Recommended Reading: November 2016 edition of the Journal of The American Physical Therapy Association. It refers to something I’ve been warning about for the last 5 years: there’s a coming inflection point in our industry that could be triggered by a number of things. One of them is the intersection of declining Insurance Payments and increasing costs of Physical Therapy programs across the US.
The University of Saint Augustine (USA) was recently sold to Laureate International Universities. Laureate – the world’s biggest for-profit educational outfit – intends to transition into a Public Corporation (for ~$1 billion) and list on the NASDAQ. You can read the Initial Publics Offering (IPO) here. Laureate’s IPO comes with enough controversy to orchestrate a rocky IPO. The current cost of attendance at USA’s Florida campus is ~12.5k per semester. For comparison it was about $6k 10 years ago.
Has the cost of anything else (maybe, other than your health insurance premium) increased 100% in the last 10 years?
Have Insurance Payments increased? Both of us know the answer. Insurance payments continue to drop across the board. Some insurance pay so little that PT’s actually lose money by treating folks insured by these particular companies.
There are more PT’s graduating in the US now than ever before.The number of PT programs have expanded across the US. In fact, from 2000 to 2016 there has been a ~25% increase in the number of PT programs. Presumably, this is intended to not only fill the supposed demand for more Physical Therapists, but also because it is lucrative business. The total cost of these programs range from $60k to $188k. There are also more applicants than ever before. And, why not? Based on the Bureau of Labor Statistics, the demand is expected to grow at 34% per year.
Combine the growing number of PT’s with down-trending Insurance Payments and imagine what you get?
Is it any surprise that salaries for Physical Therapists have (on average) dropped 2.3% in 2015. This is something that I’ve been expecting for the last 5 years. From a completely objective perspective, this is to be expected. Graduates schools are money-making machines. Guess who isn’t making as much money? You guessed it, the graduates.
Yes, the average salary of PT graduates sounds great, but what about those pesky loans? Potential graduates are considering the impact of rising costs of PT programs more & more. The number of law school graduates at lower now than they were 10 years ago. Could this happen to PT? If it could, then what would drive this trend?
Lower insurance payments has already pushed hospitals to hire more Physical Therapy Assistants than Physical Therapists. PT’s do patient evaluations, and PTA’s carry out treatments. I don’t imagine this trend slowing down any time soon.
Student Loan Debt is by-no-means limited to PT Graduates. In aggregate student loans are reaching climactic proportions. The last time something increased at such a persistent trend was the cost of housing in the 2000’s. We all know how that ended: the harshest economic melt-down since the depression.
This time the amount of money involved is significantly higher. Here’s a graphic pulled from tuition.io:
What pricked the housing bubble? Things started going south when the number of defaults exceeded expectations. So, where are we in terms of Student Loan payment delinquency? Well, it’s not very pretty. The number of Student Loan delinquencies has now eclipsed the number of Credit Card delinquencies.
Here’s what makes these delinquencies insidiously worse: student loans cannot be cleared in a bankruptcy. That’s right. What was the “best loan to have” can quickly transition into the worst loan ever. The bubble is set to pop. The question is when.
WHAT ARE YOU TO DO??
First, let’s get the obvious out of the way: Explore Income-Based Repayment Loan Forgiveness Programs. Do your research online. Then, talk to at least 5 different individuals about your options and the best course of action for you.
Now the stuff that takes a bit of elbow grease…
You have something truly priceless: YOU. That’s right, your best investment is in yourself. Let’s make this a bit more actionable.
- If you are a recently graduated PT, then I strongly encourage you to consider entering a residency/fellowship program to sharpen your clinical skills.
- Ensure that you experiencing personal growth on a consistent basis. If the week went by without any change in your thoughts, perspectives, understandings, or performances, then you are doing yourself a disservice. Get better. Now. The most successful individuals have an insatiable curiosity for something. Uncover your curiosity. Explore it as completely as possible. Read everything you can on the topic. Talk to and network with anyone that feeds this insatiable curiosity. I was (and am still) very interested in sharpening my Manual Therapy skills. I also have a couple other curiosities that I’m fostering and exploring right now.
- Make sure that you work for someone you admire. This is especially important in your early professional years. Nothing beats having a strong mentor who guides you in a direction that will likely skirt the pain of monotony and stunted professional growth.
If you are working for a company, then make yourself indispensable.
- Learn the company’s ecosystem inside and out. What drives the company and it’s leaders? How can you add fuel to their drive?
- Volunteer your time and efforts to take on additional responsibility. This has the dual benefits of learning a new role and embedding yourself in the execution of these roles. So, when they need someone to fill a similar role guess who they’ll turn to? You.
- Put yourself in the owner’s shoes. Look at the entire clinical operation from the perspective of an owner. Make decisions (as little as they may be) as if you are the owner. Got an idea to help the clinic owner spend more time away from the clinic without worrying about the day-to-day clinical/administrative routines? Lay it out for him to adopt. Time is valuable to everyone. Be the individual who makes it clear that you are the one who is saving the company and it’s administrators time and money.
- Once you’ve managed to pull-off steps 1-3 you’ll have the leverage to increase your paycheck or even better: get on a path to generate your own income.