Consumers might be willing to travel a long distance for a particular procedure, or even drive a distance for a follow-up with a specific doctor, but when it comes to PT, they are more likely to go to whichever clinic is closest.
This article was originally published December 2, 2021 on PSQH by Matt Phillion.
According to a new report, 55% of patients sought rehabilitation services outside of the system or organization following surgery, resulting in $2.5 billion in lost potential revenue. The report, conducted by Luna, examined 3.4 million commercial claims with the assistance of analytics firm Definitive Healthcare.
“Fundamentally, we know that care is expanding beyond the four walls of the hospital,” says Ryan Lewis, head of business development with Luna. “It’s rare that healthcare leaders don’t talk about their at-home strategy.”
Also, a frequent discussion point: Leadership knows that the majority of physical therapy (PT) referrals go to the competition. “We were shocked to discover how high the percentage was,” says Lewis. “It’s often higher than 50%. Some of my colleagues tried to quantify it. We knew leakage was high, but if we add it up, it’s $2.5 billion.”
The next question to ask, of course, is: why?
“There’s 20,000 or 30,000 outpatient rehab clinics out there,” says Lewis. “That’s more clinics than Starbucks. And that concept is similar for rehab clinics.”
Consumers might be willing to travel a long distance for a particular procedure, or even drive a distance for a follow-up with a specific doctor, but when it comes to PT, they are more likely to go to whichever clinic is closest. “The quality of care in or out of network is similar,” says Lewis. “There’s so many clinics, consumers are more likely to go to the closer one even if it’s not affiliated.”
Recapturing those lost rehab patients is a complex endeavor. The simplest way to do it, Lewis says, is the obvious: Build more locations. “If you have more clinics, and they’re closer to the population, if they’re a mile away instead of 14, that helps. But if you speak with any executive and ask what your budget is to build more physical therapy clinics, they’ll laugh. There’s not capital dollars for building locations.”
If money were no issue, building more clinics would be a great way to prevent referral leakage, but short of that, organizations have to find a way to differentiate their network’s care as better, safer, and more convenient than the competition.
A lot of this is also messaging, Lewis notes. “We talk about the concept of stickiness,” he says. “When you, as a system, are able to create a brand that customers gravitate to and feel loyal to, it influences the likelihood they’ll drive an extra six miles to stay in-network. Systems are in the throes of building the idea of brand loyalty right now.”
If you can’t build more locations, your organization will need to build loyalty by identifying why it’s bigger, faster, and stronger, says Lewis.
“But I don’t have an answer for that,” he says. “Our model proposes that when a patient can’t or won’t go to the clinic, bring the clinic to them. How about physical therapy at home to recapture that referral leakage?”
The home concept isn’t just about brand stickiness, either. Reasons for not going to PT can go beyond not wanting to drive, but instead involve transportation issues, work, childcare, and other obstacles. Plus, at-home care leans into patients’ generational preference to have services come to them, not the other way around.
“Disruptive is an appropriate term—it’s why you keep seeing hospitals with at-home models,” says Lewis. “If you can deliver safe, effective care and keep the patients outside those four walls—especially because of COVID—there’s a level of satisfaction from the customer perspective.”
Companies have been offering this type of service on an urgent care basis, Lewis notes. If it can be done for urgent care, why not PT?
Change acceleration during pandemic
There are limitations to at-home therapy, of course, depending on the care required. Some equipment may require a visit to a clinic. However, in general, “physical therapy is a modality that translates well into at-home care,” says Lewis.
The pandemic has been an accelerant for change across the industry, particularly with treating patients in their homes. Telehealth has been leveraged much more frequently, for example, and “it’s been a magnifying glass on the need to keep patients outside the four walls of the clinic,” Lewis says.
Another accelerant related to the pandemic: the number of elective procedures postponed or canceled, and the missed revenue from those lost surgeries. “A lot of leaders are looking for viable alternatives,” says Lewis. “In some circumstances, PT can be a viable alternative before having a procedure.”
Lewis notes that the pandemic has forced much of the industry to ask: Does care need to happen within the walls of the clinic? “Years ago, the answer was, ‘Of course,’ but now” other options are opening up, he says.
Healthcare reimbursement has also changed during the pandemic. Once difficult to be paid for, at-home and telehealth visits are now reimbursable in ways they were not before.
The customer and the provider experience
There are two sides to the marketplace, Lewis says. “For any at-home model, you have to provide a phenomenal customer experience,” he says. “But on the flip side, you need to drive value for the care providers.”
The industry knows at-home PT will not be appropriate for everyone or for every condition. “But we’re also seeing that the demand for at-home physical therapy services will far outweigh the nation’s ability to deliver that service,” says Lewis.
Luna works with physical therapists who moonlight and set their own schedules, while most still also work in a clinic setting.
“Balancing consumer demand with access to capacity … we’re a technology-driven company,” says Lewis. “I won’t say it’s coincidental that we started with physical therapy—that was very deliberate—but it’s super conducive for matching the right physical therapist with the right patient.”
The future of at-home service isn’t exclusively PT, Lewis says. Occupational therapy, speech therapy, cardiac rehabilitation, and more have come up as potential areas to explore.
Hurdles to at-home treatment
From the patient perspective, Lewis notes the success of at-home care depends on the patient’s comfort with the concept. “We’re not hearing a lot of feedback from patients that they don’t like care at home,” he says. “Quite the opposite, because it’s one-on-one treatment time and we’re able to analyze the environment. We do know that there are some patients who don’t want anyone coming into their homes.”
The friction they have run into, however, is a matter of prioritizing innovative services like PT. There is a great deal of interest, but they must contend with competing priorities, says Lewis.
Tangentially, at-home treatment also addresses the talent bleed in healthcare as the world struggles to climb out of the pandemic.
“We’re tapping into a market of qualified therapists who are already practicing,” says Lewis. “They may work at any number of private brick-and-mortar clinics, while typically doing six to 10 visits in their off-hours. It’s a way to earn additional income.” Others want the flexibility of working full-time in a gig-style role.
“When we partner with a health system, they don’t want to lose the talent they’re already struggling to retain,” says Lewis. “We’re not trying to poach talent. We want to give systems a way to offer the opportunity to moonlight.”
The world-changing impact of COVID-19 has not only affected how organizations offer care today, but how they’ll offer it going forward.
“Looking at different periods in history, it’s always some kind of event that causes a seismic shift in an industry,” says Lewis. “The pandemic will create a significant shift in how systems deliver care and how patients demand they receive care.”
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