Do therapists work, or do they practice? It is not an insignificant question, and the answer speaks volumes about how we think about ourselves as professionals.

Why is it that so few of us use the word practice to describe what we do? How does this affect the ability to:

  1. empower therapists to treat patients independently, and
  2. compensate them for their productivity and the quality of the services they deliver to patients?

Before we dive into exploring those questions, I’d like to introduce you to this concept: your patients are your practice, and your practice is your business.

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Finding the Connection Between Compensation and Care

How we think about ourselves has an important effect on how we act as well as how others think about and treat us. This idea is clearly evident is the manner in which therapists are paid for their patient care.

Most PTs are employed—meaning they work for a salary.

The Physical Therapist Member Demographic Profile reveals that 83% of physical therapists work in employed settings, while less than 15% are self-employed. Based on this data, we can say that the vast majority of therapists work for a salary or wage.

Therapists who are employed by a practice periodically undergo job performance reviews, after which they may receive salary increases. Rarely do these performance reviews cover the therapist’s clinical outcomes as recorded using valid and reliable outcomes instruments. One of the barriers to rehab therapy becoming an autonomous medical profession is the disconnect between remuneration for our services and the clinical outcomes achieved.

Clinical effectiveness should be a performance review factor.

This disconnect between payment and quality of clinical outcomes erodes the very nature of the therapist-patient relationship. An approach to compensation based solely on salary—one that does not consider a therapist’s clinical effectiveness—subverts an important means of accountability. In the plainest sense, this means that ordinary—even subpar—treatment is compensated the same as care that produces the best clinical outcomes.

Compensation strategies that separate clinical effectiveness from therapist payment can easily lead to the disjointed belief that our patient care is our work, when in truth, our work is our practice. Patient care is what therapists do, and patient care by a physical therapist is the practice of physical therapy. Patients are our practice.

Aligning Incentives and Outcomes

One reason people choose to join the physical therapy profession is to earn a living. This is a reasonable goal of professional practice. Patients and clients seek rehab therapist services to improve their functional ability and quality of life—and therapist compensation should align with the goals of the patient seeking treatment. Research has shown that compared to traditional salary or pay-for-production methods, paying healthcare providers in a way that considers their successes in treating patients leads to better alignment between provider clinical performance and patient goals.

When therapists consistently achieve optimal patient outcomes, business success naturally follows.

The fact is, because therapists earn a living treating patients, their patients are their business. Not to sound like a broken record, but again, patients are your practice, and your practice is your business. This is true whether therapists are paid hourly, annually, by the visit, or by the profit that results from a private practice. Better alignment between therapist and patient goals produces better clinical outcomes. Using compensation mechanisms that focus therapists on their practice reinforces the importance of outcomes in business success. If positive outcomes are achieved consistently, therapists earn more. The opposite is also true.

Changing healthcare market conditions will force a shift in compensation philosophy.

The realities of financing health care and paying healthcare providers are likely to accelerate our need to change the way we think about compensation. Between 2004 and 2013, actual median income of physical therapists increased by 25%. During this same time period, payment for outpatient services decreased between 4% and 10% depending on the services provided. The market forces of decreasing availability of physical therapists and decreasing payment for services will make it difficult for employers to meet the traditional salary expectations of therapists in the near future. Clearly, changes are on the horizon.

Coupling clinical performance with compensation has already proven effective in the physician world. Pay-for-performance has become the latest mantra of healthcare policy makers for good reason—it more appropriately matches payment and clinical outcomes than fee-for-service alone. To earn the incomes that are commensurate with our training and investment in education, therapists need to change expectations about how they will be paid. Individual practices are standalone businesses. Similarly, therapists employed by practices will find that approaching their individual practice as a business itself will pay dividends in an outcomes-based compensation scenario.

Preparing for the Future of Value-Based Care

Aligning rehab therapy practice with outcomes and compensation is beneficial for therapists, practices, and patients alike. This represents the basis of professional autonomy—not autonomy from other healthcare professionals, but autonomous responsibility for clinical behaviors and practice through driving the delivery of optimal patient care.

Once therapists acknowledge the notion that their patients are their practices, then it logically follows that compensation—as well as professional ethics and conduct—should reinforce the alignment of the therapist-patient relationship.

Payment based on quality is part of the APTA’s strategic plan.

In considering therapist compensation and the variety of practice ownership and employment settings that will exist in the future, the APTA Board of Directors developed The Principles of Professionalism Guiding Physical Therapist Business Relationships:

  1. Autonomy: Physical therapists must have control over all clinical decisions relating to physical therapy.
  2. Incentive: Physical therapists should have their compensation based on the value of their services and production.
  3. Equity: Ownership should be proportional to investment and shared risk.
  4. Integrity: Business relationships must avoid all potential conflicts of interest and comply with all APTA policies, positions, and guidelines.

This simple statement is part of the APTA’s strategic plan, and therapy professionals should consider these items as essential elements of how practice owners think about compensation and equity sharing in their practices.

The idea of focusing on value applies at both the individual and organizational levels.

All healthcare professions are in various stages of grappling with outcome- and quality-based compensation. Receiving payment for quality and outcomes rather than the number of services or the time spent treating will require a tremendous cultural shift for physical therapists. Research demonstrates the absolute effectiveness of aligning healthcare provider compensation, incentives, and productivity with the quality of clinical outcomes.

Embracing the concept of “your patients are your practice and your practice is your business” does not require that all therapists be owners of their own businesses. It only requires that we all embrace the highest ethical implications for our profession. It means that we must all enjoy or suffer the economic consequences of our clinical skills and decision-making.

Want more actionable business insights from rehab therapy industry leaders? Join us for Ascend, the ultimate rehab therapy business summit. At this two-day event, you’ll get a year’s worth of insights and ideas to boost your business, improve your bottom line, and excel as a therapy professional. Plus, you’ll have the opportunity to not only meet therapy professionals from around the country to discuss the ins and outs of succeeding in therapy business, but also learn from experts and thought leaders from top organizations. It’s all happening September 28-29 in Phoenix. Register now to grab the best pricing before time runs out.

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