Why Employers Struggle with MSK Costs—and How PTs Can Help

Employers are grappling with a significant challenge: musculoskeletal (MSK) disorders are the leading cause of disability worldwide, substantially impacting workforce productivity and healthcare costs. In the United States, MSK conditions account for approximately 30% of all days away from work, underscoring their profound effect on businesses.

The financial implications are staggering:

• Costs associated with MSK total to an amount that’s nearly 6% of the US GDP every year.
• UHC estimates that MSK issues cost $52 per member, per month (PMPM)—which makes it the costliest condition.
• 90% of employers rank MSK conditions as their top medical claim category.

Despite these staggering figures, most employers are stuck in a reactive cycle—paying for surgeries, imaging, medications, and disability claims instead of investing in preventative and early intervention solutions.

The Hidden MSK Cost in Group Health Plans

When employers think about MSK costs, worker’s compensation is often the first thing that comes to mind. However, group health claims account for nearly five times more in MSK-related costs.

• Worker’s compensation MSK claims total $36 billion annually.
• Group health MSK claims total $205 billion annually.
• Self-funded insurers are disproportionately affected, as 65% of U.S. employees (about 76 million people) are covered by a self-funded plan.

This means employers are paying the bulk of MSK expenses directly—and they’re feeling the pain in rising premiums, increased disability claims, and lost productivity.

Why Physical Therapy is the Solution Employers Need

Employers don’t need more expensive surgeries and imaging—they need a proactive strategy to reduce MSK costs before they escalate. This is where direct contracting with physical therapy providers becomes a game-changer.

How Direct PT Contracts Benefit Employers:

• Early Intervention Lowers Costs – Prompt PT treatment can reduce unnecessary surgeries, imaging, and opioid prescriptions.
• Faster Return to Work – PT reduces recovery time, getting employees back on the job sooner.
• Reduced Absenteeism & Disability Claims – Fewer MSK issues mean fewer missed workdays and lower long-term disability claims.
• Lower Healthcare Spending – Employers pay less in insurance claims by investing in cost-effective PT solutions upfront.
• Improved Employee Well-Being & Retention – Healthier employees are more engaged, productive, and less likely to leave due to chronic pain.

The Direct Contracting Advantage

With direct-to-employer PT contracts, self-funded employers can: 

• Cut out the insurance middleman and reduce administrative waste. 
• Pay for results, not just visits, through value-based reimbursement models. 
• Offer PT as a first-line treatment, preventing chronic conditions and costly claims. 
• Customize MSK programs that fit their workforce’s specific needs.

This approach aligns employer and PT incentives—both want to reduce unnecessary medical costs, keep employees healthy, and prevent long-term disability.

The Opportunity for PT Providers

Employers are increasingly seeking solutions to mitigate rising healthcare costs, with many turning to direct contracting as a viable strategy. A recent survey highlighted that 75% of employers are actively engaging in discussions about direct contracting, aiming to bypass traditional insurance models to achieve better cost control and enhanced care quality. 

A significant proportion (41%) of those employers do not already have direct contracts in place, but are planning to add them in 2025—this presents a significant opportunity for physical therapists to align with employers' objectives with direct contracting solutions. 

By establishing direct partnerships, PT providers can deliver tailored musculoskeletal care that addresses specific workforce needs, ultimately contributing to reduced healthcare expenditures and improved employee well-being.

Physical therapists have a unique opportunity to step into the employer market and provide a better solution for MSK care. By educating self-funded employers about how PT can reduce their MSK spending, PTs can:

• Expand beyond fee-for-service models that rely on low insurance reimbursements.
• Build sustainable revenue streams through employer partnerships.
• Position themselves as MSK experts, offering preventative and early-intervention care.
• Deliver higher-value care by reducing reliance on insurance-driven limitations.

Conclusion: A Win-Win for Employers and PTs

MSK conditions are draining employer resources, yet traditional healthcare solutions focus on reactive, high-cost treatments rather than prevention. Physical therapy is the missing link.

By contracting directly with self-funded employers, PTs can offer cost-saving, high-quality care that reduces MSK spending, improves workforce health, and strengthens job satisfaction for clinicians.

The demand is there. It’s time for PTs to step up, educate employers, and take control of the MSK conversation.

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