Study finds physical therapy leakage is a $2.5 billion problem for health systems

Aug. 17, 2021

More than 55% of patients referred to health system physical therapy clinics are seeking care elsewhere, a trend that is costing provider organizations billions of dollars annually according to a new report released by Luna.

The scale of this referral leakage points to rehab/physical therapy primary driver of such losses in health systems. Indeed, even those health systems most successful at patient retention are losing substantial amounts of patients and revenue, with the majority having leakage rates well above 50 percent.

These insights and more are revealed in The Hidden Problem Costing Health Systems Millions: Rehab Referral Leakage, a new national study of referral leakage in health system physical therapy programs. The study analyzed claims data from 3.4 million patients, and reveal that the related health systems lost more than $2.5 billion in revenue in 2019.

Key findings from the report include:

  • More than 1.9 million of the 3.4 million patients analyzed (55.9 percent) left the referring health system for physical therapy care.
  • While the majority of health systems have leakage rates of at least 50 percent, some systems see more than 80 percent of their referrals seek care elsewhere.
  • For patients seeking in-network care, a primary driver is proximity to a clinic, with patients unwilling to travel more than a few miles to an affiliated clinic before seeking care elsewhere.

The analysis was conducted using U.S. commercial healthcare claims data compiled by Definitive Healthcare. Luna analyzed the number of patients prescribed physical therapy by a health system and the number who sought care from a different provider within the same metro area. The analysis does not capture patients who did not seek care at all, meaning the true leakage statistics are even higher than the data suggest. 

 Luna release