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Value, Cost, and Insurance: Explained in a way that actually makes sense

Out-of-network, or cash-pay physical therapy may actually be more cost effective than seeing an in-network physical therapist depending upon what your insurance plan is. It sounds counterintuitive, right? But, it’s true. In order to dive into this a little deeper, there’s a couple insurance definitions we should review first. Insurance may not be the most interesting thing, but it’s important to understand certain terms before talking about how they apply to different situations

Those Pesky Insurance Terms

Let’s start with what a deductible is. A deductible is the amount of money you are obligated to pay before an insurance company starts footing a larger portion of the bill. This is separate from the premium that gets deducted from your paycheck if you have health insurance through your employer. It is also separate from the amount you pay directly to the insurance company if you are self-employed. Deductibles vary from $0 to upwards of $10,000.

How you reach your deductible varies based on your plan, but is generally determined by what your insurance company is willing to pay for and what they make you pay for. For each type of healthcare service (general family doctor, orthopedic doctor, neurologist, oncologist, OBGYN, etc.), different plans require you to pay different amounts. How much you have to pay for each of these services is determined by your copay or coinsurance, which also varies from plan to plan. If you have high copays and coinsurance rates, you will spend more money and thus reach your deductible faster.

Breaking the Numbers Down

To bring it full circle to physical therapy, those who have a high deductible, high co-pays or high co-insurance may find cash pay physical therapy services more cost effective. Let’s run through a scenario to show what this looks like.

Jerry is a father of a family of 5 that has a $7,000 deductible. They have paid $3,000 towards their deductible already. This means they have an additional $4,000 they need to pay before their insurance pay the majority of their healthcare bills. Jerry’s daughter, Emma, saw their family’s orthopedic doctor and got a referral for physical therapy as she has been having knee pain while she’s playing volleyball.

Jerry can decide to see an in-network or out-of-network provider. If he sees an in-network provider, depending upon his insurance plan, he will pay different amounts. There are typically three ways insurance works in this scenario. The first option is that insurance does not cover any costs and Jerry is responsible for the full amount. The second option is that Jerry is required to pay a fee per visit otherwise known as a co-pay. Lastly, the final option is that Jerry is required to pay a percentage of the total cost of each visit. In the last two options, whatever Jerry is not responsible for paying, the insurance company (sometimes) pays the provider. Let’s break these three different situations down a bit further.

When You are Responsible For all Costs

In the in-network setting, a typical visit is billed to insurance at a rate of $300-600 depending upon the procedures performed. On average, in-network providers request that patients have 2 visits per week where patients ‘check in’ with a physical therapist for about 15 minutes and spend the rest of the time being managing by technicians. Let’s be generous and say that Jerry would be paying $800 per week, likely for about 4 weeks. That brings his costs to $3,200 – assuming he is responsible for the full cost of all physical therapy until he reaches his deductible.

The second option is that Jerry has Emma go to Resilience RX. Emma has a thorough evaluation that includes discussion of her specific needs for her injury. It is recommended that Emma will need 5 additional visits where she is given high quality one-on-one care by a physical therapist at a frequency of one time every 1-4 weeks. This brings Jerry’s total cost to $750 for the entire plan of care.

In this scenario, going to see a provider at Resilience RX seems like the clear-cut answer. It costs Jerry less and he pays these costs from his family’s HSA and/or FSA. Jerry saves money and he saves time as Emma doesn’t need to attend as many appointments.

When You are Have Coinsurance or a Copay

If Jerry is not responsible for the full cost of care – if he has coinsurance or a copay – the numbers shake out differently. Copays tend to range between $25-75 and coinsurance ranges from 10-50%. We took averages – a copay of $50 and coinsurance of 25% to calculate cost.

Some find it surprising that even with insurance coverage, seeing a physical therapist who doesn’t accept their insurance is still sometimes more cost-effective than seeing one that is covered under health insurance. However – and this is a big however – we would be remiss if we did not point out that the difference between these options is purely a financial calculation. The difference above only pertains to how much physical therapy services cost. Value and cost are two radically different things. And, we would argue, in today’s world, value is more important.

But what about VALUE?

Value is more than a number. It is something you cannot give a number to. Experiences can be priceless and value is a critical component of that. Here are some examples of what value looks like in the context of physical therapy –

  • Less time spent driving to and from her appointments
  • Ease of scheduling and rescheduling visits as life changes
  • Being able to directly connect to your provider via text, phone, or email and get a timely answer if a question or set-back occurs
  • No time spent haggling with an insurance company over what you actually owe
  • Complete certainty about when you will get a bill or how much that bill will be for
  • Knowing that your provider truly cares about your outcome and wants what is best for you
  • Feeling like a person, not a number

Specific to Emma’s situation, Value is

  • Remembering what Emma’s favorite subject in school is and asking how her team did at the match last weekend
  • Taking time to explain to Emma why she is being asked to do certain things, thus she is more willing to perform her exercises because she understands why her exercises will help her get back to volleyball
  • Less stress for Jerry because he doesn’t have to drive Emma to and from one more place after school as often as he would if she went somewhere 2-3x/week
  • Reassurance that every effort will be made so that Emma gets back to volleyball as soon as possible but not more quickly than she should
  • Knowing that the provider she is seeing was and is an athlete and understands the mental barriers Emma may face while she takes a relative rest from sport

Each individual is unique and one model of healthcare does not fit everyone. What is right for Jerry and Emma may not be the right decision for you. We understand that our services will not be the best fit for everyone who walks in the door. But, we also know that when someone who is a good fit works with us, we help them achieve stellar results. Those are the people we want to work with because it allows us to get the best outcome for them.

We firmly believe that it is our responsibility to dispense the information we know and then let consumers make informed choices. Our knowledge of how the body and medical system work combined with your knowledge of yourself gives the best outcome. We view healthcare from a team approach – you and us, working together to get where you want to go.

If you are curious if you are a good fit to work with us, contact us. We would love to listen to what has been bothering you!

Please note that the prices discussed in this blog post were current as of the time this blog post was written. With all services and products, prices change over time. Our services are no different.

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