Nashville, Tennessee, May 29, 2025—Luna, the nation’s leading in-home outpatient physical therapy provider, has released new data showing hospitals risk losing up to $39.6 billion in downstream revenue over three years due to orthopedic patients leaking out of system-referred physical therapy (PT). The analysis underscores how loss of therapy patients often results in the loss of high-value services, including imaging, follow-ups, and orthopedic surgeries.
Referral leakage is most severe at the PT stage: 60% of patients referred by hospitals for therapy go to out-of-network providers, according to Luna’s analysis of 3.9 million commercially insured patients. This decision, often driven by convenience or location, breaks the hospital’s care pathway—and often leads to permanent loss of the patient.
“Controlling physical therapy accessibility is no longer just about patient convenience; it is the foundation for protecting surgical volumes, market share, and orthopedic service line growth.” – Palak Shah, Chief Clinical Officer at Luna
Hospitals lose more than just the therapy revenue. On average, each leaked orthopedic patient represents $16,500 in lost downstream value. Over time, this adds up to a projected $39.6 billion in lost orthopedic, imaging, and ancillary revenue across U.S. hospitals.
Key insights from the Luna report:
- 2.4 million orthopedic patients leak annually from hospital-referred PT
- $16,500 in lost downstream value per patient
- Up to $18 billion in missed orthopedic surgical revenue over three years
When patients receive PT outside of the hospital network, they often later undergo surgery at ambulatory surgery centers, with private orthopedic surgeons, or at competing hospitals—if they proceed to surgery at all. Once a patient leaves the ecosystem, health systems lose visibility into their progress and often lose the chance to provide further care.
Luna’s solution: a hospital-aligned in-home PT model that keeps therapy inside the system. By delivering PT directly to the patient’s home, Luna removes the top reasons for leakage: lack of convenience and limited access.
With Luna, hospitals can:
- Maintain patient continuity by keeping therapy under the hospital’s brand
- Retain surgical volume through escalation protocols and clinical tracking
- Eliminate access barriers with in-home PT across wide geographies
“If you lose the patient at therapy, you lose the surgery. It’s that simple; and the financial stakes for hospitals are enormous.” – Palak Shah, Chief Clinical Officer at Luna
Hospitals that retain more therapy patients see significant revenue upside. One health system projected $41 million in recaptured downstream value by reducing PT leakage by 25%. Another system saw a $33 million gain from just a 2.4% retention improvement.
In a competitive orthopedic market, patient retention at the PT stage is no longer optional—it’s essential. Luna’s model equips health systems with the infrastructure to protect surgical revenue, improve patient outcomes, and deliver care where it’s needed most: at home.
About Luna
Luna is the leading provider of in-home outpatient physical therapy, partnering with health systems and orthopedic practices to deliver personalized care at home. Fully integrated into hospital care pathways, Luna enhances patient retention, preserves downstream revenue, and ensures better MSK outcomes.
Learn more at getluna.com/health-systems.
