Psychiatric Practices NAICS 621112
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Industry Summary
The 12,000 psychiatric practices in the US provide mental health care through private practices, group practices, or medical facilities (hospitals, HMOs). Firms generate the majority of revenue through visits and consultations. Other sources of revenue include non-surgical interventions. Psychiatric practices may specialize in a particular type of disorder (eating disorders, behavioral problems, substance abuse) or patient (elderly adults, children, adolescents).
Dependence on Referrals
Because psychiatric care is highly personal and involves sensitive information, many patients rely on referrals to obtain services.
Drug Treatment Prevails
The advent of prescription drugs to treat mental illness created a fundamental shift in how the medical community provides psychiatric care.
Recent Developments
Mar 10, 2025 - Health Spending Continues Increasing
- US health spending increased 7.4% year over year in November 2024 and represented 18.1% of GDP, according to health care nonprofit organization Altarum. Personal health care spending growth in November was 7.4% year over year, with utilization growth continuing to outpace price growth. The overall Health Care Price Index held steady in December 2024 at the 2.7% revised November year-over-year value
- Healthcare providers are pushing back against recently updated federal security standards that are intended to better protect patient data against cyberattacks, according to Axios. The new requirements mark the first major overhaul of the Health Insurance Portability and Accountability Act's Security Rule in more than a decade. Many healthcare system administrators say that the new standards are unworkable and too expensive, according to Axios. Providers say they simply don't have the resources to hire experts or have the bandwidth to meet testing requirements or annual assessments of their systems that the rule requires.
- 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.
- Psychiatric practice industry employment and average wages for nonsupervisory employees increased slightly during the first month of 2025, according to the US Bureau of Labor Statistics. Psychiatric practice sales are forecast to grow at a 5.6% 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.
Industry Revenue
Psychiatric Practices
Industry Structure
Industry size & Structure
The average psychiatric practice operates out of a single location, employs 7 workers, and generates about $842,000 annually.
- The psychiatric services industry consists of about 12,000 firms that employ about 79,000 workers and generate about $10.1 billion annually.
- The industry is extremely fragmented; the top 50 companies account for less than 15% of industry revenue.
- Most psychiatric practices are small, independent firms that operate locally. State licensing requirements create geographical restrictions.
- Large practices, such as Psychiatric Solutions, operate as part of hospitals or inpatient psychiatric care providers, such as Universal Health Services (UHS).
Industry Forecast
Industry Forecast
Psychiatric Practices Industry Growth
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