The Value of Physical Therapy in Healthcare: Part 1

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.

1, 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).

2. 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?

3. 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.

4. 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 what is the answer to this problem? What should we do as physical therapists and how can we make sure our patients are still gettting the high quality care they deserve?

Part 2 coming soon........

By Ron Miller, DPT OCS
header image credit

Owner of Pursuit Physical Therapy

Owner of CashBasedPhysicalTherapy.org

Adjunct Faculty of University of Central Florida

References

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