Breaking Out of the Physical Therapy Labor Productivity Crunch
Nov 14, 2023
As I mentioned in my last post, physical therapists need to be able to increase their labor productivity to break out of a painful financial cycle.
Physical Therapist labor productivity can be improved by amplifying a therapist’s value per working hour or by redefining the value a therapist already creates:
1) Amplify Therapist Value: in this scenario, physical therapists would be able to bill new CPT codes when applying novel technologies to patient rehab. These technologies could help a therapist accelerate a patient’s rehab (thereby enabling higher billing per patient) or help a therapist better track multiple patients at once (thereby enabling more overlapping billing).
Unfortunately, the rehab medical device industry is underfunded because there are insufficient rehab reimbursement pathways. There are some novel rehab technologies in use at professional sports facilities / cash-based clinics, but these tools don’t get adopted at in-network facilities because they increase costs without improving revenues. Furthermore, rehab technologies often have insufficient clinical evidence because they don’t attract sufficient venture capital to pay for rigorous clinical trials.
Establishing tech-based rehab reimbursement pathways would unlock venture funding to develop clinically-proven technologies. These technologies could then be incorporated by in-network clinics and improve patient care / therapist productivity.
2) Redefine Therapist Value: in this scenario, physical therapist productivity would be redefined as the value a therapist creates within the larger healthcare system. I’ll define value as the amount of money saved when a patient does not need to progress to more aggressive/expensive medical treatments.
The APTA has already calculated that early PT can save thousands of dollars per patient. In a novel reimbursement system, Physical Therapists would be able to share in the value they have created. This would be a virtuous cycle, as value-based reimbursements would lead to better care and further value creation.
The quality of rehab data insights will define how value-based reimbursement is executed. A single value-based adjustment factor could be applied to all rehab CPT codes, or there could be different adjustment factors by ICD-10 diagnosis code (this would incentivize more aggressive care for patients that can benefit most from PT).
Better data analytics across the healthcare system could even enable value-based adjustment factors by clinic or provider. Individual patients could be tracked against statistical cohorts, and providers could share in the savings of reduced procedures/surgeries on a per-patient level.
Healthcare is a slow moving industry, but widespread burnout and financial struggles amongst physical therapists will force a rethink of the reimbursement status quo in the coming years. Hopefully a smart group of constituents at the CMS and APTA can create a better future for both therapists and patients.
Do you agree with this assessment? What are your thoughts on the future of rehab reimbursements?
