In this blog, I will share my grassroots perspective on the consequences of a third-party healthcare system in the United States from the perspective of both an experienced healthcare provider and a patient with complex health needs.

What other industry do you know of where the payer sets the price for the services purchased AND routinely increases the time burden on those delivering the service without increasing their pay?

One of the biggest consequences I see in the American third-party healthcare system today is that the law of supply and demand has been completely convoluted.

There is also a lack of accountability on the person receiving the services to follow through on the recommended treatment plan. The healthcare consumer has no skin in the game, so to speak when someone else picks up their tab.

This results in complex patients – or those who are most in need of healthcare – becoming a veritable “hot potato” that insurance-based providers can only hope does not end up on their patient list for the day.

I love it when those patients decide to hire me and my team to consult with them privately. The more complex and difficult the case, the more of a thrill I feel from getting involved!

However, many patients cannot afford to pay out of pocket for care.

Many patients have to go through insurance to access healthcare, due to financial limitations.

Challenges for the Clinic Owner

Three major challenges facing owners of physical therapy and medical practices who rely on health insurance for payment include:

  • Increasing paperwork burden posed by health insurance companies
  • Increased insurance claim denials
  • Declining payments for services that are reimbursed by health insurance

The majority – if not all – of my friends and colleagues who currently run physical therapy or medical practices based solely on health insurance reimbursement have implemented one or more of the following strategies to deal with the those three major challenges:

  • Significantly cut down overhead costs which has affected the customer service they are able to provide
  • Implement pay cuts to their loyal staff
  • Lay off experienced people and replace them with less experienced staff who demand a lower salary
  • Make a decision to stop taking health insurance and switch to a hybrid practice or a cash-based model (which is a difficult and risky transition for any business to make who built their referral relationships based on the health insurance model)
  • Delegate the patient care to lesser skilled providers, such as technicians, assistants, or extenders, so that the more highly skilled provider can supervise their work and then the clinic can see a higher volume of patients in a day

Illegal Employment Practices

I’ve even been informed of certain employers of physical therapists who are now requiring physical therapists to work overtime in order to complete the additional documentation now required by health insurance companies for reimbursement — creating more consequences of a third-party healthcare system.

Many of these employers are not offering an increase in salary or any overtime pay. At the same time, physical therapists are still required to meet the same productivity standard of number of patients seen in a day.

This is leading to illegal employment practices in some cases, especially in the state of California.

Employees must be paid overtime for any overtime work but are being pressured to meet the increasing time requirements for completing documentation and insurance forms on their own time.

The reason for this appears to be that some insurance companies have increased the documentation requirements without increasing the reimbursement.

That devastating impact – or financial burden – is being passed from the clinic owner or employer to the clinical staff who actually deliver the care.

Then, in turn, it can trickle down to the patient.

Patient Care may Suffer

One therapist friend told me when she looks around the gym where she works, all she sees are patients sitting around or exercising on their own while therapists are furiously typing on their computers to complete all the required documentation and insurance forms.

The clinicians who rely solely on insurance payment and the patients who see insurance-based providers are BOTH bearing the burden.

Many physical therapists who have taken my continuing education courses and completed my 24-credit mentorship program have expressed frustration and disappointment that they do not have time to use the skills they learned, due to the time pressures imposed on them by their employers and health insurance companies.

These consequences of a third-party healthcare system have affected their ability to deliver the care and use the skills that they learned from me.

Think about it – It doesn’t matter how skilled or experienced clinicians are if they do not have adequate time to deliver what they know to their patients.

Unfortunately, the trickle-down effect and consequences of a third-party healthcare system to the consumer may create a lower quality of care at some clinics that they can access with insurance coverage.

This can lead to reduced patient satisfaction as well as reduced job satisfaction for the physical therapists and other healthcare providers.

Clinician Burnout

In turn, all of these consequences of a third-party healthcare system can lead to a higher rate of burnout among clinicians who accept insurance or work for employers that accept insurance.

As I said in my other blog on this topic, I believe insurance-based healthcare providers would absolutely spend more time with their patients if they possibly could, but there are only so many hours in the day and ultimately healthcare is a business.


This blog is provided for informational purposes only. The content and any comments by Dr. Kim Bell, DPT are not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition. The details of any case mentioned in this post represent a typical patient that Dr. Bell might see and do not describe the circumstances of a specific individual.

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