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), Forecast, 2021-2028

The U.S. behavioral health market size was USD 68.79 billion in 2020. The impact of COVID-19 has been unprecedented and staggering, with behavioral health services witnessing a positive demand shock across the U.S. amid the pandemic. Based on our analysis, the market exhibited a strong growth of 11.3% in 2020. The market is projected to grow from USD 77.62 billion in 2021 to USD 99.40 billion in 2028 at a CAGR of 3.6% in the 2021-2028 period. The sudden fall in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Physical & mental health disorders, such as mental illness, anxiety disorders, depression, substance abuse, and eating disorders, are the primary reasons for distress and disability among the population. Mental health services are growing at a remarkable rate, as favorable policies are being implemented on both the federal and state level. Moreover, a shift in the trend of the adoption of telehealth-based treatments for the disorders is also anticipated to spur the market growth to new heights during the forecast period. For example, a survey conducted by American Well in 2017 found that 66% of consumers were willing to use telehealth services. Therefore, the U.S. market is expected to witness strong revenue growth during the forecast period.

COVID-19 Pandemic Boosts Growth Backed by Availability of Digital Care Services

The coronavirus disease or COVID-19 outbreak of 2019 has remarkably influenced the dynamics of the healthcare sector globally. However, several companies offering virtual healthcare services witnessed strong growth in their sales. The pandemic led to a drastic increase in the use of virtual modalities for healthcare-related services, including health treatment for behavioral disorders, such as mental disorders, substance abuse, trauma/PTSD, and others. According to a McKinsey report, due to the COVID-19 pandemic, there has been a 50% increase in the prevalence of behavioral health conditions. However, clinicians who had in-person daily visits witnessed a devastating income loss owing to the restrictions imposed due to pandemics. As the majority of healthcare professionals started offering digital care, the rate of patient visits increased, and therefore, it resulted in higher income gain amid the pandemic.

LATEST TRENDS

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Advent of New Technologies and Personalized Care to Raise Market Potential

An emerging array of disruptive technology is currently supporting major players in the behavioral health ecosystem. These technologies include virtual assistants, neurological interventions, digital phenotyping, digital consumer experience technologies, diagnostic support, and augmented, physical, and virtual reality. For example, Calm Place, a behavior and mental health software solution of Mimerse AB, which is a relaxation virtual app is nowadays being adopted by hospitals and individuals in the U.S to lessen stress and anxiety. Moreover, care providers are integrating a collection of technologies with an aim to advance the care delivery model to patients. Thus, these factors are creating great value to this market on multiple levels, thereby boosting its potential.

DRIVING FACTORS

Increasing Prevalence of Physical and Mental Health-related Disorders to Surge U.S. Behavioral Health Market Growth

According to the Substance Abuse and Mental Health Services Administration (SAMHSA), one in four Americans has a mental or substance use disorder. Also, the National Institute of Mental Health states that 1 in 5 United States adults are suffering from any type of behavioral type of health issue. Therefore, the growing prevalence of health disorders has led to a surge in facility visits by individuals demanding services and treatment. Moreover, the JAMA Open Network survey found that there has been a 30% rise in the ED visit for behavioral disorders services since 2018. Thus, a rise in the disorder prevalence and visits is contributing to the growth of the market.

Improved Access to Behavioral Health Care to Foster Market Growth

A shift in cultural change and increasing cost-efficient scientific technologies together is anticipated to provide better access to physical and mental healthcare services for every individual around the country. Additionally, the expansion of insurance coverage for these services to a large population will help them get better access to care. Also, the COVID-19 pandemic has leveraged the promotion of digital solutions resulting in higher adoption levels by individuals to access treatment services. For instance, Brightside, an app available for the treatment of anxiety and depression witnessed a 50% increase in new users during the early pandemic period. Thus, improvisation in the variety of health care services is set to foster market growth during the forecast period.

RESTRAINING FACTORS

Inadequate Research and Data for Accurate Diagnosis to Hamper Market Growth

Although there is a phenomenal change in health services related to behavioral patterns of individuals today, the lack of widespread funded research and studies in the physical and mental health areas has led to a shortage of data that can be correlated for the accurate diagnosis of disorders. With this, consumers have frequently suggested treatments on a trial-and-error basis which makes it unclear for them about the activities needed to address their health difficulties. For example, based on research studies, over 70% of people with bipolar disorder are misdiagnosed in the first instance. Therefore, inadequate R&D is anticipated to hinder the U.S. market growth.

SEGMENTATION

By Type Analysis

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Increasing Prevalence of Behavioral & Mental Health Disorders to Help This Segment to Lead

Based on the type, the market is segmented into behavioral & mental health, substance abuse, eating disorders, trauma/PTSD, and others. The behavioral & mental health segment dominated the market and held a 49.0% share in 2020. The segmental dominance is attributable to the surging demand for health services in the country owing to the rising prevalence of mental illness. According to the National Alliance on Mental Illness (NAMI), more than 43 million Americans experience mental illness annually.

The rising population of drug users in the country is mainly attributable to the strong segmental growth leading to high demand for services pertaining to substance abuse. Additionally, a large number of country populations having eating disorders have led to an increase in the rate of facility visits for eating disorder treatment. Therefore, the increased prevalence of these disorders is the primary factor attributable to the growth of these segments.

By Payor Analysis

Imposition of Favorable Reimbursement Policies to Aid Public Health Insurance Segment’s Growth

Based on the payor, the market is segmented into public health insurance and private health insurance/out-of-pocket. The public health insurance segment dominated the market in terms of share in 2020 and it is expected to retain its position by the end of 2028. The reason attributable to the leading position is the surging demand for physical and mental health services in the country, which, in turn, is resulting in the uptake of insurance under Medicare or Medicaid. For instance, companies, such as Universal Health Service and Acadia Healthcare receive the majority of the revenue from Medicare and Medicaid types of insurance. For example, in 2020, Acadia Healthcare received more than 60% of its revenue from public health insurance. Moreover, a rise in the facility visit for services is leading to the expansion of the private health insurance segment. Therefore, the imposition of favorable reimbursement policies by the insurance companies and the government is anticipated to mark strong growth during the forecast period.

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 is fragmented with a large number of companies providing substance abuse, and eating disorders services in the country. Among all the key players, Universal Health Services represents a significant share in the market owing to its widespread facilities across states. It is also the preferred location for the treatment of physical health disorders in the U.S. Acadia Healthcare is also recognized as one of the leading providers having 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 in the forecast period.

LIST OF KEY COMPANIES PROFILED:

• Universal Health Services (King of Prussia, PA)


• Behavioural Health Group Inc. (Dallas, Texas)


• Acadia Healthcare (Franklin, Tennessee)


• American Addiction Centers (Tennessee, U.S)


• IBH (Irvine, CA)


• CuraLinc Healthcare (Chicago, Illinois)


• Behavioural Health Systems (Birmingham, Alabama)


• North Range Behavioural Health (Greeley, Colorado)


• Other Prominent Players

KEY INDUSTRY DEVELOPMENTS:

• January 2021 - Talkspace and Hudson Executive Investment Corp. announced a definitive merger agreement with an aim to grow and improve behavioral health services.


• December 2020 - Integrated Behavioral Health Inc. announced the completion of its acquisition of HMC Healthworks. The acquisition led to the addition of chronic condition management, data analytics, wellness, and pharmacy services to the company’s portfolio.

REPORT COVERAGE

An Infographic Representation of U.S. Behavioral Health Market

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The market research report offers an elaborative U.S. behavioral health market analysis of numerous factors affecting this market. These include opportunities, growth drivers, threats, key developments, and restraints. In addition to this, it further helps in analyzing, segmenting, and defining the market based on different segments. It strategically analyzes several strategies such as product innovations, mergers, alliances, joint ventures, and acquisitions adopted by players in the industry.

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