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Peerview Data: Welcome to the Best Metrix podcast. Each episode, we meet with industry experts to discuss how they evaluate financial statements, what metrics they commonly use, and how their clients have improved. We'll also gather suggestions of how you can incorporate the same insights and processes into your own practice. Thanks for listening and enjoy this episode.

Glenn Dunlap: Well, today on the Best Metrics podcast, [00:00:30] we're exploring the essential financial metrics for advising clients in the healthcare sector, providing CPAs with valuable insights into the specialized strategies needed in this field. And with the increasing pressures on health care providers to deliver quality care while managing costs, having a deeper understanding of these financial indicators is indispensable. So joining us to shed light on this topic is Michael DeLuca, the principal in charge of Hbc's Florida offices and the regional director of HBK Healthcare Solutions. Michael's extensive experience in healthcare finance will provide valuable [00:01:00] insights into the specialized strategies required in this field. So welcome to the show, Michael.

Michael DeLuca: Thanks, Glenn. Good to be here.

Glenn Dunlap: Yeah, great to have you here. I'm excited to, uh, to have this conversation since we, uh, gosh, we talked about this a few months ago. It's finally good to. Yeah. It's good. That's right.

Michael DeLuca: And Locales from our home territories.

Glenn Dunlap: That's right. Well, with 15, with over 15 years of experience in this industry, Michael advises a wide range of clients, including closely held corporations, partnerships, small to midsize businesses, large private [00:01:30] corporations and individuals. He focuses on healthcare related entities, particularly private physician and dental practices. So in a moment, we'll we'll take a deep dive into the key metrics in the healthcare industry. But first, let's take a moment to introduce hbrc, which is where you call home. So establish in 1949, Hbrc is currently ranked 45th. If that's right, there's those numbers are always moving right. So for somewhere around 45 depending on the publication. That's right. That's right. Among the top 100 accounting firms. So the firm upholds core values such [00:02:00] as treating everyone with dignity and respect, acting with integrity, honesty and transparency, and collaborating to to deliver the highest value to clients. So, um, with that, Michael, why don't you share a little bit more with us about HBK, about your role and about the practice that you have there? Certainly.

Michael DeLuca: Thanks, Glenn. Again, I appreciate the opportunity to come on here and share some, but hopefully some good tidbits in the healthcare space and what we do with our clients. And here at HBK, as you mentioned, we've been, uh, in business now for 75 years. We're selling [00:02:30] celebrating our 75th anniversary here this year in 2024. We have a strong geographic presence in the Midwest and in Ohio and Pennsylvania through the Mid-Atlantic and New York, new Jersey, and then down here in Florida. Uh, our clients are national. We go coast to coast. Uh, especially in our key industry verticals, healthcare being one of those. Um, but what we try to do is be that holistic financial services provider even more so than your traditional CPA firm. We certainly handle compliance services as you would expect from your CPA. [00:03:00] Um, but each of our key industries, inclusive of healthcare, we try to take that a step further and really deliver best of class, advisory based type services to help who our client base is, which is a lot of owner occupied, owner managed entities, where at the end of the day it means something, right? It's it's their skin in the game. It's their dollars on the table. It's their employees that they're responsible for. So that's we don't take that lightly. And and we're privileged enough to call them clients and a lot of them friends. [00:03:30]

Glenn Dunlap: Yeah. That's fantastic. How long is the list of key industries? Maybe you could share a couple of those, uh, or maybe some of the larger ones or something like that with us. Yeah.

Michael DeLuca: So we have quite a few, but I would call our major industries as a firm in our geographic footprint manufacturing, construction, healthcare, not for profits, cannabis actually. And then dealerships. Those are our key six. Um, certainly that's not all that we do as a, as a top 50 firm. Um, but that certainly is six of our industries that we service. Right. [00:04:00]

Glenn Dunlap: That's interesting. Yeah. Canfield I was just at your offices. Not too, what, a few weeks ago and, uh, had a chance to meet up with some of the folks there. How did it, says Canfield, is an interesting like, do you think of an origin spot like right, that's a it's first of all, not easy to get to, to and from unless you're from there. But for all of us that are traveling in it was different. But what a great what a great office or great people. So I'm kind of curious about the origin story of Canfield, if you don't mind.

Michael DeLuca: Fantastic. Well, 1949, it was started by three veterans from [00:04:30] World War two. Uh, the firm Hill, Bath and King, who we shortened with to HPK. And it was founded right there in Youngstown, Ohio. So there's a deep sense of pride, um, there in that eastern Ohio corridor in our firm for over the years, you know, 75 years now has just been entrenched in that area. It's a wonderful area for us. Uh, the work ethic, the culture, the values. We've been able to expand outside of the Youngstown market and bring that to other areas. Now, uh, specifically down here in Florida where I [00:05:00] sit, where we have a lot of overlap with investors on the West Coast and our East Coast offices. Um, but yeah, unique. Not many firms are based in Canfield, Ohio. Certainly we're the only or Youngstown certainly were the only one that in the top 50 from from that area.

Glenn Dunlap: Yeah, right. Ohio has quite a few, uh, Michigan. Yeah, yeah. But it's it's interesting. Well, it's, uh, it's a fantastic story. Great firm and, uh, love, love to, uh, hear those stories, especially 75 years and, you know, the growth that you guys have had. Let's [00:05:30] talk about let's turn the, the the focus onto your, uh, health care practice. So, um, physician practices, dental practices, mostly, uh, independent, uh, physician dental practices. Or do you? Some hospital systems and things like that too, or what sorts of folks?

Michael DeLuca: Yeah, we do not. So our healthcare practice in general, your healthcare is a broad term, but we're very focused on the private side, independent side. So private physician dental practices, specialty agnostic ambulatory surgery centers, we do quite a few of those [00:06:00] as well that are affiliated or unaffiliated with the private practice. Yep. And then facilities. So long term care, skilled nursing, rehab that may constitute basically 95% of our health care services are offered in those two big buckets of sure sector.

Glenn Dunlap: So then you probably get in a lot of, uh, real estate LLCs and stuff like that as well to to go alongside that. Right. So that's uh, um, you can't you can't mention private physician practices without there being, uh, real estate involved with those discussions. Right? Yeah.

Michael DeLuca: You got to know it [00:06:30] all. We have a lot of planning tools on the real estate side that it's associated with, with physician practices, especially in the medical space.

Glenn Dunlap: Yeah. That's fantastic. Um, well, let's talk about my. The question I always like to open with is, you know, you're sitting down with a, you know, a, in this case a practice or, you know, a practice owner, a physician, a dentist. What? Um, when you're looking at their financial statements, what are the first things that your eyes are drawn to? You know, are you looking at balance sheet? You're looking at income statement and specifically sort of on [00:07:00] the on those two sheets, what would what would be the things that would, you know, your eyes would just naturally gravitate to?

Michael DeLuca: Sure. Certainly. And I'm going to focus in that private space, the crux of what I do and who we are, uh, on this side of my practice, at least. But when I'm looking at financial statement, I'm honestly scanning that one or the overleveraged. So I know what we're getting into from a debt service obligation. Some leverage is good leverage, um, could be an acquisition that a practice made, uh, whether it's assets, whether another practice, uh, whether it's [00:07:30] investment and physicians that they're, that they're using debt from a, a bank or a lender to kind of fund the startup of a provider. Um, so one, I want to know if they're over leveraged. Right. Um, going from the PNL side, you know, I try to dig under more than what the PNL is going to show. So the PNL is going to show you revenue. You're going to see show your expenses. I, namely, want to hone in on some key overhead metrics, right. Your provider salary metrics or those out of line from what we see is your net profitability. When I add back, any sort of owner [00:08:00] compensation is that in range of what it should be based on a decently efficient or highly efficient practice.

Michael DeLuca: Right? We'd we ideally want that number anywhere at the bottom bottom tier in the high 20% range. Right. So net profits add back you know owner compensation low 20s is getting into the 20% high 20% range is getting into so-called danger territory. I would like to see that in the 30s closer to 40 and some subspecialties especially, it just depends on the practice and [00:08:30] the area of focus, of medicine, of what they're doing. It has a range there. Most importantly to me is asking kind of the the details behind it. And really I concentrate a lot on the revenue side. Okay. So you look at the PNL, a lot of CPAs will see it, they'll see the revenue. But the real question to ask and start digging under is, is the quality of your processes and operations behind of how that revenue is being collected. And that's what we do as a firm. Right. And those are where the true KPIs, in my opinion, rest.

Glenn Dunlap: Start with those. Yeah. [00:09:00] So so all right. So let's go back. I'm going to go, uh, ask you to go back to the overleveraged, uh, you know, where we started here. So, so thinking of that, there probably a few different metrics could actually go in to help you determine whether they're overleveraged. Right. It's probably not just their debt to equity ratio. I'm assuming that you're also looking at cash flow and some other things in there too. So what what what tells you, you know, whether a company is over leveraged, especially in this space. Are you looking you know, are there you know, let's maybe break down what those metrics are and then let's talk about what [00:09:30] the what you think the goals are or where they should be.

Michael DeLuca: Yeah. Again, I, I always uh I'll give you the classic CPA answer there. It depends. Yeah. Right.

Glenn Dunlap: Right. Fair enough.

Michael DeLuca: It depends on what the what the debt's there for. You're going to have certain I mean, if it's third party and you're going to have covenants there, we want to meet the covenants. Whatever those covenants will be with the bank or the lender and financial institution. Certainly. But then it really again, it's just asking the good question. So let's say, um, uh, musculoskeletal or neuro ortho practice wants to go out and get an MRI machine. They want to finance that. What's [00:10:00] your MRI revenue right now. What's your anticipated. Because I'm all for that adding that ancillary service in there. But if you're just targeting 100,000 a year of revenue right now, or that's what you can go grasp, the MRI machines not even paying it for itself. Yeah. Over. Levered. Right. Gotcha. Even though maybe the cash flow from the practice would support it, the cash flow from that additional service line doesn't.

Glenn Dunlap: Right, right. And so you can look at alternatives in that case instead of buying that where could they you know, can they get are they allowed to get um referral fees for [00:10:30] those anymore? Probably they aren't. No.

Michael DeLuca: That's the yes. So no, not not that service. But you know, it's something where we try to say, okay, if that's the case, then how are we going to get the ROI on a certain piece of equipment like an MRI machine or, you know, on a provider what's going to happen? You know, a lot of times physicians will want to take their cash and make an investment and maybe use debt financing to to bring on a new provider. Well, we got to make sure that provider is going to get up and running and get that patient flow sooner than later.

Glenn Dunlap: Yeah, that makes sense. That makes sense. So it's [00:11:00] a combination of of, uh, from an overleverage standpoint, it's not just strictly the, the debt to equity or, you know, interest to cash flow or cash flow to, you know, it's you're not considering just that, but it's what's the debt going to be used for? And are they going to get the the return on that investment essentially. So yeah.

Michael DeLuca: Yeah it could lead to hard conversations. You know, it could be debt that we have and old equipment, uh, not investing in providers or expansion or whomever. And they still are [00:11:30] have a high level of debt. Probably tells me they took the cash out of the business sooner than what they should have.

Glenn Dunlap: Right. Do you see, is is debt, um, how common is debt on a physician practice or dental practice? I mean, you probably have some startup. You know, there are things like I think about, like, you know, starting up a new dental practice. You're going to have an investment in all that equipment that, you know, chairs, I mean, from everything in their x rays and all that kind of stuff. But once you get beyond that, is there? I mean, I suppose reinvestment and that kind of stuff [00:12:00] is, is where they consider that or.

Michael DeLuca: Yeah, when we're looking at especially new new to the firm clients, when I pick up, if I see, you know, an established practice that has an inordinate amount of debt and an aging asset schedule. Yeah, I don't I mean, I more, more or less automatically kind of come into it saying they've sucked cash flow out here. Cash flow considerations and concerns are going to be top priority for us to do our job appropriately as your consultant and advisor. Those are hard conversations sometimes because if you know lifestyles are are impacted potentially and [00:12:30] this goes into a whole different metric on the private physician side where you're, you're saying maybe you you can't afford to suck that level of cash out of the private.

Glenn Dunlap: Right?

Michael DeLuca: It really has been debt financed. We need to start reigning this in a little bit. Those are not easy conversations, but it also tips us off to what we really need to focus on in order to improve the overall financial health of the practice, if it's in that situation.

Glenn Dunlap: Yeah. Are you looking at so so just sort of staying down this line. Sorry if I'm taking you to too deep in this area, Michael, but I was just thinking about this from a, [00:13:00] from the balance sheet perspective, when you're thinking about leverage and you're thinking about what they would be using those dollars for if they were borrowing debt. And, you know, because we see a fair amount of, um, healthcare financial statements come through. And as we look at those, we don't see a tremendous amount of debt on a lot of, uh, physician practices or dental practices. So we see but but you also do see a lot of aged out, you know, or fully depreciated equipment on balance sheets. And so I'm just kind of do you also look at the from a balance sheet perspective to say, you know, it's [00:13:30] fully depreciated, but there may still be five years of useful life in this, or you know, that we need to start preparing them for replacement of of some of this equipment. Or how do you how do you.

Michael DeLuca: Yeah, the challenge there, especially on the financial statement piece in healthcare on the private side, is that, you know, when you're talking about assets and depreciation, there's always follow up questions because more, more often than not, most of these like tax payers from a tax perspective are on a cash basis, if not all of them. And you're accelerating as much depreciation as possible. Sure. [00:14:00] So if they're not required and most aren't to keep a true GAAP based financial statement, their financial statements are going to reflect that accelerated depreciation, which means in the most recent history, it could be 100% depreciation in year one. So you're looking at a balance sheet and showing no asset value. Yeah. And that's where you have to start asking and saying well what's the age of this. You know what's the repayment really. Start honing on cash flow situations. If it's again if it's levered.

Glenn Dunlap: Yeah. Because there may not be a fixed asset schedule. If it was zero, if [00:14:30] it was all zeroed out zero value.

Michael DeLuca: It doesn't.

Glenn Dunlap: Mean yeah there's no there's no.

Michael DeLuca: Schedule to the assets you have. Right.

Glenn Dunlap: Yeah. Well and then I'm sure that they you know some will treat those those assets differently and could have different useful lives. Life from one one practice to the other two. So it's interesting isn't it. But there's really not much else moving. Like you talk about a cash base, um, you know, practice. So, you know, you think about what you might traditionally see on other balance sheets would be receivables or payables [00:15:00] inventory. You're not going to see much of that on on a private physician or private dental practice, are you? I mean it's going to be you're so. Yeah. So you're going to look at that. That's most of their revenue is going to be tracked in a practice management system. And you're going to pull over the collections number to their, their PNL. Right. Yep.

Michael DeLuca: That's that's exactly right. And it's one of our keys. I'm sorry to interrupt, Glenn.

Glenn Dunlap: That's right.

Michael DeLuca: I mentioned it. Accounts receivable. I don't think a lot of CPAs historically, especially if they're more tax oriented, will ask for a, ah, aging [00:15:30] schedule. That's one of ours because it has zero impact on tax reporting, a huge impact on the overall financial and revenue health of a practice.

Glenn Dunlap: So so you started to mention revenue side. And I think you just you just touched on it when I, when I asked you to go back and look at the overleveraged thing. So, so let's dig into the revenue side a little bit because I think, you know, the one of the, uh, things that have a set of financials really probably don't from a, from a physician practice because they're cash based. They really don't tell you [00:16:00] those things. So you're having to ask for a R aging schedule out of a practice management system typically. Right? Yes. Um, do you does your firm typically recommend that they, you know, report and I'm going to get the terminology wrong. But, um, you know, what's the what's the term that, uh, chargeable calls, you know, and then, then the refunds and offsets, you know, the and then the sort of a net number there and then look at the difference between the net collections and the reporting element that, you know, the [00:16:30] revenue that's been reported on the financial statements are you looking at, do you incorporate those that kind of information to the physician so they can see that information?

Michael DeLuca: We do. We namely kind of focus on when you're talking collections to jump forward in that side. It's kind of the the tail end of the rev cycles when you actually physically collect it. I mean, one of the things we dig in is we want to make sure they're collecting extremely high percentage of what they're allowed to collect after a claim has been adjudicated or adjusted off right by an insurance carrier. So we want to see [00:17:00] that number to be specific, greater than 95%, okay. After it's been adjusted, after it's all been submitted, it's a clean claim. Insurance says, yep, we're going to pay you this or it's a self-pay, we're going to pay you this. We want to hit greater than 95% of collections on that amount, which means less than 5% of bad debt.

Glenn Dunlap: Less than 5% of bad debt. And in what time frame does it? Uh.

Michael DeLuca: That's where that aortic aging comes in.

Glenn Dunlap: Yeah.

Michael DeLuca: That's a great one. So if we, you know, we want to see [00:17:30] ideally again that that goes down to payer mix. Right. So within a practice how much is being re you know insured by Medicare. How many of your patients are insured by Medicare. How much is commercial. You know traditional third party that we think about it. How much is self-pay? Do you have any cash based type procedures that you're doing? All of that plays into some metrics there. But generally speaking we want to see are over 90 days. Like we see less than 10% of your are over 90 days on that gross basis. You know, if but that that to me is [00:18:00] I want to see even a tighter number than that on Medicare because Medicare pays so fast. Yeah. It's the quickest payer we want really tight are on our Medicare payers okay.

Glenn Dunlap: So it's it's the who's the payer, the payer mix, the timing of those things. Those all weigh into everything. Then interesting does interesting. Do you advise them on mixing up their payer mix or do they have much choice on that anymore?

Michael DeLuca: Uh, well, [00:18:30] it depends on geography. It's a little bit of both. You know, if if they have the opportunity, you know, contract negotiations have become tougher, uh, with the insurance carriers and most geographies, if not all, at this point in time. Um, but we certainly say, you know, continually review your contracts with the commercial lines and commercial payers there, um, try to maximize that off the percentage of Medicare that you're reimbursing, because most are tied to whatever Medicare is being reimbursed or CMS is reimbursing for procedures. So we do we do challenge [00:19:00] or at least consult that this should be part of your normal operating type of purview is is review your contracts. Most practices will do that.

Glenn Dunlap: Yeah. Yeah. And those come up how often once a year depends.

Michael DeLuca: But yeah a lot of times annually you know it could be longer but a lot of annually. Okay.

Glenn Dunlap: Interesting.

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Glenn Dunlap: So let's go back to some. Unless there's more on the on the revenue side, are there things there that, um.

Michael DeLuca: There's a lot honestly. I mean, we can we can move on. But you know, I, we [00:20:30] look at the whole process. So if you break down how a patient visit usually goes when you go to see your provider, you know, you see it, you go in there, you have an encounter, you see your doctor, you know, there's a couple things that I think are very important for practices to analyze that we don't see a lot do that unless, you know, you're actively working on it. Paying attention first is once you see a patient, you want to make sure that you're coding and billing and charging that within 3 to 5 days, right. We don't want that to linger, because the longer it lingers, the more cash flow hampering [00:21:00] we're putting on ourselves. So we want that initial charge to be input in order to be able to bill 3 to 5 days post service. Right. And then we want to submit a clean claim. So we want to make sure our coding is appropriate. We want to make sure what we're billing for, the notes, everything else we want to submit clean claims um, to to a provider or to a reimbursement of carrier. Right? Yep. So there's some metrics around clean claims, like we try to track KPIs we want not greater than 95%. Again clean claim submission first time go around. It creates efficiencies [00:21:30] within your process. There's less work to do once it's denied and on the tail end clearly. So if you're hitting clean claims over 95% that's that's exemplary. You know if it's if it's 85% okay you're not terrible. But we want to really see if there's something in your process or procedures of how you're submitting. Maybe it's just with one carrier that you're having issues with or one commercial we want to hone in on and say, how do we make those adjustments real time?

Glenn Dunlap: Gotcha. Clean claims. Then you collect the clean claims.

Michael DeLuca: And then if you have [00:22:00] denials on the unclean claims, we'll call them. Um, we want to work those as soon as possible. So we then track that, you know, we want greater than 85% of those denied claims to be worked within the first month. Again, the longer they linger, the harder it is to get reimbursed on the work that's already been done for the provider.

Glenn Dunlap: Yeah. So they they collect that cash and you start the cycle again. Yep. Are you managing this revenue cycle for a lot of your or are they doing it. And you're helping to measure and monitor kind of what's happening inside there.

Michael DeLuca: Uh, [00:22:30] again that's that's practice, you know, specific a lot of practice will have some sort of in-house capacity to do it. We do have the ability with a strategic partner of ours okay. Out of Atlanta management resource Group. Um, they are our outsource. We have a partnership with them for a lack of better term. And so we leverage their team. It's a phenomenal team. They work on behalf of our clients, uh, to integrate that. And we work with them on all of these type of metrics and getting that rep cycle as tight as we can. The biggest issue for [00:23:00] providers, just like it is for, you know, to find good nurse practitioners and physician's assistants, is finding good, qualified billers coders, rev cycle professionals. Now, especially especially post Covid, it's very difficult for private practices to be able to have really good individuals in-house.

Glenn Dunlap: Yeah. Did those did a lot of that change during Covid or after Covid as it was there? Were there, you know, procedures? Were there things I don't know. I know there were a lot of service interruptions at that [00:23:30] point, but I wasn't sure if the, you know, if the if they changed processes and things through the middle of that.

Michael DeLuca: I would say no more. I mean, from my talks with clients, no more than kind of normal. It was new. It was disruptive in the healthcare industry. Clearly a lot of it was because it was health care focused pandemic. But on the private side, there was a lot of relief there. But really it was well, some people got accustomed to the remote working and sometimes a practice isn't really structured for long term remote work to make sure that rev cycle is tight or operational. Procedures [00:24:00] and processes are are as good as they can be. So it was trying to get people back in the office. Some were early retirements, aging population of the country, much of the microeconomic factors that other industries are facing as well.

Glenn Dunlap: Yeah, yeah for sure. I mean, every, every industry is kind of seeing the seeing those big shifts, aren't they? Yeah. That's great. Um, those are great insights on the on the revenue side. So I made you skip over the overhead metrics, but I want to go back. You were you threw a lot at us real quick on that [00:24:30] stuff. So I want to get back and get some numbers from you on that. So. So thinking about the overhead metrics, um, um, probably the most important thing to a physician or a dentist is, you know, how much am I making? And how does that compare to my other my peers? Right. You know, how much are they? How am I doing? Right. So it's like, um, uh, you know, not not everybody, but. Well, all of us in business, uh, have that question, I guess is as part of it. So not to throw them under the bus, but it's, you know, specifically. But when you're thinking about, like [00:25:00] those overhead metrics you were talking about, um, you know, the provider comps. And so, uh, and then I guess when you start thinking about the other compensation within, within this. So walk me through how you break down, say, within a physician practice. Are we looking at, um, um, you know, the, the, the front office, back office, um, assistant nurse, you know, that kind of on the and then the, you know, providers, but, uh, non-owner providers. And then on the other side, looking at dental practices very similar with office front office [00:25:30] chairside hygienists and physicians and the kind of the same thing there.

Michael DeLuca: Similarly, and I was talking total there. You know, it's a great question, Glenn. Overhead metrics, I always tell people once you see one practice, you've seen one practice. Yeah, right. I mean, I don't envy your position. It's very challenging. And benchmarking for health care providers. Every practice is unique. Your contracts are different. It's a very unique industry overall. Every again, every contract is different. Every revenue, how you earn money is different from one practice to the next, right? [00:26:00] Even if they're right next door to one another. I'm talking overhead. I was talking total. Other people define it differently because depending on specialty practice, it may be I'm using my ancillary revenue to just offset overhead. After that it's that's my overhead percentage. Well I'm just talking total dollars in. Total dollars out. You know that's where I want to see it into the 30s if not 40 and above in some specialties on just what's the net after all the noise created? What's the net that [00:26:30] you're going to be able to take out in your earning on your on your practice?

Glenn Dunlap: Okay. And when you say things like net and thinking about add backs, you know, we were we mentioned that there are a lot of, uh, real estate related, uh, you know, entities with this, like, the physicians might own their own, the building that they're in and then be charging rent right to the to the practice and paying that out. So when you're looking at, you know, some of those add backs and, you know, are there things that you also kind of throw down below the line to say, [00:27:00] yeah, this is really sort of in that physician comp overall comp area or, or are you just looking strictly at their, at their take home.

Michael DeLuca: Yeah. Well it's it's great. We see that mostly on the transactional side. Right. If a practice is going to sell due diligence on behalf of clients to go acquire a practice or a provider, okay. We kind of take a look at that and say, are they paying themselves fair market rent? Are they not trying to put ourselves into the shoes of what's day one after an acquisition look like? That's kind of what [00:27:30] we're building. And it's it could be personal expenses or more personal related expenses. Rent obligations is certainly depreciation, amortization, interest, all that. The traditional EBITDA metrics um from a daily operational or non-transactional considerations are factored in. Um, unless there's kind of a unrest within the group or somebody trying to say yes, but you earn this on that, we'll go in and quantify that. So sometimes it carries weight candidly, sometimes it really doesn't. Yeah. Uh, most of the practices we deal with [00:28:00] offer the, the real estate in addition to the practice. If shareholders want that. Yeah. Make it fair.

Glenn Dunlap: Yeah. I mean you do see personal I mean automobiles, you see family members getting compensated through, you know, practices. You see a lot of different things that would be kind of like, ah, you know, is that does that really carry forward and that kind of thing. But yeah, it's an interesting mix. Do most of your clients, are they using sort of what I would call a traditional PNL format with revenue, you know, adjustments and then [00:28:30] looking at, you know, compensation, opex, those kinds of those things. Or are you looking more like a, um, here's the direct and then fixed expenses and then throwing, you know, throwing a bottom line from from there. Do you, do you try to organize it? How are you organizing the PNL? I guess would be my question.

Michael DeLuca: Most of its most of our clients will organize it in a very traditional manner. Okay. So some of our larger clients, we get more intricate with the PNL structure, meaning they have multiple locations, multiple [00:29:00] subspecialties where we're tracking financial performance within kind of a PNL, within a PNL. Yeah. Whether we're using class systems or, you know, dimensions, depending on financial reporting software. Right. You can handle a multitude of those. But really, that's for the larger base practices. The smaller the practice, the more traditional, I would say their PNL looks okay.

Glenn Dunlap: Yeah, that makes sense. That makes sense.

Michael DeLuca: Most common, I'd say, Glenn, is, uh, to keep going on that point. Most common [00:29:30] would be on the expense side, breaking out administrative if they want to see that versus maybe provider direct expenses. Right. So and breaking out administrative and overhead into various subcategories that we can quickly run certain metrics or ratios on percentage revenue.

Glenn Dunlap: Yeah. And a lot of times we see the financials that are being tracked by by physicians. So you know, if you want to run an automobile through if you want to run expensive cell phone service or whatever, like, you know, you know, [00:30:00] whatever it is you want to put through the system.

Michael DeLuca: Within reason, of course.

Glenn Dunlap: Within reason. Yeah. Right. Uh, but at least it's track that you could come. Yeah. Where you could come back to at least and say, well, you know, you know, because you chose all of your training sessions, uh, out in, in Hawaii versus, uh, you know, in the next state over. Yeah. You know, you had travel and, and, uh, all of the all of the meals and all that stuff that went with that. So that's, uh, but you can track those different, um, was it continuing? Cms. [00:30:30] Cms yeah. Yeah.

Michael DeLuca: Um, and that really comes down to the compensation model, right?

Glenn Dunlap: So whether they're doing that.

Michael DeLuca: Yeah, usually if you're breaking it out like that, it's it's trying to have the financial statements more closely resemble or be an easy transfer over to any sort of compensation model that exists between providers.

Glenn Dunlap: I'm sure this depends on the type of entity, and this may be a stupid question, but I'll ask it anyway in case there's somebody else that is thinking this too. Um, probably isn't just me, [00:31:00] but I'll ask it anyway. So yeah, the, um. What is it? My mom was a math teacher, and she she always said, there are no stupid questions. They're just stupid people asking questions. So I'll step up and be the stupid person asking the question. Um, yeah. When do you see is there a trend? Um, and I like I started to say this probably depends on their, their entity structure, but do you, do you see more practices where they, um, are setting it up, their compensation with salary structures, or are they doing most of it [00:31:30] through distributions, through, you know, kind of, uh, partnership distributions, that kind of thing, or probably depends on the number of practice, number of uh, providers and type of entity and stuff like that. But is there has there been a trend one way or the other, or are you seeing are you seeing one way in? You know, more common than the other?

Michael DeLuca: I'm seeing more LLCs, partnerships.

Glenn Dunlap: With partnership.

Michael DeLuca: Tax structure. Yeah. One, it provides more flexibility if the orientation of the practice is to grow and add providers, it does create more flexibility long term. And with [00:32:00] private equity and an outside investment coming into the healthcare space at an increased rate, they're of course going to set up some sort of um LLC or management service organization. Mso structure. Right. And those MSOs are nearly always partnerships, LLCs, taxes, partnerships or C corporations.

Glenn Dunlap: Yeah. And the LLC allows you to take an investment from an entity without blowing an s election and hold on to some of your tax tax benefits. Right. So yeah. Okay. That makes [00:32:30] makes perfect sense.

Michael DeLuca: In an S Corp situation. You brought up the term. We try to maximize distributions where possible without violating reasonable comp standards. But yes that's always a consideration with an S Corp I'm seeing I mean more and more as the practice grows or his practice has aspirations. We just set them up as partnerships from the start.

Glenn Dunlap: Well, and so kind of going down that path of from a trend perspective, um, because as these things sort of the pendulum sort of swings on this. Right. So we see a lot of, uh, I see probably more dsos [00:33:00] than MSOs. Maybe you maybe you see more MSOs, but it seems like there are a lot of big roll ups with, um, you know, dental practices and seeing that on a national scale. Absolutely. Um, is that do you do you see more of that happening on the medical side, too? Is that a trend that we, we, we expect to see private equity or um, you know, we've seen some with, you know, groups of dentists or docs doing that in driving the, you know, the DSO or MSO. Right. So, um, is that is that a trend towards that or are we seeing more [00:33:30] of that?

Michael DeLuca: Yeah, we certainly did. I mean, the trend dsos existed MSOs a little bit to less extent. You know, before the last five years they were out there. But I see the trend on the physician side increasing, um, that was substantially influenced, I think, by private equity and outside investors coming into the equity ownership of those practices. Dsos like I said, I, uh, to me that that was in existence, but that is national. We saw a brief slowdown. I mean, it was a frenzy there. [00:34:00] There was a lot of activity in, let's call it, 2122, beginning of 23, correlating with the interest rate increases. Uh, last year, last calendar year, you saw a pause in activity, but we're starting to hear, uh, again, a kind of a refresh or restart of of the acquisition type stuff. And again, if it's coming from outside investments. Yeah, that service organization model is the preferred model.

Glenn Dunlap: And so it's probably probably multiple things. You mentioned interest rate, but you're looking at a lot of capital that's sitting [00:34:30] on the sidelines trying to figure out how to deploy. Uh, and then the other thing is, you probably have aging docs that are looking for an exit strategy, and they're trying to figure out, how do I how do I get out of here and maximize everything that I've worked for and put into this thing? So so you've kind of got here's, here's available cash and here's a ready seller. Right.

Michael DeLuca: So it is it perfect storm I mean you have a mass disruption in 2020. Um, with just a different purview for the world, but especially in healthcare and aging. Provider population certainly has that cash on the sidelines [00:35:00] now, an increased or decreased interest rate into an interest rate environment, um, in the regulatory burden. Right. And so just the regulatory and operational burden of running an independent practice, it's it's not easy. And nowadays, you know, you're you're figuring out 2023 was a unique year in private practice. It was really the first full year of of cuts within Medicare reimbursement. Cms, you know, cut the reimbursement schedule. So cuts in revenue and really the full cycle [00:35:30] of mass inflation to really hit the P and L. So it was a double edged sword for practices. Um, that thankfully somewhat of the inflation has slowed down. But the cuts are still coming on the revenue side.

Glenn Dunlap: Yeah yeah yeah. So costs are increasing, revenues decreased. So it's getting squeezed on both sides. So if I, if I was a not paying much attention to this, but it seemed like there was um I don't know if it would be the late 90s, early 2000 that the, that the, [00:36:00] uh, acquisitions that were taking place were a lot of the individual private practices were being rolled into or acquired by, uh, physician or hospital systems. So they were kind of and, and it seems like once the there were probably some physicians that got into that were just fine being an employee inside a larger organization, but seemed like there was a lot of, uh, uh, unhappiness when they, once they got in there. Lack of control and people telling them to, you know, get, you know, see more patients and crank things out faster. And I mean, [00:36:30] it's just all sorts of metrics that they were being measured by that they, you know, uh, that I've sort of heard anecdotally. Right. Um, is are we seeing, um, what's happening with those? Are those are there any of those physician practices rolling back out and establishing their, their own, you know, practices? Are those physicians retiring out and those are just going to go away, uh, you know, and there'll be new practices that are started on their own kind of. What is that? Um, you know, what are the trends that we see maybe [00:37:00] with that or maybe maybe I'm all wet on that. Michael. It just seemed like that was the, you know, the private practices. You would see a hospital logo on the outside of them for, for quite a while and that they were just that was their exit.

Michael DeLuca: There was certainly a time period. Candidly, I'm trying to age him, but that was before I was practicing in mass. But there was, it was more private when it was hospital systems at the time, that was the biggest kind of roll up acquisition and consolidators. If they had [00:37:30] the.

Glenn Dunlap: Money at the time, it wasn't had the money.

Michael DeLuca: Right? Yeah, yeah. Now it's a lot of private investment. Yeah. So kind of a similar type deal. We we haven't. It's still too new to see the pendulum back. I will say you know in discussions I facilitated a lot of transactions here over the last 4 to 5 years. Some have gone well, some have gone well for a short period of time, then soured. Some have been not good from the start. And it's really important to get ahead of that. And it's a personal decision, honestly, of a group or a group of doctors. Some were so fed up and, you know, close to retirement within 4 or 5, [00:38:00] six years anyway. They're like, I'll just go right off into the sunset and do this. I may be frustrated, but the other frustration is outweighing going to work for this type of environment. Yeah, right. I haven't seen the mass rollout. I think there is an inherent difference between the hospital systems doing it and private investment doing it. So I think the pendulum getting out of those contracts, especially within any sort of tie up period or agreements, rather within a time period, will be more difficult. Yeah, to see [00:38:30] that. So I don't think because of how the timing of the mass roll up and consolidations happened over the last five years, those have quite come to fruition yet.

Glenn Dunlap: Okay. And then what's the what's ultimately the end game for a DSO or MSO? They're going to roll up enough of those that they sort of wring out as much efficiencies from those things and make them even more profitable than they were on their own, and then ultimately sell it to somebody else, or what's the, you know, what's the endgame in that?

Michael DeLuca: Yeah. Honestly, even for CPA worlds, you've seen a lot of activity, right? [00:39:00] A lot of activity that you've worked with firms, Glenn. And, um, be forthright. That's what I'm curious to ask the same question in all professional services dental, medical, all, uh, accounting, whatever it may be. What's the end game? What's the next move? Because traditionally it's we most of them will hold 3 to 5 years. We're looking for the next transaction, that next bite. And we don't know where that next bite is going to come from necessarily. It's a bigger private equity, bigger investment pools. Is it untraditional that are moving into this space? Meaning, [00:39:30] um, if regulatory checks out, is it insurance carriers, is it publicly traded companies? Is the MSO going public? I think there's a lot of avenues that could go. It probably is fully dictated on investment profile investment, you know, um, considerations of where that money is ultimately flowing and who's it responsible of paying out.

Glenn Dunlap: Right. Yeah.

Michael DeLuca: So it's a great question. I think it's this one only, uh, father Tom can answer.

Glenn Dunlap: Right. Uh, yeah. [00:40:00] And it'll definitely be interesting. I mean, when you think about, um, the interest rates and, you know, what's happened with those, those are certainly money was free for a good while. It's I mean, relatively speaking, it's it's not, uh, not so much anymore. Um, you know, be interesting to see what happens with that over time. Um, so, so we've, we've touched on PNL balance sheet and a lot of, uh, sort of ratios and metrics that as a result of that, what are some things that you're looking at from a non-financial standpoint, like what [00:40:30] what are things that you, you know, get concerned about or you would look at there that maybe aren't represented on a PNL or balance sheet or something like that, but otherwise you would say, these are things I'm always kind of curious about or I want to know about as I'm as I'm learning about the health of a company.

Michael DeLuca: Yeah. I mean, I think it goes a long way. You're talking ops. We do a little bit of ops consulting as well, but in the private physician or as I mean, to me, patient satisfaction scores, um, some practices do it well, some practices want that, some don't. I think you're talking [00:41:00] that drills down into how long did they have to wait in the lobby or in the waiting room. Right. So patient wait times are something to consider because that's going to influence the entire visit. Um, you know, what's your no show missed appointment rate. You know that because that's taking up a spot where a good payer, someone shows up and actually generates revenue for the practice. You know, it took time and how you're handling that. Is there any sort of penalties if you were able to charge a penalty under whatever terms there may be? Um, stuff like that is [00:41:30] what we want to make sure that you're optimizing. There's other metrics too. You know, we dig into a little bit and it's so practice specific, if you will. This is where you could come in from a benchmarking. But, you know, provider to staff or provider to patient ratio You know you're starting to see metrics of that. Again, that's so specialty specific or practice specific that there's not really one litmus that says this is where you should target.

Glenn Dunlap: Yeah. Yeah. And the types do you look at the revenue [00:42:00] mix. Like do you look at a dental practice and say, you know, basically every other dental practice is doing, you know, 20% more hygiene revenue or something? I mean, is there are there are those kind of metrics available to you?

Michael DeLuca: Lutely you know, a lot of that's going to be driven by kind of patient demographic in the area too. So you have to kind of consider that lens as it relates to payer mix as well. You know, if I tried to consult down here, where I live in Naples and in Southwest Florida in general, if I went to a practice and said, boy, your patient, your [00:42:30] paramedics needs to be really upside down, you need 70% commercial because your commercial contract with, you know, Florida Blue versus Medicare. They're going to look at me like, I don't know what I'm talking about. Yeah, right. No, I mean, the fact is 70% of the population down here is Medicare payers, right?

Glenn Dunlap: Yeah. Interesting.

Michael DeLuca: So we certainly see if something's out of whack understanding the demographics behind the patient, like the patient mix and how that translates into payer mix and how that translates into revenue. I think that's very important to understand [00:43:00] or have that in your advisory purview when you're when you're talking and working with practices.

Glenn Dunlap: Yeah. That's good. So so when you're thinking about so that would probably go back to some of the revenue numbers and looking at margin numbers. So as you're digging into the PNL and you're looking at revenue, you're kind of going, hey, what's what's you know, what's growing up going on in terms of, uh, your overall revenue, looking at margins, all those. That's when you start to peel back the onion on the, uh, revenue mix and payers and all that.

Michael DeLuca: All [00:43:30] that, you know, and we sometimes get as granular with our clients that they want us to go there and say, well, why don't you guys or your internal team, you should be looking at if this one procedure code is being reimbursed by Umar at one rate in Florida, blue at another, do you want to accept new Umar EMR patients on that or blue patients or, you know, do you want to get that granular or are you expecting everybody? What's more profitable? Start breaking it really down by procedures payers, you know, especially in a multi-specialty practice.

Glenn Dunlap: Yeah. So, Michael, when [00:44:00] I think about every other business besides a healthcare business, I think, you know, there's usually some sort of a growth number that they're looking for on the revenue side, they want to grow the business, grow the business there. Um, do to first of all, do most physician practices think from that perspective in that I want to grow my practice because at some point it becomes the interesting thing about this practice is based on, again, maybe I'm thinking of this wrong, but thinking about it from a provider standpoint, [00:44:30] there's a bit of a stair step in this. It's not a linear kind of cost model, right. There's a stair step model on this. And you're going to figure out like at some point I'm going to bring on another provider and I'm going to start, I'm going to either give up part of my practice or we're going to, you know, have this person hopefully maybe bring some patients with them or something. But kind of what's the typical model like? You see a lot of one physician practices, one dentist practices out there. So the growth model is what add additional hygienists [00:45:00] add additional nurse practitioner or add you know, so add people underneath them. Or is it to reach a certain level, add a second physician to the practice or what. Yeah. How do you stair step them or walk them through some of those cost models?

Michael DeLuca: It's a great question, Glenn. And it's we'll deconstruct that a little bit too. Okay. Starting with the fact that, you know, you talked about just total revenue, right. And we mentioned last two years Medicare or CMS has cut the reimbursement rates. So you're rolling forward the clock. [00:45:30] You're automatically as a practice you do the same procedures the same base. You're starting in the whole 3 to 4%. Yeah. Right. So you got to do 4%, 5% more work just to stay even on the revenue side. Yeah. Right. In the very next year no changes whatsoever. So that's a that's very concerning. And it's it's tough for private practices when you're starting not to mention growth. So how do we grow. Yeah. Providers like I got to see more patients. It's a that's the direct correlation right. It's it's [00:46:00] tough. So you see more patients um couple growth models that that have been successful with practices we work with. And in today's day and age. And it's it's much like the growth model of what private equity MSOs are providing support with as well. Dsos adding ancillary services. Yeah. So if a service is not being provided in-house by a group, then another example in an orthopedic practice, if you don't have PT, if you don't have MRI or anything, bringing that in-house, now adding that service line [00:46:30] in there, is that another channel of growth and profitability for the practice? Also having what I call a leverage model. So you brought up nurse practitioner, right. So that's another one.

Glenn Dunlap: There's certain assistant or whatever the.

Michael DeLuca: Role is or an MP, you know, there's a lot of things that they can handle right. Within a normal practice operational encounter patient with high satisfaction. I alway urge.

Michael DeLuca: And some providers to have a different mentality on this. But if an NP or a PA can do that, they don't need to be [00:47:00] an MD. Let them do that right. Let them do the, you know, whether it's an initial encounter, well, follow up, whatever it may be. We want to be mindful of of the revenue, how that impacts it, you know, as well. But look at this and try to maximize that leverage model so that your patient flow can increase. And it's not just all centered around the MDS.

Glenn Dunlap: Or are you not allowed to charge the same rate for, uh, a PA or an MPA versus a physician doing the doing so cortisone shot, [00:47:30] for instance.

Michael DeLuca: There's you know, there's things called incident two billing types. Um, there's haircuts, you know, at 80% and in some cases, uh, on that too. So yes, the reimbursement may be. But if you think about it from a business model perspective, your cost inputs are usually a lot different between an NP and PA and an MD. Yeah, right. So your balance. Yeah. And a lot of times what I tell them is, well, if an MP or PA can do that, especially on a follow up or something like that, where it may not be reimbursable because it's [00:48:00] attached to the previous procedure and you've already been paid for that? That's right. The MD time is now freed up to now. Then go generate more revenue. So again, it is it's not necessarily working harder which the cuts make you want to do. And everybody's like I need to do this. It's working smarter as well.

Glenn Dunlap: Right, right. Well and paying attention to the things that they may, may not have been paying attention to before, like, you know, changing the light bulbs in the in the hallway or something like that. Let somebody else do that. You go see a patient, you know, like, you know, forget about that work. And [00:48:30] so leverages that leverages. So it seems like that's what we see a lot of now in in practices. Right. There's a, you know, big ortho practice here that I've everybody in my family has had an opportunity to see. But you see a ton of leverage in that model. And I just I it's very interesting to kind of just observe what's happening when you're in there just to see how they're, you know, how how are they, how are they doing what they're doing in this, in this place. Yeah.

Michael DeLuca: So, you know, it's, you know, you take it in the dental space that's been the norm for, for a long time, right? [00:49:00] Especially. Yeah. You just go and see your hygienist, the dentist comes in, make sure everything checks it out. Boom. Done. You know that that leverage model's been there. Um, the physician side has been slower to adapt, but you're starting to see that, especially over the last decade, a significant increase in that, especially in certain specialties. You said Ortho Dermatology is another one. There's a lot of things that PA can do in an annual skin routine. And, you know, the MD's and dermatologists at that point can focus on, you know, higher reimbursement stuff like a, like a moz or, or other surgical [00:49:30] procedures that they can do in-house as well.

Glenn Dunlap: Yeah. Well, and you guys in the CPA world can help them understand the leverage model. I mean, that's something that, uh, that, that the CPA world has built on, uh, you know, quite a bit. So that's, uh, definitely something you can help them understand. Uh, you don't have as, uh, maybe as many regulatory you do, certainly on the tax, you know, telling you what to do on the tax side, but not not in your business model as much. Correct. Yeah. Right. [00:50:00] Yeah. Interesting. Uh, Michael, what anything else that you think of that we, uh, that we've missed, uh, covering here in terms of, you know, somebody walks in and, uh, the kind of, uh, top line stuff that they should be paying attention to.

Michael DeLuca: Yeah, I think we honestly hit on a lot of lot of broad range topics here. And it's it's been a joy. I mean, just you and I have talked like this off screen before. Yeah. Times getting getting here together and being able to to relay this information. Hopefully it's helpful to to a lot of your clients, a lot of the population out there because it's [00:50:30] it's challenging environment with with the private physician and dental side right now especially on the physician. Very, very tough to remain independent. It does require a change in model, you know, and that's what's been forced over the last 3 to 4 years is you just can't expect to make the same. Do the same. Um, in today's environment as you did ten years ago or 20 years ago?

Glenn Dunlap: No. Uh, what's the what's an estimate of how many physician practices there are in in the US? Oh.

Michael DeLuca: I [00:51:00] have no idea. You know, it was so friends, there was such a frenzy of consolidations and activity there.

Glenn Dunlap: Yeah. And I'm just kind of wondering how many of them are just sort of, uh, you know, I got into this because I wanted to help people and, and, you know, I wanted to do good things on the, on the medical side. I, you know, I'm really bright. And I wanted to help people out in this way and care for them that way. And and it's just a completely different beast once they get into it. Right? So it's, uh, it's something they.

Michael DeLuca: Don't they don't teach in med schools, the financial piece of it at [00:51:30] all. Um, sadly for those experienced providers, I can speak to this personal experience. Uh, my uncle was a general surgeon. Fantastic physician. Got into it, truly, for the love of medicine and to help people that to me, my. I have a great client base. I think I'm biased towards them, but truly, nearly all of my clients are not the money hungry physicians that people know. They truly just want to help, and they're there. And it's just a unique business model to where you squeeze them so much. You're seeing those early retirements [00:52:00] or the forced sales because they're just kind of medicines changed. Um, and it's not what they got into it. Yeah.

Glenn Dunlap: Yeah. Any, any sort of parting words of advice for, uh, you know, a young CPA or advisor that's sitting there with a physician practice, like, you know, things that, uh, that you've learned maybe through a couple of black eyes and, you know, from conversations, uh, you know, or something like that, you know, but anything you would, you know, pass along to somebody that's new to this space.

Michael DeLuca: Not just in physician [00:52:30] spaces, but especially there. Just try to check your ego at the door as much as possible and learn. Ask really good questions. Don't pretend like you need to know it all or have know it all. I learned a lot by just sitting there and like, hey, help! Help educate me too, right? And I just ask insightful questions and then go research it right in your spare time. You say, man, they said something here that really clicked how I'm going to go dig in on this. And that's how you're going to learn a specialty or an industry. Um, just from asking great [00:53:00] questions, not having an ego. I think it just takes you a long way as a as a professional.

Glenn Dunlap: Well, there's so many, you know, tla's. Right? Three letter acronyms that get thrown around in this space, too. And I think that's, uh, you can really get, um, uh, lost in that quickly. And you have to be willing to just throw your hand. You know what, I missed that. What was that? And and to be willing to ask the the what? May seem like a dumb question, but, um, I think the I fully agree with [00:53:30] that. And I love that because I think if you're in that spot, then I think then the person on the other side of the table that the, the physician or the dentist will be in a position where they're they're comfortable asking you the questions, because there's going to be a time when you're speaking a language that they don't understand, that, you know, if you've established that rapport with them to, you know, you give them the comfort to be able to say, don't I don't I have no idea what section 179 is or whatever you just said, you know, so just like, you know, come, come back to me with something that a, you know, layman's terms, please. Yeah. You know, what does this mean to me?

Michael DeLuca: So [00:54:00] some of my clients know it probably. And, you know, there's a lot of times I ask questions as I was really learning this industry and they would even look at me like, I've never really thought it that way. And I didn't even know maybe what the answer should be or shouldn't be. Yeah, it got them thinking, which then got me thinking and then trying to go find an answer for them or with them. Yeah. It's good.

Glenn Dunlap: Yeah. Fantastic. Uh, one final question I have for you about your practice. So as you're building this, like not everybody in at HBK or anybody starting in this is going to have the same experience as you. So do you normally [00:54:30] do you double up? Do you bring people with you? Do you bring, uh, you know, seniors and juniors with you to kind of help them see this and, and to, to get some, some first hand experience where you're kind of walking them through that too, or how do you, how do you build that into your practice.

Michael DeLuca: As much as possible. Yeah. Right. So, uh, I'm a big believer in getting individuals involved as, as early as possible. Um, especially for firms, we're far from perfect, but we're continuing to strive to be better in the mere fact that transitioning to more of an advisory based and [00:55:00] advisory concentrated type of purview and client interactions, I feel like our earlier in their career professionals, they a lot of them have the talent. Yeah. You know, a lot of them have it. They don't want to be data input specialists and just sitting behind a computer necessarily working with software all day. So get them out in front of clients, but teach them, allow them to make mistakes, be the guardrails for them. It's not going to damage a client relationship. I mean, knock on wood, I've never lost a client because I took a junior associate, right? Senior [00:55:30] or manager to a meeting, you know, too early, right? No clients done that. They most of them will understand. It's learning they're not getting double billed. Be fair. But it just is such a vital training ground for sure. Not just from a technical perspective and learning by osmosis what I call it, but really just how to interact and handle client situations. It's the soft skills and that, you know, qualitative type things that really they accelerate in.

Glenn Dunlap: Yeah yeah for sure. No that's great. It's great advice [00:56:00] Michael if somebody wants to to reach you how do they do that or the firm. What's what's the best way they can get a hold of you or the firm.

Michael DeLuca: Email I'm a religious email guy. So m DeLuca m MDL UK at NBC.com.

Glenn Dunlap: Very good. An HPA Hkfa.com is the firm's website. If you want to learn more about HBK. Um, and that that wraps it up for our session today. Michael, thank you so much for for joining us. I, um, always love our conversations. And this [00:56:30] was, uh, just a the next last one that we've had. So I'm, uh, I'm grateful for that. I appreciate you carving out some time to to share your insights. And I'm sure that, uh, I know I learned a lot. I'm sure that, uh, our listeners have as well. So thank you very much. Appreciate it.

Michael DeLuca: Thanks, Glenn. Always a pleasure with you.