"Physical therapy is not a subspecialty of the medical profession and physical therapists are not medical doctors; we are a separate profession that provides a unique service that physicians are unable and untrained to provide."

Letter to the AMA from the APTA, Dec 2009

Tuesday, January 6, 2009

A physical therapist can remember when $650 billion was a lot of money for health care

Hearing about health care reform in the news all day long, I felt compelled to educate myself about some of the facts.

I turned to a trusted source, McKinsey & Company, to understand how all the pieces fit together.

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The 17-slide Flash demonstration tries to explain why the US spends $650 billion more than expected (compared to peer-nations) even though our disease prevalence is lower than average.

I can remember when $650 billion was a lot of money.

Key points:

  • Most (2/3) of the $650 billion is spent on outpatient care, which more than offsets increased utilization by improved cost-effectiveness over inpatient and long-term care.

  • US health administration costs are 5 times higher than peer average.

  • Our multi-state regulatory system creates inefficiencies and waste.

  • Public spending (Medicare et al) accounts for almost 50% of total spending.

  • Private spending only accounts for 13% of total spending.

  • Private payer reimbursement grows when Medicare price growth slows.

My takeaway from this centers on the next-to-the last point, the out-of-pocket (OOP) expense (at 13%).

How can private spending be expected to grow (think...
  • larger co-pays,
  • alternative medicine,
  • cash-based physical therapy practices.)

...when comparable OOPs, like Japan, for instance, are in the 2-3% range?

The McKinsey report is sweet eye candy for the hardcore policy wonk but it's conclusion offers little that is new, different or hopeful for those of us with boots on the ground in the American health care trenches.

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Tim Richardson, PT owns a private practice at Medical Arts Rehabilitation, Inc in Palmetto, Florida. The clinic website is at MedicalArtsRehab.com.

Bulletproof Expert Systems: Clinical Decision Support for Physical Therapists in the Outpatient Setting is a manager's workbook with stories, checklists, charts, graphs, tables, and templates describing how you can use paper-based or computerized tools to improve your clinic's Medicare compliance, process adherence and patient outcomes.

Tim has implemented a computerized Clinical Decision Support (CDS) system in his clinic since 2006 that serves as a Reminder, Alerting, Prompting and Predicting CDS using evidence-based tests and measures.

Tim can be reached at
TimRichPT@BulletproofPT.com .

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