In what has become an annual tradition, my friend and colleague Larry Benz and I post competing predictions for the coming year in rehab therapy. I say competing—really, it’s simply a matter of differing perspectives, and I’m always eager to see what Larry has to say and what he gives me (and all the other readers) to chew on from his article.
This year, I’ve tried to look for the biggest pain points in our industry and see where they might intersect with some of the growing trends—like how our staffing and workload issues can fuel technology adoption and digital solutions, or how increasing frustration with insurance companies can drive change and innovation to ensure patients get the care they need. Regardless of the topic, I think we’re in for another year of big changes—and I hope that these predictions can help get you thinking about how you’re prepared to handle what might be a turbulent year for our profession.
Healthcare could be in for new policies depending upon the election results.
Everyone knows that our healthcare system can be better, as evidenced by the fact that most Americans are unhappy with the healthcare system as it is. Unfortunately, no one can agree on how to improve the existing system, or what improvement even means. And to make matters even more complex, research from Gallup shows that 72% of Americans think their care is good or excellent—all while other numbers show that we have the worst outcomes of any high-income nation in the world.
Despite all that, healthcare is always a big talking point during every election cycle, and 2024 doesn’t look to be any different. In fact, we might expect to see some changes depending upon the results of November’s elections. Former President Trump has repeatedly stated his intentions to replace the Affordable Care Act with an alternative. During his time in office, he also proposed cuts to Medicare spending in the FY2019, FY2020, and FY2021 budgets, as well as efforts to limit eligibility and spending on Medicaid. But, do Boomers and other older adults want to endorse the prospect of losing coverage for pre-existing conditions if the ACA is in fact repealed?
President Biden has made the continuation of the ACA one of the tentpoles of his re-election campaign. He has also committed to improving Medicare funding in the proposed 2024 budget, although the expiration of COVID-era Medicaid rules means that millions have lost Medicaid coverage as requirements for renewing coverage were put back in place. But, can the current state of the ACA continue without improved funding? And with many of the 2017 tax measures set to expire in 2025, this brings to mind a subject both parties are loath to endorse—another tax overhaul.
Much of the difference in each party’s views on healthcare comes down to the demographics of their voters. Of course, the notion of change might be moot depending on the results of the congressional elections—without unified control of both Congress and the White House, it seems unlikely either side could expect to pass any legislation that would alter our healthcare system in any significant way. Regardless, the candidates’ evolving positions on healthcare policy are something every provider should keep an eye on as we head into a contentious election season.
Demand for PT will continue to rise—and we’ll have to adapt accordingly.
It’s safe to say that, despite whatever hurdles we might be dealing with as a profession, PT services remain in high demand. You’ve probably felt that demand in your own practice, and a glimpse at your schedule or waitlist would definitely back that conclusion up. And I don’t think that demand is going to wane anytime soon; in fact, with a U.S. population that continues to age, I think demand is only going to continue to grow — which could further strain our already overworked clinicians.
That increase in demand for our services can be tied directly to Boomers (age 60-78) aging out of the workforce into active retirement. For years, Boomers have kept worker productivity high and capital generation up—and now, they’re filling our waiting rooms. Boomers’ children are now millennials (ages 28-44),who have grown up in a digital age and seek to blend that into their work. But in between, as you notice in the graphic below, there are the Gen-Xers (ages 45-59)—a generation in which we had a significant dip in population.
What these numbers point to is a pending crisis on our hands and that will require us to become more efficient with our PT skillset as the next generation of the workforce is shrinking (at least for now.) As those of us in the older age brackets move out of front-line positions and into administrative and leadership roles, there simply aren’t enough incoming clinicians to fill all the positions needed. That’s especially true as you think about senior leadership roles and our current method of career pathing in the industry — and you add in the exodus of therapists post-pandemic.
This could continue to be a big issue for the next ten years or so as we see millennials move into the dominant workforce producer roles. Because of significant student debt and their personal priorities, millennials require higher salary demands and different productivity standards—and are now self-selecting out of the profession due to other more lucrative options to meet their financial needs. This is creating the classic pressure point of high demand and low resources, and while this is and will be painful in the short term, the good news is that this type of pressure usually yields innovation and change.
That’s why I believe we’ll see our industry continue to morph, evolve, and adopt more technology to adjust to that need at a time when we’ve never been so in demand and yet so undervalued by payers.
With everyone fed up with insurance, cash-based services will increase.
We as providers aren’t the only ones recognizing that our current healthcare system isn’t working for the people involved, and that commercial insurance companies are largely to blame — patients are coming to that conclusion as well. Because these insurance companies are incentivized to focus on profit margins rather than outcomes, providers are dealing with an increasing administrative burden due to prior authorizations and other requirements just to get patients the care they need; meanwhile, patients are paying more out-of-pocket with high-deductible plans and have to jump through hoops themselves just to get in to see their provider.
Given that dealing with insurance companies has become a headache for everyone involved, it’s no wonder that therapists and patients have come around to the cash-based services model which allows treatment visits to be provided at a reasonable rate that more patients are willing to utilize.
As highlighted earlier, many Boomers have money to spend on their healthcare needs and are increasingly willing to go around their insurance plans to get the care they need. In addition, many companies are looking to go the self-insured route, and we’re seeing a record-breaking rise in insurance coverage signups. Unfortunately, not every patient has the resources to go the cash-pay route, and the rise of cash-pay will continue to widen the gap between the haves and the have-nots in terms of access to healthcare and physical therapy services.
Bad press will catch up to Medicare Advantage’s exponential growth.
The idea of Medicare Advantage seemingly had promise — an affordable healthcare option for seniors provided by commercial insurance but governed by Medicare to keep those companies’ worst, greediest instincts at bay. Unfortunately, it seems that you can only keep greedy companies down for so long, and Medicare Advantage providers have spent the last year-plus dealing with negative stories, like instances of MA plan providers defrauding the government of billions of dollars by overbilling for services or engaging in misleading advertising that targeted low-income seniors and people with disabilities. It’s gotten so bad that in this age of extreme political polarization, a bipartisan group of lawmakers has united to dig into claims that MA plans are exploiting seniors by denying necessary care with prior authorizations that would otherwise be provided under Medicare.
Unfortunately, MA plans remain affordable for many seniors and thus popular during the open enrollment period, 2023 included. But I believe the tide will shift beginning in fall 2024. In case the fraud, dishonest advertising, and denied care wasn’t enough, the Washington Post reports that a growing number of hospitals and physicians are getting fed up with MA plans and are even threatening to stop contracting with them. The possibility of no longer being able to see their preferred doctor or rehab therapist is likely to spur more defections from MA plans than any bad press ever could.
The ongoing financial crunch will convince more practices to merge.
As we outlined above (and in this article), the demand for PT services is as high as it’s ever been, and only growing bigger. But rather than being paid adequately for our necessary and cost-effective services, Medicare and other payers have seen fit to continue to cut reimbursement rates year after year. Unfortunately, the cost of doing business hasn’t dropped to keep pace with those cuts — leaving many practices in a tenuous financial position.
Given the ever-increasing cost of doing business, mergers and acquisitions (M&A) will continue to feature in 2024. In our 2023 State of Rehab Therapy report, we found that almost 17% of clinics had acquired another clinic within the past two years, with an additional 15% merging with another practice and 8% being acquired during that same period. A separate report from Provident Healthcare Partners found a significant increase in consolidation in the physical therapy and rehab space in the first quarter of 2023. And, while these consolidations tapered off throughout the year due to rising interest rates, the ongoing financial strain many clinics find themselves under due to payment cuts from insurance companies, high interest rate hold times, and the therapist shortage, we will see consolidation once again rise—with no signs of stopping any time soon.
That said, I do think we might be in line to see a shift in consolidations from the straight-up acquisitions of recent years. In this recent article from Healthcare Dive, Samantha L. Prokop suggests that interest rate increases might tamp down private equity deals and instead lead to “more provider-to-provider consolidation with increased seller financing opportunities in 2024.” But based on the most recent Graham Sessions in San Diego, a break from private equity holding sway in the market may be a good thing—but only time will tell. Regardless, we can expect to see more practices look to secure their future by joining forces in 2024.
Post-pandemic graduates will enter the workforce more prepared.
The current labor shortage is a subject I discussed a lot last year, and will likely continue to do so in the coming one. A big part of solving that problem rests on the shoulders of future generations. However, a troubling statistic we found from last year can be seen in the 2023 State of Rehab Therapy report, where over a quarter of the students we surveyed felt unprepared when it came to clinical skills. And while there are certainly questions to be raised about DPT programs more broadly, it’s not a surprise with the amount of research showing the broad negative effects of the COVID-19 pandemic on students and the decline in their learning throughout all educational systems from K-12 and universities.
I do believe that as the pandemic recedes into the background, we will see new graduates leaving PT programs feeling more prepared to start their professional journeys. But, I think the detrimental effects of increased screen time and loss of discipline in study habits will linger and affect our students for longer than anticipated.
Hybrid education programs will continue to grow.
With the cost of obtaining a DPT degree being roughly $100,000 for tuition alone, student debt levels rising to untenable levels, and declining application numbers, many DPT programs are rethinking their programs. We’ve seen an increase in the number of hybrid DPT programs over the last few years—which provides a lower cost and more efficient alternative, with most programs being two-and-a-half years versus three years. It’s appealing to our next generation of therapists from a cost and convenience perspective and for an industry desperately in need of new clinicians, it should be equally appealing for clinic owners and healthcare administrators. With the early adopters of these programs showing minimally significant differences in board testing pass rates and similar levels of clinical skills upon graduation, more PT programs will begin to adopt this option as we will see more come online this year.
Hybrid programs are an invaluable way of growing our pipeline to meet our staffing needs, especially when we’re talking about initiatives to create a more diverse workforce. And I truly believe this hybrid education model will become the norm in the next 5-7 years. But it is not without its own set of growing pains (I have spoken with some clinicians who lament the lack of clinical readiness hybrid program students are showing thus far).
Although the research demonstrates the viability of a hybrid program graduate to pass the board exam, we all know the board exam is not necessarily a good barometer of real-world clinical readiness. We, as clinic owners, clinic directors, clinical education coordinators, and educators, must challenge our educational programs and CAPTE (the accreditation body for PT educational programs) to work toward strengthening the hybrid program and elevating our profession.
We’ll see more adoption of AI.
Artificial intelligence (AI) is a hot topic—and a hot-button issue. Depending upon who you talk to, AI is either the key to unlocking greater productivity or the key to our downfall as a species. I know that since we announced WebPT’s partnership with PredictionHealth, we’ve gotten a few emails from people in the latter camp. I will say that those practices that have chosen to use this AI assistant with our EMR have given it stellar reviews.
Anything new can be scary, especially when it’s something as advanced as AI promises to be. As I like to point out to skeptics, AI has been at work at WebPT and elsewhere for years in the form of chatbots, algorithms, and other helpers aimed at improving the user experience. And that’s exactly how I see AI: as a digital assistant, not a replacement.
No matter how you feel about it, AI is here to stay, and I think we’ll be seeing even more adoption in rehab therapy and throughout healthcare in 2024. The amount of invested capital going into AI is enormous, but we are still on the bleeding edge of development and not nearly as close to the likes of Wall-E as the media would have us believe. That said, it will be part of our day-to-day as treating therapists providing administrative efficiencies in suggestive manners such as deriving the correct CPT codes based on the documentation to maximize payment, recognizing potential red flag issues from a patient’s subjective history, streamlining our HEP creation based on your history of exercise selection for similar patients and the list can go on.
We can’t judge the future of AI on where it is now; there are still a lot of kinks to be worked out, like issues of bias, and questions about efficacy with limited data sets. And we can’t worry about it taking our place—no matter how good AI gets, it can’t replicate the hands-on care we provide, and it can’t build the therapeutic alliance with patients that makes for the best outcomes. Those tools, along with our clinical reasoning skills, remain our differentiator as a profession that we must continue to tout and amplify.
Digital MSK will be paired with in-person visits to optimize care.
Not many businesses can claim to have come out ahead from the COVID-19 pandemic and public health emergency, but telehealth and digital MSK platforms are much better positioned now than they were in 2019. As a result, they’ve seen reported investment in the range of hundreds of millions of dollars—but are they producing results on par with that investment?
I think that the digital-only MSK moment has passed. As Scott Hebert, PT, DPT, CEO at Second Door Health, highlighted in his Ascend 2023 presentation, many of the digital MSK platforms offered today suffer from a meager 3% engagement by patients. But that doesn’t mean that digital MSK is going extinct—just that it needs to evolve.
Many private insurances and employers may have jumped onto the digital MSK bandwagon as a way to try and solve their MSK spending problem, and it’s doubtful that they’ll be so quick to cut bait. I think we will see the in-person visits retake the spotlight—but this time, they will do so as the regents of digital MSK.
For a start, rehab therapists are better positioned in 2024 to use digital MSK as an adjunct to the in-person care that has the kind of engagement we need to see for the best outcomes—like NPS scores in the 90s. And we can’t forget that we’re still contending with a provider shortage, so the use of digital MSK along with a surge in the use of other providers, like PTAs, athletic trainers, and even personal trainers, will help us meet the growing demands based on patient needs. For example, more complicated and perhaps acute patients would require more skilled services and be referred to a PT, while the volume of MSK general diagnosis of sprains/strains would be seen by less expensive yet qualified providers.
My hope is that we’d see PTs overseeing the training and leadership of these provider teams and preserving the term “physical therapy” as a truly skilled specialty completed by qualified PTs and PTAs; however, my gut is saying that companies won’t have time nor the patience to do this and we will see more encroachment on our DPT status.
Practices will look to their technology partners to help provide the ideal practice experience.
With all of the challenges that our profession is facing in 2024 and beyond, clinic owners will be challenged to be more efficient, more data-driven, and better equipped to provide the ideal practice experience for their providers and patients. That’s why I believe that the practice experience management (PXM) model will continue to gain ground within the rehab therapy industry.
As I laid out in this Founder Letter, the PXM approach is one that developed organically over the years to meet the demands that clinics are facing every day:
- Reimbursement cuts are forcing practices to get by on smaller margins;
- Workforce shortages are forcing us to figure out how to do more with less;
- Consolidation is making the rehab therapy space more competitive;
- More patients are seeking out therapy as a primary care option;
- Patients are looking for a more convenient and more connected experience; and
- Healthcare has become an industry fueled by data.
Those demands require solutions that are interconnected, convenient for patients and providers alike, and offer a full view of every aspect of your practice. We at WebPT truly believe that PXM is the way forward for our profession as we head into an uncertain future, and I think that more providers will understand the “why” behind this approach in the new year.
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Creating these predictions is a great exercise for looking ahead and preparing for what might come, but as with any predictions, you’re going to have as many misses as you have hits. I’m not always a fan of predictions, but I am a planner, and I encourage anyone to take the time to think about the forces that can impact our future so that we can be more sustainable as an industry.
