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, Private Health Insurance/Out-of-pocket), and Forecast 2021-2028

The U.S. occupational & physical therapy services market size was USD 46.44 billion in 2020. The market is projected to grow from USD 49.28 billion in 2021 to USD 71.75 billion in 2028 at a CAGR of 5.5% in the 2021-2028 period. The impact of COVID-19 has been unprecedented and staggering, with witnessing a negative impact on demand shock across the region amid the pandemic. Based on our analysis, the market exhibited a significant decline of -5.3% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The demand for occupational therapy (OT) and physical therapy (PT) services in the U.S. continuously increases with a significant growth rate. These services are essential in improving patients' quality of life suffering from injury, illness, and disability. It also helps to prevent short-term disabilities from becoming chronic conditions. The growing prevalence of chronic diseases in the U.S. and the increasing number of sports injuries are primarily responsible for driving the U.S. occupational & physical therapy services market growth.

• For instance, according to a report published by the Centers for Disease Control and Prevention and other national databases such as the Brain Injury Research Institute, more than 30 million teens and children participate in some form of sports in the United States Also, sports injuries are on the rise, with around 1.6 million to 3.8 million athletes each year suffering from concussions. Injuries due to contact sports, including basketball and football, are significant contributors.

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.     

Decrease in Number of Outpatient Visits amid COVID-19 to Exert an Adverse Impact on Occupational & Physical Therapy Services

Occupational & physical therapy services were significantly affected during the lockdown imposed by the government in 2020. The majority of the occupational and physical therapy clinics were closed due to strict lockdown regulations. Most of the states-imposed limitations on elective and non-emergency procedures, which significantly hampered the occupational & physical therapy services practice throughout the country. As the pandemic progressed, the initial months included the widespread imposition of strict lockdowns in the U.S. These factors led to a sharp decline in hospital visits and outpatient visits, which slowed down the greater adoption of physical and occupational therapies and revenue realization. For instance, according to the American Physical Therapy Association, 54% of physical therapists experienced decreased patient visits in the U.S.

The market experienced a strong rebound in the financial year 2021 attributed to relaxations in COVID-19 lockdown and increased adoption of telehealth tools in public as well as private practice.

LATEST TRENDS

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Increased Adoption of Telehealth to Augment Occupational & Physical Therapy Services Market Growth

The occupational and physical therapy services providers adopt electronic information and telecommunication technologies to remotely offer patients healthcare information and services. The major service providers in the U.S. are collaborating with telehealth solution providers to develop innovative solutions to treat patients remotely during the COVID-19 pandemic. Additionally, the key service providers are launching their telehealth platforms to cater to customers' needs.

• For instance, in April 2020, Athletico Physical Therapy announced the launch of a nationwide telehealth service for physical therapy patients. The company will continue its in-clinic appointments and online services through smartphones, tablets or home computers.

In addition, the requirement of physician face-to-face visits at least three days a week may be fulfilled using telehealth. The majority of the occupational and physical therapists in the U.S. are offering telehealth services after COVID-19 to treat patients. According to the report published by the American Physical Therapy Association, 98% of physical therapists were not offering telehealth consultation with patients before the COVID-19 emergency. However, after July 2020, more than 47% reported using telehealth, a proportion anticipated to increase over the pandemic.

DRIVING FACTORS

Growing Prevalence of Chronic Diseases and Rising Geriatric Population to Aid Growth

One of the prominent drivers of the market is the increasing prevalence of chronic diseases in the country. 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 data published by the Centers for Disease Control and Prevention (CDC), more than 63 million adults in the U.S. will be affected by osteoarthritis in 2020. The number is anticipated to cross 78 million by the end of 2040.

Moreover, the growing elderly population in the country is presenting a large patient pool requiring occupational & physical therapy services. As a result, the number of injuries caused by falls increases year by year. Falls are a common reason for seniors who require physical therapy. Therefore, the rising aging population in the U.S. is responsible for the increasing adoption of OT and PT services. Additionally, favorable reimbursement policies and increasing number of physical and occupational therapists in the country are expected to support market growth.

Shifting Preference toward Alternative Rehabilitation Therapies to Augment Market Growth

Another important factor that is expected to drive the 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. These factors and other serious issues, such as misuse of prescriptions, overdose and related deaths due to opioids, are some of the factors causing the shift of patients from medications to occupational & physical therapy services. The long-term benefits associated with physical therapies are anticipated to surge the demand for rehabilitation therapies, including physical and occupational therapies during the forecast period. Additionally, the increasing patient pool suffering from chronic pain is anticipated to drive the demand for pain management solutions, including physical and occupational services.

• According to the Washington Post, approximately 20% of the adult population in the U.S., 50.2 million people, live with chronic pain, which causes functional loss and reduced productivity. Opioids are the widely used option for managing chronic pain in the U.S.

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

RESTRAINING FACTORS

Reimbursement Capping for Therapies to Restrict 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 these services during the forecast period.

• For instance, according to the article published by the Centers for Medicare & Medicaid Services, the KX modifier (Financial limitation code) threshold amounts are USD 2,080 for physical and speech therapy services combined and USD 2,080 for occupational therapy services. These factors are anticipated to hamper the adoption of physical and occupational therapies during the forecast period.

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

SEGMENTATION

By Setting Analysis

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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 clinic's 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, surge in the number of industrial accidents in the U.S., and increasing demand for occupational & physical therapy services in the country.

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  • For instance, according to the U.S. Department of Labor, the Bureau of Labor Statistics reported 2.7 million nonfatal workplace injuries and illnesses in 2020 with an incidence rate of 2.7 cases per 100 full-time equivalents (FTE) workers employed by private industry employers.
  
  
  
  

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 prevalence of chronic diseases and increasing collaborations between market players and hospitals offering physical and occupational therapies are major reasons driving the segment growth.

By Application Analysis

Increasing Prevalence of Orthopedic Diseases to Drive Growth of the Segment

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 2020. The growing prevalence of orthopedic diseases and increasing number of sports injuries are anticipated to drive the segment growth. Moreover, increasing cases of bone fractures in the U.S. are also responsible for driving the segment growth.

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  • According to the data published by Schwebel, Goetz & Sieben, around 6.3 million incidences of bone fracture occur every year, and around 880,000 hospitalizations result each year from fractures.
  
  
  
  

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

By Payor Analysis

Increasing Collaborations Between Private Health Insurance Companies Led to the Dominance of Segment

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 share in the market. It is attributed to the increasing number of insurance holders in the country combined with the increasing collaborations between private health insurance companies and healthcare institutions in the U.S. Moreover, growing initiatives by private insurance companies to cover occupational & physical therapy services are expected to support the market growth.

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  • According to the report published by the U.S. Census Bureau, in 2021, an estimated 91.4% of the total U.S. population was covered by health insurance, out 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 the market growth.
  
  
  
  

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

KEY INDUSTRY PLAYERS

Strategic Collaborations along with Mergers and Acquisitions to Help Key Players Lead Global Market

The market 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 share in the market due to increasing strategic collaborations, introduction of innovative technologies, and inorganic growth strategies adopted by majority of the key players.

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  • In June 2021, Select Medical announced the acquisition of Acuity Healthcare. Acuity Healthcare owns and operates four long-term acute care hospitals and one satellite serving region in New Jersey and West Virginia. The acquisition will strengthen the company's market presence in Atlantic City and Willingboro, NJ, and Morgantown, Wheeling and Weirton.
  
  
  
  

Moreover, other players such as Encompass Health Corporation, U.S. Physical Therapy, and PT SOLUTIONS continuously engage in strategic expansion initiatives to establish their footprints in emerging regions.

LIST OF KEY COMPANIES PROFILED:

• ATI Physical Therapy (Illinois, U.S.)


• Athletico Physical Therapy (Illinois, U.S.)


• Encompass Health Corporation (Alabama, U.S.)


• Upstream Rehabilitation Inc. (Alabama, U.S.)


• Select Medical (Pennsylvania, U.S.)


• U.S. Physical Therapy (Texas, U.S.)


• PT SOLUTIONS (Georgia, U.S.)


• Kindred Healthcare, LLC (Kentucky, U.S.)

KEY INDUSTRY DEVELOPMENTS:

• November 2021– ATI Physical Therapy announced the acquisition of ‘Excel-R-ation Physical Therapy’ to expand its footprint into the Grand Rapids area. The addition of Excel-R-ation strengthens ATI's Michigan portfolio and builds on existing clinics in the southern and northwestern regions of the state.


• September 2021- Athletico Physical Therapy announced the acquisition of Endurance Physical Therapy to broaden its presence in Mississippi and 13 states.


• August 2021 - PT SOLUTIONS partnered with Western Missouri Medical Center (WMMC), focused on expanding physical therapy services through a specialist in physical and occupational therapy.

REPORT COVERAGE

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

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The U.S. occupational & physical therapy services 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 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 over recent years.

Report Scope & Segmentation