03/28/2025
It’s my perception that healthcare has been hit harder than most other businesses sectors as a result of inflation related changes.
Healthcare is a fixed price environment. (NOTE- this post is in relationship to healthcare functioning within the insurance based system. There’s no point in talking about cash pay models because that model simply can’t apply across 99% of the US population.)
In healthcare, you can’t simply increase your prices for services to combat increases business expenses like you can with other goods and services. (Food, clothing, fuel, airfare, lodging, haircuts, massages, gym memberships, etc, etc, etc)
Insurance companies pay what they pay and that’s it. In fact, they are regularly paying less rather than more. Yet, supplies, rents, wages (have gone through the roof for support staff but not so much for providers), etc have all increased significantly in the last 3 years.
Any simple financial analysis shows that increases in cost without increasing income leads directly to shrinking profit margin and quickly to the bottom line being in the red.
Hospital systems across the nation that are underwater as a result of this (along with the dramatic increase of cost associated with waste, and paying traveling/locum tenens providers to cover care at hospitals during the height of the pandemic). This was confirmed for me at CSM this year by serveral high ranking PTs who function in executive healthcare roles across the nation.
My biggest concern is that conservative and rehabilitation related care tends to fall at the bottom of the total pole when it comes to determining funding needs and slicing the financial pie in both the balanced budget system of Medicare as well as the private insurance model.
The elephant in the room is the question of “What are we going to do in healthcare to fix this train that is careening of the rails….and more specifically, what are we going to do in the rehab space to make sure we aren’t trimmed right off the bottom of the total pole?”