More Medicare Cuts for Physical Therapy in 2012
by Melissa Gerdes on October 5, 2011
in Physical Therapy
I just opened my mail today and found a pitch from PT-PAC urging me to send them $25-$1000 to keep “12 members of Congress” from including Medicare payments to all providers “especially physical therapy” in the $1.2 Trillion they have to cut from the Federal budget in the next 90 days.
Don’t get me wrong – as a consultant, who has intensely studied marketing, I recognize the pattern of their pitch – the blend of fear and urgency, the catchy creative. I recognize it, but I don’t have to like it.
I just happened to have spent this morning doing the math. I’ve reviewed the CBO reports that detail the state of the U.S. economy and the economic impact of increased Federal health care spending on our future prosperity. And I’m not OK with it. I don’t even have kids, but I think it’s crazy to mortgage the future of young people in this country to save the system we have.
We already spend more than $1 out of every $7 in total national value creation on healthcare. And that might be OK with me if (1) we had an awesome system that actually consistently delivered health and (2) there was an end in sight to the increases in the percentage of our national resources that the “healthcare” system was consuming. But such is far from the case.
Thanks, PT-PAC, but I think I’ll just go ahead and invest my $1000 attracting more clients who see the value of what I can do for them (and are willing to pay for it themselves) instead of paying for the current circus in Washington.
The best thing I can do for Physical Therapy right now is create and follow a blueprint that profitably improves the results actual patients get without contributing to the bureaucratic mess. We have no business supporting the status quo. The means is just as important as the end.
Hello Melissa, thank you for your article. My wife and I own a small \"hands-on\" therapy clinic with exceptional employees at it\’s core. You touched me with your quote \"attracting more clients\"(keep your cash local) as I am currently muddling through what looks to be a true conundrum for us corporately and personally. We\’ve struggled with the notions of closing or selling the facility and have always chosen to keep it afloat merely as a public(patient)and employee necessity. We\’re a small town rural facility that keeps costs extremely low with patient wellness always in top priority.
To my point, how are we to market ourselves at the expense of employee salary? I realize this could go more into economic or marketing fundamentals but to not miss my point; how are we to provide a need without starving our employees? I feel that the insurance companies are at the cause since they follow payment practices of Medicare. Expect a 30% decrease in insurance claim payments too! What a racket!
Chuck, thank you for your comment. I celebrate you, your wife and your employees and you commitment to a “hands on” physical therapy clinic. I believe that high value physical therapy delivery is high touch, not just high tech.
You already stated the crux of the matter – “how are we to provide a need without starving our employees?” or ourselves? My response is going to be very uncomfortable for some people…
1.) We have to acknowledge the fact that physical therapists are dealing, as a profession, with the results of past choices. Collectively, we have chosen to focus on the parts of “business” that we like – usually clinical topics. And we have starved ourselves of the business and marketing knowledge that would have helped us better prepare for our current circumstances. Can any of us honestly say that the current 30% Medicare cuts that we are facing are a surprise?
2. We must focus our attention on the possible (not just likely) outcome of current changes – understanding, as you mention, that cuts to Medicare are likely just a precursor of additional cuts from private insurance.
3. We must ask ourselves honestly if we want to become employees or if we want to acquire the skills necessary to remain in private practice. Remaining business owners will require that we learn critical business and marketing skills quickly and are able to take action on what we learn.
4. We have to innovate. Jim Collins’ work demonstrates that companies that succeed in “difficult times” are not the most innovative, but they do meet an innovation threshold. Historically, physical therapists in private practice had a very low threshold for business innovation. This has resulted in our practices being basically cookie cutouts of each other in fundamental ways – most practices get most of their referrals from MD’s, don’t directly engage potential patients and depend on third party funding for revenue. This is why MOST PT’s in private practice are so vulnerable right now.
5. We must follow the lead of physical therapy practices that combine high value delivery – to patients and other stakeholders – with innovative business models that include a generous mix of “self pay” patients and we must explore additional revenue sources from private industry. Filling our practices with more patients who don’t pay us what we’re worth isn’t the answer.
Thanks, again for your comment, Chuck. I hope my response was helpful.
Melissa