Which physical therapist delivers the best overall value for patients, employers and insurers — one employed by a physician, or one who has an ownership stake in his or her own practice?
When physicians own physical therapy clinics and refer their patients to those clinics, there is an inherent conflict of interest because of the referral-for-profit issue. Referral-for-profit has wide-ranging effects that negatively impact patients, payers and the healthcare community at large.
The consequences of physical therapy referral for profit are costly. Referral for profit services translate into higher healthcare costs for both consumers and payers because they generate more utilization and higher charges than do autonomous practitioners.
The data regarding referral for profit services speaks for itself:
A study in the Journal of the American Medical Association revealed that visits per patient were 39% to 45% higher in physician-owned clinics when compared with therapist-owned clinics; revenue per patient was 30% to 40% higher in facilities owned by referring physicians.
The Florida Health Care Cost Containment Board found that physician-owned physical therapy facilities provide 62% more patient visits per full-time physical therapist, when compared with non-physician-owned clinics. The patients referred have 43% more treatments when compared with non-physician-owned clinics.
A William Mercer study of workers’ compensation patients in California revealed that patients seen by physicians with ownership interest in physical therapy services received referrals for physical therapy 66% of the time; patients seen by physicians without ownership interest in physical therapy services were referred 32% of the time. The result: $233 million in services per year for economic rather than clinical reasons.
Patient care may also suffer in physician-owned clinics. Both licensed therapists and non-licensed workers in those settings spent less time with each patient, indicating that a lower level of care is provided, according to a Florida study, which also found that assistants are substituted for licensed therapists more often in physician-owned facilities.