Joel Swider: Hello, and welcome to the Healthcare Real Estate Advisor podcast. I’m Joel Swider, and I’m an attorney with Hall Render, the nation’s largest healthcare focused law firm. I’m joined today by Matthew Ghanem, the CEO and co-founder of National Breathe Free Sinus & Allergy Centers. Matt, thanks for joining me today.

Matt Ghanem: Thanks for having me, Joel. Much appreciated. Looking forward to it.

Joel Swider: Likewise. So before we delve into Breathe Free and your business model, which has been very successful, I’d like to hear a little bit more about your background and the experiences that prepared you for where you are today. I know you grew up in the DC suburbs in Rockville, Maryland. Did you ever think at that time that you’d end up in the healthcare industry?

Matt Ghanem: That’s a good question. Rockville’s a good 20 miles outside of DC. And no, I didn’t. I didn’t have any family members or anything like that in the healthcare industry. And we interview mid-level providers, meet with doctors, nurses, things like that, and we say, “Hey, how did you know wanted to be in healthcare?” It’s almost always I’ve known since I was five or I’ve known since I was a kid, my mom’s a nurse or whatever that looks like. For me, that wasn’t it. When I was a kid, although I’m 5’11 now, I was 5’11 in middle school, I thought I was going to be an NBA player, clearly not in the cards unfortunately. And then after that, after I blew my knee out in high school, I actually wanted to be an attorney.

I interned at a law office, I did some mock trial stuff in the summer, and my minors in political science, I thought I was going to go to law school and then probably midway through college I had another internship in a law firm, and I don’t know, it didn’t seem like a great fit for me at the time. So no, definitely did not think I was going to be doing this. So that’s a good question.

Joel Swider: Matt, I know you hold a bachelor’s degree in communications and political science from the University of Pittsburgh. You earned your MBA from the George Washington University in DC, at that point, fast forwarding in your history, what was your career aspiration at that time?

Matt Ghanem: I finished business school I think at the end of 2012, so that was about a little over 10 years ago. At that time, I had just started in medical sales, actually just started at the ear, nose and throat company that got acquired by Stryker in 2018, and that six-ish years or so prepared me to an extent for what we’re doing now. My career aspiration was to grow and continue to manage people, which is what my experience had been in before, just in a different industry, and eventually become whether it’s a national director or VP of sales or ultimately even maybe a CEO of a medical device company. So at that point, I had been in medical sales for about two years and I only did it for about another six months before I got into management. And then I got moved all over the country and things like that.

But I moved up quickly, but at the same time I knew that I was more of a self-starter. And as these companies get bigger and they get acquired, there are these systems, and it’s not like the federal government or something like that, but it’s a lot harder. You can’t be nimble, you can’t move quickly, you can’t react to the market and make changes that are best for the business because there’s processes and things in place, which, of course, obviously in a lot of these cases have been successful. But for a startup, moving quickly and being able to react and help customers in my old life was super impactful, and that’s something that I just enjoy. So the thrill, I suppose, or the challenge of a startup is something that I really enjoy. So I knew once I got into where I thought I was going at that time that it probably wasn’t something I was going to do long term, but I knew that there was still a lot to learn.

Joel Swider: Sure. At what point then did you meet Dr. Khanna, the co-founder of National Breathe Free?

Matt Ghanem: This is always a good story. I started in March 2012 with this company that is now Stryker ENT. The ENT, for people that don’t know, is ear, nose and throat. So he was one of the only customers that the company at the time had. He’s a fellowship trained rhinologist, which essentially means you go through residency as an ear, nose and throat doctor, or an otolaryngologist technically. And then you do a one to two year fellowship, which means you do specialized training. And as it relates to Dr. Khanna, rhinology is skull-based sinus surgery, which is more advanced cases where they’re doing a… I don’t want to get too technical, but a lot more advanced techniques up and around the skull base. So there’s only a small handful of folks that are comfortable with that and have trained that way.

So when I started, he was the first customer we had, he taught me a lot about ENT, he taught me how to read a CT scan, showed me abnormalities on the imaging that would lead towards someone that would need a procedural intervention of their sinuses or their septum, or their turbinates, which those two are the main factors in your breathing. So I learned a lot from him. It’s interesting, he grew up in Rockville as well. He’s seven years older than me. So when I moved out west of California about a year and a half later, and then Vegas and ultimately Arizona, I would still come home for the holidays, I would see him, we were friendly, I’d meet him in Vegas and stuff like that during the NCAA tournament, and we were friendly. And obviously we kept each other in the loop on what was going on in ENT. So it’s a full circle that we started to practice in 2018, when just six years before I literally had no idea of anything as it relates to ENT, and he taught me a lot of it. So it’s a pretty cool story.

Joel Swider: That’s neat. You never know where those relationships are going to take you. Matt, in less than five years, Breathe Free has grown from one location in DC to 17 operational sites across eight states, with, sounds like, the 18th opening next month. Congratulations on that. You said you have 225 employees, 17 clinics, about 500 patient encounters a day. You all employ 20 ENT surgeons and 37 mid-level providers, PAs and NPs. Obviously you’ve developed a formula that is scalable across a variety of geographical locations. Can you tell me more about the Breathe Free business model?

Matt Ghanem: I appreciate that. It’s been a pretty cool ride just in a short amount of time. Obviously four and a half years ago or so feels like a lifetime ago, but it’s been something that has just been a great ride so far. One caveat to your question I suppose is that most of the physicians we work with are partners, just in case they’re listening. But I understand where you were going there. What we look for essentially is ENTs a really small specialty to begin with. I believe there’s nearly 10,000 ENT physicians in the country. A few years ago some data came out that showed physicians in their 70s and 60s versus physicians in their 40s and 30s, and there was way more ENTs that were going to be on their way out than on their way in, so it’s already underserved to begin with, and I think that’ll be something that continues to trend in that direction.

Also, a side note, it’s generally one of the top three hardest residency programs to get in, so you have to be super smart and you have to really want to do it. And the people that have the highest scores and interview the best have the opportunity to be able to be an ENT. And what that means is you have a quality of life, you’re working pretty close to a nine to five, and you still have a surgical day or two where you’re performing surgery, so it’s the best of both worlds. But from a business model standpoint, we look for folks that want to perform office-based procedures. A lot of ENTs go to the hospital, there’s added cost to patients, risks with anesthesia, et cetera.

And that’s how ENTs were trained, to be candid, just to do sinus surgery in the hospital. There’s long turnover times and difficulties with the administration. So docs that are like, “Hey, I don’t want to take call anymore. I don’t want to go to the hospital, I want to do things in my office, I want to control my schedule, but maybe I can’t figure out from an infrastructure standpoint how to do that. I have a busy practice, but my staff can’t really get aligned and help me grow this office-based practice so that I can step away and spend more time with my family instead of spend time in the operating room.” So we find physicians like that and we provide an ecosystem for them that allows them to be doctors and just do what they do. So if there’s any single thing that the physician doesn’t have to do, whether it’s taking a call from an insurance company, or dealing with payroll, or a staffing issue, or dealing with a landlord, or anything like that, we essentially take that away from them and they only do what a doctor can do.

So if it’s a procedure, or if it’s reading a CT scan, or a patient that’s scheduled for a procedure has some questions, that want to talk to the surgeon, they do those types of activities during their day. And candidly, if they only have a few procedures, and the mid-level providers are comfortable and they’re trained well and everything, they’ve been there a little bit, they just go home. They don’t have to sit there and see 30 patients in the afternoon, which is what they would normally do. So I don’t know if I answered your question, but we just essentially let surgeons be surgeons.

Joel Swider: That makes sense. And one question I think that begs is do you think this model would work in other surgical specialties?

Matt Ghanem: Yeah, the surgeon’s most valuable time from a ROI standpoint and from a patient care standpoint is to be doing things that only they can do. For example, in the ear, nose, and throat, a post-op visit with a mid-level provider is very simple, especially in an office-based minimally invasive procedure. So if you were going to have someone come back in, let’s say, it could be something in pain or spine or orthopedics, orthopedic surgeons spend two and a half or two days a week operating, and then two and a half days or so in the clinic, whether it’s seeing someone that has a torn ACL and telling them how they can help them, or seeing somebody that is having a pain injection or something like that, that’s pretty simple, why not have someone that can do that, do that, and then you just operate four days a week or five days a week? And then we take the call away from you.

If there’s a call with a post-op nose bleed, which is standard in a procedure that we do, we have a nurse or someone that takes the call and we pay them a little extra, but it takes that off of the doctor. So there’s plenty of scenarios where this would be beneficial, even in non-insurance based things like IVF, or even plastic surgery and things like that, because the surgeon’s time is best spent doing these revenue generating procedures, but also procedures that people need. And so if you’re booked out six weeks because you can only do one day, or a day and a half in the operating room, or whatever you’re doing, we can make it so that you spend four and a half or five days doing that, and patients get in faster.

Joel Swider: And Matt, that leads me to another question, which is it seems like there’s a clear value proposition for providers. What’s the value proposition on the consumer, on the patient side? You mentioned scheduling maybe much easier. Are there other things from a marketing and just value proposition that you can think of?

Matt Ghanem: Yeah, so it’s actually interesting. It’s one of the only times, maybe in life, but definitely in medicine, where essentially what’s best for the practice from a business standpoint is also what’s best for the patient clinically. And every insurance carrier, outside of one or two isolated small Blue Cross Blue Shield plans cover the procedure. So the insurance companies see the value in it, that it works clinically obviously, but not only that, it saves them money, because as we know, the CEO of UnitedHealthcare, obviously his or her job is to deliver shareholder value return. And how do you do that? Obviously you add companies to your policies, but then at the same time you have to make sure that we’re doing things that make sense from a business standpoint while allowing the right treatments for patients to have. So an office-based procedure, even though it pays the physician way more than they would make in the operating room, it can save up to 75% or more depending on the site of service that they’re taking it to.

Because ambulatory surgery centers that are standalone, something that a doctor might make two to 400 bucks on, the surgery center would make nearly $10,000 from that patient depending on what specifically the doctor’s doing. So even though the doctor only gets paid a couple hundred bucks, the facility’s getting the entire thing. Whereas in the office, the doctor gets the entire payment that is less than the $10,000, and it’s a like treatment. But then if you talk hospital, the reimbursement in a hospital is significantly higher than a freestanding ambulatory surgery center. And obviously there’s added cost and things for hospitals, but if that same procedure gets done in a hospital, it might be 15 to $20,000, whereas in the office it could be 5,000 to 7,500 depending on what exactly the doc’s doing. So the insurance company saves money.

And if you’re a patient with, let’s say, a thousand dollar deductible and 20% co-insurance, that thousand dollars deductibles the same, but the 20% co-insurance is significantly less in a office-based setting than it is in a facility based procedure. And added cost for anesthesia or anything like that you don’t incur because it’s done under a local, like getting a cavity filled, so there’s a huge value proposition there.

And then not only that, lastly, at the same time, if you were going to have your sinuses done at a surgery center hospital, in nearly all cases they’re going to call you and say, “Hey, your estimated responsibility is 1800 bucks, please bring it the day of surgery.” And if you essentially don’t, they won’t help you. Whereas we can be flexible and set up payment plans and tell them, “Hey, you know what…” You could pay $300 a month for the next six months or whatever it is, we don’t need to take that upfront. Obviously we’re required by insurance contracts to try and get payment or collect payment from patients, we can’t just say, “Hey, don’t worry about it,” but we can be flexible. So that’s another value proposition.

And on top of that, if the doctor’s operating in the office five days a week, you have a large amount of flexibility. Let’s say you don’t have help for your kids three days a week and you know that if it’s on a Tuesday, it’d be way easier for you to have it, but in the operating room, the doctor’s block is only on Thursdays. So what do we do then? We have ultimate flexibility. We could even do cases on Saturdays if a patient can only do that, or do it at night, or super early in the morning, or whatever it might be because it’s pretty quick. So it just provides the ultimate level of flexibility for patients.

Joel Swider: Matt, when we were preparing for the episode, you mentioned to me that you were involved in running several restaurants after you graduated from college. And speaking of this value proposition, both on the provider side and on the patient side, really the intersection of those, you mentioned to me that running a medical practice has a lot in common with running a restaurant. Could you elaborate on that? I thought that was really an interesting analogy.

Matt Ghanem: It is interesting. It’s something that I never actually thought. So when I was running restaurants, I never thought that it would really prepare me for anything. And to be candid, it’s really hard work, it’s a lot of hours at times of the day when most people don’t work, obviously, Because you’re serving people that aren’t at work, so it’s really challenging. And a lot of times people didn’t look at it favorably on a resume, so I never thought it would really help me. But it’s interesting because you have a lot of transient employees in restaurants, and take the providers out of it, the physician assistants or nurse practitioners, or even RNs at that, and obviously the physicians, everyone else, if you had a job at a front desk, it’s like you’re the hostess at the restaurant. If you don’t like something, you could just go find another job, there’s tons of them out there.

And so you’re essentially in both scenarios, not always lowest paid employee, but a lot of times the employees with the least amount of experience and the ones that tend to be the most transient in a restaurant and in a medical practice are the ones that if you want to come in, you talk to, they’re the ones that almost ultimately decide when you come in, they’re putting your appointment on the schedule. If they’re friendly, you’re more likely to come. If they’re not, you’re more likely not to come. And so that’s another thing that’s interesting is the physician, and also the physician is like the chef. So they’re in the back, your favorite steakhouse, you don’t see the chef, they’re making sure everything’s done correctly, that the food’s cooked the way it’s supposed to be, presented the way it’s supposed to be, and that’s the same as a doctor, or even a PA.

They’re going from room to room, they’re taking calls, they’re busy, they’re answering emails, they don’t know what the front desk person’s saying, they don’t know what the medical assistant that’s rooming the patient is telling the patient, they don’t know if there’s a patient, or if someone drawing blood, what’s happening there, is that getting put in the right place, and that’s the same as the restaurant. The chef, a lot of the times if they don’t have super competent front of the house help in a restaurant, a dining room manager so to speak, or whatever it might be, to make sure that the bartender’s doing the right thing in the front desk or the hostess stand is being friendly and letting people know the right wait times and things like that. So there’s so many parallels just in medicine, it’s a service business, but they don’t see it as a service business in most cases.

It really is though because consumers have choices. A lot of plans now you don’t need a referral, you can go wherever you want. If you don’t have a great interaction, you can essentially just make a new appointment. And so one other thing, the doctor can be great, but if the staff is rude or the office isn’t well kept, a lot of the times you’re going to lose that patient. Just like a restaurant where if the food’s great but the staff’s rude, not a place a lot of people want to go. On the flip side, if the staff’s great and the food just wasn’t up to par that day, you may try it again. And that could be the same for the doctor, maybe the doctor ran an hour and a half behind, but the staff was great and they kept them engaged, and let them know, “Hey, this is what’s happening. We’re going to take care of you. Here’s a coffee or whatever it might be that we have. We’ll make sure your next appointment is a super favorable time for you.” Take care of them.

Obviously in a insurance based medical practice, you can’t give anything away to a patient for free that you’re required to charge for. Sometimes we’ll give away Starbucks gift cards if people are waiting a long time, but we can’t say, “Hey, we’re not going to charge you for your visit,” but we could do that. In a restaurant, you would give their food for free. So all of those similarities, there’s so many parallels that exist between the two of them, and I didn’t realize that being competent and comfortable hiring hourly employees or people that are going to work, or how to evaluate when you put a job up on Indeed for a medical assistant, you’re going to get hundreds of applications in the same day in an urban area, how do I look through those resumes when you’re not really looking for experience, you’re looking more for the person because we know we could teach them that stuff, and that’s the same in a restaurant, how do you manage 300 applications for a serving job?

So it’s the same skillset, and then obviously it’s people. So you’re getting comfortable with that, but the actual the way they run, if a well-run restaurant, if you transitioned or translated that to a medical practice and a medical practice became that well ran, it’s not the norm. You would probably go to your primary care doctor and wait 30 to 45 minutes and see them for five minutes. And so we also don’t do that either, but there’s just so many parallels. This is a question we could probably talk about for the whole episode honestly.

Joel Swider: Well, Matt, I love that analogy because I think you’re right, I think a lot of times, and I’m speaking mainly from the patient perspective, but there’s not as much focus on the service aspect, but of course it is a service industry, the medical industry. And obviously that’s something that when you’re looking to partner with a physician be able to say, “Look, you can do your job the best in the world,” but part of the value, I would imagine, that Breathe Free is bringing to the table is we’re going to surround you with the front of the house type people that are going to further promote that good level of service and quality. How do you screen for that from an employment perspective? Do you have certain metrics that you like to use, or how do you do that?

Matt Ghanem: It’s interesting, when we only had one practice and I was doing it, I can tell you how I would do it, and then obviously anytime you expand and grow, it obviously becomes harder for quality control. Same with anything else, like Starbucks, if there’s 10 Starbucks in your town, it would be perfect, but there’s not, so it’s harder. So it’s all about people as we grow. Actually one of the jobs that I did was for a corporate restaurant company, and it was my second job out of school, I did a management and marketing job at a full service restaurant at first, this was a little more of a quick service restaurant, but my job for the first year that I worked there was to approve every hourly hire, every hire besides the managers, that any manager, and there was 15 units in the DC area at the time, wanted to hire.

And all I was looking for was did they smile, did they show up on time, are they engaging, are they friendly, because those are the things you can’t teach. I can make someone show up on time if I pressure them and things like that. You can’t make someone be friendly. You can make them say the right words. And there’s plenty of people that aren’t friendly that say the right words, they’re just not welcoming, they’re not saying it in the right way, they’re not smiling, they’re not making eye contact. So those are so important. And obviously you need to screen as well for someone that seems relatively with it, and they want to learn, and they’re engaged, and they want to grow, because obviously those types of people are always going to do better in an environmental where they’re learning. But I can’t teach someone to be friendly, you just can’t do it. So we’re always looking for that.

There’s a couple other things. There’s a really cool test that you can do. This is one of my favorite restaurant tests that probably no one does. It’s to test sense of urgency. This is a really cool one. So what I would do, and we’ll do this, and I’ll have someone that’s coming in for an interview sit in the farthest corner of the office, and I’ll show you exactly what we do, but in a restaurant you would sit them in the right side of the dining room and say, “Hey, wait over here, I’ll be right with you.” Then you walk over there and say, “Hey, we’re actually going to chat over here. It’s a little loud,” and you walk in a pretty quick pace to the other side. And when you get there, see how far they are behind you.

If they’re right up on top of you, they have a good sense of urgency and of course you’re getting the best version of this person, just like any new employee, the best version they’re ever going to be is how they are in the beginning. So that’s a good sense of urgency test. So I’ll do that. And I’ll come to the door, open it like you’re going to call a patient back and say, “Hey, we’re going to interview straight down the hallway over here in the back,” and I’ll hold the door open, right when they get to the door, I’ll take off, and then see if they keep up with me. And that’s just one way to gauge sets of urgency. And that’s important. If you want to learn, and we’ve figured out that you’re friendly and you have a sense of urgency, there’s a great chance you’re going to be successful, at least in my book, because all these jobs, whether it’s a restaurant or in a medical practice that aren’t provider specific and you don’t need specific training, we can teach you any of it.

So we just want people that are going to learn. And the other thing is we also don’t hire a lot of people with medical experience for these roles. We hire people with customer service experience that understand sense of urgency, understand being friendly, understand that it’s not the patient’s going to wait for us because we’re the doctor. That traditional medical mentality that you’ve probably experienced and I’ve experienced as a patient is just not okay in my book just because we’re humans, it’s not okay to treat anyone like that, but also if you’re trying to run a business, you need to provide an environment that is going to allow for not only repeat customers or patients, but word of mouth. And that’s the strongest thing. If you can create someone going home and going, “I went to this doctor today, and what an experience it was. They were friendly, they spent a long time with me, they ran on time.” Nobody does that. And if you can do that, then obviously you’re going to be successful. So I hope I answered the question.

Joel Swider: I love that. Matt, our audience for the podcast consists of both people who are interested in the healthcare field, but also those in the real estate arena. What can you tell me about your real estate strategy and how that complements your broader business strategy?

Matt Ghanem: It’s a good question. So when we partner with existing practices, a lot of the times we’re stuck with what’s there because they have a lease and they have space and parking, and all those things. But about half our practices, we started from scratch, whether it was a doctor leaving a practice and opening a new one, or even moving across the country. So in those scenarios what’s really important is where it is in relation to highways and access, because we’ll run TV and radio ads in a lot of these places. We focus a lot on SEO in certain parts of the areas too, where it’s dense, so there needs to be appropriate parking, it needs to be easy to find. But not only that, if you look at, for example, let’s say in the Valley, in Phoenix, for example, you have the 101, which is 495 in DC that runs around the city, you have the 10 that runs across, and then you have the 17 that runs =south. I think I got those.

So if we’re going to put one office in the city, you either want to be at the intersection of the cross-section of the two that run vertical and horizontal or you want to be where one of them touch the big circle essentially. So that way that if you hear a TV ad and you live 20 minutes away, and it’s only 20 minutes on a highway, it’s not that big of a deal. But if you’re navigating through the city and you have to deal with parking and it’s hard, that’s so important to us. So from a real estate standpoint, it doesn’t necessarily need to be in a medical building or anything like that, because in most cases you’re not going to get walk-ins.

You can build a relationship with a referring practice in the building, but at the same time, it’s just like any other type of sales, you go in, you tell them, “Hey, this is what we do, this is why we’re different, here’s how we help people,” but if they’ve been referring to another ENT and are happy for the last 10 years, odds are you’re not going to get that referral base anyways unless something changes. So as long as you’re in a dense area and you’re around where it’s easy to get to, that’s paramount. Parking in an urban area is paramount. In our DC practice, there’s only three or four medical buildings in the west end of DC, the parking’s terrible, it’s hard to get to, we didn’t really know what we were doing but it’s in the medical area, so people are used to dealing with that, which we didn’t really know.

And that’s okay. If you stay longer than an hour, you’re paying 20 bucks for the parking. We’re near the metro, which in an urban area is important too, but it just needs to be accessible. So we can get there by Uber, you can get there by bus, you can get there by Metro, and obviously we have parking, but there’s some medical buildings that don’t have parking. So the fact that we have it is better. For example, we opened a practice in LA, we spoke to our marketing, the guy that does our TV and radio, hey, in your experience, obviously there’s tons of traffic in LA, so if somebody hears an ad in West Hollywood, they’re probably not going to go to Thousand Oaks or go to Long Beach.

And the problem there is when you advertise, the net that you’re casting is so big, so people might hear your ad in Temecula if it’s TV or radio, and you’re in Burbank where we are. So what we learned is there’s two highways that run across and one that runs down. So if you’re going to be in LA at all and you want any level of accessibility, Burbank was it. So it was going to be Burbank or Glendale. So we’re right by the Burbank airport, and the highways, I can’t remember which ones they are. I’m sorry about that. But that was the best one to be able to capture people, because if you go out into the other side of the burbs, I suppose, like Thousand Oaks or Simi Valley or something like that, it’s isolated.

And then you can go to the west side, but nobody’s really traveling through the west side of LA because there’s so much traffic, it’s really hard. We’re about to partner with a practice that has an office in Marina del Ray and in Long Beach, and just trying to go from one of those to the other in the middle of the day is pretty difficult even though it’s not very far. So just considering all of those thing, I know that sounds probably like a cookie cutter answer, but they’re important. And a lot of people don’t think that. Most doctors will go, “I want to be over here because it’s near my house or it’s near where I work out, it’s near where my kid’s school is, it’s near where we hang out, or whatever that might be,” and that might not necessarily be the best place. Maybe there’s a place five minutes away that if you live 20 minutes away it’s way more convenient for you to go, “I’m going to go here versus I’m going to go over here.” So just all things to consider I suppose.

Joel Swider: Matt, once you have the site selection then completed, which I think is very interesting and I don’t think is cookie cutter, it sounds like you give a lot of thought and consideration to that, how do you then decide is there going to be a personal guarantee, whose name is going to be on the lease? Is there going to be a corporate guarantee? How do you go through some of those business analyses if you’re leasing, for example?

Matt Ghanem: That’s a great question and a challenge a lot of the time. In our first practice we had to do a personal guarantee. Pretty much, Dr. Khanna and I leveraged everything, and so we had to do whatever they wanted. But now we haven’t given a personal guarantee I don’t think in maybe after the first couple practices we haven’t had to, which is great. We have really strong financials that have a few different practices, specifically capital, so we’ll do corporate guarantees on those a lot of the times, and that’s okay with me because you don’t want that much, I don’t want to say built up risk. And when I look at risk, there’s two different types of risk that I don’t think people realize. There’s theoretical risk and there’s actual risk. So I’m going to give a little side before I go there.

So I’m scared of heights. This is actually really great. I’m going to give Dorian a shout-out here from Prepare to Roar and the riverbank group there. She’s based in Atlanta. She did a lot of behavior style profiling for us at her old company. We actually had her at our first meeting and taught about different behavior styles and how you communicate to somebody that… For you, for example, if I’m sitting and looking at your desk and you have pictures facing out to me, that means you’re probably someone that is engaging, and wants to be friendly, and wants everyone to be in harmony as they would say, so I would ask you questions about those. But if you were someone that sat down and I could only see the backs of your pictures because you’re looking at them, then you’re somebody that’s more closed off like me to the point, doesn’t probably want to have small talk. So things like that.

So we went on this thing, I think we were in Belize, and we had to propel down into the sinkhole down a wall. You’re essentially hooked up to not a bungee cord, but you repel down the wall. And I’m terrified of heights, this is my worst nightmare, and she talked about theoretical versus actual risk. We were with people that trained, people that jumped out of planes, and did this for the military, so the risk is only theoretical. They’re experts. They’re helping you. It’s not an actual risk. Drop off the side of this mountain essentially and go down. I try to think of things in theoretical versus actual terms. And so if you fast forward to is Capitol Breathe Free going to corporate guarantee the Frederick Breathe Free office, which is in Frederick, Maryland, about 90 minutes away. The doctor’s been there, established, he’s leaving the hospital, his wife’s a primary care physician, she’ll be able to drum up some referrals in her practice depending on what their rules are with their ACO, which is essentially a referring group.

And he’s been there long enough and has a good enough name, and we know that we can market there, we know that Zocdoc, which is something that we use in our more urban markets, works well because DC is Zocdoc’s second biggest market, New York’s its first. So we know that we have all of these things in favor. So it’s a theoretical risk to corporate guarantee that. So I guess that’s how we look at it. There’s other ones, there’s a couple ones that we did where we had to have… Instead of that we did a letter of credit through the bank where it burns down for the first three or four years, and so that’s easy because all you have to do is have that money there, which we have a line of credit, so we use a letter of credit that burns down, there’s really no cost to it outside of generating a letter. So that’s preferred in some cases.

But we definitely just tell people now we’re not doing a personal guarantee. We have enough history. You can see the financials from every single one of our practices. We’re not going to do that. And I know for solo practitioners or new practices without a history that’s probably the reality. And then obviously if you’re a really well established landlord versus we’ve looked at buildings where it’s owned by the doctor that has the suite on the right side, and he’s leasing out the suite on the left, that’s always going to be tough I’m sure you know. I’m sure you’ve experienced it. There’s obviously no TI involved and no free rent, and you just need to take it as is, and you need to guarantee it, and I want your wife’s guarantee and all that stuff. So it just depends on also, as you know, I’m sure people listening know, what kind of landlord you’re dealing with and what their appetite is for, I don’t want to say risk, but I guess theoretical or actual risk. So I think that depends. I don’t know if that answers it or if there’s a side question that you have that you might want some clarification on.

Joel Swider: That makes a lot of sense, Matt. Thank you. So switching gears a little bit to maybe it’s real estate, maybe it’s not, but over the past four and a half years since you founded Breathe Free, what’s been the biggest shift or the biggest hurdle that you’ve had to surmount?

Matt Ghanem: There’s a lot of them. One of them is physician selection, because we made some choices based on more necessities sometimes in the beginning where it’s who’s willing to take the leap with us because we don’t have a ton of history, we don’t have a ton of proof that’s more theoretical of what can happen than what’s happened in the past. So we started in the end of 2018 and we thought by this time we might have a couple offices, but it’s grown like wildfire, so that was one, how do we pick the right people. And now we’ve learned a lot. Now we’re really good at that, but in the beginning that was tough, COVID was tough. We started our second office in Dallas, Texas, it was a well-established practice in Fort Worth, and then we have a satellite office that was in South Lake, now it’s in Irving, which is essentially near the DFW airport essentially, more towards the city though.

And we started February 1, 2020. And so after March we couldn’t travel anymore. Well, I was still traveling, but I was on airplanes with two people from DC to Dallas, literally two people. It was crazy. So there’s all the uncertainty, what’s going to happen, are we putting ourselves at risk? And then we loaned money to the practice there, it was what we normally do, so that the doctor doesn’t take a hit while we’re adding infrastructure and things. And we didn’t have any money then. It was just Dr. Khanna and I, we didn’t have all these practices, so that was a personal loan essentially. And then the Texas Medical Board forced them to close and made elective procedures, you couldn’t do them whether they were in the office or not. And so that was challenging. What we didn’t know at the time is that was going to push more people our way.

The next two offices we opened were physicians that were employed by either a hospital or a group, and they were significantly limited by the hospital or the group. For example, one of them is in Virginia, and they’re essentially most of their pay came from their RVUs, which is relative value units, essentially how procedures and physicians are paid based on their work, and most of that comes from the operating room. And Virginia didn’t allow elective procedures for most of 2020. So the doctors were literally making no money and they had no control over it. Whereas in a private practice, it’s all risk so you could decide what you want to do. So the next two practices, I don’t know if they would’ve happened without COVID, and now that you have four, that jump doesn’t feel as big. But navigating that was hard.

And then once we got through 2020, we realized that, all right, as long as we have precautions and things like that, we’re probably going to be okay for most folks. But we still obviously had to do tons of things in the office to make sure people felt comfortable, and that everyone was safe. But what it felt like in March wasn’t what it felt like in January of the following year. So that was a huge obstacle to deal with. And most practices moved to telehealth only, and calls only, and things like that, so that was really challenging. And we stayed in person in DC, that was our only practice essentially. And we did three days on, two days off for all the staff because we had way less patients coming through, of course, and we paid everyone the whole time, didn’t lay anyone off. It’s funny because the doctor’s mentality always is we should close, we have to lay people off, this is a scary time. And that’s what happened.

But my mentality was what happens when they turn this thing back on? What do we do then? So I go to my dentist who I loved, the only dentist I’ve ever liked, and she’s like, “I just have no help. We laid all of our staff off. They all went and found other jobs. I can’t hire anyone.” And it’s just I’m so glad that we didn’t do that. We kept everyone because we knew. And not only that, one other concern that I had personally was if we make this decision to close, it’s March 21st, we decide to close, what if the city on April 15th mandates that we close, now how long are we closed for? What happens then? Let’s just be safe, do everything we can, clean the rooms, have air purifiers, masks, gloves, whatever, way less people.

We can’t have multiple people waiting in the waiting room, clean the waiting room every hour, all the things that we did, put the plastic up around to protect the staff, and all those things. And any of the procedures that we did, honestly, for probably six months it was just me and the doctor. We didn’t have any of the staff do any of that. So I assisted in all those. And obviously if we’re going to do that, that’s a decision that we had to make. And we didn’t want to put anyone at risk. So we didn’t do a lot of them, but we still did some, and that’s probably challenging for every business. And it was sad to watch all my favorite places around DC and that area, there’s not a lot of residents. All the restaurants and bars, and things like that closed, and it was just a really challenging time in general. So I’d have to say that’s probably the biggest hurdle.

And now obviously it’s passed for the most part, but I hate to say that it helped us, but it did. I don’t know if you have any follow-up questions to that, but that was something that was a big deal in ENT. Actually one of the biggest ENTs [inaudible 00:41:16] say biggest, one of the most prominent ones wrote a paper about how nasal endoscopy, which is something that’s standard care in nearly every nasal visit that you have, which is a little telescope going in your nose, how that essentially activates all of these spores or whatever where COVID lives and how dangerous it was to do, and things like that, so it was a really challenging time. And a lot of ENTs, we have a few different practices that were like, “We would’ve went out of business if it wasn’t for working with you. 100%, there’s no doubt in my mind we wouldn’t have made it through.

Joel Swider: So I think that’s, I can imagine, very satisfying to say, “Look, we came through this stronger because of the model that we had in place.” And trusting the system is incredibly courageous. I think that’s really cool. So Matt, I know you travel a lot. What does work-life balance look like for you right now?

Matt Ghanem: That’s a tough one. We used to have these courses and you could read books about the CEO mindset, and how to do all these things in the morning. And I want to say I subscribe to that, but I just don’t. I think when you’re running a business that’s growing, you have to be available. And then when you have people on Pacific time, you have people on Eastern time, you have people in the Middle, when I’m out here in Arizona, half the year it’s Pacific time. So if I wake up at 06:30, it’s 09:30 on the East Coast, and I’m going to have a million phone calls and emails. And so the first thing I have to do is make sure there’s nothing emerging. So what I’ll do is look, and if there’s nothing emergent, I can let it be and do what I need to do.

But that’s one thing. And then also as it relates to if I’m out East, the West Coast is going until eight o’clock. Luckily for us, there’s not really a lot going on the weekend, so I try to disconnect a lot. I try to disconnect, but I try to be available. And maybe this isn’t the right thing to say, because a lot of people don’t really believe that they should always be available, but I don’t want people to think that they’re ever bothering me. I don’t want someone to feel uncomfortable. It doesn’t matter who they are, how long they’ve been with us, what role they’re in. It’s an open door policy across the board, whether it’s positive or negative. I always want people to reach out and be able to contact me. Of course, there’s things that I’m better at delegating at now, which when you start a business where you’re like, “I don’t know when my next paycheck’s coming,” because we didn’t essentially take any money from the practice, I didn’t receive a paycheck, so to speak, for nine months part.

That was from when I left my job and moved to the East Coast, and we didn’t start the practice for a few more months based on some things that you learn about signing leases and things like that, which I’m sure you’re familiar with. But I just want to be available. So I try to disconnect at night. I’ll do things like leave my phone if I go to dinner with my wife or something like that, put my phone in her purse or something like that, and just nothing could really be that important, but I’m going to be more available than most. And I know work-life balance is important, but I don’t want to say we’re running a sprint, but it feels like a sprint so I want to be available. So that’s a really tough question to answer, and that’s one of my personal challenges is each year goes by like, “Where can I find more time to disconnect?” If anyone listening has any great strategies or philosophies, or maybe something that they’ve read or subscribed to, I would definitely love to know.

Joel Swider: Thanks. Well, Matt, thank you so much for your time and sharing your expertise. Speaking of availability, if listeners want to get into contact with you, what would be the best way to do that?

Matt Ghanem: There’s a couple things. I’ll throw my emails out there. If you go to nationalbreathefree.com, you can click I think request information, that goes directly to me, but I have two emails. They’re both Matt, matt@nationalbreathefree.com, and  matt@capitolbreathefree.com, and that’s Capitol like the Capitol Building with an O, so capitolbreathefree.com. I think my cell phone might even be on my LinkedIn. You could text me. I don’t know if I should give my phone number. That doesn’t matter to me. (202) 423-7825. So shoot me an email, text, give me a call if you have any questions or some ideas on work-life balance. That would be awesome.

Joel Swider: Great. Well, Matt, thanks again, and thanks to all our listeners. Have a great day.

Matt Ghanem: All right, thank you. Thank you so much for having me.