When You Discharge a Patient from Physical Therapy and They are Walking Out the Door - Do They Still Limp a Little?

I am concerned about something I see more and more with private practice physical therapists and that is the ease in which we place blame on an insurance company for patients who do not get better. I hear things like, “Their insurance company cut them off” or “The patient could not afford the co-pay so I had to discharge them” amongst many other things.

There are really two games at play here. One of them is the game of figuring out what is going on with a patient’s condition and restoring them to optimum health. THIS game is fun, challenging and rewarding. There is tremendous pride in the playing of this game.

The other game is trying to receive an equitable exchange for the work you did in restoring a patient’s health and function. It seems like it should be like buying a pound of bananas at the store. You receive the bananas and pay the cashier on the way out. You receive the treatment and you pay the receptionist on the way out. Simple.

There is another sub-game at work in receiving compensation for your service. It is not like buying bananas, it’s WAY more complicated than that. The insurance company is playing a different game and this game is not in alignment with the game that both the physical therapist AND the patient want and that is simply to be “fixed.” The insurance game is loaded with unforeseen barriers, complexities and ever changing “rules.”

I am not saying that insurance is without value because it really is valuable to the consumer. There was once a time when insurance companies were working more in coordination with providers to ensure that there was high quality delivery of services and they exchanged back for those services rather well AND with significantly less documentation burden. It’s different now.

You hear over and over about the “high cost of healthcare” and this is true. It gets communicated in the press and any time the subject of healthcare is discussed. It does cost more to deliver. Salaries are insane compared to the amount of revenue a physical therapist can make in the current healthcare system. The cost of goods is not coming down so I agree fully with the high cost of healthcare. What is NEVER communicated in the press is that the insurance companies are not paying for the “high cost of healthcare” YOU AND YOUR PATIENTS ARE!

Reimbursement is reducing, co-pays and deductibles are increasing, providers are signing up with insurance companies on a “case-rate” basis and have to eat any services above the case-rate. Not to mention the costs associated with getting paid with waiting on the reimbursement, the fact that they can pay you and then months later ask for the money back, and the time spent with over-the-top documentation and account follow-up time answering their queries. Couldn’t we just sell bananas?

We see physical therapists and physiotherapists from all over the US and Canada and I have never heard one of them complaining about the “frustration” of treating patients. That is where their passion lies directly. It is the red tape of being reimbursed for those services that stresses one.

The above is only some data to wake you up but my concern is really on the patient. I am truly concerned with the final result with our patients and just how much sacrifice will be made in the future to achieve those outcomes. If physical therapists start going weak on making sure that the patient gets a great outcome it will begin to weaken the profession. Our outcomes are largely affected by this financial arrangement with the insurance carrier.

Here are the options as I see them on a patient outcome when the insurance carrier is cutting services or not covering what is needed for the patient and who is ultimately making the sacrifice:

1.Discharge the patient early. This results in both patient and profession sacrifice.

2.Continue treating the patient. Without additional compensation this results in PT sacrifice.

The lucky guys who are not in network have the option of having the patient pay cash for additional services beyond what the insurance considered UCR but most everyone else who is in-network cannot and have to resort to number 1 or 2 above.
Sure there are barriers to putting up a separate cash practice. I will not deny that. You have to figure out how to get doctors and patients to refer but you already have that now with your current practice. You have to figure out how to get patients to pay maybe $50.00 a visit but co-pays are almost that high now and if you are not collecting them you are committing fraud so you already have to figure out how to “sell” those co-pays.

The barriers to opening up a separate cash practice are something YOU CAN DO SOMETHING ABOUT! The barriers imposed by the insurance carriers are complicated and always changing. Ask yourself if you think the insurance game is getting more simplified and efficient or complicated and decide what you should do next.
Whatever you do - DO NOT LET YOU PATIENTS DOWN!

Take the Cash Practice Survey

We wanted to take a moment to ask for your assistance in a matter that we think would be important to you.

First, we feel our clients have the greatest potential and courage to step out of the norm of providing PT services in a consistently shrinking reimbursement environment to providing PT services in a stable reimbursement environment with significantly less red tape and paperwork.
Second, we are not interested in your abandonment of the traditional PT practice but want to explore the possibility of helping the profession through the establishment of cash-based practices.

As you may already know from reading our blog, there are over 47 million uninsured in the US and many of them are in need of PT. The current healthcare system is suppressive and we’d imagine we have your agreement on that. You have only two options when you are under suppression and those are to handle or disconnect. We don’t want you to give up your fight to provide physical therapy service and resort down to other “solutions” to make yourself profitable by diversifying into providing, for example, vitamins and supplements to your patients or opening a Wellness Clinic with the intention to capture your discharged patients and have them pay cash for this service, etc. We want PTs to promote and deliver PT and not become some kind of substitute profession of vitamin salesman or health club operator.

Take a moment to fill out this survey – it will provide us with information that will help us expand the entire profession of physical therapy – making it available to more people – and making it possible for more practice owners to succeed in their business ventures.

Your can do this by simply emailing us your answers using the "Email Us" link on this blog. We are also sending this survey out in an email from Diane so you can respond that way too.

1. What do you consider is the biggest barrier to starting a cash practice? Why?

2. What would be good about a cash practice?

3. What benefits would there be for you if you could do a cash practice?

4. What is your greatest fear or anxiety concerning doing a cash practice?

5. What do you feel would be the difficulties in starting or running a cash practice?

6. What do you think of when you think of a cash practice?


Best,

Shaun Kirk & Jeff F. Lee

Competition and the Cash Practice

The word “competition” can elicit many different emotional responses. For some it represents a challenge to be overcome and for others it may represent an excuse as to why they are not succeeding in business. Competition can be seen in the form of obtaining new patient referrals, having the most respected practice in the area and especially in the recruitment and hiring of experienced physical therapists.

Physical Therapy Products recently published their 2008 Hot Job List in their most recent issue and the report on Physical Therapy was very interesting. According to the industry research firm IBISWorld, Inc. which is one of the nation's most respected independent publishers of business intelligence research reports “those seeking a stable career, in a potentially lucrative industry, should think about physical therapy, a career path which incorporates the fields of physical, occupational, and speech therapy. Mr. Van Horn said Physical Therapy will drive job growth for years to come as aging Baby Boomers, as well as high school, college, and professional athletes often require extended periods of therapy to recover from painful injuries. The Bureau of Labor Statistics claims jobs in these professions are set to increase at a much faster rate than the average for other occupations, advised Mr. Van Horn. He added, "IBISWorld predicts that significant growth in demand for these occupations estimated to be about 4.9 percent could well result in labor shortages over the next five years, which may negatively impact the sector's revenue growth by driving up wage costs." However, according to our clients across the US and Canada there is already a shortage of physical therapists and wages are already being driven up.

So how does all this relate to a cash based physical therapy practice. Well, first off a good cash practice model has very little overhead so the business immediately has more profit potential. Second, you do not need an army of experienced physical therapists at an average of $70,000 a year to run a cash practice. A correctly setup and managed cash practice needs very few physical therapists and a drastically reduced number of administrative staff.

Since in a cash practice you can offer a physical therapist the chance to deliver care on their own terms without the treatment arbitraries forced by an uneducated insurance industry you can offer something that the competition can’t – freedom.

A cash based physical therapy practice offers a business model that puts the owner ahead of the competition as it provides a higher profit potential and better work environment for the therapist who simply wants to treat patients and help them with the treatments they know will get results.

The future of private practice physical therapy is a correctly setup and managed cash practice and that is why we are devoting a significant portion of our time in helping our clients set up their own cash practice.

Getting Out from Under the Thumb of the Insurance Industry

As you may already know, we started delivering several of our seminars in Canada. This gave us a unique opportunity to see for ourselves how a Canadian practice is run.

We noticed immediately that the Canadian physiotherapy differs greatly in treatment methodology as compared to a physical therapy practice in the US. The physiotherapists are exceptionally well trained but are reimbursed poorly. They also deliver in higher volume per week than the typical US physical therapist.

Their physios generate as much if not more income per hour than the typical US physical therapy practice. That alone would make them more profitable but what blows the US physical therapy practice out of the water is that a Canadian PT practice doing nearly 300 patient visits a week would only have a single receptionist handling ALL of the admin. How many admin are needed to deliver to 300 patients a week in the US? I bet more than one.

In the US, Chiropractors had been very much involved in the insurance model for years. About 15 years ago the AMA and the insurance industry began putting the “squeeze” on the Chiropractic profession. At that point many decided, “that’s it!” and quit the hassle of dealing with insurance companies and moved more and more into a cash-based system for the majority of their services. It is from that exact point the Chiropractic profession moved out from under the thumb of the AMA and the insurance industry. Chiropractors began to prosper and they continue to prosper and let’s face it, the lobbying power of the Chiropractic profession is powerful and a good part of the reason for its power is because they are no longer suppressed.

Delivering an economical treatment for patients can be done. Think about a time when you may have worked on a family member. Did you deliver all those modalities, put them on your treadmill or even ice for that matter? I bet you put your hands on them and applied your “magic” that you or any other well trained physical therapist has and they got better. You do not have to have a bunch of “stuff” to get your product with a patient.

In my next post I will begin to cover the benefit of using your “magic” to build a cash practice.

Can a Cash Practice Work?

The simple answer is yes. The first prerequisite for a cash practice is to determine if there is a need for the service.

There are over 47 million uninsured in the US and many of them are in need of physical therapy but do not have insurance. There is also a public of hugely underinsured people who cannot afford physical therapy in a cash-based format because the high delivery and overhead costs of your traditional practice does not afford you any profit offering cash patients a truly economical service.

The current healthcare system is suppressive and I’d imagine I have your agreement on that. You have only two options when you are under suppression and those are to handle or disconnect. We don’t want you to give up your fight to provide physical therapy service and resort to other “solutions” to make yourself profitable by diversifying into providing, for example, vitamins and supplements to your patients or opening a Wellness Clinic with the intention to capture your discharged patients and have them pay cash for this service, etc.

We want physical therapists to promote and deliver physical therapy and not become some kind of substitute profession of vitamin salesman or health club operator. We are talking about you keeping your traditional physical therapy practice and opening a separate physical therapy practice that delivers cash only physical therapy services to patients. There is a simple and easy solution on how to set this up and we want to show you how. In my next post I will tell you how we came up with this idea.