Rehab salaries likely to remain stable; supply of PTs, OTs on the rise

Meantime, some regions are experiencing nursing shortages

(Editor’s note: Rehab Continuum Report’s annual salary survey results are in. You can see charts describing some of the findings, on pp. 14-15 and 17-18. The cover story highlights interviews with a half dozen rehab industry experts who predict that filling new rehab positions will not be a problem in coming years, except in the area of nursing. Another trend will be that rehab facilities increasingly will turn to contract or per diem professional help, rather than hiring full-time employees.)

Rehab providers will continue to see an abundant supply of physical therapists (PTs) and occupational therapists (OTs) in coming years. But the opposite trend is occurring when they look to hire nurses and nurse’s aides, rehab experts say.

"Right now our biggest hiring challenges are with registered nurses, nurse’s aides, and LPNs," says Jackie Brozena, MBA, vice president of Allied Services Rehabilitation Hospital in Scranton, PA. The freestanding 117-bed rehab hospital has seven outpatient clinics.

"There’s more demand for nurses than supply right now, and we’re seeing the exact opposite trend with PTs and OTs," Brozena adds. "Nursing has been in a lull for a while, and they’re simply not graduating that many nurses from nursing schools, so demand has caught up with it."

Businesses that provide rehab personnel to skilled nursing facilities and home health agencies also have been having difficulty finding enough nursing staff, says Susanne Sonik, director of the Section for long-term care and rehabilitation of the American Hospital Association in Chicago.

"We’re beginning to see a rather significant swing again toward scarcity, particularly in post-acute settings," Sonik says.

One explanation for the current shortage of nurses is that the market pendulum is swinging back after several years of hospitals’ laying off nurses in response to changes in acute care reimbursement. After the nursing cutbacks in the mid-90s, some nurses left clinical work to enter management, such as working for managed care organizations (MCOs), says Gene Bianco, president of the Pennsylvania Association of Rehab ilitation Facilities in Harrisburg, PA. "We’ve seen reductions, and then we’ve seen a shortage," he sums it up. "That’s even affected our nursing in areas that are not hospital care." In the short term, it has led to an increase in nursing salaries in some regions, he adds.

Many rehab providers also are having trouble hiring enough nursing assistants. The problem with that position is it’s filled by entry-level employees who could make as much money working in some other entry-level job, such as in the fast-food industry. And even after training to be nursing assistants and working in the field, some employees are choosing other jobs that may offer slightly better wages or more flexible schedules, the experts note.

"The economy is doing well, and a lot of people are employed, so there are many opportunities for people to change jobs," Brozena says. "So you’re competing with stores and fast-food restaurants for employees. When someone else offers a job that may be paying a quarter or 50 cents more per hour, these employees are willing to make the move even if it means changing careers."

In addition, health care work may appear to be less attractive to entry-level employees because of the weekend and shift work that might keep them away from their families.

The same trend of shortages in the nursing industry is becoming true for nursing assistants. However, the opposite is true with other rehab positions. The high end of physical therapist salaries has come down about $15,000 since the mid-90s, when the demand for PTs was at its peak, says Bonnie Breit, administrative director of rehabilitation services for Crozer Keystone Health System in Upland, PA. The not-for-profit health system has four rehab hospitals, including a burn treatment center.

"PT skills still are very valuable, and in outpatient care when they were making much more money, they could afford to pay a $90,000 salary," Breit says. "But now they’re not being reimbursed as much, and they can’t afford to pay it."

Also, the rehab industry is experiencing a change from salaried employees, including PTs and OTs, to contract employees or per diem workers, says Nancy J. Beckley, MS, MBA, president of Bloomingdale Consulting Group in Valrico, FL, and a member of Rehab Continuum Report’s editorial board. "There are a lot of facilities that are reluctant to have staff on the payroll without the knowledge of whether therapy services are going to fluctuate up or down. Medicare has been a big driver in the marketplace, but there have been other changes. Managed care has driven a lot of these trends in big metropolitan markets."

Two market forces have greatly affected PT demand and salaries in recent years. One is that rehab facilities are cutting back on the number of PTs they need, or they are using more PT assistants because of the changes in reimbursement caused by the Balanced Budget Act of 1997.

The second force is that more PT graduates are entering the marketplace because a greater number of universities are offering a physical therapy curriculum, Brozena says.

The reimbursement changes are the bigger of the two forces behind the market shift, Bianco says. If Medicare’s payment policy had remained the same, the greater numbers of PTs probably would have been absorbed by the growing need for physical therapy as the U.S. population aged and grew larger, he explains.

PT salaries stay lower than in peak years

The combination of the two forces has led to an overall deflation in PT salaries and a future outlook of flat or stable salary growth, industry experts predict.

"About 100% of the people I’ve talked to have indicated that PT salaries have remained the same or have decreased," Beckley says. "And the people who’ve maintained the same salaries say they’ve increased productivity so their cost per unit has gone down."

The rehab facility might pay the physical therapist the same salary as several years ago, but the therapist now is treating more patients for that pay, she explains. The reason for the change is that PT salaries were inflated. There was a high demand when PTs were scarce, and now the wages are settling down to levels that reflect the true value of their work, Beckley and Brozena say.

"PT salaries were purely market-driven, and now with the change in the market there are a lot of physical therapists out there looking for work, and you don’t have to pay a premium to hire them," Brozena adds.

No need for incentives today

For example, in late 1996, Western Pennsyl vania Sports Medicine and Rehab in Johnstown, PA, had such a difficult time recruiting physical therapists that the company offered one candidate a sign-on bonus to get him to make up his mind quickly, says Paul Goble, president of the outpatient physical therapy business that specializes in orthopedics, sports medicine, and athletic training.

The company also paid the college tuition for one of its PT assistants so the staffer could earn a physical therapy degree and come back to work for the company. But by the time the employee graduated, the company no longer had a pressing need for physical therapists, Goble says, adding that they hired the employee anyway.

"Shortly after that, I had five good applicants that I could have hired, and I had to turn them away because there were no openings," Goble says. He’s continued to receive many qualified applications in recent years.

The same trend holds true for PT assistants, who once were scarce and now are plentiful, he adds. "Now I turn away more PT assistants than PTs."

Speech therapists (STs) and OTs also have been affected by the same market pressures from Medicare and managed care, although salaries in those areas might not have reached the peak levels that PT salaries once achieved.

"I’m seeing a lot more speech people out of work," Beckley says.

Speech, physical, and occupational therapists should expect to see the trend continue as the prospective payment system (PPS) comes on line for rehab facilities. Already, PPS has caused nursing facilities to cut back on therapists.

Before PPS, a nursing home would hire or contract for OTs and STs to provide excess amounts of therapy services because each treatment was reimbursed separately. Under PPS, nursing facilities are paid a flat rate per day for all care provided, which has caused them to cut back on costly therapy, Beckley says.

"Out of that flat rate per day you have to squeeze out enough money to pay everybody who provided services," she explains.

Rehab facilities, which rely much more heavily on therapy services, likely will handle PPS constraints by hiring a greater ratio of therapist extenders, such as physical therapy assistants, Breit predicts.

Both OTs and PTs will be directed to handle more evaluation and management duties, while therapy assistants increasingly will deliver the hands-on care. Soon, STs might see the same trend in their industry as a new speech therapy assistant position catches on, Breit says. Recrea tional therapy services, which already are ignored by many payers, could suffer even more under PPS pressures, she suggests.

"The reimbursement structure is not favorable to that group," she explains. "If the length of stay is reduced to 11 days, you’re really working on very basic functions rather than lifestyle and modification, so reimbursement is not there for that position."

Rehab hospitals such as Crozer Keystone Health System will remain committed to using recreational therapists, but not everyone will absorb that cost, Breit adds.

Likewise, psychology services are becoming threatened. "A lot of organizations that have hired psychologists have begun to consider them less essential," she says. "We still have one psychologist on our staff, and this person is a team member and can be billed as part of the hospital overhead, or a physician can order the psych service, and it can be billed separately."

Psychology services in the outpatient rehab setting continue to face the uphill battle of convincing payers that these are medical issues, Brozena says.

"Often you’re faced with fighting the battle of whether this is a mental health or medical issue, and often payers don’t want to reimburse for mental health issues," she explains. "So an awful lot of education needs to be down with insurers that we’re treating psychology issues as related to rehab injury."

As managed care and PPS push rehab facilities toward even greater efficiency measures, another trend likely will grow: Managers who only manage employees will become an endangered species.

"You’re seeing many reductions in management staff," Breit says. "Instead of having managers with a master’s degree in health care who could never step in to assist with clinical care, there will be more managers who started in clinical areas and will have one or two patients and be able to step in to help."

Need More Information?

Nancy J. Beckley, MS, MBA, President, Bloom ingdale Consulting Group, 1421 Holleman Drive, Valrico, FL 33594. Telephone: (813) 654-4130.

Gene Bianco, President, Pennsylvania Associa tion of Rehabilitation Facilities, 2400 Park Drive, Harrisburg, PA 17110. Telephone: (717) 657-7608.

Bonnie Breit, Administrative Director of Rehab ilitation Services, Crozer Keystone Health System, One Medical Center Blvd., Upland, PA 19013. Telephone: (610) 447-2429.

Jackie Brozena, MBA, Vice President, Allied Services Rehabilitation Hospital, 475 Morgan Highway, Scranton, PA 18501. Telephone: (570) 348-1367.

Paul Goble, President, Western Pennsylvania Sports Medicine and Rehab, 927 Menoher Blvd., Johnstown, PA 15905. Telephone: (814) 255-6814.

Susanne Sonik, Director, Section for Long-Term Care and Rehabilitation, American Hospital Association, One N. Franklin, Chicago, IL 60606. Telephone: (312) 422-3000.