Specialist
Former VP at ATI Physical Therapy Inc
Agenda
- Key trends and developments in physical therapy segment relating to ATI Physical Therapy (NYSE: ATIP)
- Mismanaged approach to SPAC merger in 2021 leading to business underperformance and tarnished industry reputation
- Coronavirus and reimbursement headwinds
- Staffing dynamics, ability to repair PT (physical therapist) relationships and labour wage trends
- Growth prospects, juxtaposing de novo vs acquisition expansion strategies
- 2022 outlook – operational turnaround and execution prospects
Questions
1.
What major industry trends and developments have you been following over the past 6-9 months as it relates ATI Physical Therapy?
2.
How do you assess the demand environment around physical therapy utilisation and clinic foot traffic? Do you think the worst of the pandemic impact is behind ATI? How might volumes trend over the next six months?
3.
Could you outline some of ATI’s missteps as it approached its SPAC merger last year, exacerbated by pandemic and reimbursement headwinds, leading to a marred industry reputation?
4.
What are the keys to drive higher average revenue per visit for ATI? How would you assess its ability to maximise revenue per visit?
5.
What impact are labour shortages for PTs [physical therapists], PT assistants and other clinical staff having on wages and overall margins for a player such as ATI?
6.
What are you hearing out of CMS [Centers for Medicare and Medicaid Services] around near-term shifts in government reimbursement? Could there be any additional haircuts after 2021’s reductions? What’s the trickle-down impact on ATI?
7.
You mentioned there could be some reimbursement increase in commercial to offset declines in the government segments. Could you quantify the potential uptick from commercial payers? How do you assess ATI’s ability to negotiate favourable commercial reimbursements given its substantial scale vs competitors or smaller independent practices?
8.
What is the average revenue per visit for Medicare patients? Does it vary significantly across players? Is there any difference in Medicare Advantage revenue per visit vs regular Medicare?
9.
Could you contextualise the discussion on Medicare compared to commercial and workman’s compensation? Is commercial revenue around 30-40% higher vs Medicare? How does workman’s compensation compare to Medicare?
10.
You mentioned alternative payment models and risk-sharing agreements . What has been ATI’s willingness to take on increasing risk in these arrangements? How much could these reduce the company’s exposure to reimbursement headwinds across the board?
11.
How would you compare the strengths and weaknesses of the ATI model vs a franchise/ JV model? Is one more favourable? If so, why?
12.
How do you expect ATI’s growth strategy to evolve over the next year or so? What are the benefits and drawbacks of the de novo approach vs acquisition? How do you assess the company’s ability to execute on a de novo strategy given its staffing issues? What are some important strategic considerations here?
13.
What are your thoughts on ATI’s upper management, including former CEO, Labeed Diab, stepping down in August 2021? Does this represent an opportunity for strategic realignment and turnaround for the company? How do you assess its execution prospects?
14.
What should be the top 2-3 priorities for ATI’s upper management and the incoming CEO to improve business performance? Does the company need to temper its scaling efforts until staffing issues can be worked out? What levers can it pull to improve staffing relationships and industry reputation? Could you round out our discussion by laying out an optimal turnaround strategy?
15.
Is there anything you’d like to highlight around ATI Physical Therapy?
