My fellow PTs, 2020 was a year unlike any other. Dare I say it was “unprecedented”—a word I’m sure you’ve heard more in the past 11 months than the rest of your life combined?
As we rode the highs and lows of 2020, it often seemed like we couldn’t look much beyond the next week—let alone the next quarter or year. The uncertainty of the pandemic forced us all to live in the present, which can be a struggle for many goal-oriented and forward-focused individuals. But as this crazy year draws to a close, I feel compelled to look toward the future. In that spirit, here are my predictions for the physical therapy industry in 2021:
1. Revenue Diversification
The pandemic has been a serious wake-up call for PT practices that were previously resistant to diversifying their revenue streams—and in light of impending payment cuts for Medicare services, this theme will stretch well into the new year and beyond. This is especially true for practices that currently rely on Medicare as a substantial source of revenue. Moreover, while the first round of COVID-19 vaccines has been released to frontline workers, we still won’t be out of the woods for many months to come, which means we can expect to continue feeling the financial strain of the pandemic for some time. To combat this, PTs need to investigate alternative sources of income—particularly in the form of cash-based services that aren’t reliant on physician referrals and payer contracts—in their clinics. That way, disruption to one stream doesn’t bring cash flow to a grinding halt. (Wondering how to go about implementing cash-based service offerings in your organization? Check out this free guide.)
While many practices were already starting to do this before 2020, the benefits became strikingly clear with the pandemic. One glaring example I can think of is the widespread postponement of elective surgeries this past spring and again this winter. This dealt a major blow to practices that support a high volume of post-op patients—one that wouldn’t have been nearly as devastating if they had a more diversified patient and payer mix to fall back on.
Patients want these services, too.
For patients, cash-based wellness services aren’t merely a preventive measure to avoid future healthcare expenses; it’s a lifestyle trend—one that doesn’t seem to be going anywhere anytime soon. Thankfully, because physical therapists are dedicated to helping their patients restore optimal physical function and improve their quality of life, the PT industry is perfectly positioned to pivot toward—and capitalize on—the health and wellness market. Plus, it aligns perfectly with a push to spread more brand awareness for the PT profession. Fitness-related programs, holistic health interventions, dry needling, and even nutrition counseling all integrate seamlessly into the spectrum of physical therapy services.
The challenge lies not just in offering these services, but providing them with knowledge and evidence-based practice that produces high patient satisfaction and quality outcomes. With service diversification, we must maintain our quality levels—or risk damaging our professional brand.
Unique services play a pivotal role in spreading brand awareness.
Furthermore, diversifying your service offerings can, in turn, help you diversify your patient population and reach markets you may not have otherwise permeated. According to the United States Bone and Joint Initiative, an “estimated 126.6 million Americans (one in two adults) are affected by a musculoskeletal condition—comparable to the total percentage of Americans living with a chronic lung or heart condition—costing an estimated $213 billion in annual treatment, care and lost wages.” Unfortunately, 90% of those 126.6 million Americans—that’s nearly 114 million people—will never see a physical therapist. Instead, they’ll undergo riskier, costlier, more invasive treatments—like surgery or prescription pain medication. Or, even worse: In some cases, they’ll simply continue living in pain.
Taken at face value, those numbers are absolutely devastating—but they also represent a huge untapped market that could easily offset the impact of dwindling reimbursements. When you diversify your clinic’s revenue streams, your brand—and the physical therapy brand in general—reaches a much wider audience. And the more people therapists reach, the more opportunities they have to showcase their value and convert prospective patients into actual ones. Research shows that rehab therapists must become an integral part of primary health care to reach more people in need. Plus, improving the baseline health of the wider population sets the US up to better weather future health crises—something I discussed in detail in this article.
COVID-19 has presented PTs with an opportunity to showcase our value.
We are currently in front of a major opportunity with recovering COVID-19 patients—especially those with long-haul COVID-19. Stepping up to meet the demand and becoming a go-to provider for these patients can help us solidify our place in the primary care world as well as diversify our patient reach. We are equipped to support these patients and significantly improve their chances of an accelerated recovery with positive outcomes.
2. Creative Cost Reduction
If there’s one way to put a positive spin on the financial uncertainty we’ve experienced this year, it’s that practices have been forced to look for unconventional ways to bridge budgetary gaps and tighten their belts. And in light of the impending reimbursement cuts in 2021, knowing how to turn a dime into a dollar will be essential to our continued success as a profession.
Specifically, practices found creative ways to adjust operational strategies and structures—and they saw firsthand how those changes can improve efficiency and reduce costs. This includes things such as:
- changing up scheduling practices;
- modifying the practices put in place during the pandemic to incorporate telehealth and mobile visits—both of which allow teams to conduct more appointments with less physical clinic space;
- introducing alternative/shared-risk employee compensation models to reduce labor costs; and
- re-evaluating tech stacks to consolidate vendors and eliminate unnecessary tools.
3. Greater Focus on Diversity, Equity, and Inclusion
This year, diversity, equity, and inclusion (DEI) initiatives gained a lot of momentum. While this can be a difficult topic to discuss, in the future, I believe we will look back on the events of 2020 as a real impetus for social and societal transformation. As I mentioned in my last article for EIM, I know many individuals who have taken it upon themselves to dig into their own unconscious biases and learn how their perceptions can impact the bigger picture.
All of that is to say that the focus on DEI isn’t going anywhere in the new year—nor should it. We will see this across every facet of the PT industry, from the educational level (i.e., looking at PT school recruitment and admissions practices) to the organizational level (i.e., adjusting hiring/training practices in individual clinics).
4. A Flurry of Exits and Partnerships
The M&A landscape is abuzz with activity. There’s a lot of opportunity to sell or partner if that is the right path for your practice—so if you’re a clinic owner, it’s an important time to stop and evaluate your goals and options. With that in mind, selling your practice or sticking to business as usual aren’t your only two choices. More and more practices are entering into alternative merger and acquisition relationships that don’t involve a full sale for pennies on the dollar. For instance, some companies are willing to step in and take on operating expenses (or temporarily pay staff) until revenue begins to pick up, putting both organizations in a position to prosper. Remember, there are good companies out there that want to forge long-term, mutually beneficial relationships.
There is opportunity beyond your immediate geographic region.
Another thing to consider is that not all physical therapy practices experienced the same level of economic impact from the pandemic. Prior to 2020, many organizations preferred to merge with—and acquire—clinics inside specific, limited geographic regions. But now, there is budding interest in reaching into new markets. This has created a new opportunity for multi-location PT practices looking to expand their reach as well as smaller practices looking for the financial stability that comes with being part of a larger operation.
For example, providers with a strong presence in urban areas are beginning to consider expanding into rural areas, which (generally speaking) have been less affected by COVID-19. If you’re interested in pursuing a partnership, remember that while there’s often strength in numbers, you should be thoughtful about any partnerships you enter. Will joining forces create a stronger, more balanced organization? After all, you must be able to support one another through economic ebbs and flows.
Now is a great time to buy.
On the other hand, if your practice has weathered the coronavirus storm fairly well, you might be in a position to expand your own reach. If you believe you’ve found an acquisition opportunity that is a good deal with a lot of potential upside for your practice, then it may behoove you to strike while the iron is hot. As we mentioned in this FAQ on post-COVID recovery, my colleague Nancy Ham, WebPT’s CEO, “suggests working out an acquisition deal where you don’t have to pay the entire cost of the practice up-front. For example, you could potentially partner with the retiring practitioner and work with them side-by-side for a time before completely acquiring their business.”
5. More “Cooperatition” Among Therapy Providers
Despite this climate of mergers and acquisitions, I don’t want to give the impression that remaining independent is off the table in 2021. In fact, I’d say there’s plenty of opportunity for you there, too. However, the challenges we’ve faced in the past 10 months have required practices to get creative with referral marketing strategies—including looking inward to the PT community rather than focusing completely on referring physicians.
We can—and should—refer patients to each other.
Lagging patient volume has seemingly created more competition between PTs, but providers who resolve to cooperate—rather than compete—with each other can actually help raise the tide for all boats (er, practices). Individual PT providers can’t be everything to every patient, but they can work together to refer patients to each other. For example, a PT who specializes in orthopaedics is the perfect provider for helping a patient get back on her feet after a serious injury. However, if the same patient is experiencing complications due to neuropathy as a symptom of diabetes mellitus, a physical therapist who specializes in diabetic complications could be better suited to treating this issue. (The same is true in the inverse scenario.) So, if we connect patients with our peers who are best equipped to help them—instead of hoarding those patients for ourselves—we lift each other up while also spreading awareness about the value and scope of physical therapy services.
In the end, this also helps our brand. Bad outcomes or poor patient experiences due to therapists going beyond their core competencies and expertise can permanently turn patients off to physical therapy—not to mention the physicians who refer those patients. As we have seen from the data, there are plenty of patients who need us—we must stop fighting over the same 10% who currently make it into our clinics.
6. Prioritization of Mental Health
You’d be hard-pressed to find a person whose mood and overall outlook wasn’t affected by all the events of 2020, but the silver lining is that it pushed us all to focus more on mental health—both personally and professionally. Instances of depression and anxiety skyrocketed in 2020: prior to the pandemic, 19% of adults in the United States reported suffering from a mental illness such as anxiety and depression. During June of 2020, 40% of U.S. adults reported struggling with mental health or substance abuse, according to the Centers for Disease Control. And even though things have returned to some semblance of normalcy, the trauma and emotional fallout of the pandemic will linger for who knows how long.
While we are not psychologists, physical therapists certainly have a part to play in improving the emotional well-being of our patients. As any PT worth their salt can tell you, a patient’s success with therapy ultimately boils down to attitude. So, in a moment rife with widespread anxiety and depression, focusing on ways to work with struggling patients and increasing knowledge and empathy around mental health is of the utmost importance. (As a side note, establishing referral relationships with psychologists may be another avenue for revenue diversification.)
Of course, it’s important to remember your own mental well-being in the midst of all this—as well as that of your employees. After all, caring for others can take an emotional toll if you are not also caring for yourself.
7. Advocacy Full-Court Press
We advocated hard in 2020—and saw some results. About a month after the US declared a state of emergency, physical therapists—along with their OT and SLP colleagues—won the battle to be recognized as essential workers. Not only did this help us establish our authority as musculoskeletal experts, but it also meant we could continue serving our patients and keep our practices open during shutdowns. We also won the right to provide virtual and telehealth services through temporary changes to state and payer rules—including Medicare’s.
But, we have to push harder. As reimbursements start rolling in and we begin to experience the cold, hard reality of the 9% cuts (as I write this, our efforts to stop or delay this reduction have not yet been successful), it will hopefully light a fire under us to be proactive with our lobbying efforts. We can’t be reactive; we must be strategic. This will be the year that we have no choice but to unify our efforts.
Here’s how we can move forward.
Fortunately, we’re heading in the right direction. At this moment, two bills (H.R. 8702 and H.R. 8755) that would place a hold on the 9% cuts have entered the House of Representatives with some bipartisan support, and one bill (S.5007) has entered the Senate. That’s great news, but I’m sure I don’t need to tell you that new legislation can take a very long time to get pushed through Congress. Therefore, we must continue advocating for our interests. Reach out to your legislators and ask them to support these bills—and to help protect rehab therapists and our patients.
If nothing else, 2020 has taught us the value of slowing down and living life one day at a time, the power of optimism and gratitude, and the resilience and moxie we have as a profession.
I have no doubt that these are things we will all carry forward into the new year. The future of physical therapy is bright and rife with opportunity—if you’re willing to fight for it. I know I am, and I hope you are, too.
Happy holidays, everyone—and cheers to a new year!