Something strange is happening in outpatient rehab. The demand for PTs couldn’t be greater. The American Therapy Association (APTA) released its annual “Top 10 List of Hard-to-Fill Jobs” Guess what came in at #8 hardest job to fill? Physical therapists.
And according to a recent story in Forbes, among careers that require a college degree, physical therapists (PTs) are 1 of the “top 10 jobs in high demand.”
At the same time, there is a shortage of physical therapists. APTA projections point to a physical therapy shortage of 606 to 26,696 over the next five years depending on how many PTs leave the workforce. (This is a reversal from pre-2014 data that predicted a surplus of PTs.)
Demand Rises, Supply Decreases and …Payment Takes a Nose Dive?
The law of supply and demand defines the effect that the availability of a particular product and the desire (or demand) for that product has on price. Generally, if there is a low supply and a high demand, the price will be high.
But the opposite is occurring for most physical therapists. As the need for physical therapy rises, reimbursement rates are taking a nose dive.
Outpatient Rehab Commoditization
Something becomes commoditized when one offering is nearly indistinguishable from another.
The quality of a given commodity may differ slightly, but it is essentially uniform across producers.
Signs of physical therapy commoditization are popping up everywhere. In reduced reimbursement rates, in the over-emphasis on therapist productivity (instead of optimizing their time and taking burdensome administrative tasks off of their workload), and in the replacement of local physical therapy groups with national chains for managed care contracting.
Many referring physicians and payers view physical therapy as an easily repeatable service with little variance in value and, therefore, cost. Given this presumed uniformity, who would want to spend more than the lowest possible amount for it?
What do you think? Why is physical therapy becoming increasingly commoditized at the same time that demand soars? In an upcoming blog, Jerry Henderson will address ways to distinguish the unique value of your PT.