U.S. Behavioral Health Market Size, Share & COVID-19 Impact Analysis, By Type (Behavioral & Mental Health, Substance Abuse, Eating Disorders, Trauma/PTSD, and Others), By Payor (Public Health Insurance and Private Health Insurance/Out-of-Pocket), and Forecasts, 2022-2029

The U.S. behavioral health market size was valued at USD 76.44 billion in 2021. The market 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.

• For instance, according to the national Institute of Mental Health, in the U.S. nearly 52.9 million people were suffering from mental health in 2020. The number increased by 18.4% as compared to the year 2016.

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.

• For example, according to the KAISER FAMILY FOUNDATION in 2021, 58% of mental health or substance abuse patients use out-patients visits out of which 62% visits were performed via telehealth.

COVID-19 IMPACT

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.

• According to the Commonwealth Fund, there was a 56% increase in the use of telemedicine for specialties such as behavioral health in December 2020 as compared to March 2020.


• Before the COVID-19 pandemic, virtual visits accounted for only 1% of all the visits for behavioral and mental health conditions which could be conducted virtually. However, post the pandemic, based on various factors, these grew to around 25% of all visits that could be conducted virtually, as it was deemed more convenient to some patients.

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.

• For example, Acadia Healthcare also witnessed a growth of 10.7% in their revenues generated from their behavioral health segment in 2021 compared to previous year by developing new services within their existing locations along with expanding to new locations.

LATEST TRENDS

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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.

• For instance, in August 2021, Ginger announced a collaboration with Headspace in order to meet escalating demand for mental health support. This agreement will allow both the companies to provide the world’s most accessible and comprehensive digital mental health and wellbeing platform to the patients suffering from mental disorders.

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.

• For example, in April 2022, Talkspace, Inc. announced the launch of Talkspace Self-Guided, a suite of offerings for employers designed to help executives, managers, and teams to build emotional intelligence and mental intelligence in and out of the workspace.

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.        

DRIVING FACTORS

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.

• For instance, in 2020, the National Alliance on Mental Illness stated that 5.6% of the U.S. adults experienced serious mental illness in 2020 as compared to 5.2% in 2019 and showed 0.4% of increase in patient count in one year.

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. 

• In September 2022, according to the U.S. Department for Veteran Affairs, people suffering from PTSD start using alcohol and other mood-enhancing drugs which increase their endorphin levels and lead to substance abuse.

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.

• For instance, in April 2020, Psious launched a virtual reality-based teletherapy solution. The application helped therapists from all over the world to conduct remote therapy sessions. This solution offers the freedom of teletherapy and helps increase the therapeutic possibilities for mental health professionals, which allows the acceleration in the results since patients can focus on the VR therapy sitting at their home.

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.

RESTRAINING FACTORS

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.

• For instance, according to a report by GoodTherapy, LLC., the U.S. has an average of 30.0 psychologists per 100,000 people and 15.6 psychiatrists per 100,000 people.

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.

• For instance, in the U.S., patients suffering from major depression have to spend an average of USD 10,836 a year on treatment.

Such factors along with limited awareness and availability of mental health education may restrict the growth of the market in the forecast period.

SEGMENTATION

By Type Analysis

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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.

• For instance, according to the statistics published by Mental Health America, Inc., in 2022, nearly 50 million American suffered from mental illness, which represents 19.86% of U.S. adults.

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.

• For instance, according to a report published by the National Survey on Drug Use and Health (NSDUH) in 2020, among Americans aged 12 years or older, 37.3 million were illegal drug users.

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.

By Payor Analysis

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.

• For instance, in 2021, Acadia Healthcare received 49.6% of its revenue from the Medicaid segment.

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.

• For instance, in March 2021, Anthem Insurance Companies, Inc. through its student advantage health plans entered into an exclusive partnership with Christie Campus Health. The partnership will help colleges and universities to address escalated rates of anxiety and depression reported on campuses throughout the country.

Hence, the aforementioned factors combined with partnerships with hospitals fuel the segment’s growth.

KEY INDUSTRY PLAYERS

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.

• For instance, in June 2022, Universal Health Services, Inc. signed the letter of intent with an aim to expand the inpatient services.

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.

LIST OF KEY COMPANIES PROFILED:

• Universal Health Services, Inc. (U.S.)


• BHG Holdings, LLC. (U.S.)


• Acadia Healthcare (U.S.)


• American Addiction Centers (U.S.)


• CuraLinc Healthcare (U.S.)


• BEHAVIORAL HEALTH SYSTEMS, INC. (U.S.)


• North Range Behavioral Health (U.S.)


• Uprise Health (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• June 2022: Universal Health Services, Inc. and Trinity Health Michigan, in a joint venture, opened a new freestanding inpatient behavioral health hospital in Byron Center, to improve access to care for patients.


• June 2022: Acadia Healthcare formed a joint venture with Tufts Medicine to build a new 144-bed hospital with an aim to expand access to critically needed inpatient behavioral health services.


• January 2022: Acadia Healthcare announced the acquisition of CenterPointe Behavioral Health System with an aim to extend its footprint in high growth markets.


• March 2021: Acadia Healthcare announced a partnership with Lutheran Health Network of Indiana LLC to focus on building hospitals for mental disorder services.


• March 2021: Acadia Healthcare announced a partnership agreement with Geisinger Health with an aim to expand behavioral health services. The partnership will help build a 96-bed inpatient facility.

REPORT COVERAGE

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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.

Report Scope & Segmentation