you have more than 40 providers, you do not need to be a Prompt customer. That's how we've structured it.

If people wanted to reach out to you and ask questions about that, how do they get in touch with you?

They're welcome to email me directly. It's Jason.Womble@PromptHealth.com. I'm still very much involved in just about every practice that we work with to help them introduce these models and test them and roll them out effectively. They're more than welcome to reach out to me directly.

You're on LinkedIn as well, I assume?

Yes.

Before we take off, is there anything else you want to add to the conversation?

One thing I'd like to add is I've never run into a practice owner who says this is a bad idea. What I have run into is practice owners who say, “This is just too scary for me.” What I would encourage you to do is, number one, talk to somebody who's done it and had success and hear about their experience. Number two, the secret sauce is really just to go slowly with the process and to not rush it, both in terms of designing the models, implementing the models, and giving your therapists a period of time. If you go slowly with this process, there's really nothing to worry about regarding your attrition rate.

If you follow the best practice strategy that we have identified over the last 10 or 12 years, your attrition rate with regard to your therapists is going to be zero. You're not going to lose any therapists. I couldn't say that ten years ago. We've made a lot of changes, some of which we've talked about. You can feel confident that the attrition rate is zero. There's really no reason not to try it. The thing I would ask you is just to consider what the alternative would be if you did not do this. What other lever do you have at your disposal that you could pull to try to improve your retention and recruitment efforts? Just some things for your audiences to think about.

Can I ask one more question?

Sure, of course.

A sticky question, but I'm sure you've had people who have tried this model and have opted out. Is there a common denominator as to why it did not work out for those clinics?

I'm glad you asked that. A couple of things. Number one is not following our best-practice rollout strategy.

The rollout did not go smoothly. It did not go well.

We recommended X. They did Y, for example. I'll give you an example. We always recommend at least a six-month grace period, preferably twelve months. Owners might say, “Financially, my back's against the wall. This is my Hail Mary to save my practice.” I cannot afford to wait six months. I need to get them on these models. Our recommendation is always against that because you cannot rush change management.

Even if your back is against the wall financially, this is not a solution that's going to get you out of a financial hole in six weeks or eight weeks. You have to be willing to play the long game when you're dealing with something as sensitive as compensation and how people feel about it emotionally. Owners who are not willing to commit to that long game, as I said earlier, it takes twelve months.

It's usually not going to be a good outcome. In fact, when we talk with owners and they tell us that they're not willing to do that, typically we do not move forward with them. We do need to know that they're committed to this because we've done it so many hundreds of times now. We know what's going to work and what's not going to work, and what isn't going to work is rushing the process.

Good information to have. Trust the experts is what you're saying.

That probably would have been a lot faster to just say that.

We've done this before.

Just trust us.

Thanks for your time. I appreciate it, Jason. It was great to have you on the show again. I'm sorry that it's been five years, and hopefully it's not another five years before we talk again.

I hope not, but if it is, I'm sure we'll have some other things to share then. Thanks for having me, Nathan.

Thanks, Jason.

Important Links 

• Jason Wambold on LinkedIn
• High Performance Practice Conference
• OnusOne
• Prompt
• Jason.Wambold@PromptHealth.com
• Salaries Vs Incentive Programs – What Your Employees Actually Want With Jason Wambold, PT Of OnusOne - Previous Episode

About Jason Wambold, MSPT