The MSK Intelligence Layer: Why Employers and TPAs Need Better Visibility into Musculoskeletal Outcomes

The problem is painfully familiar to all employers. Musculoskeletal (MSK) conditions now make up the largest category of healthcare spending in America. Workers' compensation claims for MSK conditions frequently exceed $100,000, while employees with MSK conditions face a 2x risk of developing other chronic diseases that add further cost burden. Meanwhile, the conditions themselves are the biggest single threat to workforce productivity.  

Familiar as these challenges are, employers have little visibility into, or control over, how MSK care is delivered. The disconnect begins with how the conditions are managed. Employers rely on a disorienting patchwork of health plans, specialty networks, physical therapy vendors, digital health solutions, navigation programs and utilization management tools.

The problem is not a lack of MSK programs. If anything, employers are overwhelmed by the seemingly endless choices. What they lack is governance across the entire care journey—an approach that transforms healthcare's biggest cost driver into a source of resilience and value.

Care struggles with a shortage problem

The need for a new approach is clear when you consider the larger picture. Employers are attempting to manage the largest healthcare spending category while the clinical workforce itself is under unprecedented strain. Both orthopedic specialists and physical therapists are in short supply.

The U.S. is projected to experience a shortage of over 5,000 [RK1] [TS2] orthopedic specialists by 2038 (17% of the expected total) at a time when the population is aging fast and demand for knee and hip replacements is at record levels. Many states already have fewer than six orthopedic surgeons per 100,000 people, well below the number needed to ensure timely access to care.

Meanwhile, patient access to timely physical therapy is jeopardized by an ongoing shortage in PTs, with a shortfall of 12,070 FTEs as demand for therapy continues to surge. Seventy-two percent of physical therapists report being at or beyond capacity to meet local demand.

Even before patients reach specialists, the system struggles. Primary care physicians—the gatekeepers for MSK conditions—are ill-equipped to diagnose most conditions. In fact, since primary care residents receive virtually no MSK-specific training, 87 percent of them fail MSK competency examinations—a fact that reveals the need for an efficient and easy way to provide additional upskilling.

The consequence is that MSK patients enter the healthcare system through providers who often lack specialized MSK decision-support tools, which creates delays, unnecessary referrals, excess utilization of imaging, and inconsistent care pathways. In fact, no single stakeholder is truly incentivized to guide patients through the entire journey. Primary care physicians, specialists, health plans, and point solutions each manage pieces of care, but often in a manner that ends up confusing patients.

And no one owns the outcome.

The Hidden Cost of Disconnected MSK Solutions

Historically, payers attempted to control MSK costs through network management and reimbursement negotiations. More recently, employers have invested heavily in musculoskeletal point solutions, especially digital physical therapy and virtual care solutions. Yet it’s questionable whether the investments have paid off. Many employers continue to struggle with rising costs, delayed care, and inconsistent outcomes.

While the quality of these solutions is typically high, the nature of point solutions is that they operate independently of one another. That can be a problem when the ecosystem of programs that don’t talk to one another includes not only solutions for health plans and provider networks but also virtual physical therapy vendors, workers’ compensation programs, care navigation solutions and utilization management programs.

Each of these solutions is designed to improve a specific part of the care journey but few coordinate the entire journey. They may improve access or lower costs in specific areas, but they can also create new silos, triggering confusion for employees who use them. Patients are frequently transferred from one program to another, with no single organization accountable for coordinating diagnosis, treatment, physical therapy, specialist referrals, recovery, and outcomes.

The Provider Alignment Problem

Adding to this challenge is the broad lack of alignment within the U.S. healthcare system. Health plans and providers are historically at odds when it comes to referrals, for instance. Patients may be referred to an orthopedic surgeon by the primary care physician with whom they already have a trusted relationship, only to discover that the surgeon is out of network with their health plan. The surgeon, in turn, will refer them to a physical therapist but their health plan may prefer a virtual-first MSK program.

Confused by all the back-and-forth, many patients may give up on treatment altogether.  

What’s badly needed is a more coordinated and sustainable model, an intelligence layer that enables earlier decisions and more coordinated care leading to the right care pathway at the right time.

How an MSK Intelligence Layer Works

An intelligence layer sits atop individual care programs and provides active governance across the entire MSK journey. The intelligence layer has four functions: find risks earlier, improve triage and steerage, shorten the care cycle, and create accountability.

Function 1: Find risk earlier

Rather than waiting for claims, surgeries, or disability events, an intelligence layer could help employers identify risk at a population level through movement-health assessments and proactive screening. That would shift employers’ role from reactive to preventive.

Function 2: Improve triage and steerage

An intelligence layer could help patients reach the right level of care sooner through more coordinated, intelligent triage and steerage. The goal would be to reduce inappropriate and costly specialist referrals, reduce unnecessary imaging, and make better use of physical therapy resources.

Function 3: Shorten the care cycle

Traditional MSK pathways often take several months to resolve the condition. By contrast, AI-powered “movement intelligence” could give primary care providers specialist-level insights that streamline diagnosis and treatment. The goal is to compress diagnosis and intervention into days instead of weeks or months by enabling assessment, triage, and care coordination earlier in the journey.

Function 4: Create measurable accountability

Employers understandably want proof that MSK programs are effective and cost efficient. Rather than simply tracking employee participation, as many existing systems do, a true intelligence layer would carefully measure utilization and clinical outcomes as well as the impact on productivity and financial performance.

The Economics of MSK Governance

When employers gain visibility and control earlier in the care pathway, the financial impact can be significant. Reported outcomes from organizations that have used an intelligence layer include:

• 25-35% reduction in total direct MSK care spend
• 79% pain reduction within 30 days
• 80% reduction in likelihood of surgery following digitally guided physical therapy
• Up to 20:1 combined ROI through increased productivity and healthcare savings

Several industry studies also show that tighter more coordinated MSK management influences shorter return-to-work timelines and less absenteeism, making it both a healthcare and workforce-performance issue.

From Vendor Management to Care-System Management

All of this points to the need to replace the old model of MSK management with an emerging intelligence layer model. 

In the old model still used by the majority of companies, employers purchase the various pieces of the puzzle – physical therapy vendor, navigation vendor, specialty network access, etc.—and hope that the pieces all fit together into a unified whole.

The emerging intelligence-layer model, by contrast, is carefully designed to govern the entire MSK pathway. Equipping primary care providers with MSK knowledge through AI-powered “movement intelligence” enables earlier identification of conditions and better triage. Integrating and aligning PTs with specialists ensures better coordination and streamlined movement through the care pathway. And precise outcome measurement helps to drive financial accountability.

Bottom line: The organizations that succeed in controlling MSK costs over the next decade are unlikely to be those with the most programs. The real winners will be those that create the strongest alignment among the providers, networks, and solutions they already have.

As healthcare costs rise, provider shortages worsen, and employers face growing pressure to prove ROI, the need for an MSK Intelligence Layer becomes increasingly clear.

The future of musculoskeletal care is not simply digital. It is coordinated.

 [RK1]We reference research in our investor and customer presentations showing a 25% shortage the accounts for 5K orthopedic specialists and the highest burnout rate for phys. 25% (5K) orthopedic shortage with 55% burnout.

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