A Louisville-based company is building a national presence in a growing sector of the health care industry by empowering local partners.
Confluent Health manages more than 40 physical and occupational therapy company partners, which operates over 500 outpatient physical therapy locations in 28 states.
President and CEO Dr. Larry Benz founded Confluent in 2014, and while the private holding company has grown due to rapid acquisition, it has done so by balancing centralization with local control.
“We always say, ‘We don’t buy anything. We form partnerships with partners,'” Benz said.
In most acquisitions, practices sell a majority of ownership to Confluent but continue to hold some equity in the business.
“We started in the industry well over 30 years ago, and what we find is those practices that maintain some local ownership and presence always sustain and flourish, versus those who sell out completely,” Benz said.
There are more than a quarter of a million physical therapists in the U.S., and that number is expected to grow by 21% in the next decade, according to the U.S. Bureau of Labor Statistics.
Beth Bush first visited ProRehab on Brownsboro Road because of her three sons, all of whom are athletes. When she injured her shoulder three years ago while playing tennis, Bush turned to ProRehab once again.
Bush could hardly move her arm, keeping it “in a sling-like” position because of the pain.
She spent three days a week for six months undergoing physical therapy.
“They give you this long-term plan, and while you’re in here they help you figure out exactly what’s going on and what you should do, or what you should expect,” Bush said. Although rehab isn’t always a linear progression to healing and health, Bush worked with physical therapists to get results.
“I can’t even believe it is totally fine, I thought I was going to have surgery, I was thinking there was no way it was going to heal without surgery,” Bush said. “I can’t stand surgery, I didn’t want to have to take any medications or anything. I did exactly the exercises they said to do, and I still do them.”
Eric McElroy, Clinic Director and owner at ProRehab Physical Therapy, wanted to create an environment where patients can achieve their goals. The clinic plays music, shares high fives and promotes a positive mentality to rehab.
“They want to have a good time, they want to joke around, they want to get away from their pain, they want to have fun,” McElroy said. “And they want to see that other people are going through what they’re going through.”
In a profession that doesn’t have quick fixes, consistency and compliance matters, according to McElory. The environment of a rehab clinic leads to success.
“I love the energy, the atmosphere of this place,” Bush said. “As much as we hate being injured, it’s a fun place to come to. It’s like a ‘Cheers’ neighborhood watering hole, but it’s for getting yourself better.”
At the local level, prior naming and branding remains the same after an acquisition, the idea being that the partners at the local level will continue to stay connected within their own community. With local leadership retained and branding unchanged, Confluent works to improve partners’ efficiency and operations to help for greater performance.
Pat Wempe, CEO and founder of ProRehab, said there’s a healthy balance between centralization and decentralization with Confluent. It starts with trust.
“There is certainly a significant amount of trust,” Wempe said. “I think the whole company believes in the idea of speed of trust. Trust saves money. If you distrust, it costs money.”
Wempe founded ProRehab in 1998, building a practice with numerous clinics.
“The problem for us after about 10 years of practice was our margins were getting thinner,” Wempe said. “We felt like we needed to do something different.”
A consultant told Wempe that ProRehab needed to build stronger infrastructure. Wempe sought advice from Benz, who was then the founder and CEO of Kentucky Orthopedic Rehab Team (KORT).
Confluent was founded in 2014, with ProRehab partnering in 2016.
“‘Think local’ is one of our most key core strategies,” Wempe said. “I saw the mistakes HealthSouth made trying to be a central command and control type environment. We can’t deliver health care that way. It’s very much a local commodity.”
Confluent strengthens local companies’ accounting, analytics, physical therapy forecasting, software, operations and processes, according to Wempe. He said some companies are limited because the cost of growing outweighs the return on investment.
Confluent’s model focuses on what it can do to help partners at the local level thrive.
“I think what works is he [Benz] is partnering with you, he’s not trying to acquire you,” McElory said. “Whether it’s accountants, whether it’s the CFO, whether it’s marketing, whether it’s PR, they’re all asking, what can they do for us.”
Confluent seeks local partners with an entrepreneurial mindset.
“They still have the entrepreneurial zest,” Benz said. “They still have grit and tenacity and enthusiasm about what they’re doing and they still own a piece of the rock.”
Benz said Confluent looks for partners with like mindedness as it grows into new areas of the country. The company’s footprint now touches all regions of the U.S.
Confluent is adapting as virtual health continues to grow. It’s investing in digital health and therapeutics, building a system to serve clients whether it’s virtual or on-demand.
“We really believe strongly that health care will be a consumer-oriented business that we need to meet patients where they want to be met,” Benz said.
Partnering with BehaVR, a company specializing in virtual reality therapeutics, Confluent is investing in a new way to serve clients.
Confluent Ventures is an innovation center with digital health, virtual reality physical therapy and omnichannel health care pathway services. Virtual reality is going beyond gamification, shifting into a larger segment of health care. For Confluent, it’s used for a virtual trainer or physical therapist but it’s also utilized as an educational tool and simulation, Benz said.
“About 40% of all virtual reality usage is for fitness and for movement, and what can be better for physical therapy patients than fitness and movement?” Benz said.
Wempe believes the surface has just been scratched for digital health care.
“VR has been incredibly helpful in allowing us to educate and immerse our clients in that education process, because the take home is way better when you’re immersed in it,” Wempe said.
The private practice physical therapy clinics make up just a part of Confluent.
There’s an occupational health division that’s on-site for more than 1,400 locations across the country. It primarily focus on prevention but also offers work screening, along with form factor and ergonomic analysis and safety.
The education division trains licensed therapists and also partners with universities to provide physical therapy schools around the U.S. Confluent has more board-certified specialists than any other company in the U.S. and is the only Executive MBA program for physical therapists in the industry, according to Twitter post.
“Those three divisions do a lot of the growth organically,” Benz said.
In January, Confluent announced its plans to relocate and expand its headquarters in Louisville.
Benz calls Kentucky a “health care friendly climate,” and keeping Confluent headquartered in Louisville builds on the legacy of health care companies in Kentucky.
“It’s important that we promote the commonwealth from an entrepreneurial and business aspect,” Benz said. “We wanted to double-down and make sure that our headquarters were here.”
The expansion, which will triple the number of employees at its headquarters, is expected to create around 350 jobs in Louisville. The new jobs will include marketing, IT, human resources and administrative roles.
The $10 million project is expected to be completed this summer.
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