Physical Therapy Price Innovators Hated by Everyone

$68 visits for physical therapy in Michigan have some private practice physical therapists hoping Theramatrix loses its fight to treat Ford and Chrysler workers with Blue Cross Blue Shield (BCBS) of Michigan.

The Justice Department, however, views BCBS actions with hospitals to keep competitors from seeing the Ford and Chrysler workers by charging up to 40% for the same treatments, like physical therapy, as anti-competitive.

Is it hard to tell who to root for?

On the one hand, TheraMatrix Physical Therapy, Inc. has organized a provider network to compete against the monopolistic Blue Cross franchise and bring prices down to $68 per PT visit.

Isn't that the goal? To bring healthcare costs down so employers can offer affordable coverage eventually to everyone?

On the other hand, Michigan private practice PT owners are openly hoping for TheraMatrix to loose its battle and, ultimately, its revenue stream and go out of business.

$68 per visit, according to some PT thought leaders, is insufficient revenue per visit to run a private practice.

I would agree - under our present system with many hidden costs, compliance and administrative burdens, malpractice risks and increasing healthcare labor costs.

My costs here in Florida are about $68 per visit. We used to take United Insurance which is like giving every patient with that insurance a $20 after each treatment session.

However, physical therapy is flourishing around the world - in countries that DO NOT HAVE our hidden (and non-hidden) compliance costs.

Physical Therapists in Spain have full direct access, charge about $35 per visit and collect cash.

Oh, and by the way, private practices are flourishing with brand new clinics every time I go and visit. Spanish physical therapists also don't face competition from physicians.

Low payments are a problem in American healthcare because current owners of capital need those payments to meet expenses, including profit.

What gets missed in this discussion, however, is that the hidden costs of compliance is what is preventing innovation and lower costs.

TheraMatrix has produced innovation pricing and put itself in a head-to-head confrontation with everyone in Michigan: BCBS, hospitals and PT private practices.

What if, instead of innovative pricing we had innovative service delivery? Things like...

1. distance therapy by e-mail reimbursed
2. video home exercises
3. mixed home and clinic based therapy from a single provider
4. therapist deciding medical necessity instead of the physician
5. no need for the physician signature on the plan of care
6. therapist deciding of appropriate delegation to support staff (including PTA and non-licensed staff).
7. simple, inexpensive standards for outcomes measurement
8. benchmarks for progress according to these standards

Many of these concepts currently exist but they are NOT part of our service delivery model, especially under Medicare.

The problem, then, is that our current system rewards ONLY price innovation and not service delivery innovation.

It's not rocket science - the only way to innovate on price is DOWN and the innovators, like TheraMatrix, are hated by everyone.