How will “Obamacare” affect out-of-network Physical Therapy businesses?

I was recently asked a question that I get almost monthly, especially since late June when the Supreme Court upheld the constitutionality of the Affordable Care Act. So I figured it was time to answer it for all my readers …

What are your thoughts on the cash-based business model with “Obamacare” / universal health care taking form?  Do you see it having a large impact at all?

Well, there’s no way to know at this point how The Patient Protection and Affordable Care Act will change the landscape for cash-based PT practices. The bill is hundreds of pages long so no one can say for sure how it will affect Physical Therapy as a whole … regardless of your business model.

Though I can’t give a specific and certain answer to this question, it’s still an important topic to bring up because it highlights some broader components of my success with cash-based Physical Therapy.

There were three general steps/characteristics that led to my entry into, and positive experiences with, the private-pay PT business model:

  1.  A recognition that the current model was no longer working and was likely to worsen.
  2. Being flexible enough to consider change, and motivated enough to actually do so.
  3. A willingness to work intensely and creatively toward an ideal situation for my patients and myself.

I don’t need to go into details and examples of each of the above steps since they can be found throughout this site.

The take home point is this:

No matter what changes occur to the legal and financial landscape of our field, we can always utilize the above three characteristics and actions in an effort to continue providing high quality care while earning a good living.

 If you have specific insights to the above question, please share them with us in the comments below.

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{ 7 comments… read them below or add one }

Ann Wendel August 2, 2012 at 11:21 pm

I agree with you, Jarod. There isn’t any way to say what will actually happen; however, I am 99% sure that those of us in cash-based practices will retain more of an ability to treat patients as they need to and deserve to be treated. That’s why we went this route to begin with!


Dr Jarod Carter August 3, 2012 at 10:24 pm

Thanks Ann. It’s nice to be agreed with 🙂 To play the devil’s advocate (against myself), my primary fear with the government getting more involved is if they make the “free market” an “un-free market” in which everyone is limited in who they can see for healthcare (not just Medicare Beneficiaries). I imagine a move like this would create such a public outcry, it would never stand; but these days I hesitate to say “never.” Even if that were to happen, I’m still confident in what I wrote above and that we’ll always be able to help others and do well financially in the process. Thanks for the comment and for spreading the word!


Matthew St.Aimee August 5, 2012 at 10:11 pm

I am also quite confused about the details of this Act and therefore have limited insight to the impact it’ll have on cash based practice. However there are patients with Medicare who pay out of pocket for maintenance physical therapy. I’ve also seen patients who choose to pay cash due to having insurance plans that don’t cover beyond 20 visits in a calendar year.
I believe being specialists and marketing a wellness delivery model will give us an opportunity to maintain profitability with those who truly desire personalized quality care. Those are the same people who pay cash for our services now instead of opting for the high volume clinics. I think these clinics will focus on volume and not quality first. I believe that will leave many unsatisfied patients who will seek private specialists similar to people who pay for their children to go to private school for education, though still being taxed for public schools in their area.


Lisa Holland August 5, 2012 at 10:28 pm

What it really comes down to is creativity and effectiveness. These are standard small business needs and a cash based specialty allows for that. I know evidence based practices and standards of care are important and will bring those points to the table as a qualified professional but as we see here in America people will pay for what they want. If they do not want to get better for what ever reason then they will not pay for something to get better. If they do and I can create a payment plan or adjust treatments as per need and not insurance mandated doctrine then we both have a better chance of being successful. I would 100% agree that a cash based model is going to be the one more flexible towards Jarod’s points in times to come.


Allan Besselink, PT, Dip.MDT August 6, 2012 at 6:14 pm

Jarod – I am in a cash-based practice as well. I agree with many of your points. But let us not forget that a “free market” isn’t one defined by a gatekeeper. A true free market is one in which the patient can access care from their provider of choice without limitation. Once consumers have that, I think you will find far greater opportunities for creativity in the models we use to provide necessary and appropriate care to patients.


Dr Jarod Carter August 7, 2012 at 2:02 pm

Thanks for the comment Allan. I couldn’t agree more, and hope my post and comments above didn’t imply/read differently. As your statement (and my comment to Ann) imply, Practitioners and Medicare Beneficiaries are dealing with a “free market” because the government acts as a gate keeper and prevents us from providing “covered services” if we are not enrolled as a Participating or Non-Participating provider (in which cases, our rates are of course not dictated by the market, rather they are dictated by the government). As far as cash-based PT practices and the Non-Medicare population are concerned, I would say we currently are dealing with a free market when you specifically look at the forces that dictate pricing. But as I write this reply, I’m starting to realize you may be referring to the Direct Access issue and Physicians being gate keepers … and by your definition, this is not a truly free market? Let me know if I’ve interpreted that correctly? If so, I can only agree.

I look forward to seeing you at the Capital soon and working with you again as we strive for Direct Access in Texas.


Michael Carr January 22, 2013 at 2:38 am

I enjoy your posts and I agree that it is ridiculous for PT not to have direct access when Chiropractors, Personal trainers, and even Massage Therapists can see cash patients right off the street. As far as Obamacare, I am concerned it will impose the same difficulties as a cash Medicare patients at best, and at worst there will be a ban on cash for services of any kind and a collapse of the private health insurance market.
Call me conspiratorial, I just hope we all aren’t forced to become civil servants in quasi-Govt owned clinics or hospitals in the next 10yrs.


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