This article’s PDF was updated on August 1, 2023, to correct 2 numerical values within Table 3.
This counterfactual simulation study on a nationally representative sample of the working population with musculoskeletal conditions estimated the value of patient-initiated virtual physical therapy.
This article’s PDF was updated on August 1, 2023, to correct 2 numerical values within Table 3.
Objectives: To estimate the economic benefit of evidence-based patient-initiated virtual physical therapy (PIVPT) service among a nationally representative sample of commercially insured patients with musculoskeletal (MSK) conditions.
Study Design: Counterfactual simulation.
Methods: Using a nationally representative sample from the 2018 Medical Expenditure Panel Survey, we simulated the direct medical care savings and indirect cost savings from reduced absenteeism resulting from PIVPT among commercially insured working adults with self-reported MSK conditions. Model parameters of the impact of PIVPT are drawn from peer-reviewed literature. Four potential benefits of PIVPT are explored: (1) more rapid access to PT, (2) improved adherence to PT, (3) less expensive PT care per episode, and (4) reduced/avoided referral costs of PT.
Results: The mean medical care savings per person per year from PIVPT range between $1116 and $1523. Savings are mainly attributed to early initiation of PT (35%) and lower cost of PT (33%). The benefits of PIVPT result in a mean reduction of 6.6 hours in pain-related missed work per person per year. The return on investment of PIVPT is 2.0 (medical savings only) or 2.2 (medical savings plus reduced absenteeism).
Conclusions: PIVPT service provides added value to MSK care by facilitating earlier access and better adherence to PT and lowering the cost of PT.
Am J Manag Care. 2023;29(6):e169-e175. https://doi.org/10.37765/ajmc.2023.89375
Musculoskeletal (MSK) conditions are widely prevalent and costly. More than half of American adults experience back, shoulder, knee, or other joint pain some time in their life. The direct health care cost of MSK was estimated at more than $380 billion in 2016, greater than diabetes ($309 billion) and cardiovascular diseases ($255 billion).1 The COVID-19 pandemic dramatically changed the daily routine of the working population and exacerbated the increasing trend of sedentary lifestyles. Such change increased the prevalence of MSK concerns and presented a new challenge to the health care delivery system.2 Pain management and rehabilitation services for MSK conditions must be agile, versatile, and value based to meet the new demands of a postpandemic patient population.
Physical therapy (PT) is an effective, safe, and versatile treatment option for MSK conditions.3-8 Medical care interventions for MSK conditions, such as medication or surgery, require that a physician make a diagnosis and write a prescription. Contrary to popular knowledge, patients can self-refer to PT on their own and receive a clinical diagnosis and treatment plan directly from the therapist. The Affordable Care Act mandates that marketplace health insurance plans cover PT within the categories of preventive care, chronic disease management, or rehabilitation care.9 Patients receiving patient-initiated PT (PIPT) are found to have fewer PT visits, lower costs, and better health outcomes compared with patients receiving physician-referred PT (PRPT).7,10,11 Despite its high potential to improve the value of MSK care, the utilization of PIPT services is low in the United States.10,12,13 Major barriers to PIPT include the lack of knowledge of PT-guided care, limited PT provider availability, transportation challenges, out-of-pocket costs without adequate insurance coverage, and physician referral requirements for Medicare or Medicaid beneficiaries.14
The rise of patient-initiated virtualPT (PIVPT) services offers a new pathway to initiate PT care and improve the value of care for patients with MSK conditions.15,16 The increased availability of high-speed internet and mobile technology in recent years has made it possible for PIVPT to be more accessible at large scale. PIVPT is delivered via digital apps on mobile devices by licensed physical therapists who can make a diagnosis and set a treatment plan that is comparable to in-person PIPT.17 If patients self-refer to PIVPT, they avoid the cost of a physician referral for PT. Preliminary data suggest that PIVPT is associated with lower PT costs.18 The associated cost savings and ease of tracking outcomes because of the technology platform also make PIVPT more amenable to value-based care contracts than traditional PT.19
There is a gap of evidence-based research to gauge the added value of PIVPT to the health care system. The major reason for the lack of evidence is the paucity of data sharing between the PIVPT service innovators and the health benefit carriers, most often commercial insurers. The fragmentation of data infrastructure greatly limits the ability to link the PIVPT service utilization and engagement data with medical care claims longitudinally to execute rigorous real-world data analysis.
To address this knowledge gap, this study constructed a counterfactual simulation model that applies the parameters of effectiveness of PT and PIPT from peer-reviewed publications to a nationally representative sample of patients with MSK conditions. Under a series of assumptions, we estimated the potential savings and return on investment (ROI) rate from the clinically effective PIVPT services among commercially insured working adults with MSK conditions.
This study used a counterfactual simulation model to estimate the potential savings from PIVPT services. The analysis included 3 major steps: (1) identification of a sample of patients with MSK conditions who are covered by commercial insurance plans from a nationally representative survey about health and health care utilization; (2) estimation of the net economic cost of MSK conditions by comparing the medical care cost and work absenteeism of the sample of patients with MSK conditions with those of a sample of commercially insured adults without MSK conditions by propensity score matching; and (3) simulation of the potential savings from PIVPT by applying parameters of percentage and absolute dollar value of savings regarding the effectiveness of PIPT and PT from peer-reviewed publication to the sample of patients with MSK conditions identified in step 1.
MSK Sample and Matching Comparison Sample
We used the 2018 Medical Expenditure Panel Survey (MEPS) collected by the Agency for Healthcare Research and Quality in this study.20 The MSK sample includes commercially insured adults with self-reported pain during the survey year in 3 body areas: back, neck, and all other joints. To create the comparison sample, we used a 1:1 propensity match between the MEPS population covered by commercial insurance without self-reported pain and the MSK sample. The matching is based on age, gender, race/ethnicity, body mass index, confirmed diabetes diagnoses, marital status, income level, and Census region. Both the MSK and the comparison samples excluded individuals with disabilities, Medicare and Medicaid beneficiaries, women who were pregnant or had medical procedures or expenses related to childbirth that year, and individuals with a cancer diagnosis.
Simulation of the Net Cost of MSK
We took a societal perspective in the simulation, counting in the total medical expenditures from all payers as the direct medical care cost and the productivity loss from missed workdays as indirect cost. Because we conducted 1:1 propensity matching between the MSK and comparison groups, the incremental costs of the MEPS MSK sample are considered solely attributable to MSK conditions.
The medical care costs were calculated by summing the medical care expenditures by all payers from the insurance component of MEPS. For specific MSK treatment procedures, we identified the mean annual expenditures at $688 for advanced imaging and $784 for spinal injection/lumbar surgery as references in the cost savings calculation.21
The total number of missed workdays were obtained from the household survey component of MEPS. The cost of total missed workdays was calculated by imputing the mean daily salary of full-time workers published by the US Bureau of Labor Statistics by age group (18-44 years, 45-64 years, and 65 years and older).22
Simulation of Gross Medical Savings From PIVPT
Our counterfactual simulation of the savings in medical care cost from PIVPT was based on 3 strong assumptions: (1) PIVPT is as effective as face-to-face PRPT services for the entire MSK sample23; (2) The simulation is limited to MSK care provided by certified PT via a virtual platform. All patients in the MSK sample have a pain management treatment plan already, including PRPT. There is no difference in the PT-initiated MSK treatment plans between PIVPT and PRPT, and PT care does not influence access to necessary clinical care; and (3) The rate of misdiagnosis is similar between PIVPT and PRPT.24-26
Based on these assumptions, we simulated the potential savings from PIVPT by imputing the estimated parameters of the benefits of PIVPT compared with usual care with PRPT via these pathways: (1) more rapid access to PT services, (2) improved adherence to PT services, (3) lower cost of PT services, and (4) avoided cost of PT referral. The parameters used in the simulation and the references are summarized in the eAppendix Table (available at ajmc.com).
PIVPT is easier to access than face-to-face PRPT services, making it easier for patients to start treatment early. Approximately 44% of patients with back pain and 48% of patients with neck pain experience delays accessing PRPT services.21,27 We took the mean of these 2 estimates (46%) as the proportion of MEPS patients with MSK conditions who would benefit from PIVPT for early initiation of care. Previous studies report that for patients with low back pain, immediate access to PT can lower medical costs for advanced imaging (–33%), inpatient services (–20%), emergency services (–7%), injections or surgery (–24%), and pain medication (–12%).7,8,28 Among patients with MSK conditions seeking PT care for neck pain, consulting a licensed physical therapist within 14 days is estimated to reduce the mean 1-year medical costs by 36% compared with a similar population with delayed access to a physical therapist.29 Synthesizing the mean savings from different types of medical services, earlier access to PT is associated with a 22% reduction in 1-year medical costs associated with a patient’s MSK condition.
PIVPT helps increase adherence to PT services, promote continuity of care, and improve attendance and follow-through with evidence-based treatment guidelines. Fritz et al reported lower medical care among patients with low back pain who had better PT adherence.21 Estimated savings include lower costs for provider visits (–17%), advanced imaging (–26%), injection/surgery procedures (–26%), pain medication (–23%), and emergency care (–14%). Horn et al found that adherence to PT reduced medical care costs among patients with neck pain.29 The savings are realized in provider visits (–46%), advanced imaging (–43%), and prescription medication (–25%). For patients who receive PT services, improved adherence to treatment guidelines is associated with 54% lower costs for PT care. For the category of reasons for PT care that includes all other joints and arthritis, we identified no published studies on PT adherence, so we used the findings from Horn et al.29 In addition, due to lack of direct evidence on what proportion of patients might benefit from increased adherence as the result of convenience from PIVPT, this parameter was estimated as 20% based on discussions with a PIVPT program administrator with field experience.
The direct cost of PIVPT is lower than that of traditional in-person PT treatment and other more invasive treatment. We used a hypothetical generic PIVPT service as an example; this program charges a fixed annual enrollment fee of $600 for the therapist-guided recovery program, which includes a $200 initial evaluation consultation fee. In comparison, our analysis of MEPS data showed that patients who received face-to-face PT care for diagnosed back pain, neck pain, and pain in other joints had a median number of 9, 8, and 8 PT visits per year, respectively. This is equivalent to annual expenditures of $1152, $1256, and $998, respectively, based on our in-house analysis and literature.30
PIVPT significantly reduces the cost of referral to PT service by primary care physicians or specialists (eg, advanced imaging, surgery, and/or medication use).31 Patients seeking care for neck or back pain for whom a physical therapist was the initial provider had substantially lower medical costs compared with a comparison population using PRPT.32 The mean cost of office visits by provider type was estimated using the MEPS, including $161 for primary care providers, $247 for orthopedic surgeons, and $211 for other specialists. For patients referred to PT by someone other than a physical therapist, 24% had advanced imaging prior to the referral, and the relevant cost is considered savings from PIVPT.27
Simulation of Gross Indirect Cost Savings From PIVPT
Previous literature found a 39% reduction in missed workdays associated with early vs delayed access to PT care.33 Given the case mix and national mean wages by age group, this equates to approximately $171 savings per working patient annually among the MEPS MSK sample.
ROI of PIVPT
The ROI of PIVPT is conditional on 2 key parameters besides the per capita gross savings of PIVPT: (1) the cost/price of PIVPT service and (2) the current utilization rate of PRPT among the population of patients with MSK conditions. We approximate the cost of PIVPT services with the reimbursement of the existing product on the market, which usually includes the cost of initial consultation starting around $200 and a treatment/recovery plan between $600 and $1200.
We made a strong assumption in the baseline simulation that all the patients with MSK conditions have certain types of pain treatment or MSK management as status quo, including PRPT. Such an assumption ensures that our baseline estimate of savings from PIVPT is on the conservative end. The reality is that many patients with MSK conditions forgo PT care because of lack of access. For these patients, PIVPT will help them gain access to PT care and bring added benefit. Therefore, we modeled scenarios with 10% and 20% of patients with MSK conditions forgoing PT care.
Our estimate of the savings from early initiation of PT care, which is one of the major contributions of PIVPT to MSK care, is based on a published study with 46% of patients with MSK conditions experiencing delayed PT care. Such an assumption is also on the conservative side. Therefore, in the ROI calculation, we added 2 scenarios with a 10% and 20% increase in the percentage of patients with MSK conditions who would benefit from early initiation.
Institutional Review Board
We obtained a waiver for institutional review of this study from Western IRB, Inc.
Cost of MSK
Summary statistics for the MEPS MSK sample are presented in Table 1. We identified 6341 patients with MSK conditions. Among them, approximately 44% experienced back pain, 25% experienced neck pain, and 31% experienced pain associated with other joints or arthritis. Compared with the propensity-matched sample, patients with back, neck, and other joint pains have higher annual medical expenditures of $3129, $3758, and $5038, respectively (Table 2). Higher costs for inpatient care and physician office visits are the major contributors to the economic burden of MSK. On average, patients with MSK conditions miss approximately 2.4 to 3.2 more workdays per year. The weighted annual per capita cost of MSK is estimated at $5746, including both direct and indirect costs.
Gross Savings From PIVPT
The simulated per capita medical care savings are $1116 for patients treated for back diagnoses, $1523 for patients treated for neck diagnoses, and $1149 for patients treated for other joint conditions and arthritis (Table 3). Early access to PT brings savings of $391 to $565. Improved adherence to PT services is simulated to reduce medical expenditures by $101 to $257 per treated patient. The lower cost of PIVPT vs in-person PT care contributes to $313 to $519 mean savings. The savings from self-referral to PT are calculated at $188 on average. Work absenteeism would decline by approximately 5 to 7 hours per participant under PIVPT vs usual source of care. Given the case mix and national mean wages by age group, this equates to approximately $171 per employed patient. Counting both the savings in medical care and the reduced work absenteeism, annual gross savings from PIVPT are $1421 per patient.
The Figure shows the distribution of cost savings by type of care. The biggest proportion of saving stems from the lower cost of PT (38%), followed by avoided primary care (24.5%), avoided imaging and lumbar surgery (9.6%), and lower costs for pain medication (7.6%).
ROI of PIVPT Under Different Scenarios
Under the baseline scenario, the ROI of a generic effective PIVPT service with a hypothetical consultation price at $200 and recovery plan price at $600 is 2.0 without indirect savings and 2.2 with indirect savings (Table 4). Under alternative scenarios in which a higher percentage of the MSK population will benefit from easier access to and earlier initiation of PT, the ROI of the generic product could increase to 2.5 for the best-case scenario. If we hold the baseline scenario of participation and early initiation of PIVPT constant and change the recovery plan price by doubling from $600 to $1200, the ROI gradually declines from 2.0 to 0.6, with the break-even point close to $1000.
This is the first study to estimate the value of PIVPT at the population level. Our results suggest that if priced correctly, PIVPT will increase the value of MSK care with an ROI between 2.0 and 2.5 among the general working population, and the break-even price is around $1000 for the care plan. This estimate is based on virtual, evidence-based care provided by licensed physical therapists who are the first point of contact for care.
Changing the first contact of MSK care to the virtual platform could help improve the value of care delivery and lead to a paradigm shift of the delivery system to empower individuals to manage their own health. However, the estimate in this study applies only to virtual, evidence-based care provided by licensed physical therapists who are the first point of contact for care. Such a model of care is not universal across the spectrum of digital care providers treating MSK, as only a few, such as Omada Health, include physical therapists as the first point of contact at this time. Other models of virtual care for MSK offer PT that is accessible only through provider referral, and others focus on a different type of MSK care altogether, such as health coaching or PT provided by artificial intelligence–driven software.
Our estimate of the per-patient gross savings and ROI of PIVPT is likely conservative. We excluded costs for transportation and the indirect cost savings from flexible appointment and exercise schedules. In addition, data limitations prevented estimation of the impact of PIVPT on reduced quality of life due to pain. Last, we did not incorporate the public health benefit of PIVPT, which may serve as a safe pain management treatment substitute to help address the nation’s opioid crisis.
Due to the restriction of data and published literature, there are limitations that should be considered when interpreting study findings. First, there is a lack of evidence of the comparative efficacy of PIVPT vs face-to-face PT. We made the strong assumption that PIVPT is as effective as in-person PT among those who engaged.34 Nevertheless, the reality includes several scenarios in which PIVPT serves as a substitute for or complement to face-to-face PT. Second, the parameters that we used in the simulation were mainly obtained from the studies that focused on neck and lower back pain. We suggest caution in applying the findings to broad inclusive MSK conditions. Future studies with more accurate estimates of the effectiveness of PIVPT using real-world data will strengthen the methodology. Because much of virtual care is not filed through claims, it is not possible to directly evaluate the true costs of these services at a population level. Stakeholders of MSK care, including PIVPT providers and health plans, will need to share proprietary data to allow for these analyses. A more integrated health care data ecosystem will help inform the value of digital technology for population and public health.35
PIVPT has great potential to improve the value of care among the working population in the United States who experience MSK conditions and chronic pain.
The authors acknowledge Hope Chang, PharmD, AAHIVP, for copyediting and Sarah Linke, PhD, MPH, for providing valuable commentary on this manuscript.
Author Affiliations: GlobalData PLC (FC, CVS, TMD), New York, NY; Omada Health Inc (CBJ, TN, LB, ZY), San Francisco, CA.
Source of Funding: Omada Health Inc.
Author Disclosures: Dr Chen, Ms Siego, and Mr Dall report that this study was funded by Omada Health through a consultancy project with their employer, GlobalData. Drs Jasik, Norwood, and Yang are employed by and own shares in Omada Health, which offers virtual physical therapy services. Dr Norwood is also a member of the clinical advisory board for Nice Healthcare LLC; has received honoraria for speaking about virtual physical therapy at conferences for the American Physical Therapy Association and University of Connecticut and teaching the subject for Great Seminars Online; and holds US patents 10,902,741, 10,922,997, and 11,183,079. Dr Beresford is employed by Omada Health.
Authorship Information: Concept and design (FC, CVS, CBJ, TN, LB, ZY, TMD); acquisition of data (CBJ, LB, ZY); analysis and interpretation of data (FC, CVS, CBJ, ZY, TMD); drafting of the manuscript (FC, CVS, TN, ZY, TMD); critical revision of the manuscript for important intellectual content (FC, CVS, CBJ, TN, LB, ZY, TMD); statistical analysis (FC); administrative, technical, or logistic support (CBJ, LB); and supervision (CBJ, TMD).
Address Correspondence to: Fang Chen, PhD, GlobalData PLC, 441 Lexington Ave, 2nd Floor, New York, NY 10017. Email: email@example.com.
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