Psychiatric Practices
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 11,300 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 11,300 firms that employ about 70,100 workers and generate about $9 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
Recent Developments
May 6, 2023 - Telehealth Benefits Will Extend Beyond Public Health Emergency
- President Biden signed in April a congressional resolution to bring the US national emergency to respond to the COVID-19 pandemic to a close after three years. Congress extended telehealth flexibilities enacted during the PHEs, however, so they will continue after May. More Medicare enrollees got care via telehealth during the PHEs. Telehealth is now no longer limited to those living in rural areas. Telehealth visits can be conducted at home, rather than a health care facility. Beneficiaries can also use smartphones and receive a wider array of services via telehealth.
- Medicaid reimbursement for the same mental health treatment varies dramatically among US states, according to researchers at Oregon Health & Science University. The researchers found as much as a fivefold difference, with Pennsylvania, Rhode Island and Maine reimbursing the least for the same set of services. Nebraska, Alaska and Arkansas reimburse at the highest rates. Medicaid is the largest single payer for mental health services in the country, according to the researchers.
- More than 150 million people live in federally designated mental health professional shortage areas, according to the Health Resources & Services Administration. The country will be short between 14,280 and 31,109 psychiatrists within a few years, and psychologists, social workers, and others will be overextended as well. More than half of US counties lack a single psychiatrist, according to research conducted at the University of Michigan's School of Public Health Behavioral Health Workforce Research Center. Several factors fuel the shortage, according to experts. “The U.S. population has grown, there’s a lot of mental health need especially with the pandemic, and we don’t have enough residency slots to train people,” says Anna Ratzliff, MD, PhD, psychiatry residency program director at the University of Washington. There’s also a retirement drain since more than 60% of psychiatrists are 55 or older.
- The mental health system is increasingly reliant on psychiatric mental health nurse practitioners (PMHNPs) to meet the psychiatric needs of Medicare patients, according to researchers at the Harvard School of Public Health. The researchers found that PMHNPs account for 50% of all mental health prescriber visits in rural areas of states with no restrictions on prescribing medications by PMHNPs. There would have been a decline of nearly 30% in mental health specialist visits for Medicare patients without growth in the PMHNP workforce from 2011-2019. The drop was 12% during the period instead, according to the researchers.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.