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A changing marketplace

Robert Millett finds out how private physiotherapists are coping with reduced payments from insurers

The UK recently avoided plunging into a triple-dip recession, albeit by the narrowest of margins.

But an air of financial austerity still prevails and the ongoing economic constraints are having a debilitating knock-on effect on the healthcare marketplace. For CSP members working in the private sector, it’s taking its toll.

Over the last few years the uptake of private health insurance in the UK has steadily declined.

So much so that from 2009 to 2012 the proportion of people covered by health insurance fell by eight per cent, to around 3.9 million people, according to figures from the Organisation for Economic Co-operation and Development.

This rapid downturn has led many third party insurers (those selling policies that protect against the actions of others, such as third-party car insurance) and private medical insurers, such as Bupa, to reconsider their fee structures.

This has resulted in a cut in the fees offered to practitioners carrying out various private medical procedures and outpatient treatments – including physiotherapy.

Bupa told Frontline that the vast majority of its members’ premiums go directly towards the costs of the healthcare they receive, including from physiotherapists.

The company says it aims to ensure that members receive high quality, good value physiotherapy services. To this end, it has set up the Bupa Physiotherapy Network – a quality- assured network of therapists, underpinned by formal agreements.  

Natalie Beswetherick, CSP director of practice and development, says physiotherapists who have traditionally relied on medical insurers and ‘commercial intermediaries’ referring accident victims are being hit hard. Indeed, reports suggest some self-employed practitioners are losing up to one fifth of their incomes.

‘These companies’ profit margins have been reduced and the market is forcing them to tighten their belts,’ says Mrs Beswetherick.

‘As a result all the third party insurers have reduced the fees they are willing to pay to private physiotherapists.’

The situation even prompted one member to make the following comment on Twitter: ‘Private medical insurance price-capping is pushing UK private physiotherapy to the edge of bankruptcy.’

Mrs Beswetherick says the CSP is acutely aware of the problem and is responding to members who raise concerns. However, she warns, the situation is unlikely to change in the foreseeable future. Mrs Beswetherick points out that the CSP is unable to influence the fluctuations of a free market.

Many private practitioners are responding by adopting new business models and exploring other avenues to replace this unprofitable line of work, she adds.

Contract renewals

Judith Pitt-Brooke is a CSP Council member and a partner and practice principal at East Midlands Physiotherapy Clinic, Loughborough. She says the current contract renegotiation terms have not come out of the blue.

‘About four years ago some insurers came down quite heavily on private practitioners and it created a lot of discomfort at the time – with many practices suffering financial losses of up to 30 per cent,’ says Mrs Pitt-Brooke.  

‘At that time we were given the option to accept their terms and conditions or not, but it was made quite clear that if we didn’t we might not be approved in future.’

Since then there has been a second and third wave of contract renewals and as a result the insurers have gradually reduced the amount they are willing to pay. Indeed, Mrs Pitt-Brooke’s company receives 22 per cent less than it received four years ago from one major health insurer.

She says the competitive environment is rapidly changing: a combination of lower payments from some insurance companies, a reduced volume of referrals from third party insurers and an inability to raise fees in line with inflation are to blame. Many uninsured patients are feeling too financially squeezed to pay more.

Mrs Pitt-Brooke says insurance companies such as Bupa are starting to limit the length of an episode of care by saying how many follow-up sessions can be offered, in a similar way to the NHS.

‘At the end of the day we’re being asked to do quite a bit more for quite a bit less,’ says Mrs Pitt-Brooke.

‘The obvious way for us to respond to downward pressures on fees would be to reduce our appointment length – but we also have to keep an eye on wider quality and reputational issues.’

Reacting to the changes

Alex Perry is director of health and benefits management with Bupa Health Funding. He said that the Bupa Physiotherapy Network was launched in 2009.

‘We made two separate increases to the fees we paid Bupa-recognised physiotherapists who entered into four-year agreements.  

‘We recently invited all network physiotherapists to renew their contracts with us and continue to be included in the Bupa Physiotherapy network.  

‘We benchmarked all current providers to make sure the fees we were paying were competitive with other local providers.

In the vast majority of cases they were and so their fees remain unchanged.

However, a small number were charging significantly more than other Bupa therapists in the same area and so we asked them to reduce their rates in order to be included in the network in future.’

Market changes

Paul Donnelly is general secretary of Physio First, which represents CSP members working in the private sector.

He says that the CSP private practitioner network has been working hard to inform its members about the market changes. It is also offering business courses that aim to help members react to the challenges.

Mr Donnelly says many Physio First members are surprisingly sanguine in their response to the recent marketplace changes, simply because they feel more prepared to face the challenges.

Rather than ‘griping’ about market forces, about which they can do nothing, they are focusing on running their businesses and ensuring they survive, he says.  

‘Over the years Physio First members have come to understand that the only way to meet the massive business challenges of a fast-changing marketplace is to learn proper business skills and apply meaningful business discipline to their businesses,’ says Mr Donnelly.

‘Our members understand the need to keep in touch with changes in the marketplace and link the running of their business to a robust plan’.

Mrs Pitt-Brooke agrees that  traditional private practices will have to look at their business models.

‘There are now challenges within the private sector that are equal at least to the challenges in the NHS,’ she says.

‘Changes in the NHS are rippling out into the private sector and the sustained downturn is creating a lot of change.’ fl

Resources:

For more information on Physio First, visit: www.physiofirst.org.uk/default.asp; Tel: 01604 684960
If you have questions about the Physiotherapy Network, contact Bupa at: www.bupa.co.uk/healthcare-professionals

Promoting your service:

Commissioners and purchasers of physiotherapy services want to see evidence of how services are being promoted to referrers and the public.

The CSP has produced some guidance that will help physios to raise their profile and respond to patient feedback.

To find out more, visit: www.csp.org.uk/promoteyourservice
To see a previous Frontline article that explains how to market your service, visit: www.csp.org.uk/frontline/article/marketing-your-service

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