Mental Health Practitioners

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 36,000 mental health practitioners in the US diagnose and treat mental, emotional, and behavioral disorders and problems due to mental illness, alcohol and substance abuse, physical and emotional trauma, or stress. Practitioners include psychologists, counselors, therapists, social workers, and nurses. Practitioners may operate private or group practices or work within third-party facilities, such as hospitals, medical centers, substance abuse treatment centers, hospitals, and colleges.

Dependence on Third-Party Payers

Mental health practitioners are highly dependent on government programs and third-party insurers to pay for services.

Battling The Stigma

The stigma associated with mental health problems often discourages individuals from seeking help and can delay treatment.

Industry size & Structure

The average mental health practitioner operates out of a single location, employs about 5-6 workers, and generates $556,000 annually.

    • The mental health practitioner industry consists of about 36,000 establishments that employ about 204,000 workers and generate $20 billion annually.
    • The industry is highly fragmented; the top 50 companies account for 11% of industry revenue.
    • The industry does not include psychiatrists, psychoanalysts, and psychotherapists having the degree of MD (Doctor of Medicine) or DO (Doctor of Osteopathy).
                                Industry Forecast
                                Mental Health Practitioners Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Jul 8, 2024 - Labor Costs Increase
                                • Mental health industry employment increased moderately during the first four months of 2024 while wages for nonsupervisory employees decreased slightly, according to the US Bureau of Labor Statistics. US mental health industry sales are forecast to grow at a 6.08% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                • US health spending increased 7.1% year over year in April and represented 17.7% of GDP, according to health care nonprofit organization Altarum. Personal health care spending increased 7.6%, year over year in April, with utilization growth continuing to outpace price growth. The overall Health Care Price Index (HCPI) increased 3.4% year over year in May. The HCPI increased 2.9% year over year in April. Economywide inflation held mostly steady, with year-over-year growth in the overall Consumer Price Index falling slightly to 3.3% and growth in the Producer Price Index slowing to 2.2%.
                                • Private equity firms are buying behavioral health and substance use disorder services nationwide, according to a study published in the journal JAMA Psychiatry. Researchers found that 642 mental health clinics and 1,152 clinics treating substance use disorders had undergone private equity acquisition between January 1, 2012, and July 31, 2023, constituting 6.2% of all mental health facilities and 7.1% of addiction treatment facilities nationwide. Private-equity-owned practices accounted for roughly a quarter of all facilities providing mental health treatment in Colorado, Texas, and North Carolina.
                                • Mental health urgent care sites that treat the increasing number of those needing mental health care are proliferating, according to The Wall Street Journal. The sites help ease a therapist shortage that has caused many people to wait months for appointments or go to the nearest emergency room. A letter published in the journal Psychiatric Services in 2021 identified 77 such clinics across the US. The sites can provide therapy and drugs or refer patients to a higher level of care if needed, said Katherine Du, a University of Pittsburgh School of Medicine student who was lead author on the letter. Some sites are run by hospitals, while others were established by private equity firms. Many are in wealthy areas, but most accept Medicaid.
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