If you browse all the different private practice forums out there (or receive all the emails I do from practice owners), it is clear there is a great deal of uncertainty and fear about how Obamacare, ACOs, and other changing components of the healthcare system will affect private physical therapy practices. In many areas of healthcare (often moreso than in the PT realm) we are seeing progressively more corporate conglomeration of private practices and the “pushing out” of small private practices. Physicians are finding it much harder to keep their practices profitable, and hospitals/corporations are buying up them up left and right. What does all this mean for physical therapy private practice owners?
My referring physicians are being forced to keep their physical therapy referrals “in house”
The above statement is a complaint I’ve heard a number of times in the past few years. With the aforementioned hospital/corporate purchasing of medical practices, those physicians become employees of a system that usually has a “physical therapy department,” and the doctors are being told that they must keep all therapy referrals within their hospital/corporate system. Is this legal? I doubt it, but it’s happening anyway and in greater amounts every year. So what can you do to protect your current or future PT practice against this damaging trend?
Stop relying on physicians for all your referrals!!
This situation, and the fear surrounding it, loses a great deal of intensity if your practice does not rely solely on physicians for new patient referrals. In no way am I saying that cooperation and collaboration with physicians is not important. I’m looking specifically at the topic of patient/income generation (not patient care and/or the health care team).
Some of you may think, “But I’m not in a Direct Access State, so I’m forced to rely on physicians for referrals.” I practice in Texas where we do not currently have true Direct Access, so all my patients must acquire a referral before I can start treatment. However, less than 10% of my patients are directly referred to me by physicians. Most of my new patients come from word of mouth (other patients), complementary health/wellness/fitness practitioners (ex: personal trainers, acupuncturists, massage therapists, etc.), and online sources (Google, YouTube, etc.). The majority of my prospective patients call without having a physician referral and then have to go through the extremely frustrating process of getting one, but that’s another topic altogether. See this post for more information on cash-practices and the direct access issue.
Building non-physician referral sources for your physical therapy practice
So how do you decrease your dependence on physician referrals? Well, I could write a book about marketing PT services directly to the public; and that is in fact a huge component of my Cash Practice Guidebook. I’ve also written a number of blog posts on this topic, so I’ll direct you to these sources rather than re-typing everything:
When you live off word-of-mouth, make every patient a walking advertisement
Break into Niche Markets, and Create New Streams of Cash-Paying Patients
A Free Marketing Technique That Helped Get My Cash Practice Going Strong
Networking – A Key Component of Filling your Cash Practice – Part 1
Marketing Advice for a New Cash PT Practice Owner
Take Advantage of Trends and Squeeze Every Drop From Your Marketing Efforts
How to use Blogging to Grow a Cash-Based Physical Therapy Practice
Discharge Marketing – Are You Capitalizing on this Precious Opportunity?
The landscape of healthcare is changing, and diversification of our referral sources is becoming ever more important for survival. In my next post, we’ll look at a related topic and address a statement I recently heard that “when the Affordable Care Act (aka Obamacare) is implemented, and everyone has insurance, cash-based practices will become extinct.”
If you’ve had experience with the conglomeration and referral issues discussed above, or have any advice on how you have marketed your services directly to the public, please let us know in the comments below.
Interested in the cash-based private practice model?
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I’ve had patients call physician offices repeatedly (5+ times) to have their prescriptions sent. Quite the process… but if you provide quality service… your patients are willing to do what it takes!
Jarod, thank you for your wonderful insight!
You’re welcome, Jason! Thanks for the comment
Great blog post… it’s a very serious problem, and you have given some very practical suggestions to help with dealing with lack of referrals from physicians. Great job Jarod.
I really appreciate that, Greg. Thanks for the comment and best of luck with your practice!
I am lucky I live in a Direct Access state, Florida. It is a little nerve racking for me to step out of the comfort zone of having an MD backing but I explain to the pts what I can do, that they will need to see an MD if I feel it is out of my practice scope, and if it takes longer than 21 days (Florida rules). I am being restrictive of the type of condition I treat, only hands on and body wgt/light exercises, I am mainly using Myokinesthetics and exercises. So far so good.
Thanks for sharing, Dan. Direct Access… must be nice!
It is ridiculous the burdens placed on PT. I feel badly for those without direct access when hypocritically, people can walk off the street and be treated by a Chiro, accupuncturist, or trainer. Your message about marketing is key. As a field, I don’t think we market ourselves well. The ship is starting to turn, but we need some serious PR work.
Great article, I cannot agree more. Since starting my practice 3 months ago, I have received exactly 2 physician referrals, yet my schedule is filling up. One thing I would recommend is to get involved in local community organizations. This is a great way to get to know new people and spread the word about you, all while helping a good cause and having fun. Prior to opening I was already involved in a local rowing club, but since opening I have volunteered with a local running group, and gave a presentation for Team in Training, next week I’m speaking to a local swim club.
Congrats on the early success, Justin! Thanks for sharing what has been working for you… a lot of the same things that helped get my practice off to a good start.
Excellent Article, thank you. One point to keep in mind regarding “Direct Access”. Even if you are lucky enough to live & practice in a State that offers Direct Access (as we do here in Washington) the insurance companies still have a very firm hold on their requirements to get a claim paid timely and properly. Many payers here, while following the law by allowing “direct access” place several restrictions on the patient and PT Provider such as signed POC’s, constant documentation support, frequent medical review, and yes even the requirement of a referral. True Direct Access and Independence as Practitioners will only come when the profession as a whole stands up and demands to be recognized as something more than an ancillary commodity in Primary Care.
Great point, Scott! And another reason being out-of-network is so liberating… not having to jump through so many hoops just to get paid (even after your State has won a hard-fought battle for Direct Access)
Jarod,
Great post! I agree, that too many therapists/practices rely on physicians for referrals. That set up has a very unbalanced power dynamic. In my practice I see less than 1 new patient a month referred from physicians or nurse practitioners, and when I do get a referral over half the time the patient does keep or schedule an appointment.
The one thing most health care workers do not have is an online presence. I tried to find the information for a practice that called today to refer a patient and could not find anything definitive, until I dug deep in to the 2nd page of google on my 3 search and still did not find a practice website.
An online presence so patients can find “us” when they are looking for physical therapy or a solution to their problem is a must and is how 50% of my new patients find me.
Jarod,
I practice in Georgia where we don’t have direct access. Being a private practice owner, we are being approached by many hospitals to jump on board with ACO’s. That in itself is scarry because PT’s roles are not spelled out(i.e APTA letter to office of HSS). I have done some research and it seems that the hospital or physicians benefit. The whole idea of ACO’s seemed very corruptable to say the least. The fear is if you don’t join early or have a working knowledge of this then kiss your practice good bye. I know several private pay insurance companies are testing ACO formats as well. Our practice is trying to get other niches such as cash based programs but it takes some time. We still have to function in this upcoming system as we try to be more diverse. I am curious what your thoughts are on this subject. Can you join multiple ACO’s or are you subjected to one only. So many questions…
Hey John,
To be honest, I know very little about ACO’s so I couldn’t answer your questions there. Wish I could be of more assistance here. I would suggest ramping up your attention to adding cash-based services, so that if the ACO issue really hurts rather than helps your practice, it won’t have as damaging an impact due to your cash-based income hedge. Here again, I find my self so happy to not be in a position where all the confusing government rules and regulations around Medicare and 3rd Party Payors will affect my practice and livelihood.