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The U.S. behavioral health market size was valued at USD 76.44 billion in 2021 and is projected to grow from USD 79.69 billion in 2022 to USD 105.14 billion by 2029, exhibiting a CAGR of 4.0% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with behavioral health services experiencing higher-than-anticipated demand across the U.S. compared to pre-pandemic levels. Based on our analysis, this market exhibited a growth of 17.5 % in 2020 as compared to 2019.
Behavioral health services are focused on daily habits, behavior, and actions of an individual, which can impact the mental health of a patient. Physical & mental health disorders, such as mental illness, anxiety, depression, substance abuse, and eating disorders, are the primary reasons for distress and disability among the population.
The growth in the number of people suffering from mental health disorders lead to the U.S. behavioral health market growth at a remarkable rate. Furthermore, due to implementation of favorable policies on both the federal and state level and a shift in the trend of the adoption of telehealth-based treatments for the disorders, the U.S. market is expected to grow to new heights during the forecast period.
Availability of Digital Care Services during the Pandemic Boosted the Growth of the Market
The COVID-19 pandemic influenced the dynamics of the healthcare sector globally. During COVID-19, behavioral healthcare services emerged as both challenging and as an opportunity across the globe. The pandemic elevated the need for these services due to the increasing prevalence of depression, anxiety, and stress among the U.S. population. The pandemic also disrupted the supply of medicines, medical devices, and others, leading to the adoption of virtual care services by therapists and patients among the U.S. population. The pandemic led to the increasing adoption of virtual care services for behavioral health therapies such as depression, mental illness, and others. In-person, outpatient visits to healthcare services drastically declined due to the lockdown restrictions. Therefore, a shift toward digital care services was witnessed among the patients and healthcare providers during the pandemic.
In 2021, the market witnessed substantial growth as restrictions related to the pandemic were lifted and healthcare activities resumed to their normal pace. The increased prevalence of mental illness and behavioral disorders among the U.S. population lead to the increased adoption of these services in the country. Major players also witnessed a growth in their revenue from the behavioral health segment due to the increased demand for such services.
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Transition toward Advanced Digital Tools due to its Increasing Advantages and Applications
The U.S. is witnessing a significant shift of customers toward digital tools. Factors such as cost reduction, easy access, and improved patient monitoring are a few of the factors causing the shift in their preferences. Increasing demand and the growing awareness among people led major players and new entrants in the market to focus toward introducing advanced and innovative digital tools to cater to patients requiring mental health treatments in the U.S., thus fueling the behavioral health market growth.
Furthermore, initiatives taken by employers to promote mental health awareness in their organization drive major players to launch new products catering to the demand and contributing to the market growth.
These applications track passive symptoms by collecting data using sensors. These sensors recognize differences in the behavior pattern, which can signal episodes including depression and psychosis. Such factors have increased preference among individuals to use digital tools, resulting in the growing demand for behavioral therapies in the U.S.
Increasing Prevalence of Mental Disorders to Aid Market Growth
Over the years, increasing number of trauma, substance abuse, and poor nutrition cases have resulted in depression, anxiety, and eating disorders. This has led to an increase in the number of people suffering from functional impairment such as managing assignments and prioritizing tasks. Thus, rising prevalence of mental illness in the country is leading to an increased demand for treatment services.
Furthermore, patients suffering from mental illnesses, such as anxiety, depression, and Post-Traumatic Stress Disorder (PTSD), is leading to the growing cases of substance abuse, which is considered as one of the major behavioral disorders.
The increasing prevalence of mental illness and substance abuse disorder has led to the rise in demand for behavioral health services in the country, propelling the growth of the market.
Improved Access to Healthcare will Foster Market Growth
Increasing adoption of digital technology has improved the access to healthcare services for individuals across the country. Telehealth and virtual reality tools have accelerated the adoption of therapies among individuals due to factors such as less time consumption, advanced technology along with providing solutions across different geography and during any time in a day.
Integration of artificial intelligence and smartphone assisted therapies including AI-chatbots, such as Wysa (Touchkin eServices Private Limited) and Woebot (Woebot Labs, Inc.), assist patients to practice cognitive-behavioral therapy helping them analyze their condition though these tools. The seamless interaction provided by these apps create a positive therapeutic experience for the user.
Advantages associated with the digital tools have led to an increase in the adoption of these services among the U.S. population. This has driven a few emerging and existing companies to focus on R&D initiatives in order to launch AI integrated digital tools for the assistance of behavioral therapies in the U.S., thus making behavioral therapies accessible to every individual in the U.S.
Lack of Mental Health Professionals and High Cost of Treatment to Hinder Market Growth
One of the key factors affecting the market is the lack of availability of behavioral health services caused by the combination of high demand for treatment and low supply of trained professionals. Increasing population and the growing need for mental health services especially after the pandemic are contributing to the shortage.
In rural areas of the country, shortages are more likely to occur due to the lack of funding and infrastructure. Therefore, lack of professionals to cater to the growing demand hinders the market growth.
Another factor restraining the market growth is the high cost of treatment. Although the Affordable Care Act requires medical insurers to cover behavioral and mental healthcare, the cost of treatment still limits the access to mental health services. In the U.S., lack of financial resources prevents many individuals to seek professional help or may receive inadequate treatment.
Such factors along with limited awareness and availability of mental health education may restrict the growth of the market in the forecast period.
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Rising Patient Count for Mental Illness to Contribute to the Segment’s Growth
On the basis of type, the market is segmented into behavioral & mental health, substance abuse, eating disorders, trauma/PTSD, and others. The behavioral & mental health segment dominates the market due to the rising cases of depression and anxiety disorders among the U.S. population leading to increase in in-patient admissions, and outpatient visits in hospitals seeking behavioral and mental health services which positively contributes toward the segment growth.
This is presenting a large patient pool requiring treatment in the country. This along with increasing awareness regarding available treatment and management options and expansion of behavioral health services by market players in the country will drive the growth of the segment during the forecast period.
Substance abuse segment is projected to register a comparatively moderate CAGR. The growth of the segment can be attributed to the rising number of illicit drug users in the country leading to strong demand for treatment among patients suffering from substance abuse disorder.
Therefore, above mentioned factors along with stress and emotional distress causing individuals to consume alcohol and substances such as drugs as a coping mechanism also majorly contribute toward the growth of the segment.
Significant Surge in Adoption of Public Health Insurance Augments the Segment’s Dominance
On the basis of payor, the market can be segmented into public health insurance and private health insurance/out-of-pocket.
The public health insurance segment accounts for a large share in the market due to increasing demand for behavioral therapies, which leads to high uptake of insurance under Medicare and Medicaid.
Private health insurance/out-of-pocket segment holds a substantial share in the market. Strategic initiatives taken by insurers such as launching integrated care management and outreach programs contribute significantly toward the segment’s growth.
Hence, the aforementioned factors combined with partnerships with hospitals fuel the segment’s growth.
Expansion of Related Health Facilities across the U.S. to Lead to Intense Competition among Industry Players
The U.S. behavioral health market share is fragmented with a large number of companies providing substance abuse and eating disorders services. Among all the key players, Universal Health Services represents a significant share in the market owing to its expanded presence across states with several facilities.
Acadia Healthcare is also recognized as one of the leading providers for behavioral health services as it currently has 227 facilities, including primary care, emergency departments, and outpatient facilities across 40 states in the U.S. The incorporation of telehealth technology by these companies and their focus on acquisitions & partnerships to provide services to a large number of the population is anticipated to raise the potential of the U.S. market over the forecast period.
Other players, including BHG Holdings, LLC. and American Addiction Centers and Uprise Health are focusing toward expanding their presence in the U.S. market by expanding their facilities and introducing services in the country.
An Infographic Representation of U.S. Behavioral Health Market
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The U.S. behavioral health market research report provides a detailed analysis of the market. It focuses on key aspects such as regulatory and reimbursement scenario in the U.S., statistics related to mental health, opioid addiction, adoption of telehealth technology to benefit behavioral health, key industry developments, such as mergers, acquisitions, and partnerships, and impact of COVID-19 on the market. Besides this, the report also offers insights into the market trends and highlights key industry dynamics. In addition to the aforementioned factors, it encompasses several factors that have contributed to the growth of the market in recent years.
Value (USD billion)
By Type and Payor
Fortune Business Insights says that the market size was USD 76.44 billion in 2021 and is projected to reach USD 105.14 billion by 2029.
In 2021, the market stood at USD 76.44 billion.
Registering a CAGR of 4.0%, the market will exhibit steady growth during the forecast period (2022-2029).
The behavioral & mental health segment is expected to lead this market during the forecast period.
The increasing prevalence of behavioral disorders, coupled with the growing reimbursement policies, is the key factor driving the market.
Universal Health Services Inc., Acadia Healthcare, and Behavioural Health Group Inc. are some of the leading companies in the U.S. market.
Acquisitions, partnerships, introduction of telehealth services, and establishment of advanced facilities are expected to drive the adoption of these services in the U.S.
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