U.S. Occupational & Physical Therapy Services Market Size, Share & COVID-19 Impact Analysis, By Setting (Hospitals, Outpatient Clinics, and Others), By Application (Orthopedic Therapy, General Therapy, Geriatric Therapy, Pediatric Therapy, Neurological Therapy, and Others), and By Payor (Public Health Insurance and Private Health Insurance/Out-of-pocket), and Country Forecast 2023-2030

The U.S. occupational & physical therapy services market size was valued at USD 49.19 billion in 2022. The market is projected to grow from USD 53.08 billion in 2023 to USD 92.38 billion by 2030, exhibiting a CAGR of 8.2% during the forecast period.

The U.S. has recently witnessed a steep demand for occupational & physical therapy solutions. These services are crucial in alleviating the quality of life of individuals suffering from cognitive disabilities, movement disorders, chronic pain, and injuries. Moreover, these therapies aid in preventing short-term disabilities from turning into chronic conditions. The growing prevalence of chronic diseases in the U.S. and the growing awareness about the increasing number of sports injuries are primarily responsible for augmenting market growth.

• For instance, arthritis is one of the common musculoskeletal disorders reported among the U.S. population, requiring occupational & physical therapy services. Arthritic conditions, such as osteoarthritis, gout, rheumatoid arthritis, and others are associated with joint and muscle pain, restricted mobility, and swelling. Thus, occupational and physical therapies are required to improve or preserve mobility among patients suffering from these conditions. According to a report published by the Centers for Disease Control and Prevention (CDC) in 2021, an estimated 58.5 million people, or 23.7% of the total population in the country, suffer from arthritis, which is projected to increase to 78.4 million by 2040.

Additionally, favorable reimbursement policies, the growing number of occupational and physical therapists in the country, and increasing awareness about the benefits of occupational and physical therapies support the adoption of these services.     

COVID-19 IMPACT

Market Growth Hampered Due to Reduction in Patient Visits amid COVID-19 Pandemic

The COVID-19 pandemic adversely affected the U.S. market in 2020. Reductions in patient visits to outpatient rehabilitation clinics due to the imposition of stringent lockdown regulations in the nation is one of the key factors that affected the market during the pandemic. Furthermore, a sharp decline in hospital visits due to a temporary halt in elective and non-emergency procedures disrupted the demand and supply of these services. In addition, most of the occupational & physical therapy clinics were closed due to the strict lockdown. Moreover, the impact of COVID-19 affected the business of the key players operating in the market.

• For instance, ATI Physical Therapy, one of the prominent occupational & physical therapy service providers in the U.S., reported a decline of 50.5%, 27.9%, and 24.4% in per day patient visits in the quarters ended 30^th June 2020, 30^th September 2020, and 31^st December 2020, respectively.

However, the market experienced a strong rebound during the post-pandemic period and is expected to grow at a steady growth rate attributed to the relaxation of the COVID-19 lockdown and increased adoption of telehealth tools in public and private practices. Additionally, the increase in patient influx observed by the players to seek occupational and physical therapy also supported the growth.

• For instance, Select Medical, a provider of occupational and physical therapy in the U.S., witnessed an increase of 4.1% in in-patient visits for outpatient rehabilitation in 2022 compared to the previous year.

LATEST TRENDS

Growing Emphasis on Patient Engagement Integrated with Wearable Technologies Adoption to Drive Market Growth 

The occupational & physical therapy service providers are adopting advanced technologies and rehabilitation gyms for patient retention and engagement. Many rehabilitation centers are opening gyms for patients so that they remain healthy after being discharged from hospitals.

• For instance, in October 2021, UofL Health recently established a medical facility, Frazier Rehab Institute's Community Fitness and Wellness gym. The facility provides rehabilitation services to adults and pediatric patients suffering from disabilities and conditions, such as movement disorders, stroke, brain injury, and others.

Furthermore, the increasing adoption of wearable devices and telehealth services improved patient engagement. The requirement of physician face-to-face visits at least three days a week may be fulfilled using telehealth. Most occupational and physical therapists in the U.S. offer telehealth services after COVID-19 to treat patients. According to the report published by the American Physical Therapy Association, 98.0% of physical therapists were not offering telehealth consultations with patients before the COVID-19 emergency. However, after July 2020, more than 47.0% reported using telehealth, and the number is anticipated to increase over the pandemic. Moreover, launching virtual occupational and physical therapy programs in the country also improves patient access.

• For instance, in May 2022, United Healthcare partnered with Kaia Health, a digital therapeutics start-up, to launch a virtual physical therapy program. Through this program, the eligible patients will receive 24/7 on-demand feedback on physical therapy exercises to complete the physical therapy movements correctly.


• In January 2019, MbientLab launched MIOTherapy (MIO) wearable technology for physical and occupational therapists. The device combines the effectiveness of traditional physical therapy with smart sensors, games, and other advanced technologies for a personalized and improved outpatient rehabilitation service, thereby accelerating recovery.

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DRIVING FACTORS

Market Growth Propelled by Growing Prevalence of Chronic Disorders and Geriatric Population 

The increasing prevalence of chronic diseases in the country drives market growth. The growing number of patients suffering from chronic diseases is anticipated to surge the demand for rehabilitation services, including OT and PT services, during the forecast period.

• According to the Centers for Disease Control and Prevention (CDC) data, chronic pain in the U.S. was 20.4% of the total adult population in 2020. As per the same source, the prevalence of high-impact chronic pain was 7.4%, the highest among women (21.7%) and those aged 65 years and above (11.8%).

Moreover, the growing elderly population in the country is presenting a large patient pool requiring occupational & physical therapy services. Older people are susceptible to various chronic disorders. Also, falls are a common reason for seniors who require physical therapy. Thus, the rising aging population in the country is responsible for increasing OT and PT services adoption, augmenting the U.S. occupational & physical therapy services market growth.

Shifting Preference Toward Non-Opioid Alternatives for Pain Management to Propel Market Growth

Another important factor expected to drive market growth is the shifting preference of patients toward physical and occupational therapies instead of medication due to certain side effects associated with medication therapies. This factor and other serious issues, such as misuse of prescriptions, overdose, and related deaths due to opioids, are causing patients to shift from medications to occupational & physical therapy services. Furthermore, significant coverage provided by payors for non-opioid treatment for pain management has raised the demand for these services in the country.

• For instance, according to an article published in NCBI (2018), commercial and Medicare insurers considered physical and occupational as medically necessary. The payors covered 98% and 96% of the U.S. physical and occupational therapy plans.

Furthermore, the long-term benefits associated with physical therapies are anticipated to surge the demand for rehabilitation therapies, including occupational & physical therapy services. Additionally, the increasing patient pool suffering from chronic pain is anticipated to surge the demand for pain management solutions.

Moreover, the growing awareness about the benefits of physical and occupational therapy among patients influences the adoption of these services and is anticipated to drive the market growth during the forecast period.

• In September 2022, the companies offering physical therapy care joined the APTA Digital Health Transparency campaign launched by the American Physical Therapy Association to provide improved patient care.

RESTRAINING FACTORS

Reimbursement Capping for Therapies to Impede Market Growth

The majority of the patients in the U.S. are dependent on medical reimbursements for healthcare expenses. The country's public and private insurance providers are instigating price capping on various physical and occupational therapies, which is anticipated to hamper the adoption of the occupational & physical therapy services during the forecast period.

• For instance, according to the 2022 Medicare Outpatient Therapy Cap Explanation article, a cap of USD 2,150.0 per year was levied on occupational therapy services in the U.S. Additionally, USD 2,150.0 was charged for combined speech and physical therapy services.

Moreover, high claim denials associated with occupational and physical therapies are prominent factors restricting market growth. The primary reasons for claim denials are data entry errors, misuse of the modifier codes, failure to establish medical necessity, and eligibility issues. The increasing claim denial rates in the U.S. are accountable for restraining the adoption of occupational & physical therapy services.

SEGMENTATION

By Setting Analysis

Outpatient Clinics Segment to Hold Largest Share Owing to Increasing Workplace Accidents

Based on setting, the market is segmented into hospitals, outpatient clinics, and others. 

The outpatient clinics segment is estimated to be the largest segment during the forecast period. The dominance of this segment is attributed to the increasing number of physical therapy outpatient clinics, the surge in the number of industrial accidents in the U.S., and the increasing demand for occupational & physical therapy services in the country.

• For instance, in July 2022, the Physical Rehabilitation Network (PRN), a U.S.-based operator of more than 200 physical therapy clinics, opened its first outpatient physical therapy clinic in Washington. Through such business activities, the company continues to widen patient access to outpatient physical therapy care programs in the state.

The hospitals segment is expected to account for the second-largest market share and is anticipated to register a significant CAGR during the forecast period. The surge in the prevalence of chronic diseases and increasing collaborations between market players and hospitals offering physical and occupational therapies are major reasons driving the segment growth.

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By Application Analysis

Orthopedic Therapy Segment Dominates the Market Owing to Increasing Prevalence of Orthopedic Diseases

Based on application, the market is segmented into orthopedic therapy, general therapy, geriatric therapy, pediatric therapy, neurological therapy, and others. 

The orthopedic therapy segment dominated the U.S. market in 2022. The growing prevalence of orthopedic diseases and the increasing number of sports injuries are anticipated to drive segment growth. Moreover, increasing cases of bone fractures in the U.S. drive the segment growth.

• As per the Osteoarthritis (OA) Action Alliance, osteoarthritis is the most common form of arthritis affecting citizens of the U.S., with an estimated 32.5 million adults in the country suffering from the condition.

Moreover, the general therapy segment held a significant share in the market in 2022 due to the growing prevalence of psychological disorders, such as anxiety and depression. An increasing number of occupational therapists further drives the segmental growth to meet the rising demand for occupational therapy services.            

By Payor Analysis

Private Health Insurance/Out-Of-Pocket Segment’s Growth Led by Increasing Collaborations between Healthcare Institutions

By payor, the market is segmented into public health insurance, and private health insurance/out-of-pocket. 

The private health insurance/out-of-pocket segment held the largest market share in 2022. It is attributed to the increasing number of insurance holders in the country and the increasing collaborations between private health insurance companies and healthcare institutions in the U.S. Further, the market is projected to grow owing to rising initiatives by private insurance companies to cover occupational & physical therapy services.

• According to the U.S. Census Bureau report, in 2021, around 91.4% of the total U.S. population was covered by health insurance, of which 66.5% of the insured comprised private insurance plans. Thus, the increasing number of private insurance holders in the country is likely to support market growth.

Moreover, the public health insurance segment held a significant market share. The growth is attributed to collective initiatives by Medicare, Medicaid, and other public health insurers to provide affordable healthcare to U.S. people and increase public insurance holders in the country.

KEY INDUSTRY PLAYERS

Select Medical Dominates the Market Owing to Growing Emphasis on Strategic Collaborations 

The U.S. occupational & physical therapy services sector is highly fragmented, with many players operating in the market. The top players leading the market include Select Medical, Upstream Rehabilitation Inc., Athletico Physical Therapy, and ATI Physical Therapy. These players hold a significant U.S. occupational & physical therapy services market share due to increasing strategic collaborations, innovative technology launches, and the rising emphasis on inorganic growth strategies for bolstering their market presence.

• In October 2021, Select Medical Corporation formed a joint venture partnership with Grandview Medical Center, a subsidiary of Community Health Systems. Select Medical’s five existing physical therapy centers through this joint venture partnership would serve as Grandview Medical Center’s rehabilitation network in Birmingham.

Moreover, other players, such as Enhabit Home Health & Hospice, previously a part of Encompass Health Corporation, U.S. Physical Therapy, and PT SOLUTIONS, continuously engage in strategic expansion initiatives to establish their footprints in emerging regions.

• For instance, in March 2023, U.S. Physical Therapy acquired 80% of the equity of the physical therapy practice of a large clinic.

LIST OF KEY COMPANIES PROFILED:

• ATI Physical Therapy (U.S.)


• Athletico Physical Therapy (U.S.)


• Enhabit Home Health & Hospice (U.S.)


• Upstream Rehabilitation Inc. (U.S.)


• Select Medical (U.S.)


• U.S. Physical Therapy (U.S.)


• PT SOLUTIONS (U.S.)


• LifePoint Health, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• February 2023 - Select Medical Corporation entered into a joint venture agreement with AtlantiCare to meet the rising demand for in-patient and outpatient rehabilitative care by establishing an in-patient hospital and 13 outpatient physical therapy centers in Southeastern New Jersey.


• September 2022 - U.S. Physical Therapy, Inc. acquired a six-clinic physical therapy practice in West Virginia and Pennsylvania. The company expanded its market presence through this acquisition and strengthened its market position.


• June 2022- Upstream Rehabilitation Inc. acquired Crescent Physical Therapy services provider in South Carolina. With this acquisition, the company aimed to grow and expand its services in more underserved communities in the state.


• February 2022 - Athletico Physical Therapy acquired Pivot Health Solutions, an onsite health and occupational health service provider. Through this acquisition, the company strengthened its market presence in the country's eastern region.


• December 2021 - ATI Physical Therapy acquired Auburn Physical Therapy, comprising four clinics in East Central Michigan. With this acquisition, the company strengthened its position in Michigan with its presence in more than 85 locations.

REPORT COVERAGE

An Infographic Representation of U.S. Occupational & Physical Therapy Services Market

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The market report provides a detailed analysis of the market. It focuses on key aspects such as competitive landscape, setting, application, and payor. Besides this, it offers insights into the industry and market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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