Deciding to expand your practice, either by acquisition or starting new, is an exciting time. But, adding new staff, physicians, and equity partners can come with a handful of problems. On this episode of Inside Reproductive Health, originally aired in 2019, Griffin Jones, CEO of Fertility Bridge, talks to Dr. Michael Levy, IVF Director and President of Shady Grove Fertility. Shady Grove Fertility is the largest independent fertility group in America. Griffin and Dr. Levy discuss the implication of having such a large staff base and just how they manage it, all while keeping the patient at the forefront of their culture.
Transcript
Dr. Michael Levy 00:00
They transform lives, but it works. And we have to help them through difficult journeys, but it doesn't work. And we need every one of those people to feel the support that we give them. And you know, we do really well about patient satisfaction surveys, but not unbelievably well. And I'm much more anxious about it now, given our size and our geographic diversity than I was with our staff meeting was 15 people in the entire practice.
Griffin Jones 00:32
My podcast manager, and my audio producers suggested something that the audience has been asking for, for some time, which is on to bring back episodes that were popular so that we can listen those again, maybe offer some new context and go back in the annals of it and find things that you can listen to now to see how they hold up the test of time. And so one that I went back to was episode 36. That's with Dr. Michael Levy. Most of you know him as one of the founding physicians of Shady Grove fertility. And put that episode two, your attention now, because a lot of change was shaved off fertility. When we recorded this episode, they were the largest practice group in the country of courses three years ago. But they did not have any private equity partner. They were not part of the network. They were almost a network in themselves, because they were so big. But since then, US fertility has come to be they're backed by amulet capital. So now there is private equity, behind shale boom, they're part of a network that includes other practice groups. And in this episode, Dr. Levy talks a lot about partnerships with younger physicians and attracting younger Doc's. Well, what's that like now, where the fellows were not being offered 500k signing bonuses three years ago, when we recorded this episode, and I've seen that now. And so how does that all stand the test of time at the time of this episode, the Shady Grove didn't have to necessarily, itself? And I'm not saying it does that. But I this is a question that I keep forgetting to ask. Yes. But when you belong, when you're so big of a group, and you're part of a network, what happens like she drove bought a practice in Houston, and one of us fertility or one of the other groups suggest fertility wanted to open a group in Houston. So I want you to listen to this interview and see what still holds up to you and see what you think is completely off from three years ago. And then if you want to share that with maybe an email that feel free to and I will, I'll get follow up with you, as I ask these types of questions. Look into them. But enjoy this episode about building a large fertility group with Dr. Michael Levy. I'm interested in this conversation, mainly because I want to go into the brain of someone who helped found the largest fertility group in America. And maybe I'll back up and give a little bit of context. Because I think while we assume that everybody knows about Shady Grove, there are a lot of people in this country and other parts of the world that are listening, that are just practicing medicine in their little practice that listen to this show. And they actually probably don't know a lot about it, because they don't often check out necessarily the other things that are happening with other people in the field. They're doing their thing. You're a group that started in Maryland, in the DC area, you now have close to 1000 employees. Is that right? Correct. Yep. And how many Rei is now
Dr. Michael Levy 04:16
stopped losing count, but I think 5858
Griffin Jones 04:19
Which is just an extraordinary number, considering that a group that had nine or 10 would be most folks would consider a big group and I'm very interested in how that starts. So you're one of you, you have to found this practice. A lot of people will start their own practice and have 10 people work with them and that's a good life and a good career for them. You've got a 58 physician group with almost 1000 employees now 950 When we spoke to Marian credit earlier in the show, did you set out to do that?
Dr. Michael Levy 05:00
Absolutely not. So my goal, career wise was to? Well, first of all, I had a mandate from my wife that I was staying in DC. So I wasn't able to look further afield. There were no jobs available in DC wanted to join Frank Chang who ultimately became one of the partners in our practice. But my goal, when I set up this practice was we had three or four physicians and that three or 400 cycles, I would have signed on the dotted line right there. So there was no grand roadmap or ambition created at all?
Griffin Jones 05:34
Well, it wasn't an accident, either. Because if it were an accident, everybody would have done it. How did it happen?
Dr. Michael Levy 05:41
So every quarter, I speak to our new hire orientation. And these days, that's about 25 or 30 people, which was bigger than type of stuff in 1991, when we started the IVF program, and I'll say the same thing to you that I say to them, we never had Grand Designs to be as large as we are, we focused on one core issue. And that led to a virtuous cycle, which I think allowed the practice to expand before, you'll know what that is. But before I articulated properly, Paddy style, who you probably know, who was, you know, Director of Marketing, or is our Director of Marketing, not the not the correct title, by the way, it's a bit, she has a better title than that. But she started at the very beginning with me, and about seven or eight years into the practice when we were about 10 physicians and growing rapidly. She was cornered at ASRM by a couple of physicians who said, Okay, Patti, you've been at Shady Grove for eight years, what's the secret sauce, and she said, you know, the, the absolute central tenant of the practice is always do the best thing for the patient. And immediately their eyes glazed over, they say, Stop bsabs, we want to know the secret sauce. She says they really she says always do the best thing for the patient. And I think we we've absolutely adhered to that. And that's allowed us to have patients feel very good and comfortable and refer their friends or physicians to know that that's the way in which patients are gonna get treated. And what I mean by that is, not only do we have to have very good success rates, we have to be incredibly transparent with patients, we have to have financial programs that are affordable. And that in turn attracts physicians who want to work in that environment, patients and staff who want to work in that environment, we have very low staff turnover. In 28 years, we've had one physician leave the group. And that was because she got divorced and wanted to work part time and live in California. No other physician has ever left the practice. And that I think speaks volumes to the environment. And we have a true partnership. We are 100% physician owned and we have 28 equity partners. And the model is everyone becomes a true equity partner. So everyone has skin in the game and feels engaged from day one.
Griffin Jones 08:06
I don't even know how to break this out from here with 20 equity partners. Maybe I'll come back to that, because I'm really interested on how you manage direction with 28 equity partners. So let's let's talk a little bit about doing the right thing for the patient. And I can see the physicians eyes glazing over when Patty gives them that answer. They are it tell us tell us what they're looking for one or two tactics, right, they're looking for something that's a specific process that they used are some very specific thing as opposed to seeing it as an attitude. And I wonder if that just speaks to? Well, there are hundreds of tactics right there, there can be 1000s, there are hundreds of different or dozens of processes. There's hundreds of key players. There's however many techniques, but they're all grounded in that one, in that that virtue of doing the right thing by the patient. I think we need to explore it a little bit more because to me, it just seems so subjective. And we were talking about this with I think I was talking about this on another podcast interview where I said it's very often like the local restaurant owner that says yeah, we've got the best service in town, but sometimes they just don't sometimes there's just a local a local restaurant that perceives that they've got the best service in the place across the street does. So as you're growing, that means you've got to measure things and now you have people in place like Marianne and Patti and some of whom started from the beginning. But when when you're measuring in the beginning, as Michael levy someone that's starting off with a handful of Doc's and now you're at nine doctors and you go invest, how are you measuring how you're How are you keeping the pulse of how you're serving the patient have a
Dr. Michael Levy 09:58
formal basis we serve it have the patience on a regular basis, and we get constant feedback. And we're never satisfied, which is good and your work life not good in your personal life. So, you know, we constantly pushing each other and ourselves. And, you know, any negative feedback freaks us out. And we look carefully at, you know what the root cause was, and welcome that. I think most importantly, we've attracted staff and retain staff who get that. And we, we were never good at letting anyone go, which was an early problem with Maryann and a more professional HR team. Occasionally, occasionally, someone doesn't fit in, and we will let them go. But I think that everyone is a role model for everyone else. So from the front desk to the new patient call center, which was a modification we made about seven or eight years ago, in typical doctor's offices, you got someone at the front desk, checking you in checking you out, answering the phone and make a new patient appointment. So when a patient calls our practice, we now have a call center. You know, in our office, very well trained individuals who know a lot about infertility, we give them a completely different experience with that first phone call. And we look at the whole patient journey, and make sure that it's going well, you know, there's some large practices, you don't give monitoring appointments at SEC first, come first. So you can wait an hour or two for your appointment, you know, we're upset if a patient's not in and out of the office in 20 minutes for their monitoring visit, we'll bend over backwards, because everyone knows I had a patient last week, who with the floods in in the Washington area, came in two hours late for appointments, I mean, really shut monitoring that at a relatively new front desk person was telling her well, you know, there's no one there, we can't do your monitoring. And she came to me expecting I was gonna say, yeah, she's out of lack, it's two hours late. And she's, you know, very frustrated, you know, understood that she was two hours late, but she showed me a video of a basement flooding. And we turned the machines back on, and we got staff there within a monitoring visit. And there was no question that that's what we would do. And I'm sure many, many practices would do that. But we also modeling that for the staff. So that person on the front desk knows that, you know, next time, this should be no question, you know, we're going to accommodate, you know, a difficult situation for a patient. So, I think you create a norm, and when people come and visit our practice, almost across the board, what I hear is, what do you put in the water? You know, everyone seems happy, everyone seems into it. You know, we remind our staff that we we started lackey to work in this field, you know, unbelievably motivated patients, we transform lives, whether it works, or we have to help them through difficult journey, but it doesn't work. And we need every one of those people to feel the support that we give them. And you know, we do really well about patient satisfaction surveys, but but not unbelievably well. And I'm much more anxious about it now, given our size and our geographic diversity than I was with our staff meeting was 15 people in the entire practice.
Griffin Jones 13:12
And love that you just said that every year you're coming from a practice group that is doing very well just in terms of what the practice is doing. And when it comes to, when you're talking about patient satisfaction survey like that we're doing well, we're not doing that great in terms of what I would want us to be doing. I think that is pretty telling, I often hear people think, Oh, we've got the best patient satisfaction, whether they're looking at any surveys or not. And I just I often think about a lot of different groups, I just think you're not hungry enough for me, you're not you're not paranoid enough for me that somebody else could be serving the patient better. And I tried to run my businesses the same way every single thing was like yeah, we could be doing that better. This is pretty good. We we've had a lot of success with this but I'd still like to be doing this much or have the client this happy instead of this happy and I think that's a really important attitude. I also think the example that you gave about a woman comes in she's two hours late she shows you the video on her phone or her basement flooding you make the call to turn the machines back on and get her in that particular example I think is some version of that is one that I hear small practices tell a lot about the advantages of a small practice that that large groups don't or can't do. So and here you are bringing up that particular example for you. How do you though I mean is it you Michael levy that can make that call? I mean, are there cuz an associate doc make a call like that? How do you you know, when it's when it's your practice, and it's So eight people on your staff, it's pretty easy to say, Okay, this is my bottom line, my top line, I can make a call if I'm going to help somebody out. Once you got 58 doctors, and 950 employees, it's a lot harder to make these sort of judgment calls. So you can make it in your practice, but can other folks in how do you maintain that if you can.
Dr. Michael Levy 15:21
So that's an important point. And one of the things I say to all the new physicians and all the new stuff, is, we want fresh eyes to see situations and make it better, and empower people to I'd be really disappointed if a soul should have been with us for one week didn't make that same call. And I would, you know, I'm pretty easygoing, and I never want to make anyone feel bad about anything. But I would sit someone down, and I'd expect any physician in the practice to sit someone down and say, you know, accommodate the patient, you know, that's the culture, we had a physician join us as a senior partner that in his first couple, and he'd been in practice elsewhere. And in his first couple of weeks, he then embryo transfer. And there was some communication issue between him and the embryologist. And he was frustrated with it. And he walked into the lab, and he started yelling at the embryologist and everyone like looked around and cracked up. Like, where the hell do you think you are? You know, that is not what happens at SGF. You know, if there's an issue, you're come and discuss it, and we'll explore it, we'll make sure it doesn't happen again, that type of hierarchy, that type of, you know, bad behavior just doesn't exist. And what was great for me was, it's organic to the practice of this point. So it's not that, you know, we're not of a very hierarchical organization at all. And everyone who's been here a while, gets the culture and buys into it and reinforces it. So you know, it's, it's not just, I could make that call, or half a dozen physicians who've been here for 20 years could make that call, we would we empower people, the physicians know more about the business realities of this practice. Within a week of joining us, then many physicians that have worked so well for 10 years, and they've got a, you know, senior partner who's keeping everything close to the chest. So transparency and empowerment are at the core of our model.
Griffin Jones 17:19
That's part of the culture and you say it's organic. But as you start to grow partly by acquisition, and you talked about that 50 positions, we had one lead and that whole time one for personal reasons. I imagine that doesn't mean doctors have practices that you've acquired, but as you as you start to acquire practices in other areas, how do you make sure that it fits with that organic culture, because you've grown it from the beginning, you're in the offices in the DC area, you and the founding members now, in once you start to get to other states, you're further away from that base, and you might be hired, you might be buying practices of people that have no problem, dog cussing their embryologist in front of the rest of the staff? How do you part ways with them? If that's the case? Or get them on board? How do you decide what's the root there?
Dr. Michael Levy 18:18
So I think it first goes along with who you partner with so many of the physicians who have joined us or we've hired, we just know they're a good fit. And they get the right combination of clinical skills, personal commitment, entrepreneurial instincts, and we want them on the best. And when we looking at a practice to acquire, that is probably the most important issue. Well, these doctors fit in with the culture, it could be a great business opportunity on paper. But if on a personal level, you've got a very egotistical physician who is never going to let go. That's a non starter for them and for us, because, you know, but at the same time, we don't straightjacket and the personality of our Tampa office and Richmond office in Philadelphia will be different to rock for that there's enough commonality. And we so one of the other critical issues we have is we meet on a regular basis. So three out of four Monday nights, we have physician meetings, we have a clinical meeting, we have a journal club, we have a business meeting, everything is discussed. And as I said, it's important that transparency, so that helps build the culture. And one of the things we had a very difficult situation. A week ago we had to deal with and a senior partner in Richmond and a senior partner in Atlanta, both spoke up in such a moving way to say we get the culture we get how this needs to be handled, and were fully on board. And that may not have been the case and I think it's a combination of we had the right people who we merged with and acquired and they got the culture in wreck. implies that the greater good is served by all of us reinforcing it. So so we're not competing with each other. You know, our compensation formula is a very well balanced and fair, largely rewarding productivity, you know, not seniority, not equity. In fact, the opposite is the case, you have to sell your equity and 65, we did not want to have top heavy situation where you've got, you know, a 70 year old physician working part time and trying to take the lion's share of the income, you know, you're phasing out at 65.
Griffin Jones 20:32
All the 20 equity holding physicians all come to those meetings. So they all go to the business meeting, via video conference or whatever means.
20:42
So not only that, but all 58 physicians come to the business meetings,
Dr. Michael Levy 20:47
every Monday are average to me every business Monday, which is what I said now, we probably them to two out of four Mondays a month we have a meeting, because that's become unwieldly with 58. So now we have an elected board, and no one has tenure on that board. So anyone can get voted off every two years. So we have seven physicians on a board that that meets every Monday afternoon with our executive team. We have a shareholder group of with everyone with equity, which is 28 physicians. And that's a quarterly meeting. And then a business meeting. I think we have one or two a quarter all physicians associated physicians know our revenue. Now our profit, though I expenses in detail from day one. And, you know, we've always held that transparency as a key to the culture.
Griffin Jones 21:37
There's a reason why Dr. Lee talked about EngagedMD In this episode. This was long before EngagedMD was a sponsor, Dr. Levy helped found EngagedMD and they because he saw the need for news willing to help in enrollments in the biggest program in the country. And since then, their market share has only exploded the Devon almost half the centers in North America using EngagedMD, why did Dr. Levy? And it why did he end up becoming a sponsor? Why have they expanded their market share so much? It's because it's a technological solution, where we have long been aching for one to have our nurses not have to do the type of pre education of pretreatment education that can be done in a module that is much better suited for the patient so that nursing time provider time is personalized to the patient so that the patient can do it on their own time, enjoy their experience more, go back and learn again come in with a much better foundation so that informed consents aren't being lost or taking time to make sure that they're each in the right file and then moved from one location to another. They're all in one place with a much greater informed consent to because it's tied to a module that you can show people watch all of these things, and they engaged in the what it is. And that progress has been amazing in the last few years. And if you're one of the few people that hasn't taken advantage of that, in that time, you can get going new engaged.com/grif. And you have to do the slash grif. And you have to tell them you saw them on inside reproductive health you don't, but it will get you a free assessment of your workflow, which is really good to do right now. And also just create more content for the show. So we're gonna engage them the slash Griffin, and enjoy the rest of this conversation with Dr. Levy. Dr. Levy seen from RSC and back on the show as well. And he talked about how those his partners and the physicians that his group meet, and they meet each Mondays and one one day a month they talk about business with his shape position, that's a lot harder. So I see the importance of having a group but I can't stress the importance of reserving time for all of the partner Doc's to talk about business, not just oh, let's let's pick a time here, and we'll get to it, but then so and so's on vacation, something happens with so and so and then someone else is covering their patients. And those meetings that are supposed to happen every two weeks happen every six weeks, or every two and a half months, and so on. And that time of reserving the attention and focus for everybody to meet and talk about the practices of business, I don't think can be understated. And to me it often seems that the smaller the group, sometimes very often, the less likely that is to happen. One of the things that we do as a company when we start working with someone is we need to make sure that they have Time, focus and attention to be a part of whatever engagement that we go through with them, which is why we start off at a very small little level. And when people sort of can't get into that little level, they want to, they want to jump forward and say, Well, can you just put together some service package for us? I say, I am not going to put together anything that is destined for failure. And if there isn't the ability of the leadership to say, Okay, this is important, then there isn't the ability of the subordinates underneath them to say, this is what we need to be working on. Because we know it's important because the leadership is, is meeting on it frequently. How do you decide who gets on that? Board? You said, it's not tenured? So people can sometimes people leave you said it's 65 people start to phase out is the board sort of a volunteer, we work with some bigger practices that they have like a marketing committee and some of the partners and they might have a finance committee and other types of, of committees, but how do you decide who sits on the board?
Dr. Michael Levy 26:08
So it's a mix about all the shareholders. So we have an election every two years,
Griffin Jones 26:15
we tried to 28 physicians. So it right now, it's different, because your group that is entirely physician known, one of the concerns that a lot of people have is about the consolidation that's happening in our field from for from groups that are backed by private equity firms. And it would certainly be easier to become the largest fertility group in the country, if one had private equity, that things can move really fast or venture capital, for that matter. You haven't yet. So I'm assuming that means that there's some concern, but that's an assumption, do you share the concerns about what's happening with consolidation? And if so, what are
Dr. Michael Levy 27:07
so many facets to that I was going to disagree with you that it would happen, you could become the largest group more quickly, if you have private equity, I'd say the opposite is true. Because I think you get distracted by your quarterly performance. And you have pressures that don't allow you to be as strategic, especially if they've got a short term exit plan. And they're trying to micromanage without the clinical insight and experience needed, you know, they may be very well trained business people, but it's, you know, we're not widgets. And I think that to a certain degree, private equity is discounted, you know, the importance of individual physicians, and how much of an impact that has on the practice that they are appropriately motivated, you know, we've probably get two calls a week for private equity groups wanting to get into the space. And we've resisted that, at a certain point, we're going to have capital needs that we're going to have to address, but we've managed to finance it internally and with, you know, into, you know, and with bank funding, and it is tempting, to be honest, but I think that our structure is such that it precludes all the physicians wanting to exit and get a nice multiple for private equity. Because if you're 35 years old, and a new partner, you know, you're not as excited about private equity as if you're 60 years old. I happen to be 60 years old, but like, my primary responsibility is to the practice and to the 35 year old doctors in our group, and I'd be averted, which is good. So I think looking long term is is important for future growth, and private equity doesn't look as long term. And, you know, we recognize that there probably four or five networks in the country, most of which are private equity backed at this point, and they are good competitors. But when I started in practice, 28 years ago, a really lovely colleague in the area said to me, you know, I'm sorry, you weren't able to join us because there was no space, but it's a big space. And there are lots of patients, and we'll all do well. And that was true, then, and it's true. Now. I think the market is underserved. I think we're too expensive. I think there are patients who don't have access to care who should be accessing care, and if we find ways to accommodate them, the whole pie grows, and we will do well.
Griffin Jones 29:24
Not. This could be an entirely different topic, but maybe it's worth it's worth bringing up because I completely agree that the market is underserved. We yet that I talk a lot on the show about the interior of the country, especially because I think we're seeing in even more disparity, a lot of the younger areas are moving to the DC, Boston, New York, Los Angeles, San Francisco, and very often the only doctors moving to the smaller markets are those that are from there. They grew up there and they just want to be by their family. Those practices are having a much harder time. and recruiting folks. And I think that ultimately limits the number of people that they can serve in those areas as well. And this might be a little bit of a side topic, but you did talk about were too expensive. I had Rob kilts on the show to talk about that particular topic. And I could probably have more guests just to talk about that. Why are we so expensive when so much of what we do is a cash pay the criticism of, of health care and why health care is cost increase, while most consumer technology cost goes down, is that it's because you have the government or an insurance who's not really insurance, because so much of their liability is mitigated by the government or someone else inflating the costs in our field, the majority of it is self pay, at least for IVF. And so why are we still so expensive,
Dr. Michael Levy 31:00
you touching on a topic that I'm very passionate about, and have always looked at ways to ensure better access to care. And if you look at our field, the the rate of inflation in IVF, is much, much lower than in other fields of medicine. One of the facts I'm most proud of is when we started the shade rose program in 1992. Our package was $19,000, led up to six cycles, full refund of it on every baby, we just modified our shaders program into three tiers. And for patients under the age of 35, we reduced the price from $21,000 to 90,000. To 28 years later, it's the same cost. That's that's the opposite of what's happened in medicine. And by the way, as you obviously figure out immediately, we do much better because our success rate is double. So you know that's so as technology improved as it does in other areas, you should become more cost effective. I think the fact that there's such huge barriers to entry allows practices to charge more, which is problematic, you know, costs do go up in general. So our margins are lower now than they were 10 years ago, our pricing has not kept pace. I'm also very frustrated at the cost of medication. I think this is a problem across the board in medicine, at the cost of gonadotropin to have more than doubled in the last 20 years. And certainly the cost of an IVF cycle has not come close to that. So whereas early on, it was about 20% of the cost of an IVF cycle now can be 50% of the cost of an IVF cycle, especially when the prices are going to bash pharma a little bit here with this opportunity. But especially when you look in Europe, where the cost of gonadotropin is a fraction of what our patients pay here, that's very problematic. So I think our whole health care system is messed up. I do believe and I'm not. I guess it's ironic, given my career, but I'm not that much of a capitalist at heart. But I do do believe in transparency and price compensation. And I think the fact that it's a self pay market has kept prices down. If you look at the cost of a knee replacement 28 years ago, versus IVF. And you're looking at now, it's exponentially higher with the rate of inflation with the knee replacement. patients aren't looking closely, you know, I could go on and on about this topic, I'd love to talk to you about it again, I became very interested in it. In our practice, our health insurance is our biggest expense after occupancy. And we're now exploring becoming self insured, because we want to control costs better. And I think medicine has failed dismally at controlling costs. And I do think if you look at the rate of inflation, in fertility, it's much much lower than medicine as a whole.
Griffin Jones 33:55
I think that we definitely could have you back on about that. But it does explain why you got into some of these other ventures and I want to talk about how one gets into those because I think a lot of especially principles of fertility groups have the opportunity to maybe be a co founder of a of a new software a new EMR a new maybe a new workflow, where or or have the opportunity to get involved in physician owned pharmacies or a number of different side ventures sit on an advisory board for some large tech startup or existing farm company. One of the things you started with this passion that you talked about you started the share price financial program, then you also helped co found donor egg bank and I think you're involved with my friends at EngagedMD How do you make those decisions to you've got your your your main focus, which is presumably the practice group, and then there are different than Churches and there could be 1000. As the field needs technology and meets all of these new opportunities, how do you decide which ones are a good fit? What advice would you give for principals that are thinking about maybe getting involved in some sort of venture that is ancillary to their practice, I think we
Dr. Michael Levy 35:18
always do better in an area that we know well. So you know, for me to say I think I'm going to invent some kind of, you know, it opportunity unrelated to infertility would be completely crazy. And that is almost certain to fail. But I think if we have an entrepreneurial instincts, and we see areas within our field that open up new opportunities, I think the egg bank exemplifies that, and we pursue it with a vigorous focus will be successful. So when the new technology for egg freezing was developed about 10 years ago, I think that it opened up a big opportunity with egg donation, where typically one egg donor was matched with one recipient, and it was extremely expensive. So egg banking allowed one to decrease the cost by less than half of what it used to be. And there was, was we were early adopters of it and started the egg bank in partnership with a number of other groups.
Griffin Jones 36:19
And maybe a good place to conclude is with the model that you talked about, because you made a really great point, which is when you're 35, the private equity offer isn't so excited when you're 60. The private equity offers a lot more exciting because the buyout is essentially one's golden parachute retirement. And I have made this argument on the show very often that I think no small part of the reason why a lot of retiring physicians or doctors that are within five years of retirement are taking this exit because they don't have another exit because they don't have a doctor that wants to take over their practice. Or if they do, there's trapped equity that the incoming doctor can't afford what the practices were. And even if they can they're the expectations aren't set. Well. We've talked about that with Holly I just said on the show of why associated Doc's would leave after two or three years before ever becoming a partner and why that happens fairly frequently. So if her the I think maybe the five to seven Doctor groups, because there's still a decent number of those, and they haven't sold equity yet, but they're probably around that age where they're really thinking about it. Does the Shady Grove model work for someone that sized where you're getting people in, they're meant to be on a partnership track. And then the older Doc's are meant to phase out, or is it too late if the doctors are at certain age or a certain career?
Dr. Michael Levy 37:53
So so we refer to our Constitution as a critical components of our practice. And that's all embedded in our Constitution. And I don't think it's too late. For any practice. I think that you absolutely correct that if the only avenue for excellence in significant ways private equity, and you don't have younger physicians who are going to purchase your equity in the practice, you're in trouble. So we have a very clearly defined internal, multiple and excellent we've had three physicians, or more probably at this point. So when I started the IVF program, I joined us a Gascon and Bob Stallman have been our fellowship director, GW, he joined us five years later, both Alice and Bob have now sold the equity in the practice. And that was very orderly, the younger physicians bought the equity. If they can, and it's a win win, they got a good, you know, valuation, and the younger physicians, you know, got a good deal being able to acquire that equity. So, I think ensuring that that is in place at the earliest stage is a good idea.
Griffin Jones 39:03
Can doctors do that, like in owner financed home, I buy the home from the older couple who's going into the nursing home, we don't get the banks involved, we we draft a contract that maybe I put down a down payment, and I owed them directly as though I'm paying them the mortgage and not the bank. Can it happen that way? Or does it have does do younger position typically have to get a loan in order to be able to buy that equity.
Dr. Michael Levy 39:29
So the way we structure that when physicians buy into the practice is we do the practice guarantees a bank club for the CIO, and it's a significant amount but the return on that and they own that equity day one and the return of the profit pool that is returned according to equity pays more than pays for them right away. So we will ensure that they will do better from day one as a as an equity partner. They'll also purchase them there'll be It's a you know, everyone can get about the same amount of equity in the practice. But someone who's got less productivity would not be able to afford to buy the maximum amount of equity that they could, because it would be too expensive. But I think it could be financed internally, by the practice, I don't think that you have to involve a bank to do it effectively. But I really do think that it's when we interviewing, it's interesting, you know, that I think the incorrect stereotype apply to millennial physicians or graduating physician fellowship is they want to check in and out, they want to get a nice salary, they're not interested in the business side. And they're not that focused on the long term partnership track. Now, I think many of those probably exist. And those are the ones will attract most of the physicians who come to us from word of mouth, know that they are going to have the opportunity to be true partners, it is important to them, they have to be productive and fit in with the culture in order to achieve that opportunity. But I think we have in a in an era in which there are fewer fillers graduating than there are positions. So So most veterans get multiple offers. We have almost our pick of the finish of graduates who not going into research who want to be in clinical practice, because of that model that I
Griffin Jones 41:21
think that that point of there are still so many entrepreneurial RBIs coming out of fellowship. So many of the some of the millennial areas that I know, some of whom are still in fellowship are among the most entrepreneurial that I know with their involvement in Silicon Valley with their following funds and Wall Street, they are really dialed in. I think from a recruitment standpoint, why it sometimes appears that way is because these minor positions are going to show you go there some often times not going other places because you have a structure for them. A lot of times there isn't a structure in place. And the ambiguity that was that suffice 25 years ago doesn't suffice anymore, they need to go to a place that has a human resources department that that's active on social media that isn't using paper charts that is forward thinking because I think very I make the analogy. Very often that it's like buying the the old house, but the work needed on the house is so much more than just the the Biden and especially if there's going to be someone in place that's fighting you on the changes that you need to make before they retire if they ever retire. And I think that that you all have that structure in place, it seems so definitely I'll give you the final thought what would you want to conclude on? I like that you counter my point that it would be easier to use private equity to build the largest practice group in the country, you counter it because you've actually done it so clear, because evidence that it's true, you said that you didn't set out to do that. But for someone who wants to grow or sustain their practice, for your general view of the field, how
Dr. Michael Levy 43:08
would you want to, you know, one area that you had a question or which we didn't touch on, which I'll finish with is like one of the other really key decisions we made early on is that physicians need to be fully engaged, but they should not be the business leader of the practice. So we have a really superb executive team, led by Mark Segal is our CEO. And I think Mark had the vision and ambition to grow as big as we did. And we went along with him and supported that. So we have the right balance between not trying to micromanage. I do see physicians fall into the trap of we know a lot about a little so we assume we can know a lot about everything. And, you know, that's risky. So we have, you know, as you said, great HR, great marketing, you know, administration accounting, you know, and we don't micromanage that group at all the board meets every week with that team, do we know what's going on, and we involve the important decisions, but finding the right balance is critical for the right foundation for the practice. I spent 80% of my time practicing typical medicine, I still enjoy it the most, which is why I keep doing what I'm doing, and certainly want to be involved, as do all our physicians. And lastly, I love the fact that you said that you familiar with a lot of entrepreneurial young fellows and reproductive endocrinologist and send them our way, but I wouldn't want that to be the primary driver. The right physician in our practice is going to do what's right for the patient every time. My favorite patients are those with sexual dysfunction. We send them home with a 10 cent five cc syringe and tell them to inseminate themselves at home, and they don't need us for anything. And we make because we're doing right by them. It's the most cost effective treatment. And, you know, if everyone knows that That's what we get to do. The practice is strong before because they're going to send their friends or staffs gonna know that's what's required. And they're going to act like that in every situation. And of course, I love the patient way too complicated situation. And we need to use all the bells and whistles of technique, bells and whistles of the top technology to get a good result. But we've got to tailor to the patient. So do right by the patient but be entrepreneurial and successful follow
Griffin Jones 45:27
Dr. Michael Levy, thank you very much for coming on inside reproductive health.
45:32
You've been listening to the inside reproductive health podcast with Griffin Jones. If you're ready to take action to make sure that your practice thrives beyond the revolutionary changes that are happening in our field and in society. Visit fertility bridge.com To begin the first piece of the fertility marketing system, the goal and competitive diagnostic. Thank you for listening to inside reproductive health
Griffin Jones 00:04
You don't have to make less money. In a recession, you do not have to, you don't have to provide less care, you don't have to lay people off, don't have to have everything blown to smithereens, it doesn't have to happen in a recession very often it does. I for one did very well, in the last recession, who worked really hard, I was younger, that helped. But in a sense, that helped me to rise, because I saw other people phrase like deer in headlights, and I focused on trying to create value and just doing whatever I possibly could, there's a couple of pieces of value that you can shore up, that will help you to do better. And it's knowing where your patients are coming from investing in those sources, and not investing in other sources has to do with attribution, I have a very strong opinion. On attribution, I've had people come work for my firm that have had opinions on attribution. And they're not nearly as thought out as this point of view, because there isn't a perfect way to do it. And I've tested lots of different ways of doing attribution, I'm gonna give you some ways that work. But the first rule of attribution knowing where your patients come from, is stop looking for the perfect source of attribution, it doesn't exist. So sick of hearing that these these while this type of patient that comes from paid search, they're better or, or they don't convert, or they do convert, it doesn't work like that it can work that more patients that are more qualified for treatment sooner come from certain channels, but it isn't that there's one channel, that means other qualified patients, one channel that brings in pages that are qualified to go into treatment, one channel, that doesn't work at all, that's not how it works. This is 2022, God to be 2023. Maybe when you hear this episode, I don't know, there isn't three channels on the television is not one newspaper, and a handful of radio stations are market, there's infinite number of ways that people can come to hear about you. And they can even just be siloed to media, because if I see something on Instagram, or Facebook, is it because I was in that Facebook or Instagrams, that ad reach for was it because a friend of mine communicated to me through Instagram or Facebook and was word of mouth, these channels are not perfectly siloed. So don't expect them to be perfectly siloed. And also don't expect them to just be perfect, because until we have 1984 style, whatever he does, or whatever dystopian show, you're watching on Netflix right now where you can put in your wig in somebody's brain, and map all of the ways they came to make a decision. Perfect attribution doesn't exist. And in our field, even now, it's hard to make excellent because there is no CRM, that's a customer relationship management, software, HubSpot, a Salesforce that most of you don't have, and those of you that do have it using a very cursory level, because none of them perfectly communicate with your EMR, most of them don't at all, and most your EMRs are not set up to be able to track this kind of flow. So we're getting rid of the fact that, that we can't have perfect attribution, that it doesn't exist. That doesn't mean that we shouldn't get the best information that we can have, and use it to make decisions make decisions. We're looking for directional attribution, not perfect attribution. So how do we get directional attribution after you train the same triangle and the three, but you can subdivide a couple of these into four, the first thing that we have to be doing is tracking volume to marketers should be tracking volumes did an article I updated a year or two ago called shut fire my practices marketing director, that's still a good article, because it's about all of the different roles within marketing teams. And so you might say you have a marketing person, that doesn't mean anything, look up what role that is, and what outcomes they're actually responsible for, but at the tippy top, that somebody has to be responsible for volunteers. When marketers don't achieve an outcome. It's because there are lots of variables for that outcome one, and they either don't have the capacity with the autonomy to achieve to be able to work on all of the variables that improve that outcome. So you can't call the paid search person to new patients in the door. or, because all they all paid search person can do is get you more leads from paid search can't pull the brand new person to more new patients because all branding person can do in and of themselves is make good messaging and nice design. And so it all has to come together if you're going to be achieving the outcomes, that's whoever is in charge of that you're holding that accountable to, they got to have that number front and center number of new patients in the door number of IVF, cycles, retrievals, then whatever other procedures that you're trying to increase, but especially as we start to go into a recession, depending on how bad this thing is, the more you have to be able to do that. So the first thing is having the persons responsible for monitoring those outcomes. And the second point of the triangulation is the digital attribution. This can come from multiple sources and very often dies. But one of the one of the main ones, this is what I mean by you can even sub split the triangulation, but where you sub split, the digital attribution is Google Analytics. Everything that's important has to be accounted for in Google Analytics, in your form fills your request appointment submissions, if those things are different. For example, if you have a request an egg freezing appointment, that's that counts as a lead. That's a goal that has to be measured in Google Analytics that comes from a thank you page on your website, it's got to be in Google Analytics, if you have a different request appointment for anything that is about becoming a patient needs to have a page. So that can be a goal that's in Google Analytics. And last I checked, you can have like 15 goals and Google Analytics. One of them has to be phone calls, to need dynamic number insertion, and your website and the ads that you run, because you have to have, you have to know how many calls you're driving that and your marketers have to be able to know that because they have to be able to make decisions based on us, especially if we're heading for a recession, you gotta be driving towards these things, not just eyeballs not just clicks. And then from there, you can quit, especially when you're using dynamic number insertion, you can use that to actually measure the calls and the number of calls that that fall off and what you can do to do that, but I'm starting to veer off on sticking with attribution right now. But that takes you to the point of attribution, where you can see, okay, this is this is where leads are coming from. And then you can assess quality of leads after that and quality of process. Also, within your visual attribution is any place that you're running ads in, in that native in that native ads platform. And that ads platform that Google ads are running ads on Facebook and Instagram, Facebook ads, in those platforms, you're going to have some different points of attribution that need to be reconciled with Moulinex. They don't, they don't always go perfectly. Yeah, that you think is frustrating for you try doing it for a living. But Google, for example, will sometimes optimize for goals that you don't want or that you want less of sometimes you want to use the artificial intelligence and go bid right below what they're recommending. So it makes the AI work harder, sometimes Google will be lazy, and they'll just try to automatically get you into more clicks or their geographic targeting is broader than you would then what you're actually intending to do, because they want to just get the spend up. So those need to be accounted for in those digital platforms. And the third sub point of the the second Digital Point of attribution is your CRM. So upset does not perfectly talk with Google ads, or Google Analytics for that matter. But you can get a lot more information from BRM by using CRM, and at least don't have didn't did these people and then import the leads from your ads platforms into CRM, you won't get all of them. But did of the people that we have how many of them convert to treatments that you can use or how many of them at least made an appointment so that you can use some of that as part of your digital marketing as you start to build campaigns and and optimize more you can see how well this works. So we have volumes IVF volumes by month. New patients by month and then any sunbird eight Using patients, any third party patients, if that's what you're in marketing for, then digital, Google Analytics, the ads platforms themselves, your CRM. Finally one of the third point, triangulation, which is self reporting, it's still important, it still makes sense. Their self reporting in and of itself is not reliable. People will say sources that you don't even advertise on or they will totally, maybe they'll just do the last thing that they can think of. But it wasn't the most effective, it's incomplete. But triangulated with the other two points of attribution, it's very useful, and you can make it more reliable in and of itself is that we do? Every question needs to be binary, yes or no? If you're advertising the ton, the traditional radio or TV or whatever, need to ask people, did you see us? On TV? Yes or no? Did you? Did you hear a radio commercial? Yesterday? You least need to know? Are they perceiving it in someone? Did you see us on social media? Yes or No? Were you referred to a friend? Were you referred to us by a friend? Yes or No? Were you referred to us by a doctor? Yes or no? So these are binary questions has to be yes or no, you have to calculate the acids, you have to calculate the numbers, you do at least be able to see, is this particular channel, registering with them? In some way? And if it's not, then you get rid of it. The final question is not binary. It's a drop down of all of these ways. What was the most influential in your choice to selecting our practice? And then it's just all the the what had been questions are now your options. So social media, referred by that groups, or by friends, etc. Those two pieces of information help to balance each other out. So you can see, okay, are these things even registering with people is, is this making an impact and have all of these things what seems to be making the most impact because when you balance those two stories together, you'll see different stories 60% of patients, fertility patients, our patients are referred to their AI by a doctor. But only 21% of total patients say that being referred to their Rei by a doctor was the most influential factor in choosing their their doctor location is number three areas number two, at 20%, referred by a friend is 90%. So I will often see this with digital marketers is that pesos is a marker sit at all time paid social work, paid social doesn't work. It's all about paid search. Gotta do higher intent, keyword search. That's what that's what's driving traffic. See, you look at the Google Analytics, you can see it, yes. Who you can't see is all of the things that people are saying to each other because they saw it on their social media, we didn't have that 20 years ago, we didn't have people telling their friends that they went through fertility quest more than they saw specialists at their throat. And when I first got into the field, do nothing but organic social media, because I didn't have any of the background do this other stuff or any money to hire other people that did this other stuff. I got results for people using organic social media, because it was just the word of mouth friend referral. And that's the number three influential reason why somebody chooses to practice it's 90% of fertility patients that have the most influential factor. A lot of that's coming from social media. So you got to put all of these things together. To make the story clear, and you're not doing this in the EMR. EMR is not the place to report attribution doesn't belong in some of these charts. It's not one question such as one question that happens at the at the phone call, because it's got to be done in this way. Prior to COVID. Now, a lot of you are still doing just telemedicine for for new visits or for many of you are doing a hybrid choice. We used to just have clients buy a tablet, put Survey Monkey on the tablet, and we just make the client do it for every single patient that work the best. Since COVID, it gets trickier you have to be you just have to be more on top of that. If you're doing this type of new patient attribution for for new patients, but you can require that when they when the rest of their forms are due. But it is more operationally intensive. So doing these three things, properly tracking volumes against digital attribution coming from Google Analytics, the ads platforms themselves and CRM if you had one against self reporting, that is multi question binary and then final question, non binary, that is not done in an app, not multiple choice, I should say for that last one. It is not done in your EMR. Doing all of these things is going to give you the best information that you need to see where your patients are coming from. So you can invest more indoors those sources so that you spend less money during our session, and that the money that you are investing, you keep investing in because it's the one bring people in, it's not an expense, it's an investment. You need that information all the time, but you can't get away without in a really bad recession. Hope this is really useful to you, and I hope you are able to implement soon if you need some help with it. Just email me Griffin that fertility bridge.com
You've been listening to the inside reproductive health podcast with Griffin Jones. If you're ready to take action to make sure that your practice thrives beyond the revolutionary changes that are happening in our field and in society. Visit fertility bridge.com To begin the first piece of the fertility marketing system, the goal and competitive diagnostic. Thank you for listening to inside reproductive health
