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As I look back at the year that was, the word that jumps to mind for 2023 is “whirlwind.” Maybe it’s a function of me getting older (I hit the double nickel this year, which is what I consider to be mid-life) and my kids getting to an age where they need you in different ways than before, but the year seemed to pass by in a flash. Throw in some travel, another awesome year of awarding scholarships to inspiring future DPTs and residents, and the inflation roller coaster, and yeah, it's been quite a ride. Not that I’m complaining, mind you; I tend to thrive in a little chaos and never miss a chance to learn something new when possible.
For many rehab therapists, “whirlwind” might be an apt description for most days in the clinic this past year. In addition to trying to treat more patients with a workforce that is struggling to meet demands, it seems like the pace of change within the industry continues to accelerate along with technology. This rapid change was predicted somewhat in my 2023 predictions, but I have to say that I was only about 70% correct last year. We correctly saw the rise of Medicare Advantage, a downturn in the economy (although interest rate hikes were not in the equation), more companies going self-insured, the continued increase in demand for PT, and, unfortunately, more payment cuts from CMS. Due to interest rates skyrocketing, the business consolidation trend took a pause, but I believe it will pick up again in 2024. My predictions of increased use of RTM and digital health companies adding brick-and-mortar locations were off, although digital health companies did start to add home health options for in-person visits.
With that in mind, it’s time for my annual predictions for what 2024 has to hold for the rehab therapy profession.
Continued financial pressures will lead to more mergers in rehab therapy.
Mergers and acquisitions (M&A) have become some of the most prominent growth strategies within the rehab therapy space; 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. While these consolidations tapered off throughout the year due to rising interest rates, given 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’re seeing consolidation once again on the rise—with no signs of stopping any time soon.
There are some pretty clear reasons this trend keeps emerging. As we laid out in this article, there’s a lot of demand for healthcare—and a lot of complexity and uncertainty. Despite the growing need for physical therapy services, we’re still seeing reimbursement cuts from Medicare and other payers and a continued labor shortage—so it only makes sense that many practices are seeking the security that economies of scale provide.
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.” The push toward employee retention may also lead to more creative options in shared ownership models. Regardless, we can expect to see more practices look to secure their future by joining forces in the new year.
Preparedness among new graduates will start to trend towards previous levels.
Recent years have seen a rise in the number of students leaving their DPT programs feeling largely unprepared to enter the workforce. To go back to the State of Rehab Therapy report, over a quarter of the students we surveyed felt unprepared when it came to clinical skills—which is a troubling statistic. 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, 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. 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
We’ll see more adoption of AI.
Artificial intelligence (AI) can be a touchy subject. We’ve gotten a handful of heated responses since the announcement of our partnership with PredictionHealth, but for the practices that have chosen to use this AI assistant with our EMR, the reviews have been nothing but stellar—without any mention of Skynet or a doomsday. Anything new can be scary, especially when it’s something as advanced as AI promises to be. However, 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.
The truth is, the AI train has left the station, 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. However, AI is coming and 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.
There are still many areas to work out and to be cautious of including its bias based on limited data sets, but what it can’t do is provide the hands-on care and build the therapeutic alliance with the patient. That and our clinical reasoning skills remain our differentiator as a profession that we must continue to tout and amplify.
The industry will shift as demand for PT increases.
It’s not exactly a revelation to say that PT services are in demand— everyone reading this has probably felt that acutely in their own practices. Nor would it be much of a prediction to say that the demand will grow in 2024; that only follows with a U.S. population that continues to age. What I believe is that 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.
We have a pending crisis on our hands and will need to become more efficient with our PT skillset. Not only is the US population getting older, but the next generation of the workforce is shrinking. If we take a look at the demography of the US projected for 2025, we see the unique profile that is affecting healthcare needs and more specifically our PT workforce.
We have acknowledged the increase in demand for our services due 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 are seeking 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.
As we (I am part of this category) move into being the mature workforce, and consider the exodus of therapists post-pandemic, there simply aren't enough of us to fill all the positions needed, especially as you think about senior leadership roles and our current method of career pathing in the industry. Most of us in this demographic have moved out of patient care to more administrative and leadership roles at a time when we have a shortage of clinical providers.
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 are requiring 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.
Cash-based services will continue to increase.
Our patients are discovering what we’ve long known as providers: our current healthcare system is broken and needs revamping as commercial insurance companies seem less concerned with patients getting the care they need and more concerned about profit margins due to the system which incentivizes this behavior. That’s led to an increasing administrative burden on therapists and an even higher patient financial burden through high deductible plans with large out-of-pocket demands. With the elimination of that administrative burdened middleman, 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 mentioned above, the Boomers have money to spend and are willing to spend it on their healthcare needs, so as demand rises, we will continue to see more clinics have these options available. The downside is that this will continue to widen the gap between the haves and the have-nots in terms of access to healthcare and physical therapy services. Even with the increase in cash-based services, we have also seen a rise in self-insuring companies and a record-breaking rise in insurance coverage signups.
Unfortunately, MA plans remain popular during the open enrollment period, 2023 included. But I believe the tide will shift beginning in fall 2024. In addition to the ongoing bad press about exploiting seniors, 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.
Digital MSK will be bolstered by in-person visits.
Since the COVID-19 Public Health Emergency, telehealth and digital musculoskeletal (MSK) platforms had quite the moment. And with the reported hundreds of billions of dollars spent on MSK, who wouldn’t try to have a piece of the pie? But I stress the word “had”. As was recently highlighted by Scott Hebert, PT, DPT, CEO at Second Door Health, in an Ascend 2023 presentation, many of the digital MSK platforms offered today suffer from a meager 3% engagement by patients.
So although many private insurances and employers have jumped onto the bandwagon to try and solve this MSK spending problem, 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. In 2024, rehab therapists will be better positioned 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. However, as noted above, the shortage of providers is here to stay, so we will also see a surge in the use of other providers, like PTAs, athletic trainers, and even personal trainers, to meet the demands based on patient needs. In this scenario, more complicated and perhaps acute patients would require more skilled PT-delivered services, while the volume of MSK general diagnosis of sprains/strains would be seen by less expensive yet qualified providers.
What I would hope to see is 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.
The election will impact healthcare moving forward.
Typically, healthcare is one of the third-rails of politics, which is to say a topic you’d sooner not touch. It’s certainly a delicate situation; while most Americans are unhappy with the healthcare system as it is, there’s no agreement on how to fix it. Further complicating that is the fact that, according to data from Gallup, 72% of Americans rate their care or healthcare coverage as good or excellent—even as statistics show that the US has the worst outcomes of any high-income country in the world
That hasn’t stopped healthcare from being a talking point in this election cycle — which means that depending on the outcome of the November election, we could see major changes that impact the industry as a whole. 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.
It's no wonder that there is a difference between parties on this issue and it again comes back to the demography of voters. Of course, many of these proposed changes hinge upon the results of the congressional elections and whether the winner of the presidential election has a unified government or has to contend with opposition control of one or more houses of Congress. 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.
PXM will define the future of clinical operations.
With all of the challenges that our profession is facing in 2024 and beyond, providers must be more efficient, more data-driven, and better equipped to keep patients engaged. 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.
So, what do you think? Do I have it just about right, or do you think I’m off-base with some of these predictions? While I doubt I’ll get everything exactly correct, I do think it’s a useful exercise for thinking about what might be coming in the next year so that we can be prepared for anything the universe throws at us. I’m not always a fan of predictions, but I am a planner and encourage spending the time to think about the forces that can impact our future so that we can be more sustainable as an industry.