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As private equity firms move to invest in healthcare providers, Direct Access will play a vital role

Tuesday, November 13, 2018   (0 Comments)
Posted by: Matthew Nicholas
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As private equity firms move to invest in healthcare providers, Direct Access will play a vital role in physical therapist practice

Last week, Crain's Chicago Business1 reported on a large orthopedic physician group considering offers from multiple private equity investors. The author quoted the chairman of the American Academy of Orthopaedic Surgeons’ practice management and rehabilitation program committee who cited the reason for small practices to consider merger and consolidation to be that it is becoming increasingly difficult to negotiate fair payment by insurers.  The article continues on to discuss the increasingly challenging processes put in place by insurers that are administrative burdens for health care providers -- and another reason why physicians are looking to consolidate practices and seek outside investors to help lessen those burdens.

For private equity groups, orthopedic practice has the potential to include ancillary services, including physical therapy, which has the proven potential to increase returns on their investment.  When it comes to physical therapy or any ancillary service, we know that hospital systems and medical groups are working to keep patients within their system and minimize "leakage" to outside providers, despite laws intended to protect patient choice of providers.  As an association, we believe that patients have the right to choose the provider that best fits their needs and not be forced to see one just because it financially benefits the referring provider - or the private equity firm backing a provider/group. 

While private equity groups have already invested directly in physical therapy practices in Illinois and elsewhere in the country, this move to invest in orthopedic physician groups has the potential to create even more competition for physical therapy patients. It is most fortunate that the IPTA was able to champion direct access legislation to level the playing field between physicians, chiropractors, and even athletic trainers competing for physical therapy business.

The IPTA's focus now is empowering our members with tools to help promote direct access to the public. We have partnered with Comcast Spotlight and, in just a few short weeks, we will release a video advertising package that members may purchase to promote their clinics to specific geographic markets and target audiences.  Our January #THIRDTHURSDAY will focus on direct marketing to consumers, and the 2019 REVITALIZE Conference's programming will place emphasis on implementing direct access in practice. 

- Mike Riley, PT
IPTA President (2016 - 2021)
Member since 1973

This month, we have added several new communities to our direct access in practice web resources and information and dialogue continues on those communities already available to our members.  We encourage you to share information with your colleagues about payment for direct access services, new intake processes, and other issues positively - or negatively - affecting patients directly accessing physical therapy.  From the information collected through the hospital outpatient community, we have already begun work to address a conflict in law that prevents hospitals from implementing direct access and we hope to resolve this quickly through the revision of an existing rule administered by the Department of Public Health. 

We need to hear from you about other barriers in order to take steps to address them, so please sign up for these member only, practice setting specific, communities and share what you learn with us and others.

Together we have accomplished great things for Illinois - let's keep the momentum going as we work to accomplish our greatest goal of improving the health, wellness, and quality of life for the people in Illinois through physical therapy delivered by qualified providers.

1Murphy, H. Lee. “Rush Ortho Group Scopes out Private-Equity Infusion.” Crain's Chicago Business, 6 Nov. 2018,



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