Robert Hall

U.S. health care spending reached roughly $5.3 trillion in 2024, accounting for about 18 percent of the entire economy. Those figures, reported by the Centers for Medicare and Medicaid Services’ Office of the Actuary, are not just abstract national statistics. They are the data points payers rely on when they justify tighter utilization management, expanded prior authorization, and continued restraint on provider payment. For private practice physical therapists, this cost growth matters because it helps explain why administrative burden keeps growing even when payment does not.

CMS attributes recent spending growth primarily to increased utilization and increased intensity of services. That language is important. It is broad by design and makes few distinctions between services that drive downstream cost growth and services that help avoid it. When payers react to national spending pressure, they rarely target only the highest-cost settings. Instead, they apply blunt utilization controls across wide categories of care. Physical therapy often ends up swept into these controls, not because of evidence of overuse, but because it is visible, measurable, and administratively easy to manage.

This dynamic creates a fundamental disconnect. National spending rises, but physical therapy payment remains flat or lags inflation. At the same time, documentation requirements increase, prior authorization expands, and denials become more common. From the payer perspective, this is framed as cost containment. From the practice perspective, it looks like rising administrative expense layered on top of already thin margins. The result is less time with patients, delayed access to medically necessary care, and growing burnout among clinicians and staff.

What often gets lost in this conversation is that physical therapy is not anywhere close to a driver of health care inflation. As PTs know, it actually functions as a cost-avoidance service. Timely access to physical therapy can reduce unnecessary imaging, delay or prevent surgery, shorten episodes of disability, and help patients return to work and daily function sooner. Those downstream effects matter in a system under pressure from rising utilization and intensity, but they are rarely captured in simple utilization management frameworks.

This is where state-level advocacy becomes critical. Many of the policies that most directly affect physical therapy practices are regulated at the state level, including Medicaid payment, commercial prior authorization rules, utilization review standards, and network requirements. National CMS data provides the macro justification payers use, but state policy determines how that justification is translated into day-to-day rules. Without organized advocacy, those rules tend to default toward restriction rather than value.

Efforts like the State Payment Advocacy Resource Consortium (SPARC) exist to bridge that gap. By helping power state-specific payer policy, SPARC helps ensure that physical therapy is represented accurately in payment and utilization discussions. That work depends on both data and lived experience. Aggregate CMS figures establish the broader environment, but real-world examples of patients whose care is delayed, PTs’ time being wasted because of administrative burden, and the better bang for the buck provided by physical therapy give those numbers meaning.

For individual practices, this context underscores why engagement matters. Tracking outcomes, documenting functional improvement, and identifying avoided downstream costs are not just internal quality exercises. They are the raw materials of effective advocacy. When used effectively, they help counter the narrative that utilization controls applied to physical therapy are an “inevitable” or “harmless” response to national spending growth.

At $5.3 trillion, health care spending will continue to be closely scrutinized. The question is whether physical therapy will continue to be managed as a utilization problem or recognized as part of the solution. Answering that question requires coordinated advocacy, grounded in CMS data, informed by practice-level experience, and focused on policies that preserve access to appropriate, high-value care.