Video Killed the Radio Star.  At least that was the message MTV brought us with its debut almost 30 years ago (back when National Physical Therapy Month made more sense when it was  a week).    As we now know, video only enhanced the radio star.  I am more confident than ever that the same phenomenon will occur due to idiotic concepts like accountable care organizations (ACO’s) and the larger than life Affordable Care Act known as Obamacare.

While being on my semi-annual quarterly self-inflicted blog vacation, I have gotten deluged with questions, articles, and fear regarding the following:

-approx 50% of new docs are now opting for employment in a hospital

-ACO’s are going to put independent private practice physical therapists out of business

-ACO’s will lower cost and improve quality of healthcare

-publications including those from the Obama administration are telling MD’s that they better get with the program and join large organizations or hospitals

-physical therapy should be administered in a medical home model

From prior posts, I have provided the reasons that I don’t believe ACO’s have any more chance of success than the Cleveland Browns (or Cavaliers or Indians) will in their seasons.  To recap:

-ACO’s are regurgitated capitation or hospital PHO models that were summarily rejected in the 1990″s

-ACO’s with hospitals as their core drivers are the highest cost environments and have historically charged the highest fees in the healthcare chain-so much about lowered cost

-The post acute care market is fragmented by nature. Any attempt to centralize thru the creation of a large beauracracy will only result in attempts at negotiating higher fees not lower.  Decentralization is the key to the “invisible hand”, not centralization.

-Demonstration projects that have published data demonstrate sketchy results at best

-Quality is not an easy concept

Ironically, if physician groups banded with post acute providers they would have a great chance at lowering cost because they already have much lower costs and lower fees as a starting point.  They would have to create their own organizational infrastructure which is quite challenging or they can partner with payors (something I definitely see happening-a physician driven ACO in some markets being administered by a large payor).

How does all this impact the private practice PT?  For the good in at least 3 major ways:

1.  While the kneejerk reaction is that none of this is good news, I see more opportunities than ever.  When a magnitude of change like the Affordable Care Act unfolds there is always those that throw their hands in the air.  It shouldn’t come as a surprise that hospitals are employing more docs as docs seek those opportunities since they don’t want to deal with the environmental “noise” as well as clearly young MD’s due to generational issues want a secure employed relationship.   ACO’s and employed MD’s by nature create conflict between docs and hospitals.  Hospitals want “business lines” and independent docs want patients.  The chasm between the two will get greater.  When hospitals have to cut costs due to lower volume, they will in some markets will emancipate many of their employed physicians which will cause even more conflict.  Docs disgruntled with their “capped” pay or unrealistic volume production for bonus will not be happy campers.  This benefits the independent PT’s who will gain more and more loyalty from independent (and newly released docs) in terms of referrals.  When cost is key, there is always room for the lowest cost providers-just ask those that no longer have to deal with union contractors.

2.  What is missing from the articles is employment of PT’s.   50% of the approx 7,000 new grads are not going to work at hospitals. In fact, the medicare data shows that despite the competitive advantage of not having a medicare cap, hospitals are losing outpatient PT business every year.  Vision 2020 and the notion of an autonomous provider is at least working in regards to employment data as more PT’s are working in home health, skilled nursing, and private freestanding locations than ever.   Hospitals aren’t expanding their PT and will have to find ways to subcontract in the cases of their ACO’s.  The best current example of this is Tricare.  Since the military cannot accommodate all of their patients in their hospitals, independent providers are able to contract and this is a win/win for private practice PT’s.

3. We already know from experience the problem in insuring more people is that we don’t have enough providers.  All one has to do is look at Obamacare’s Mini-Me otherwise known as Massachusetts’ healthcare to see that their expansion has resulted in some of the longest in the U.S.  waiting lines for primary care and emergency care. While one can argue philosophically  whether we should be insuring an additional roughly 40 million Americans, the results if anywhere deployed like the intent of the Affordable Care Act’s goals will result in a a huge supply and demand problem.  This coupled with the greying of America with large increases in musculoskeletal complaints should definitely bode well for force multipliers like PT’s who are well equipped to handle such issues.

Time for me to now get on my Sirius Radio and dial in to the Springsteen channel.  Sure glad MTV was wrong.

Thoughts?

larry@physicaltherapist.com