The hardest decision JAG Physical Therapy CEO John Gallucci made in the last two years was saying no to a deal in his own hometown. It would have grown the company by a third.
He passed because the math didn’t work and the timing wasn’t right. Twenty-one years in, JAG carries little debt and has grown revenue and EBITDA by double digits every year except the COVID year, when clinic count and patient visits still grew.
Our Guest:
John A. Gallucci, CEO and Founder of JAG Physical Therapy. Associate Chief Medical Officer for Major League Soccer for over 20 years, with prior experience in the NBA and NHL. Author of four books, including the Amazon bestseller Pickleball, Pickleball, Pickleball, Don’t Get Hurt and a soccer injury prevention book published in English, Spanish and Chinese.
The Problem:
The physical therapy industry has a workforce shortage that the credentialing system hasn't kept up with. It takes five to six years to get a new PT school approved, compared to three for a medical school. Gallucci knows a CEO colleague with 900 facilities where 100 can't operate because there aren't enough therapists to staff them.
The Solution:
JAG built its workforce pipeline directly into its growth model. l. The company holds relationships with 125 clinical schools, hosts close to 200 students a year and runs a mentorship program for therapists in their first year. It won’t open a clinic it can’t staff. It tracks performance with detailed EMR analytics and stays 99.9% in-network across all its markets. With low debt on top of that, JAG has grown by double digits every year outside of COVID.
Key Takeaways:
[1:19] What patients feel walking into any of JAG's 173 locations
[2:31] Treating every patient like a VIP, a model borrowed from pro sports medicine
[6:17] Scaling culture across 173 locations without losing the patient experience
[9:48] How JAG uses analytics and stays 99.9% in-network across the business
[13:05] The physical therapist shortage and JAG's pipeline strategy with 125 clinical schools
[18:05] Why JAG shifted from a 50-50 acquisition/de novo model to mostly de novo
[22:21] The hardest growth decision of the last two years, and why he walked away
[24:58] 21 years of EBITDA growth, minus one flat year, and the debt philosophy behind it
[27:18] His $100K EBITDA move for any multi-site operator
Scaling fast isn't always scaling smarter. The math on the deal matters more than the size of it, and sometimes the smartest move is protecting the EBITDA you already have, even if it means a slower path.
Full conversation on Healthcare100.
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