As more people return to work, occupational therapy services will become more affordable
Los Angeles, CA (PRWEB) April 03, 2013
The Occupational Therapists industry has grown over the past five years due to steady demand from an aging population because older individuals are more likely to develop chronic conditions, such as back and joint pain. As a result, occupational therapy has been increasingly required to help these individuals return to work. Further, “growth in funding for Medicare and Medicaid has helped individuals pay for occupational therapy, thereby improving downstream demand,” says IBISWorld industry analyst David Yang. “Therapy services are also a cheaper alternative to medical surgeries, which helped demand during the recession.” In the five years to 2013, industry revenue grew an estimated 4.5% per year on average to $14.8 billion.
Over the past five years, Medicare and Medicaid administrators and private insurance providers have turned to occupational therapy as a low-cost alternative to traditional medical care. Occupational therapy can provide early detection for health problems, thereby lowering long-term healthcare costs. To meet growing demand, the number of enterprises in the Occupational Therapists industry has increased at an annualized rate of 1.3% over the past five years. “Although demand has increased, industry operators also faced pressures on profitability,” Yang says. “Medicare has set reimbursement caps on therapy services, which limits some patients' ability to pay for industry services. Additionally, therapists have faced a growing number of malpractice suits.” In response, companies implemented cost-cutting measures, such as consolidating services and hiring assistants with lower wages, to help bolster profitability.
The aging population will provide sustained demand for industry services; however, industry operators are expected to continue facing further pressure on profitability from continued malpractice suites and reimbursement caps. Despite pressures on profit, strong demand will provide an incentive for more firms to enter this industry. Currently, the Occupational Therapists industry has a low level of market share concentration. The industry is highly fragmented, comprised of nonprofits, small community-based volunteer organizations and large national corporate chains. Major companies include Kindred Healthcare Inc., Select Medical Holdings Corp. and Concentra Inc. For more information, visit IBISWorld’s Occupational Therapists in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes independent health practitioners who help individuals with physical, mental or developmental conditions with daily living and working through everyday activities (occupations). More specifically, occupational therapy includes: helping children with disabilities to participate fully in school and social situations; helping individuals recovering from injury to regain skills; and providing support for individuals experiencing physical and cognitive changes.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
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