I think that we’ll look back on 2022 as the year when things trended back toward “normalcy.” People started to venture out of their homes and take those trips they’ve prolonged. I for one have cherished being able to resume my yoga classes and catch up with my friends, whether over a shared meal or at an industry conference that thankfully isn’t remote! And after two years that seemed more bad than they were good, we’ve started to see some wins for rehab therapy. Of course, there will be challenges in the year to come, but after what we’ve been through, I think our collective resilience will allow us to roll with the punches.
With that in mind, I’ve put together a list of rehab therapy predictions for 2023 so that we can be prepared for what the universe might throw at us—good, bad, and otherwise.
1. We’re due for a recession.
It’s never good to hear so many economists and experts agree about the continued downward trajectory of the US economy, but that’s exactly where we’re at as we head into 2023 (or at least in the first half of the year). We’ve all personally felt the effects of inflation and high interest rates and now it’s poised to drag the global economy into what we can only hope is a short recession. That’s why clinic owners should be thinking about the potential effects of contraction when creating a 2023 budget.
Although we can’t time the markets precisely, with some advance knowledge of the coming economic slowdown you can start to plan for the near future. The financial challenges of the pandemic are fresh in the minds of every clinic owner, and revisiting those same austerity measures again is going to be prudent in 2023. We’ve previously discussed the importance of having cash on hand equaling three months’ worth of expenses against worst-case scenarios; now, with high interest rates that look set to climb higher, I’d go so far as to say that you should aim for four to six months if possible. And if you haven’t budgeted for diversification in your revenue streams, you may want to reconsider it. Flexibility is going to be important for clinics as patients struggle with their personal budgets and have to make tough decisions as they prioritize their spending.
Remote therapeutic monitoring (RTM) is a must-have for 2023.
Providers didn’t have much choice in adopting remote care in 2020 and 2021, but many quickly saw how effective it could be as a mode of treatment—even in a post-pandemic world. In addition to its efficacy, remote therapeutic monitoring (RTM) is another effective adjunct to your revenue while offering patients more convenient and cost-effective care. Best of all, RTM is showing a positive effect on improving outcomes and increasing patient engagement. If you’re considering implementing RTM into your clinic, we’ve created a handy guide to help you get started.
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2. Cost-cutting for CMS will mean the potential for more reimbursement cuts for rehab therapists.
As far as reimbursement cuts, we’ve managed to dodge a bullet and were hit with a BB instead, as the year-end legislation passed by Congress reduced the physician fee schedule cuts from 8% to 2.5%. Unfortunately, reduced cuts are still cuts, and we could see another rebound before the year is out.
I’m not exactly going out on a limb predicting that we’ll see another round of reimbursement cuts, considering that’s been the trend across too many years; according to the AMA, we’ve seen a 22% decrease in physician payments from 2001-2022. However, as we head into the aforementioned recession, we’ll likely see spending cuts across governmental agencies and organizations, CMS included. And as we’ve learned, rehab therapy is an easy target for cuts even in strong economic climates; there’s no reason to think the same wouldn’t apply when Medicare is tightening its belt across the board. My prediction is that we will have more therapists and clinics stop taking Medicare patients, which will mean that many families and communities will lose access to valued and often critical services.
3. The trend of consolidation and acquisition within rehab therapy will increase.
We’ve already seen more mergers and acquisitions (M&A) within the industry in the past few years, and that trend will continue into 2023. However, I do believe that acquiring clinics will become more selective, and their standards for acquisitions more stringent. Many clinic leaders have been dealing with tight budgets and uncertain economic futures well before COVID struck. An opportunity to become part of a larger business with more financial stability, better benefits, more opportunities for clinicians and staff, and access to more resources beyond the budget of smaller clinics are strong reasons to consider joining forces. And with the shortage of therapists and skilled clinic managers, there may also be greater opportunity for clinic owners to be granted more autonomy in running their businesses—with the bonus of added financial security.
As we found in our State of Rehab Therapy report, 13% of clinic leaders overall were more likely to sell as of 2021 than they had been previously; that number rose as high as 30% with clinic leaders in physician-owned practices. Moreover, 27% of all clinic leaders mentioned being acquired as one of their growth strategies for the next five years. And in our webinar on M&A deals, Martin Healthcare Advisors Founder and President Paul Martin MPT, CBI, M&AMI detailed how M&A activity doubled in 2021 after a pandemic-induced pause in 2020.
Clinics looking to sell in 2023, however, will face a more discerning acquirer. With interest rates high, loans are expensive and an earlier return on investment—as well as strong cash flow and margins—will be a top priority. So if you’re considering selling in this climate, be sure you’re asking the right questions, and getting a clear understanding of the investors’ expectations, before entering any deals.
4. Medicare Advantage will continue to expand its share of the market.
Medicare Advantage has been a hot topic within health care over the past year, albeit not always for the best reasons. One recent report from KHN found that Medicare Advantage plans have been overcharging for years, costing taxpayers millions of dollars in fraudulent payments—this in addition to the billions in overpayments already plaguing the program. Nevertheless, Medicare Advantage plans continue to make inroads with Medicare patients year over year, expanding its total number of enrollees to 28.7 million as of February 2022. And that the number will continue to grow in 2023.
Negative headlines notwithstanding, it’s easy to understand the appeal of Medicare Advantage plans to Medicare patients. Private health insurance has morphed over the years from a tool to help patients recover financially after illness or injury to something more akin to disaster insurance—the disaster in this case being the astronomically high healthcare costs patients have to deal with for anything more serious than a routine checkup.
While they may be provided by private insurance companies, Medicare Advantage plans offer patients cost certainty, with out-of-pocket costs limited by Medicare. With private insurance costs continuing to rise every year, we will continue to see even more patients choose Medicare Advantage plans—particularly in the face of a recession and rising interest rates.
For rehab therapists, this increasing volume of potential patients may be what keeps them seeing “Medicare” patients as they enroll in the Advantage plan networks. However, it’s important to remember that these networks often have more administrative requirements than traditional Medicare.
5. More employers will opt to handle insurance themselves.
Just as patients have become more fed up with the private insurance model, employers have also shared in those frustrations. Companies that contract with insurance companies under the traditional model are already feeling the strain of increased costs, which currently look to get even more burdensome in 2023. It’s no wonder that more employers are looking to become self-insured with direct-to-employer contracting to provide healthcare benefits to their employees.
This trend offers rehab therapists a great opportunity to position ourselves as main players within the spectrum of both preventative care and cost-effective treatment. In offering healthcare benefits directly, employers are taking on financial risk—and are looking for anything that can reduce their long-term costs. By bringing their employees into our practices—or traveling to their worksites to provide services onsite—we can demonstrate that PT represents one of the best ways to save money on healthcare costs. This is especially true considering that work-related musculoskeletal disorders cost between $45 and $54 billion per year in total, according to the Institute in Medicine (referenced in this CDC article). And with the growing number of employers opting for this benefit model, it’s a great opportunity to grow our footprint and our businesses.
6. Digital MSK will expand into brick-and-mortar.
Digital health is hot right now, and with good reason; recent years have only seen an acceleration in online services, so it only makes sense that health care would follow suit, at least in part. Companies like Hinge Health and others in the digital musculoskeletal (MSK) space have grown rapidly on the back of the employer-provided healthcare trend, fittingly enough.
And while I think that digital health is an important part of the future of healthcare, it’s impossible to eliminate the element of human touch, or deliver optimal treatment outcomes without in-person, hands-on interactions. That’s why I have a hunch that Hinge Health and others will venture into placing therapists inside of brick-and-mortar locations. Given the shortage of providers, the more likely scenario is to partner with existing practices to deliver hands-on care. Technology is invaluable for supporting and augmenting the work clinicians do, and automating some of the more tedious and time-consuming tasks, but it’s never going to replace clinicians completely.
7. We’ll see patient awareness of PT continue to grow.
Building public awareness of PT and its benefits has been a long process—far longer than anyone would like, myself included. But in recent years, we have seen those efforts pay off in a greater number of patients adopting the PT-first approach.
MSK conditions have become the largest healthcare cost among chronic conditions, to the tune of $420 billion in 2018. And while that’s not a good thing for the countless patients struggling with pain and a lack of mobility, it does present an opportunity for PTs to put themselves forward as the right healthcare providers to meet this moment. Given what we know about the potential cost and consequence of choosing surgery or opioids to treat MSK conditions, patients, physicians, and insurance companies will recognize that PT is the safest and most cost-effective way to treat many of those conditions.
The work isn’t done, however. We need to continue to collect and share the evidence showing that PT improves patient outcomes—and saves employers and insurance companies money in the long run.
8. Turnover will continue to affect the industry.
Dealing with a greater number of patients will of course require a robust workforce of PTs—and that’s no sure thing these days. As we found in our State of Rehab Therapy report, providers are seriously considering career changes, if they haven’t already left; 14% of respondents were considering switching to a non-clinical role, and 12% are considering legging healthcare altogether. And the 9% resignation rate we found among rehab therapists was far greater than the 3.7% turnover rate within the healthcare industry. Pair with this the fact that the Bureau of Labor Statistics is projecting over 15,000 job openings a year for physical therapists in the decade between 2021 and 2031—in part due to increased demand, yes, but also due to resignations and retirements.
On a personal level, I can say that WebPT has seen the greatest number of PTs applying for positions in our history, so there’s certainly something to what the numbers are telling us about turnover and attrition. And it’s not just us—digital health companies have been adding rehab therapists to their teams, offering them an escape from the burnout of clinical care. If we’re looking to increase the number of patients seeking out PT, we’re first going to have to figure out how to grow and retain our workforce.
Building our professional ranks is going to require academia, the APTA and other academic governing boards to recognize that we do in fact have a staffing shortage, and to prioritize the continued growth of DPT programs rather than restricting it. And it will also require clinic leaders to prioritize the use of technology to improve process and efficiency, so that patients have more self-serve options and clinicians are able to do more with less. Relieving the administrative burden with technology and automation will be a key retention strategy to keep providers from leaving for jobs offering better work-life balance and more opportunity.
9. Ascend will soar to new heights.
This year marks the 15th anniversary of WebPT, if you can believe it, and what a ride it’s been! The company has grown into something far bigger and better than I ever could have imagined at the outset. As I reflect on the impact that WebPT has had on the profession, it’s absolutely incredible to think about what we’ve built over the years, and I’m so thankful for our amazing team and for our Members who have helped make it possible.
And what better way to celebrate than with our best Ascend ever? Fittingly, we’re also celebrating the 10th anniversary of our annual business summit, and I’m predicting that we’ll set a new mark for attendance at this year’s event. For a start, Ascend is coming home to Phoenix in 2023, and where better to host an event than our HQ location in the Valley of the Sun? And if you are like me, you’re just as eager to be live and in-person with an amazing group of attendees!
This year’s Ascend will be a can’t-miss event as we’ll be sticking with our tradition of curating incredible speakers, stimulating content, and great networking opportunities—but, we’ll also be adding some incredible, only-in-Phoenix additions to make this a truly memorable experience. If you want to join us on September 21-23, you can get the jump on buying your tickets now before the prices go up. It’s going to be a fun, lively, and enlightening way to get your CEUs and meet some of the most incredible people in our industry—and at the very least you can help prove my attendance record prediction correct!
Do you agree with my predictions? Disagree? Feel free to leave your own best guesses in the comments; you’ll never know when you might need written proof of being right!