Rehabilitative Therapy 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 30,400 rehabilitative therapy practices in the US provide services to help patients restore function, improve mobility, relieve pain, and prevent or limit permanent disabilities. Rehabilitative therapy includes physical therapy, occupational therapy, speech therapy, and audiology. Practices may also provide therapy through art, music, dance, exercise and recreation.
Dependence On Referrals
While most states allow patients to have direct access to therapy services, many managed care and Medicare plans require patients to obtain a referral from a physician.
Demand Projected To Grow
The aging US population, earlier hospital discharges, and improved infant survival are projected to drive increased demand for rehabilitative therapy.
Industry size & Structure
A typical rehabilitative therapy practice operates out of a single location, employs 15 workers, and generates $1.3 million annually.
- The rehabilitative therapy industry consists of 30,400 companies, employs about 470,000 workers, and generates about $41 billion annually.
- Most rehabilitative therapy practices are small, independent operations; 67% have a single location and 89% employ fewer than 20 workers.
- Large companies include Select Physical Therapy, US Physical Therapy, and Concentra.
Industry Forecast
Rehabilitative Therapy Practices Industry Growth
Recent Developments
Dec 17, 2024 - M&A Activity Increases
- Global merger and acquisition (M&A) activity increased 18% year over year in Q3 2024 to $582 billion, according to GlobalData. M&A activity decreased 15% year over year during the second quarter of 2024. The combination of high interest rates, current valuations, and political uncertainty have negatively impacted M&A activity, according to GlobalData, but a rebound may be underway as 2024 closes. "Prospects of rate cuts in certain markets and an overall improving global growth outlook could drive increased activity," said Priya Toppo, Analyst at GlobalData's Thematic Intelligence. "However, mega deals will continue to face significant challenges, especially in the US, where antitrust concerns are a key focus for regulators.” The outpatient physical therapy industry remains highly fragmented and vast compared to other healthcare services sectors experiencing investment and consolidation activity, according to M&A advisory firm Provident Healthcare Partners.
- National health spending totaled $4.5 trillion in 2022, accounting for 17% of gross domestic product (GDP), according to health policy research firm KFF. Health spending is projected to increase faster than GDP through 2032. One or two health systems controlled the entire market for inpatient hospital care in nearly half (47%) of metropolitan areas in 2022. One or two health systems controlled more than 75% of the market in 82% of metropolitan areas. Nearly all (97% of) metropolitan areas had highly concentrated markets for inpatient hospital care when applying Herfindahl-Hirschman Index thresholds from antitrust guidelines to MSAs.
- Legislation introduced in the US Congress would require increased transparency for private equity investment in health care services companies. The Health Over Wealth Act would require PE-owned practices to publicly report their debt load, executive pay, lobbying activities, healthcare costs and service reductions. The biggest change would be expanded powers for the Department of Health and Human Services (HHS): Private equity firms would need to "obtain a license" from HHS to invest, either directly or indirectly, in a health care services firm. Were a firm to fail to qualify for such a license, it could be forced to divest existing portfolio companies. HHS also could prohibit any deal, even from licensees, while it conducts a study into the impact of private equity on health care. HHS also could block any sale-leaseback transaction that it believes "would lead to a long-term weakened financial status of the health care entity or place the public health at risk."
- Rehabilitative therapy industry employment increased slightly and average wages for nonsupervisory employees decreased slightly during the first 10 months of 2024, according to the US Bureau of Labor Statistics. Rehabilitative therapy practice 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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