The industrial orthopedic rehabilitation market: a niche opportunity

The industrial orthopedic rehabilitation market is an opportunity for hospitals of all sizes to provide a needed service with significant revenue potential. For a 250-bed community hospital, an industrial orthopedic rehabilitation program can generate $3.5 to $4 million in revenue. Based on the authors' experience, contribution margins from the programs, if designed properly, can range from 30% to 40%. A well-designed industrial orthopedic rehabilitation program adds to a strong orthopedics product line by providing continuity of care and the "extras" that make a program successful. For a hospital that is developing an orthopedics product line and trying to build a presence in the marketplace, an industrial orthopedic rehabilitation program can introduce your services to local employers, opening the door for their use of other "high tech" orthopedic services that you provide. Industrial rehabilitation is synonymous with what is often referred to in health care as the outpatient "workers' compensation" or "injured workers"' market. Essentially, this market consists of employees whose on-the-job injuries or job-related chronic conditions require medical care. These injuries may or may not involve lost workdays during which injured employees are unable to perform job functions. Since the orthopedic segment of the industrial rehabilitation market represents the bulk of the injuries and costs, developing the services and programs that can produce return to work (or case settled) outcomes for these workers represents a sound opportunity for health care providers. However, since workers' compensation insurance is liability (not health care) insurance, understanding the rules and regulations specific to this insurance segment in your state, along with the needs of all the key players in the system, is the key to developing programmatic elements critical to long-term success.