The Broken U.S. Healthcare System: How to Thrive as a Physical Therapist

 In Osteopractic

The rising rates of chronic disease, illness, pain and injury combined with the individual and employer mandates for insurance coverage due in part to the enactment of the ‘Affordable’ Care Act in 2012 have led to added demand for healthcare services and ironically less ‘affordable’ healthcare. Furthermore, rising medical costs, inflated billing practices, declining third-party reimbursement and disconnect between treatment cost and patient-centered outcomes have severely limited the U.S. healthcare system from meeting the needs of the American people—which was the original intent. In a recent blog posting, economist John Mauldin stated, “the US healthcare system as it stands is dysfunctional and can no longer continue as it currently operates.”1

The broken healthcare system has particularly stymied the growth and prosperity of physical therapists working in independent, non-hospital based outpatient orthopaedic settings.  In another way, however, the challenges of the present healthcare system may also lead to opportunity. As hospitals and clinics attempt to continue reducing costs, physical therapists will be asked to provide care that is more efficient, innovative and evidence-based. Physical therapists that recognize this future need and prepare accordingly will have a significant advantage over competitors.

Wayne Gretzky is considered by many to be the greatest hockey player of all time. Often asked how this was possible, given that he was not the biggest, fastest or strongest player, Gretzky typically responds, “Most players skate to where the puck is, and I skate to where the puck is going.” This concept also clearly applies to business, as the ability to foresee trends is a powerful tool that typically translates into significant profit. Perhaps the best example of this is the housing crisis of 2007. As the movie “The Big Short” highlights, the gift of foresight has the potential to lead to wealth and prosperity. So, what are the future trends in healthcare?

  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. Physical therapists will likely be paid the same amount per patient, regardless of health status. Therefore, goals will be predominantly based on outcomes.
  2. Health insurance companies will continue to increase premiums, deductibles and co-pays. They will also continue to add coinsurances and decrease reimbursements. That is, insurance companies will charge more while reimbursing less.
  3. Businesses will continue to alter their employee’s health insurance plans in an effort to decrease expenses, offering more high-deductible health care plans with health incentives, health savings accounts and flexible savings accounts. While this will force employees (prospective patients) to become more financially responsibility for their healthcare, it will also provide them with added freedom to decide where to receive healthcare services.
  4. Accountable Care Organizations (ACOs) will dominate local markets. Many private practices will be (and already have been!) bought out, and their clinicians will join large medical groups.

The impact of these changes on outpatient physical therapy practices is contingent on insurance companies seeing the value of physical therapy. However, despite the numerous studies demonstrating the cost effectiveness of PT for neuromusculoskeletal conditions,2,3,6,7,8,9,11,14,15,22,23  the superior long-term outcomes of PT compared to surgery,13,16,17,18,19,20,21, and the short and long-term benefits of direct access PT services,4,5,7,10,11,12,14,15,24 the current healthcare system makes it difficult for independent, non-hospital based outpatient physical therapy practices to survive. The average reimbursement from Medicare in the state of Florida is roughly $75 per visit and many physical therapy practices are one Medicare cut away from closing shop. Recently a local Workman’s Comp group reached out to my practice because of our exceptional outcomes and offered just $58 per visit!

So What is the Path Forward for Physical Therapists?

In order to answer this problem, we must model successful entrepreneurs like Mark Cuban and Elon Musk and think “outside the box”. At the same time, the physical therapy profession must look to companies like Uber and Amazon to understand the value of being innovative and efficient. The bottom line is that we must design and administer a new approach to physical therapy that achieves better patient outcomes in fewer visits for a cheaper cost as compared to standard healthcare. In doing so, we will be able to demonstrate value and innovation within the framework of the larger healthcare system. The following are my recommendations for accomplishing this goal:

  1. Superior Outcomes and results. – Healthcare is an over saturated marketplace with lots of competition. As Elon Musk noted, “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 be a great product or service. Not a little bit better, but a lot better!” Therefore, physical therapists must learn and incorporate the latest evidence-based treatment techniques into clinical practice. While there are many avenues for accomplishing this goal, I have been particularly impressed with the training offered by the American Academy of Manipulative Therapy. As Dr. Dunning asked during my first spinal manipulation course several years ago, “Don’t we owe it to our patients to deliver the best treatment possible and do what is best for them?” Today, this mindset drives my practice philosophy.   The American Academy of Manipulative Therapy (AAMT) provides evidence-based training in spinal manipulation, extremity manipulation, tool-assisted therapy and dry needling. AAMT offers the Certification in Spinal Manipulative Therapy (Cert. SMT), the Certification in Dry Needling (Cert. DN), the Diploma in Osteopractic, and an APTA-accredited Fellowship program in Orthopaedic Manual Physical Therapy. Perhaps take a second look at AAMT if you want to optimize your patient outcomes.
  2. Eliminate the middleman – Go cash-based. Insurance companies do not seem to see the value in physical therapy services as evidenced by a continued decrease in reimbursement rates. Additionally and of concern, Medicare appears to be running out of funds rather rapidly. Moreover, physicians are joining ACOs and will be ‘forced’ to refer in-house. Perhaps it is time to eliminate the middleman by incentivizing patients to pay cash for superior service.

Three years ago, I started a cash-based physical therapy clinic that continues to thrive and grow. Although opening a private practice was one of the hardest and most challenging things I have ever done, it has also been the most rewarding. Regardless of the state of the U.S. healthcare system, I believe that we have the ability to help many people suffering from pain and injuries with efficient and cost effective care. I am currently working with researchers at the University of Central Florida to publish 3-years of clinical data highlighting the cost effectiveness and outcomes of a cash based physical therapy practice. I have also started to help share my cash-based physical therapy system (available only to physical therapists) with other members of the profession.

  1. Better Physical Therapy Branding – The public is not always aware of the services provided by physical therapists in an outpatient orthopaedic setting. Moreover, there is no way for the public to identify physical therapists with the best training that achieve superior outcomes, as all physical therapists are identified as either PT or DPT following licensure, regardless of training. Worse yet, the public has little knowledge of the letters that physical therapists often use after their name to indicate special skill or training. Perhaps APTA and/or AAOMPT should consider better publicizing Fellow of the American Academy of Manipulative Therapy (FAAOMPT). Alternatively, perhaps more physical therapists should consider the Diploma in Osteopractic, an intensive post-graduate training program that is awarded to physical therapists or medical physicians following 12-18 months of specialized training in high-velocity low-amplitude thrust spinal manipulation, extremity manipulation, instrument-assisted soft tissue mobilization, dry needling and differential diagnosis. Osteopractic Physical Therapists are highly skilled in thrust manipulation of the articulations of the spine and extremities, and most members of the public understand that ‘OSTEO’ has something to do with bones or joints…. There are many kinds, brands and/or specialties within physical therapy, perhaps we should use them to tell the public and other healthcare providers what specific kind of physical therapy we offer within our respective clinic. Likewise, a pediatric physical therapist, neurologic physical therapist, or lymphedema therapist should certainly advertise such to allow the public (and referring physicians) to find the kind of physical therapist they are looking for.
  2. Target patients that will maximally benefit from your physical therapy treatments. Physical therapists must improve their ability to identify patients that would benefit most from physical therapy services and market to this population, accordingly. Importantly, not everyone is an appropriate fit for physical therapy, but our ability to identify patients that are appropriate will maximize outcomes and add value to the profession. There are a number of continuing education courses designed to provide physical therapists with better evaluation and screening tools. However, I have had a number of colleagues recommend the Differential Diagnosis & Multi-Modal Management of Upper and Lower Extremity Spine Related Pain Syndromes (DD-1). The treatment approaches and critical thinking being taught at AAMT are giving physical therapists the state-of-the-art interventions and skill sets that they need to succeed in cash-based physical therapy practices.
  3. Demonstrate cost effectiveness – In order to survive healthcare reform, the PT profession must demonstrate cost effective outcomes compared to standard healthcare. Notably, a recent blog post highlighting the Osteopractic Physical Therapy approach taught by the American Academy of Manipulative Therapy demonstrated cost effectiveness, improved outcomes and increased patient satisfaction when compared to standard physical therapy care.6


As independent private practice owners, we must aggressively pursue strategies that fall “outside the box” so as to achieve superior patient outcomes over the large corporate, hospital-based, or physician-owned physical therapy clinics down the road. Using the 5-pronged approach described above, I am proud to say that Pursuit Physical Therapy continues to be voted as the Best Physical Therapy Practice in the Winter Park-Maitland Florida area.


Ron Miller, DPT, OCS
Owner, Pursuit Physical Therapy
Adjunct Faculty, University of Central Florida, Orlando, FL


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