We recently went through open enrollment for our family health insurance. We had been on a traditional PPO plan, but over the past three years, we have also had the alternative option of a high-deductible health plan (HDHP) tied to a health savings account (HSA). This year the HDHP became more attractive due to bigger contributions from my wife’s employer, so we revisited our decision. This required going back and looking at past healthcare expenses and trying to predict future ones. As we look at our situation (a family of four), even with two family members having conditions that require ongoing specialized medical care and imaging, the high deductible plan looks to now be a better fit. So, starting this year, we have a much greater incentive to be informed of the true costs of our healthcare decisions.
I know that many of you are making the same decisions – increasingly, employers and individuals are moving to high-deductible plans with HSA accounts. Even on PPO plans, the trend is for higher and higher deductibles. PT is definitely one of those healthcare expenses that can hit you in the pocketbook! So, now that we have more incentive to ‘price-shop’ our healthcare, how can we do that without sacrificing our health and quality of care?
I believe that being a smart consumer is positive for both the patients and the employer. Historically, consumers haven’t given too much thought to the provider they use or the pharmacy that they fill their prescription from a cost perspective. In our case, we usually had a $5 copay for a 30-day medication supply, so unless we looked at our insurance explanation of benefits (EOB), we had no idea what the medication cost, what insurance paid, and even then we had no idea of cost differences between pharmacies. However, more tools are starting to become available to help us as consumers make informed choices. One that my family will be using this year is GoodRX, which lets you price compare your prescription medications between different local pharmacies – we found a $100+/month difference in the price of one medication that one of my family members is on!
In the physical therapy world, it is harder to price compare. First of all, under the traditional in-network model, the PT will have no way to tell you exactly what codes will be billed to your insurance until you have been examined. The amount charged from visit to visit may also vary, especially if you see more than one provider due to the way clinic scheduling works. Also, what pricing information is publicly available is fragmented making it difficult and time-consuming to check prices. However, as an insured person, my insurance company does provide me with a tool on their member site that can at least help. Some insurers have tools that are publicly accessible and others are inside member sites, so hopefully, your insurer can provide you with some data. This tool had been promoted in open enrollment to help employees price shop, and doing so for physical therapy I was amazed how great the variation is from clinic to clinic. However, even with that information, there are still things that make it hard for a consumer to understand. So, here is a breakdown and some notes that might help. (Note: These numbers are hypothetical estimates informed by average pricing information that I found through internet searches; they are intended to give a ballpark idea of the price ranges for PT, not exact pricing for any specific providers or negotiated insurance rates. The numbers provided here are intended to reflect negotiated rates; i.e., the amount due after the bill has been processed by your insurance company.)
With that knowledge, let’s compute the cost of a hypothetical evaluation (first PT visit) as performed in many clinics around the country. The patient will be with the therapist 40-45 minutes and will be in the clinic for 60 minutes. Evaluation (the talking and the physical examination) takes 20min, the therapist does 10min of manual therapy, 15min of exercise and puts them on electric stimulation (during which they might write notes, or in many clinics will move on to treat someone else):
Let’s also consider a follow-up appointment where 15min is spent on manual therapy, 30min on exercise (2 units) and the session is completed with 15min of electrical stimulation (unattended):
Assuming you only need evaluation and a follow-up it would total $780. With the shift to high deductible plans, you may not have hit your deductible (The average individual deductible across the US is $1,696 for any sized company, and is $1,205 in Alabama)! The policy my family is moving onto has a $3000 family deductible that has to be met before it will then pay 80% of the charges (coinsurance). Typical PT in the US is 2-3 x a week for 4 weeks, so with evaluation costing $410 and follow-ups costing $370 each, you may have been billed somewhere in the range of $3000-$4480. For anything more than 2x a week for 4 weeks I would have hit the deductible with the increased visits being subsidized by coinsurance. Even with insurance paying some of the cost at that point the larger amount for 2x a week for 4 weeks would have only been reduced to $3296. Visits add up quickly and when you are seeing the dollar amount instead of a copay you might be shocked! It is even more shocking when you consider there is no research showing superior results being seen over so many visits in such a short space of time.
I often hear HR departments and insurance companies tell people that it is cheaper/better to stick with in-network providers. This is not necessarily true as it makes an assumption that out-of-network and in-network providers will do the same things. This is not the case and is why PhysioWorks is an out-of-network provider! Knowing some of the numbers from my time working as an in-network provider for a large local company, I set my cash rate at what I considered to be a fair value for my clients and for myself. At $135 for 60-minutes, if I saw someone for 12 visits it would only total $1620, but I do not typically see people on those schedules! On average, I see my patients 5-6 visits over a 6-month period using a highly tailored plan of care. Using those numbers, my patients’ out-of-pocket costs for a plan of care likely average ~$800.
The differences in these numbers are huge! However, with the assumption that it is cheaper to stay in-network, the first question I am asked when people call me is: “ Are you in-network with my insurance?” If people give me the chance to explain things and also look at our reviews they start to see our business model is very different and that it yields results. Once our clients experience the highly-tailored personalized care that we provide, they often tell me that they see our service as a fantastic value at a bargain price! If you are considering physical therapy or any other form of healthcare, do not just look at the dollar value. As with any other decision (car purchasing, restaurant choice), consider the overall value of the service. I hope the above helps you to consider the value of physical therapy! If you have any questions send me an email or call.