10/06/2025
Chained to Convenience? The Unseen Costs of In-House Physical Therapy Referrals
In the evolving landscape of healthcare, large integrated systems like the University of Rochester Medical Center and Rochester Regional Health offer a promise of seamless, coordinated care. However, beneath the surface of this convenience, there’s a growing concern for patient autonomy and economic efficiency, particularly when it comes to physical therapy referrals. This isn't just about choice; it's about the very real, measurable impact on patient costs and care quality.
The Elephant in the Room: Physician Self-Referral and Its Financial Implications
When a healthcare system integrates physician groups and their own physical therapy practices, an inherent conflict of interest arises: the incentive for "in-house" referrals. While presented as streamlined care, this model often leads to a phenomenon known as "utilization creep," where patients receive more services than might be necessary, directly impacting their out-of-pocket expenses and overall healthcare spending.
Let's look at the data:
Increased Utilization & Costs: A landmark study published in Health Affairs examining physician self-referral for physical therapy found that patients referred to physician-owned physical therapy (POPTS) facilities received, on average, 39% more visits than those referred to independent physical therapy clinics. This translates to significantly higher costs for both patients and payers.
Higher Average Charges: Further research indicates that average charges per episode of care for physical therapy can be 20-40% higher in integrated systems compared to independent practices, even for similar conditions. These increased charges contribute to higher co-pays, deductibles, and overall financial burden for the consumer.
Diminished Choice, Diminished Specialization: Beyond the financial aspect, limiting referrals to in-house options can inadvertently restrict a patient's access to the most specialized or appropriate care. An independent clinic might offer a highly specialized hand therapist, a unique sports rehabilitation program, or a renowned pelvic health expert that isn't available within the larger system. Denying this choice can compromise recovery outcomes.