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Payers: Embrace the Value of Physical Therapy to Reduce Costs
August 12, 2019

Payers: Embrace the Value of Physical Therapy to Reduce Costs

The Alliance for Physical Therapy Quality and Innovation (APTQI) unites small, medium and large physical therapy practices to advocate for the physical therapy profession in the areas of payment reform, quality initiatives, outcomes and innovation projects. We are an aligned group of therapists and practices who share a common vision for the future of our profession. Our goal is to establish physical therapy as the treatment of choice and the best value for patients and payers.
This article was written by Nikesh Patel, PT, DPT, a physical therapist and executive director of Alliance for Physical Therapy Quality and Innovation.

As our country continues its push to lower the cost of healthcare, especially among the burgeoning population of seniors with age-related disabilities, transitioning to a value-based insurance design (VBID) payment model that rewards value, rather than quantity, will become progressively more important. In the realms of musculoskeletal pain and movement dysfunction, this transition must be accompanied with sincere efforts to identify treatments that can effectively manage pain and reduce the total cost of care. 

Within this context, there is a growing recognition that a treatment approach beginning with early physical therapy (PT) not only reduces short- and longer term healthcare costs, but often decreases pain, improves function, and helps patients return to work.1 Further, a new report establishing benchmarks of quality care in the field of physical therapy found clinically important improvements in patient-reported outcomes were observed across body regions over 12-14 PT visits.2

It’s an approach that has proven valuable to countless patients and stands to benefit both public and private payers.

Physical therapists are highly trained professionals who assess and treat people of all ages and abilities to maximize their mobility and help them improve or maintain their function and quality of life. Given the many benefits of PT, the number of Medicare beneficiaries who have received outpatient physical therapy from this group of skilled professionals has increased in recent years from 3.96 million in 2008 to nearly 6 million in 2015.3-4

From a cost and outcomes perspective, it’s easy to understand the trend: PT is a cost-effective first intervention that saves time and money, especially when utilized early in the treatment process. According to a study conducted by the Moran Company, use of PT as a first intervention for lower back pain resulted in 19% lower costs to the Medicare program when compared with injections as a first intervention, and 75% lower costs when compared with surgery as a first intervention. Beneficiaries who received PT early (within first 15 days of their diagnosis) had lower average treatment costs than those who began PT later.5 In fact, those beneficiaries who received therapy within the first 15 days (compared to 45-90 days post diagnosis) had downstream costs that were 27% lower on average. Further, the evidence suggests that the frequency in which patients attend PT appointments can also impact cost. Patients diagnosed with lower back pain who visited a physical therapist between 9-to-12 times reduced Medicare Part A/B spending by 32% compared with beneficiaries who only attended a single appointment.

Amid an environment where there seems to be a high-dollar treatment for every condition, it’s remarkable to consider that relatively low-cost and non-invasive PT is making such a mark on reducing healthcare costs. Moreover, there is hope that increased access to PT can address a growing yet troubling trend affecting more and more older Americans every year: falls.

Each year, accidental falls among the elderly result in roughly 300,000 hip fractures and 800,000 hospitalizations.6 Worse still, an estimated 27,000 seniors die annually from fall related injuries– a number that will only grow as America's population becomes demographically older.7 The associated medical costs of these injuries are staggering. In 2015, the total medical expenses related to senior falls were estimated to be $50 billion–a cost borne by both public and private payers.8

According to the National Institute on Aging, PT is a simple solution that can increase senior mobility and reduce the risk of an accidental fall. The US Preventive Services Task Force gave its highest-grade recommendation to PT and regimented exercise to avoid unwanted slips.9 And, lastly, a recent study showed that older citizens who underwent an exercise intervention from a trained healthcare professional lowered their risk of a fall by 31%.10

With a growing population of American seniors, PT will be well placed to reduce both the rate of elderly falls and the associated downstream medical costs. Simply put, available evidence shows that efforts by payers to curb access to and use of PT through cumbersome preauthorization requirements, escalating co-payments, and needless bureaucratic hurdles only forces patients into more costly and less effective methods of treatment. As our system continues to transition from the traditional fee-for-service payment model to one that is based on value and outcomes, PT will play an increasingly important role. PT epitomizes the kind of quality treatment service that VBID seeks to emphasize, and payers should support– rather than discourage– PT as a way to enhance value in healthcare.
  1. Ijzelenberg W, Rubinstein S, Hayden J, Koes B, van Tulder M. Exercise therapy for acute non-specific low-back pain [published online October 5, 2011]. Cochrane Database Syst Rev. doi:10.1002/14651858.cd009365.
  2.  Brooks J, Chapman C, Lutz A. Evaluation of legacy patient reported outcome measures as performance measures in rehabilitation. The Alliance for Physical Therapy Quality and Innovation. Published July 11, 2019.
  3. Ciolek D, and Hwang W. CY 2008 Outpatient Therapy Utilization Report. Computer Sciences Corporation. Centers for Medicare and Medicaid Services. Published June 4, 2010.
  4. Bunis D. Medicare beneficiaries might have to pay thousands more for therapy." AARP. January 24, 2018. Accessed June 20, 2019.
  5. Physical therapy episodes for low back pain: Medicare spending and intensity of physical therapy services. The Alliance for Physical Therapy Quality and Innovation. Published October 2017. 
  6.  Falls prevention facts. National Council on Aging. Published June 04, 2018. Accessed July 17, 2019.
  7.  Fact sheet: Aging in the United States. Population Reference Bureau. Published July 15, 2019. Accessed July 16, 2019.
  8. JAGS paper: The medical costs of fatal and nonfatal falls among older adults. The John A. Hartford Foundation. Published March 16, 2018. Accessed July 17, 2019.
  9. Gomez A, Sloves G. Reducing fall risk. Today's Geriatric Medicine. Accessed July 17, 2019.
  10. Sherrington C, Fairhall FJ, Wallbank GK, et al. Exercise for preventing falls in older people living in the community [published online January 31, 2019]. Cochrane Database Syst Rev.

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