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

                                Dec 4, 2024 - Health Spending Continues Increasing
                                • US health spending increased 7.5% year over year in September and represented 17.7% of GDP, according to health care nonprofit organization Altarum. Personal health care spending growth in September was 7.8%, year over year, with utilization growth continuing to outpace price growth. Nominal health care wage growth in September 2024 was 3.6% year over year. The overall Health Care Price Index (HCPI) increased 2.6% year over year in September, down 0.4 percentage points from August’s revised value. Year-over-year growth in the overall Consumer Price Index (CPI) increased 0.2 percentage points to 2.6% in September and growth in the Producer Price Index (PPI) increased 0.5 percentage points to 2.4%.
                                • Medicare payments to Medicare Advantage plans are expected to increase an average of 3.7%, or over $16 billion in 2025, according to the Centers for Medicare & Medicaid Services. Medicare Advantage plans are required to cover all mental health and substance use disorder services covered under Medicare Parts A and B. The finalized the Calendar Year 2025 Rate Announcement for Medicare Advantage is projected to result in payments of between $500 and $600 billion in Medicare Advantage payments to private health plans in 2025.
                                • Private health insurers will be required to cover mental health care and addiction services the same as any other condition under a final rule released by the Biden administration. Most provisions in the rule will apply to group health plans and health insurance issuers for plan years starting January 1, 2025, or after. The Association for Behavioral Health and Wellness, the Blue Cross Blue Shield Association, and the ERISA Industry Committee, a major employer group, said the rule would have “unintended consequences” that could raise costs and jeopardize access to mental health care. Addressing the shortage of mental health providers is a top priority, the groups said, but “the final rule will complicate compliance so much that it will be impossible to operationalize, resulting in worse patient outcomes.”
                                • Mental health industry employment increased significantly while wages for nonsupervisory employees increased moderately during the first nine months of 2024, 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.
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