ADVANCE sat down with three successful practice owners and operators to gauge the current status of the profession, explore the pressing issues facing today's private practitioner, and speculate on the future of private practice physical therapy.
ADVANCE: Is running a physical therapy business more or less challenging than it was five years ago?
Stimac: Running a business is significantly more challenging today than that it was five years ago. The expense to run a practice has gone up, while reimbursement has gone down, leaving a narrowing profit margin. This requires practice owners to really know how to run their business and not just be great clinicians.
Weinper: More! Decreasing reimbursement and increasing third-party scrutiny- for example, through bill review companies used by private insurers-have led to a playing field that's changing dramatically. In many markets, profits are tighter due not only to lower reimbursement, but also to therapists' willingness to take low rates, often lower than the cost of providing care. That willingness demonstrates to payers that we don't value what we do, or even understand how to value what we do. An additional threat is the uncertainty around the Affordable Care Act. We're not sure how we're going to get paid, but we do know that the insurance exchanges that are forming in most states will lead to competition on price among insurers, which means we're likely to get paid less, and that the move toward bundling payment will be another challenge for private practitioners.
Warner: It's definitely more challenging. There are much more stringent documentation requirements today in order to support the need for skilled therapeutic intervention and ultimately reimbursement. Issues involving compliance have become more complex and change all the time, which is why we have a dedicated compliance officer. Finally, and rightfully so, our therapists want to be challenged with more evidence-based clinical education opportunities.
ADVANCE: What do you feel is the most pressing issue facing today's physical therapy private practice owner?
Stimac: Declining reimbursement is the most daunting. While there are many other pressing issues facing the private practice owner, owners can do some things in these areas to directly lessen the impact and risks, and improve their chance of success. However, with reimbursement dictated by the government and insurance industry, we have much less say in how it will turn out.
Weinper: A significant issue that we can't ignore as practice owners is meeting demands for documentation while maintaining productivity. Both Medicare and private payers are increasing their documentation requirements, and electronic medical records (EMRs) have often proved not to save time, but rather to decrease productivity and increase time away from the patient. And as we all know, as productivity decreases, so do profits. Another pressing question is how to provide appropriate and necessary care when we often don't get paid enough to provide that care. We're often forced to pick and choose what to do with the limited time and resources available, and that problem is likely to increase with bundled payment schemes. We're faced more and more with doing only that which is most effective, so measuring our outcomes is ever more important.
Warner: Reimbursement compression from all our payers is the most pressing issue. We are being asked to work significantly harder for less reimbursement. Too, our payers are starting to more aggressively control utilization, which not only affects a positive clinical outcome, but also the profitability of our practices.
ADVANCE: Is it becoming more or less difficult to attract, keep and motivate today's physical therapy graduates?
Stimac: I don't see a significant change in this area of practice. If your company is doing well clinically and as a business, then staff therapists can be satisfied and grow professionally. However, there is a problem brewing with regard to salary ranges for new graduates versus the cost of schooling and their ability to service their student loans if current trends continue.
Weinper: It's becoming more difficult, in part because of cultural differences of the Gen X and Gen Y age groups, but also because of the costs associated with PT school. The cost of education is higher for recent graduates than it's ever been, so many of them are leaving school with significant student loan debt and unreasonable expectations for compensation that is higher than practices can pay, particularly given declining reimbursement. This leads to dissonance between expectations and reality, which causes therapists to seek out the high watermarks for compensation, often in less desirable settings such as skilled nursing facilities and physician-owned facilities. In the private practice world, owners need to find ways to reward efficiency and productivity to retain and motivate staff.
Warner: We have been very successful in recruiting and retaining "A" level talent throughout our organization. We have created a very clinician-centric environment that's focused on driving a significant number of internal continuing education opportunities to our therapists. Accelerated has a best-in-class voluntary retention rate of 95 percent. I am very proud of our clinicians and the way in which they put patients first every day.
ADVANCE: What niche services do you anticipate will become more in demand in the coming years?
Stimac: Wellness and preventive approaches will become big. Our current healthcare system is not sustainable and we're going to have to start spending money on the front end, and not wait until the body is broken before we address.
Weinper: Wellness and preventive services will be in more demand, because they are not typically dependent on insurance or other third-party payment. Our own research tells us that there are significant portions of the population that are seeking out (and willing to pay out of pocket for) wellness services from medical professionals such as private practice therapists. For example, as people get older and grayer, they want to stay functional. They fear dysfunction and immobility. Who better than therapists to help the aging population stay fit, functional and mobile? This is why PTPN launched our Physiquality initiative a few years ago, to help practice owners understand and meet the "retail" health and wellness needs of their communities. If you're not offering these services, start now before your competitors corner the market.
Warner: Because of advances in medicine and technology, seniors are living longer. We will need to have more clinical services geared directly toward them, such as fall prevention programs, vestibular rehabilitation, lymphedema management, and prevention/management of diabetes.
ADVANCE: If you could offer one piece of advice for someone opening their first practice, what would it be?
Stimac: Be diligent in your research on what knowledge and abilities are required to be successful as a private practice owner. Simply being a great and highly skilled clinician is not enough to run a viable and profitable business. As you make your move, make sure you formulate a plan to have every area of the practice skillfully handled. Partnerships and strategic alliances can be an effective way of meeting all the demands of private practice ownership.
Weinper: Start with a good foundation, then proceed cautiously. I've seen many therapists jump in to practice ownership without realizing the commitment required to manage a practice and how much that keeps you from patient care. Do your homework to learn about reimbursement, staff supervision and the financial aspects of running a business. Consider affiliating with someone already in practice, so you can capitalize on that person's expertise, experience and resources. The details of opening a practice are so complex that PTPN has created a web portal for therapists who are making that transition. Our "Future Members" portal gives soon-to-be practice owners access to the advice and best practices of our staff and member therapists, as well as to things like discounts with vendors for products and services that owners require as they open practices. Our goal is to help the aspiring practice owner anticipate the challenges ahead and lay the groundwork for a successful practice before they turn the key.
Warner: Be mindful of your costs and aggressively negotiate all your payer contracts. Too, I would advise them to review all their contracts annually and seek a price increase for the services they render. Finally, I would advise them to align themselves with people who share their own moral and ethical compass.
Jon Bassett is a senior managing editor for ADVANCE and can be reached at firstname.lastname@example.org.