US Physical Therapy

Source: Healthcare Digital

Date :12/12/2007 5:51:52 AM

US Physical Therapy has had a big impact on the way post-operative and post-injury rehabilitation therapy is provided. Glenn McDowell spoke to Ruari McCallion

Written by Ruari McCallion and Produced by Tom Venturo

Treating an injury, whether work or sports-related, is relatively simple at the clinical stage. The surgeons operate; they repair, replace or excise the injured body part and put the patient back together again. It’s then that the hard work starts.

The patient has to learn to use the affected hand, limb or whatever, get used to the changed muscle behavior and endeavor to bring the working parts back up to full performance. Surgery may take a matter of hours; rehabilitation can take months. Everyone – patients who want to get back to earning a living and employers who want productive workers back – has a vested interest in achieving full recovery as quickly as possible. In some ways, however, the rehabilitative has been a bit of a Cinderella activity.

Employers may be less enthusiastic about granting the time away from work they were happy to accommodate when it was about surgical treatment. If there are budget pressures in hospitals, then rehabilitation services are likely to come under close scrutiny. US Physical Therapy, Inc. (USPh) is changing the perception of rehabilitative therapy and is doing so with a business model that provides value for money, efficient and effective services and gives its key employees – the therapeutic staff themselves – a stake in their businesses, without the burden of time-consuming administrative tasks.

“USPh was established in 1990 by Livingstone Kosberg and two partners. He was very entrepreneurial and thought there was an opportunity to partner with physical therapists and hand therapists who were interested in opening up private practices but may not have the financial means or background to do so,” said Glenn McDowell, chief operating officer of USPh. It has grown to become a company of over 3,500 employees, with 346 clinics and 85 equity partners in 35 States. But the original idea was a bit puzzling, of itself – after all, America isn’t short of medical practitioners.

Therapeutic growth

“When you look at the outpatient rehab world of 17 years ago, you had hospital-based therapy and some in private practice but it was pretty much a wide open market,” McDowell said. “It was very fragmented; even the outpatient corporate world comprises only about twelve percent of all the therapists and practices in the country. The company saw the opportunity to create a model that would do well. Which it has; we’re enjoying around 15-20 per cent growth, year on year.”

He believes that the root of its success is that it is one of the few corporations in its market that really gives an equity component to the therapists it partners with. It isn’t about bonuses based on business-wide numbers; the remuneration relates directly to the therapists’ own practice performance.

“Most therapists are medical practitioners, not business people. The support package we offer is attractive; they have the choice to get involved with the running of the business if they wish but they have a large degree of control in the way they run the business either way. The practices are named and marketed locally, as local businesses. We don’t put USPh branding on their names, their signage, their stationery or their publicity material.”

Markets

USPh is headquartered in Houston, TX. Its clinics are typically on the fringes of downtown areas and in the suburbs, close to where their current and potential clients live. While individual clinic ratios may vary, workplace compensation industrial injury cases represent around 30 percent of business across the corporation, with 15-20 per cent sports medicine – in which some clinics specialize – and the balance is general orthopedic work. Growth has been achieved both organically and by acquisition.

“We have partner recruiters who spend their days calling therapists around the country, looking for people who may be interested in starting private practices. Once they find them, we go through due diligence with them prior to opening brand new start-up private practices,” said McDowell. “We also contact people who are already in private practice, with a view to acquiring them.” One of the ‘blank spaces on USPh’s map of the US was the state of Arizona but it has recently established a presence there, with a multi-clinic practice joining the fold.

It’s not all plain sailing, however. USPh’s clinicians get their clients through referrals, primarily from physicians but also from case managers of insurance companies. A significant proportion of patients have their bills paid by Medicare and it imposed a five percent cut in payment scales in 2006.

Meeting challenges

“Almost all our work is under third-party payers; we don’t control our own prices, so there are pressures there. Medicare work represents approaching 20 per cent of our total business, so our numbers were off a bit last year,” he explained. “However, we’re proud we’ve been able to hold our business as strongly as we have.”

The company has reason to be proud. Even in challenging circumstances, net patient revenues in the nine months to 30 September 2007 were over $6 million higher than in the equivalent period in 2006 – growth of over five percent. There will always be challenges; there is currently a shortage of skilled therapists, for example, but USPh is confident that its strategy remains the way to go forward.

“Clinics are the sort of places therapists want to work as we have industrial, sports medicine and orthopedic caseloads. Many therapists don’t want to work in a hospital-based system, nor in nursing homes or home health,” McDowell said. Incentives in the form of sponsored and fostered continuing education programs, with rewards for improved qualifications, are part of the package. The corporate area is growing in importance – USPH has a number of direct employer relationships, including a nationwide contract with Ford Motor Company for work and compensation injuries – but the expectation is that physician referrals will remain at the heart of physical rehabilitation.

“Our objective is to double the size of the company over the next five years, entirely within the US,” he said. “We intend to double the number of locations we have, through both start-ups and acquisitions. And we will embrace other opportunities as they arise.”