The Rising Cost Of Health Care

In our current health care system, there is the belief that insurance is "the only way to go". There is the perception by patients that their care, especially care such as physical therapy, is driven exclusively by their insurance plan, and that using their insurance is, in fact, the most cost-effective way to deal with an injury.

Sadly, this is no longer the case.

In the current insurance-based payment model, your insurance company will "approve" payment for a certain number of physical therapy visits for your current episode of care (and oftentimes over a calendar year). This is typically anywhere from 8 to 12 physical therapy visits. This is what CAN be utilized, not what MUST be utilized.

Physical therapists that are part of these insurance networks are usually reimbursed at a very low rate per patient or per treatment activity. In order to compensate for this, it is then in the best financial interest of the physical therapist to either a) utilize ALL available treatments that have been approved by the insurance company, or b) increase the overall cost to the insurance company in the hope of attaining a greater income based on the percentage paid by the insurance company. The average cost per visit billed by a physical therapist, based on a number of references, is in the range of $100 to $200 per visit.

The patient is typically billed a copay, and many insurance companies are also implementing a specific deductible for physical therapy or allied health services, or a percentage of the bill to be paid by the patient. Patients are now typically faced with $40 copays and up to 20% of the cost of care along with their copay. That can bring the total to well over $60 per patient visit.

More treatment visits do not mean greater improvements in function. Though the national average for back pain is along the lines of 12 visits per episode of care, most practitioners are utilizing non-evidence-based assessment and treatment strategies, and are not focusing on elements of competent self care in conjunction with clinical care provided in order to optimize the patient outcome.

Fortunately, there are some new approaches that return to a focus on quality and value in health care.

In the last 7 years of my clinical practice (Smart Sport International), I am proud to note that the average number of visits per patient episode of care is less than 6 visits. This is less than half the national average. This amounts to an improved functional outcome at a lower cost.

Don't forget that each treatment visit costs the patient time away from home or work, which is oftentimes forgotten in the process. How much is your time worth to you?

In doing so, I have utilized a number of models for care that break these traditional approaches in order to provide cost-effective and optimized solutions for care, with a focus on competent self care strategies combined with evidence-based clinical strategies. Let's examine the actual patient costs, and then make a judgment based on consumer values of quality and value.

Traditional payment model:
Number of visits = 8 to 12 (approved by insurance)
Copay per visit = $40 per visit (on average)
Per visit cost = $100 per visit (billed to insurance)
20% patient percentage = $20 per visit
Lost time per visit (including session and travel) = 1.5 hours per visit x 8 visits = 12 hours
Total out-of pocket expenses = $60 per visit for 8 to 12 sessions = $480 - $720 per episode of care

Smart Sport International - Per Session Approach
Average number of visits = 6 (including initial assessment)
Cost per visit = $60
Lost time per visit = 9 hours
Total cost per episode of care = $360 - a savings of $120 - $360 (and 3 hours of your time)

Smart Sport International - Retainer Approach
Initial Consultation = $60
Quarterly fee = $270 ($90/month)
Total cost = $330

Many insurance networks will reimburse the patient directly as an out-of-network provider. This is typically at a rate of reimbursement of 50 to 80%. This lowers the cost to the patient even further.

In most other industries, quality and value are key. Health care has lost the focus on this. My goal, as a physical therapist and within Smart Sport International, is to reduce the barriers to care, to provide optimal and cost-effective treatment strategies, and to promote self care strategies. The future is now.

Photo credit: abesselink