Last year, the US Department of Health and Human Services (HHS) announced its plan to link half of all Medicare fee-for-service payments to alternative payment models by 2018. That’s only a year and a half away, which means the clock is ticking—and the demand for alternative model adoption is increasing. If you work in a large healthcare organization—especially a hospital—you undoubtedly already know about one such model that’s been garnering quite a lot of attention across the healthcare space as of late: accountable care organizations (ACOs). But, you may not know that physical therapists (PTs) are critical to hospital ACO success. Here’s why:

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ACOs require a team effort.

Simply put, an ACO is a group of doctors, hospitals, and other healthcare providers who coordinate their efforts with the goal of delivering high-quality care to Medicare patients. CMS’s hope is that this level of care coordination will improve communication and collaboration among all members of a patient’s healthcare team, thus ensuring that patients—especially those who are chronically ill—receive the best care at the most opportune time. ACO structures also foster the elimination of unnecessary or duplicate services, because providers are less likely to operate in silos and more likely to keep each other in the loop. When done right, this model can lead to big savings: in this post, WebPT’s Lauren Milligan reported that the Accountable Care Collaborative, which is Colorado’s statewide ACO, ”achieved gross savings in medical costs between $98 million and $102 million with net savings totaling $29 million to $33 million after administrative expenses”—and those totals account for infrastructure investments and incentive payments.

Essentially, all providers in the ACO get paid more when they work together to keep their patients healthy—and out of acute care settings. But, as WebPT’s Brooke Andrus explains here, this last point brings up an interesting dilemma for hospital and large healthcare system administrators, because they must balance the incentives associated with keeping patients out of their facilities with the money they would otherwise receive from admitting those same patients. Of course, most people who go into health care do so to help people first and foremost. However, this quandary represents a real challenge in terms of financial stability—especially given shrinking insurance payments and increasing regulations and penalties.

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No team is complete without rehabilitative providers.

The good news, though, is that there may be a way to achieve a balance that’s good for everyone involved—especially patients. By incorporating specialized outpatient services such as physical therapy into to the organizational care umbrella, hospital administrators can keep some of the revenue generated from both preventive and rehabilitative services within their systems—thereby completing the care loop—while simultaneously earning the incentives associated with reducing hospital admissions. As Patric McQuade, director of the rehabilitation service line at North Shore–Long Island Jewish Health System, notes in this article, “The idea is that offering outpatient physical therapy as part of the hospital's care continuum helps to avoid readmissions and offers continuity to patients. When patients select the hospital's outpatient PT program, it has the added benefit of keeping that downstream revenue in the system.” And PTs treat more than “the orthopedic and stroke recovery [patients] that usually pop to mind.” In the same article, Courtney Bryan—director of rehabilitative services at Houston Northwest Medical Center—said, “The list of patients who are served by physical therapists has expanded over the past 10 years.” Physical therapists now treat “patients with pneumonia, congestive heart failure, and chronic obstructive pulmonary disease” as well as those with “diabetes, lymphedema, vestibular disorders, and those who need continuing wound care.”

Physical therapists bring big value.

Historically, rehabilitative services have been undervalued and underutilized, despite the fact that they can help reduce hospital admissions and readmissions as well as improve post-discharge patient safety—two things Andrus discussed in this post about what keeps hospital CEOs up at night. However, this trend simply cannot continue. In order for ACOs—and thus, the healthcare industry as a whole—to be successful in this new pay-for-performance environment, PTs and other rehabilitative service providers must have a seat at the care-team table. Rehab therapy often is the bridge that helps patients transition from the hospital to their homes—which means rehab therapists bring too much value to remain on the sidelines any longer. Here’s why:

1. They focus on function.

Recent studies—such as this one published in the Journal of the American Physical Therapy Association—have demonstrated a link between functional decline (both during hospitalization and post-discharge) and a greater risk of hospital readmission, which is exactly why “physical therapists can contribute meaningfully to existing care transition models and work collaboratively with other healthcare disciplines in reducing avoidable hospital readmissions.” For many patients, outpatient physical therapy serves as a way to maintain and improve functional ability through personalized, high-touch treatment plans that are adaptable based on the patient’s progress—or lack thereof. Furthermore, because physical therapists are so intently focused on their patients’ functional abilities, they are in a unique position to be able to spot potential problems and alert other members of a patient’s care team before the patient declines so much that he or she requires readmittance. “Functional deficits represent an independent risk factor for hospital readmission and are potentially addressable with physical therapy interventions,” this journal article explains.  

2. They solve real-life problems.

Most patients in the hospital just want to go home—and understandably so. However, it can be challenging to properly prepare patients for success in a home environment while they’re still in the hospital; there’s simply no way to foresee all the potential obstacles patients and their caregivers may face once they’re on their own. That’s where physical therapy can be an incredible asset. When a discharged patient continues outpatient therapy after returning home, he or she can address the specific functional challenges that come up during daily life. For example, in this study on mobility, researchers found that “...physical therapists play a critical role in educating older adults about mobility-related red flags, such as slowing gait speed or new impairments in strength or ADL function that occur during care transitions.” Furthermore, in a small study conducted on improving care for veterans following total knee replacement surgery, researchers found that “involving physical therapists in the mobility education given to older adults during care transitions resulted in a 36% reduction in hospital readmissions.”

3. They leverage patient-reported outcomes measures (PROMs).

Sure, performance-based functional outcome measures are key to assessing patient progress. However, these measurements only account for part of the patient story. To get a complete understanding of a patient, the provider must also take into consideration the patient’s perspective on his or her own functional abilities. After all, research has demonstrated that a decline in self-reported activities of daily living function is strongly linked with less-than-ideal outcomes following hospital discharge. Although inpatient providers administer PROMs, the patient's burning desire to get out of the hospital may very well skew his or her responses. In other words, chances are good that the data collected from these measurements in an inpatient setting are biased and therefore cannot be used to identify true risk for reinjury or readmission.

4. They’re uniquely positioned to build important relationships.

Unlike many other healthcare providers, physical therapists tend to see patients frequently and regularly—especially immediately following hospital discharge. This—combined with the fact that therapeutic treatment is often delivered in a one-on-one, hands-on way—allows physical therapists to develop deep and meaningful relationships with patients and caregivers. As a result, they’re able to establish a level of trust that not only opens the channels of honest communication, but also improves patient engagement, which positively impacts patient outcomes.


Whether we like it or not, payment reform is here. And to be successful in this new era of health care, providers and administrators must be willing to let go of the status quo and experiment with new models of care delivery. This requires remaining flexible, learning from mistakes, and carrying on—together—to do right by patients and each other.

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