The Value of Physical Therapy in Health Care
Current Status in Healthcare
Economist John Mauldin states in his recent blog “the US healthcare system as it stands is dysfunctional and can no longer continue as it currently operates.” The necessary changes in the US healthcare system are going to happen with or without Obamacare. The whole system is simply dysfunctional. So what is exactly wrong with our healthcare system? I like to keep things simple so like Einstein said, “Everything should be made as simple as possible, but never simpler.” So there are 4 simple factors that we need to identify as problems with our healthcare system.
- The overall cost of medical care1
- Inflated billing cost and declining reimbursement. (For example: A hospital system may bill about $18 billion for medical services and collect around $6 billion.)1
- Increased rates of chronic disease, illness, pain, and injuries. Also the increase in coverage needed from the implications of the Obamacare. So there is an increased need for healthcare services. 1
- Lack of cost effectiveness and poor outcomes. Can the diagnosis and treatment be performed at a more efficient and cost effective manner?
I am not an economist, but this looks like a major health care and financial problem. What will happen overall to medicine? Now looking at the big picture of healthcare; hospitals and clinics need to reduce overall cost and expenses, healthcare providers will have to reduce the cost per patient, and clinicians being more innovative how care is given. We could talk about this for hours with long debates of how to correct this problem we are facing. Regardless of your individual beliefs, biases towards physical therapy, and political views, in the future all medical professionals ranging from, hospitals, to skilled nursing facilities, to outpatient private practices, we will all have to perform healthcare services in a more efficient, innovative and cost effective manner.
Future of HealthCare and value of Physical Therapy
Again lets look at the big picture here, beyond just physical therapy services, and look at the reimbursement, insurance company, financial, and healthcare trends that are starting to occur.
Over the next several years we will go from volume-based reimbursement in medicine (based on the number of procedures or patients a provider sees) to a value-based or outcome-based system (being paid the same amount per patient no matter how well or sick, so the goal will be based on outcomes).
Health insurance companies are increasing premiums, increasing deductibles, increasing co-pays, adding coinsurances, and decreasing reimbursement and controlling what is actually covered. Insurance companies are charging more but paying out and reimbursing less. The interesting topic is how are insurance companies going to value physical therapy?
Businesses are altering their employee’s insurance plans to decrease their expenses, and using more high deductible health care plans with health incentives, HSA, and FSA. So the patient or employee will have more responsibility for services, financial, and where to go even with health insurance.
Accountable Care Organizations (ACOs) are forming and dominating local markets. Private practices are being bought out and their clinicians are joining into these large medical groups. Where will the physical therapist fall in the ACO model and what will happen to the quality of care?
What is outpatient physical therapy and private practices going to do? Will insurance companies ever see the cost-effectiveness and value in physical therapy? Will a private physical therapy practice survive? How many more studies have to come out to show the cost effectiveness of physical therapy for musculoskeletal injuries?2,3,6,7,8,9,11,14,15,22,23 How many more studies need to come out to show the same long term outcomes as compared to surgery?13,16,17,18,19,20,21, How many more studies show the benefit of direct access and good short-term and long-term outcomes with physical therapy services?4,5,7,10,11,12,14,15,24 Currently, physical therapist can implement evidenced based interventions and show great outcomes with patients as compared to standard care, show great patient satisfaction, but the governing health care system will still make it hard for outpatient physical therapy practices to survive. The average reimbursement from Medicare in my state is roughly $75/visit and many physical therapy practices are one Medicare cut away from closing shop. Recently a local Workman’s Comp group reached out to us because they heard of the great results we are getting and tried to offer and negotiate for $58/visit! Yeah, $58!
So where does outpatient physical therapy fit in the future of healthcare.
Lets think outside the box when we answer this. We need to address all factors that affect physical therapy. Lets be new and innovative like Uber. Lets think like an entrepreneur, like Mark Cuban or Elon Musk, when solving this healthcare problem. Lets be cost-effective and efficient like Amazon. Lets create new model or a new belief, a new way of how to make healthcare better, like Steve Jobs and Apple. Can we create true value in healthcare, or what I like to call value-innovation. Lets stop relying on others and insurance companies for our success, and take full responsibility for what we will become in the future of health care. Lets remove our biased opinions and our old mindset and create something new. Think of a new creative way to get things done and improve our outcomes. Lets design a new system that will gets our patients better, faster, in fewer visits for a cheaper cost as compared to standard healthcare.
- Superior Outcomes and results. – Healthcare is an oversaturated marketplace with lots of competition. Elon Musk said it best “When starting a business with an established marketplace with lots of competition, your product or services must be superior to your competition. It has to a great product or service. Not a little bit better, but a lot better!” Don’t we owe it to our patients to deliver the best treatment possible and do what is best for them, and get patients better in fewer visits?” Not in the current healthcare system. We need to do what is best practice for our patients and get them better, faster in fewer visits. With this, we creates value in healthcare. In a private practice, you need a treatment approach that is superior to other physicians, chiropractors, other standard physical therapist, and anyone else in health care. If you can get people better, faster, in fewer visits, there is true value in this with treating patients with pain. If you can get a patient better in 4 visits when others are taking 12 visits, why would they not choose you for treatment?
- Eliminate the middle man – Go cash based. Yes, I said it. Medicare is going bankrupt and enforces so many limitations. Insurance companies don’t truly value PT services and continue to decrease reimbursement rates. Physicians are joining ACOs and will be forced to refer in house. Eliminate the middle man. Create enough value and have a superior service than your competition and people will pay cash for your services.
- Target people that will best benefit and respond from your physical therapy treatments. What if you could identify what patients will best benefit from physical therapy treatment? What is you could identify what patient will best respond to your treatment approach? Identify these people and start marketing directly to them. Become confident in medical screening and during the evaluation identify red flags and when to refer out. Not everyone in pain is ideally perfect for physical therapy. Identify what patients will best respond to your treatment approach and start marketing to them. Yes, learn how to market directly to the public.
- Create true value innovation in an oversaturated healthcare marketplace – First, identify all of the problems your patients are experiencing with standard healthcare. Then simply provide answers to all of these problems and solve it better than your competition. Unfortunately, we can show great outcomes and implement evidenced based interventions and still struggle due to declining reimbursement and insurance limitations. Again if the average cost of treatment for acute low back pain is >$4000, and a patient has a high deductible health care plan, if you can get them better for $1500 and have personalized one-on-one care, why would they not choose you!
- Create cost effectiveness – given that patients will be more responsible for the financial part of healthcare, take advantage of this opportunity. For example; if you have a patient with plantar fasciitis and they have a $5000 deductible, and you are seeking medical services, the hospital care and track would cost probably over $3000, a chiropractor wants you to come in 2x a week for 8 months for a package of $4000 , and you can go to XYZ Physical Therapy for $1800. Who would you choose? Identify the patients that would best benefit from your treatment approach. Some acute musculoskeletal injuries can get better in a few treatments and the total cost could be under $450.
The Future of Outpatient Physical Therapy
I believe in physical therapy and we can truly add value to healthcare. We can still help so many people in pain or suffering from injuries with efficient and cost effective care. Now standard health care may keep physical therapy as “just a tool to use” or keep up at the “bottom of the totem pole” with the way current health care legislation is going. ACOs and health insurance companies may never truly see the outcomes and cost effectiveness of physical therapy, so I recommend a cash based or private pay system. No more relying on others to dictate what is best for our patients. No more relying on others for referrals to make your practice grow. No more being limited by insurance company guidelines dictating treatment and reimbursement. No more worrying about declining reimbursement. We can learn how to run a private pay small business and still treat our patients with the high quality care they deserve.
Three years ago I started a private pay physical therapy clinic and my practice continues to thrive and grow. I currently am working with researchers at the University of Central Florida to publish my 3 year clinic data to highlight the cost effectiveness and outcomes of a cash based physical therapy practice. Many physical therapists started reaching out to me to find out what I am doing too and how I was able to grow my cash based practice so fast in an oversaturated market, so I started cashbasedphysicaltherapy.org. A proven cash based physical therapy online system, only for physical therapist, who want to open a private pay practice. Now physical therapist will know, a proven step by step system, exactly how to open a successful business and grow a cash based physical therapy practice just like I did.
This is exactly what we need to do to survive health care reform and to continue to do what is best for our patients. A cash based outpatient physical therapy practice! With the proper business and marketing training, we can truly add value to healthcare, help our patients, and create real value to the public. The answer to the outpatient part of health care is simple: physical therapy value innovation.
By Ron Miller, DPT OCS
Owner of Pursuit Physical Therapy
Owner of CashBasedPhysicalTherapy.org
Adjunct Faculty of University of Central Florida
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