All Things #PhysicalTherapy: Mid-Year Update — What’s Going On with Our 2024 Predictions?

Remember our bold predictions for 2024? (HERE and HERE with 2023 review) Well, it’s time for a reality check. Let’s dive into what’s actually happening this year with our predictions, and let’s just say, some of these developments are evolving-one way or another.

Medicare Advantage Backlash

In 2024, we predicted an unprecedented backlash against Medicare Advantage (MA) plans, and boy, were we right! Providers of all stripes are revolting against the notorious MA plans. These plans, marketed heavily to Medicare patients with endless mailers, seminars disguised as health fairs, and every other trick in the book, have grown to cover over 50% of Medicare-eligible patients. Talk about a monopoly!

The problem? These MA plans are a bigger headache for providers than traditional Medicare. They pay less — think 70% of the Medicare fee schedule — and pile on additional rules and regulations like arbitrary visit limits and endless documentation requirements that do nothing but increase cost which in effect is further reduction from the paltry 70% of medicare. Providers are tired of the “Deny, Deny, Deny” mantra when it comes to claims management and are doing what they have to-namely “deny, deny, deny” medicare advantage patients access as losing money can’t be made up in more volume. Double jeopardy also exists in this game-the major MA payors won’t let #physicaltherapy and most other providers contract with their commercial products unless you agree to lose money on every one of their MA patients! Ouch!

This year, we’ve seen providers stand up and say, “No more!” Lawsuits are flying, providers are refusing to accept MA patients, and the smart ones are sending patients to competitors. Rural hospitals are leading the charge, and it’s about time.

Continued Drop in PT Applications to PT Schools

We also foresaw a continued drop in applications to PT schools. Perhaps half right and half wrong would describe the preliminary numbers just released while awaiting the full numbers at the end of Sept. The 2023–24 cycle of PTCAS closed on June 3 with 18,157 applicants submitting 78,984 applications. Compared to the 2022–23 application cycle, this represents an increase in the number of applicants (we were wrong) although a decrease in the volume of applications (where we were right). The lower volume in applications is due to the applicants applying to fewer total programs. It is believed this trend will continue as APTA now publishes a price transparency tool on the application service (this is a very good thing). APTA has several initiatives aimed to bring the applicant pool back over 20,000. This is significant as trends in college enrollment are beginning a downward trend known as the enrollment or demographic cliff. For some really good news on the diversity front, 39.6% of the applicant pool identified as a race or ethnicity other than exclusively white, a 1% increase over the previous cycle and nearing the same ratio as the US Population. For a terrific piece on this read about Melissa Yeung getting the prestigious Stanford Award from the American Physical Therapy Association (APTA) Academy of Education for her research titled “Experiences of Underrepresented Racial Minorities in the Entry-Level Physical Therapy Application Process: A Conceptual Framework.” This work was done at the public institute, THE Bowling Green State University (what grads like me affectionately refer to as the Harvard of the Midwest). BGSU is one of our EIM-affiliated schools, which is a 2-year DPT with 100 students in a blended format, and these accelerated programs have far more racial minority representation than the brick-and-mortar incumbents.

Here is the five-year trend, so 18,157 is the highest in this period.

The reasons applications are down generally are many and varied: three years of grad school tuition, student debt north of $150k, and salaries that don’t quite keep up. Plus, our field has suffered from academic creep — bachelors to masters to doctorates — driven more by higher education’s need for tuition dollars than by our profession’s demands. In my humble opinion, until we have an adult conversation with the combination of PT’s, academics, employers, and decision-making reps from higher education on student debt, it is going to be a battle to get to the 20k level-something I broached in this post exploring the problem and a potential solution.

Value-Based Payment Models in Physical Therapy

We had a hunch that Value-Based Payment (VBP) models wouldn’t make a significant impact in PT payments this year, and we’re seeing that play out. Direct VBP for outpatient PT is still on the horizon, but there’s buzz about MSK (musculoskeletal) VBP pilots starting to influence physical therapy.

Primary care has a shot at driving this shift with their experience in VBP, and big players like Amazon, CVS, and Optum are pouring resources into these models. Their profitability is illusory and, according to owners of the large primary care groups, not expected for years. While traditional VBP isn’t shaking things up just yet, we’re seeing Alternative Payment Models (APMs) take root. These models — think bundled payments and per diem rates — could finally let PTs operate at the top of their license without being bogged down by outdated rules and regulations.

AI Enters Physical Therapy

AI is making waves, but not quite in the way we imagined. It’s not patients or PTs, but the back office where AI is making its mark. Documentation, compliance, scheduling, and revenue cycle management are seeing some AI-driven efficiency.

AI’s impact on physical therapy documentation and coding is still minimal, thanks to the complex web of regulations we deal with. However, the potential for AI to assist in note generation and coding through digital interactions is exciting-something we explored in this post.

Retention in Physical Therapy for New Grads

New grad turnover rates remain a thorn in our side, with over 33% of new PTs leaving within 18 months. The pressure on employers to attract and retain talent is immense, leading to sign-on bonuses, student debt retirement programs, and expanded perks. But as these incentives wear off, turnover is likely to remain high and the focus will be re-recruitment and retention-something we explored in a series of posts.

More Work Pushed to Patients

We predicted that 2024 would see more work pushed onto patients, and it’s happening. From online scheduling and registration to electronic payments and virtual reception, practices are shifting tasks to patients. Done right, it enhances service while lowering costs — a win/win in today’s challenging environment. Lots of great companies are entering this market.

Increase in PT Transactions

Finally, we expected a rise in PT practice transactions, and the market is indeed heating up-albeit at a smaller practice level (think 1–8 site practices). Better performance in 2023 has boosted market valuations, and if interest rates ever decline, we’ll see even more activity. Small and medium-sized practices face daunting challenges, making mergers and acquisitions more attractive for a ton of reasons.

Year of the Ozempic Olympics

Boy, were we right about this one. 2024 is the year of weight loss injections, with semaglutide drugs like Ozempic, Wegovy, and Mounjaro stealing the spotlight. These drugs, initially for diabetes, are now the latest craze for weight loss. See one of your buddies with obvious weight loss and significant shrinking of their muscles-you don’t have to be Carnac the Magnificent on why, (unless you want to guess the specific semaglutide!). While some employers require physical therapy trials before covering these drugs, offering a potential boon for PTs, most are not offering it on their formulary, making imitation drugs (compounding substitutes) the best cash-based business ever.

While these drugs promise much, history reminds us of the unintended consequences. Phen Fen and Belviq come to mind, and we can only hope for a better outcome this time. Ironically, given the mass muscle mass loss as a tradeoff for weight loss, this could be as good of a boon for #physicalthearpy as pickleball or crossfit!

That’s the mid-year update, folks! Let’s keep pushing forward, adapting, and thriving in this ever-changing landscape. Here’s to the second half of 2024 — may it be full of surprises and success!

@physicaltherapy

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