Psychiatric Practices

Industry Profile Report

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

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 10,700 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.

Industry size & Structure

The average psychiatric practice operates out of a single location, employs 5 workers, and generates about $649,000 annually.

    • The psychiatric services industry consists of about 10,700 firms that employ about 57,600 workers and generate about $7 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
                                    Psychiatric Practices Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Coronavirus Update

                                    Apr 25, 2022 - Disruptions Expected When Pandemic Ends
                                    • Some healthcare industry experts say that an expected wind down of pandemic-related emergency measures could create major disruptions for a US health care system made more generous, flexible, and up-to-date technologically. Winding down those policies could begin as early as the summer. That could force an estimated 15 million Medicaid recipients to find new sources of coverage, require congressional action to preserve broad telehealth access for Medicare enrollees, and scramble special COVID-19 rules and payment policies for hospitals, doctors, and insurers. There are also questions about how emergency use approvals for COVID-19 treatments will be handled. The Public Health Emergency declaration that enabled the emergency measures is set to end on July 15.
                                    • The US Department of Health and Human Services (HHS) will seek to sustain and expand access to telemedicine after the federal government declares the COVID-19 public health emergency to be over, HHS Secretary Xavier Becerra said. The Centers for Medicare and Medicaid Services significantly relaxed restrictions on telemedicine during the pandemic. Beneficiaries can now use telehealth in their homes because authorities suspended a requirement that they travel to rural health facilities to speak with providers in remote locations for most services. Medicare also expanded the number of allowable telehealth services by 146 and permitted providers to bill the same as for in-person visits.
                                    • Some 88% of consumers surveyed by Sykes want to continue using telehealth for non-urgent visits in the future (up from the 20% of patients that used telehealth before the coronavirus pandemic). About 58% of physicians surveyed view telehealth more favorably now than they did in 2019, and by spring of 2021, 84% of the doctors surveyed were offering virtual visits.
                                    • The Centers for Medicare & Medicaid Services (CMS) issued a final rule for 2022 that provides for payment of various telehealth services through at least the end of 2023. Some of these reimbursable services fall under the category of “remote therapeutic monitoring” (RPM). The creation of these new RPM codes enables providers to continue to provide care to patients who don’t feel comfortable returning to the office without losing the ability to submit for reimbursement through Medicare or Medicaid. Industry experts say that patients may be more likely to continue with treatment if they know that their visits will be covered through their federal insurance plan, since it has less impact on their monthly budget.
                                    • About 96% of clinical psychologists surveyed by the American Psychological Association (APA) said that they were providing remote or “telehealth” services to patients, and an equal portion judged them to be effective. Only 21% of psychologists reported offering videoconferencing as an option as recently as 2019, according to an APA spokesperson. Insurers have loosened rules around remote diagnosis and treatment, and clinicians have begun using teletherapy for first assessments in addition to post-assessment treatment.
                                    • More mental health support is needed for pregnant individuals, according to a team of researchers who conducted a survey which found that nearly three-quarters of respondents who had been pregnant during the pandemic reported moderate to high levels of distress. One in five respondents experienced depressive symptoms.
                                    • Suspected suicide attempts by teenaged girls have increased significantly during the coronavirus pandemic, according to the Centers for Disease Control and Prevention (CDC). The number of emergency department visits between February 21 and March 20, 2021, for suspected suicide attempts was about 51% higher among girls aged 12 to 17 years than during the same period in 2019. Emergency department visits among boys aged 12 to 17 years for suspected suicide attempts increased 4%, the CDC reports.
                                    • Health insurance firms are sending mixed signals regarding payment for telehealth services, according to the news site. Some are rolling back liberal telehealth reimbursement policies that they launched at the start of the pandemic. UnitedHealth Group, Anthem, Cigna, and CVS Health all have increased some copays and adopted other rules that might cause some patients to delay or avoid telehealth visits unrelated to COVID-19. They also have imposed an array of deadlines, reimbursements and out-of-pocket expenses for telehealth, depending on the insurance plan. Countermeasures may already be under consideration. “Telemedicine has been a huge success. It’s not going away,” said Larry Downs, chief executive of the Medical Society of New Jersey, the state’s largest organization of physicians. “We think that it will be a permanent thing. The discussion and dialogue now is how do we finance it appropriately and ensure people have access.”
                                    • Online gaming and gambling addictions are increasing during the COVID-19 lockdowns, according to industry news site Healthline. While addiction is most commonly associated with substances like alcohol, certain human behaviors can be addictive too. There are no approved medications to treat these addictions, but other treatments, such as cognitive behavioral therapy, can be helpful.
                                    • The Office for Civil Rights (OCR) at the US Department of Health and Human Services announced that it would not impose civil penalties for HIPAA violations “against covered health care providers in connection with the good faith provision of telehealth during the COVID-19 nationwide public health emergency”. The OCR Guidance does not provide an expiration date. OCR will publicly announce when the Notification is no longer in effect “based upon the latest facts and circumstances.” The US Department of Health & Human Services (HHS) announced on October 2 that the Public Health Emergency (PHE) declaration for COVID 19 will be renewed for another 90 days, beginning on October 23 (the date the PHE was previously scheduled to expire) and extending through January 20, 2021. HHS retains the discretion to terminate the PHE at any time.
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