Rehabilitation Therapy Services
Description
Companies in this industry provide physical therapy and other treatment and activities to help patients regain or improve mental or physical functionality following an injury or illness. Major companies include Select Medical, Select Rehabilitation, and US Physical Therapy (all based in the US).
Globally, there are about 1,600,000 registered physical therapists and about 600,000 occupational therapists, according to Cross River Therapy and the World Federation of Occupational Therapists (WFOT).
The rehabilitation therapy industry in the US consists of about 41,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $32 billion.
COMPETITIVE LANDSCAPE
Demand is driven by demographics and medical advances that increase patient survival rates and prolong life. The aging of populations in global nations including the US is leading to increased demand for rehab services. The profitability of individual practices depends on efficient use of personnel. Large companies have some economies of scale in financial and administrative systems. Small companies compete by developing positive relationships with local health care providers and delivering superior customer service. The US industry is fragmented: the 50 largest firms account for about 30% of revenue.
Therapy practices compete with similar services provided by hospitals, physician offices, nursing homes, home health care services, chiropractors, and educational institutions that employ their own therapists. Strong growth in demand can lead to competitive hiring practices in markets where skilled therapists are in short supply.
Some rehabilitation services are critical, such as regaining motor function following an accident, and therefore see steady demand. However, other services are elective or follow surgeries that are elective, which can lead to a decline in demand during economic downturns, pandemics, or other situations where elective medical procedures and services are delayed.
PRODUCTS, OPERATIONS & TECHNOLOGY
Rehabilitation therapy practices treat patients suffering from physical, mental, emotional, or communication disabilities. Rehabilitation therapy service companies get their revenues mainly from the treatment of diseases of the musculoskeletal system and connective tissues (about 50%) and home physical, occupational, and speech therapy services (about 25%). Other services are provided by audiologists, radiation therapists, exercise physiologists, and recreational therapists (including art, music, and social therapists). Most industry revenue comes from fees for patient services; other revenues include lab test fees and sales or rentals of medical equipment and supplies, such as orthopedic appliances.
Physical therapists provide services that restore function, alleviate pain, and reduce permanent physical disabilities of patients suffering from injuries or illness. Treatment begins with a review of the patient's medical history and a test of the patient's physical condition. A treatment plan is documented that describes specific tasks and anticipated outcomes. Treatment often includes exercises to improve flexibility, strength, and endurance. Physical therapists also use massage, electrical stimulation, hot or cold treatment, and ultrasound to relieve pain. These treatments may also be performed by a physical therapist assistant supervised by a physical therapist.
Occupational therapists treat many of the same physical conditions as physical therapists, but also work with individuals suffering from mental or emotional disabilities. Their goal is to improve patients’ ability to perform tasks in daily living and work environments, which can range from dressing and eating to using a computer or making to-do lists. Occupational therapists teach patients with permanent physical disabilities to use adaptive equipment, such as wheelchairs and aids for eating and dressing. Some therapists work with employers to arrange jobs for disabled individuals and identify modifications to the work environment to accommodate their needs.
Speech therapists, also called speech-language pathologists, work with people who have problems speaking correctly, such as lisping or stuttering; have problems understanding or producing language; want to modify an accent; have attention, memory, or problem-solving disorders; or have swallowing difficulties. These problems may result from stroke or brain injury, learning disabilities, cerebral palsy, cleft palate, hearing loss, or emotional problems. Speech therapists assess each patient’s condition and develop and deliver a treatment plan of exercises and drills tailored to their needs.
Respiratory therapists work to improve breathing function in patients suffering from diseases such as asthma or emphysema, as well as those recovering from inhalation trauma or infants with underdeveloped lungs. Respiratory therapists conduct diagnostic testing and treat patients using physiotherapy techniques and ventilation devices.
Rehabilitation therapy is performed in hospitals, inpatient rehabilitation centers, skilled nursing homes, outpatient clinics, and in a patient's home. Accurate and timely billing and reimbursement processes are critical for therapy practices, since nearly all services are paid for by managed care programs, commercial health insurance, Medicare/Medicaid, or workers’ compensation insurance.
Globally, there are about 1,600,000 registered physical therapists and about 600,000 occupational therapists, according to Cross River Therapy and the World Federation of Occupational Therapists (WFOT).
The rehabilitation therapy industry in the US consists of about 41,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $32 billion.
COMPETITIVE LANDSCAPE
Demand is driven by demographics and medical advances that increase patient survival rates and prolong life. The aging of populations in global nations including the US is leading to increased demand for rehab services. The profitability of individual practices depends on efficient use of personnel. Large companies have some economies of scale in financial and administrative systems. Small companies compete by developing positive relationships with local health care providers and delivering superior customer service. The US industry is fragmented: the 50 largest firms account for about 30% of revenue.
Therapy practices compete with similar services provided by hospitals, physician offices, nursing homes, home health care services, chiropractors, and educational institutions that employ their own therapists. Strong growth in demand can lead to competitive hiring practices in markets where skilled therapists are in short supply.
Some rehabilitation services are critical, such as regaining motor function following an accident, and therefore see steady demand. However, other services are elective or follow surgeries that are elective, which can lead to a decline in demand during economic downturns, pandemics, or other situations where elective medical procedures and services are delayed.
PRODUCTS, OPERATIONS & TECHNOLOGY
Rehabilitation therapy practices treat patients suffering from physical, mental, emotional, or communication disabilities. Rehabilitation therapy service companies get their revenues mainly from the treatment of diseases of the musculoskeletal system and connective tissues (about 50%) and home physical, occupational, and speech therapy services (about 25%). Other services are provided by audiologists, radiation therapists, exercise physiologists, and recreational therapists (including art, music, and social therapists). Most industry revenue comes from fees for patient services; other revenues include lab test fees and sales or rentals of medical equipment and supplies, such as orthopedic appliances.
Physical therapists provide services that restore function, alleviate pain, and reduce permanent physical disabilities of patients suffering from injuries or illness. Treatment begins with a review of the patient's medical history and a test of the patient's physical condition. A treatment plan is documented that describes specific tasks and anticipated outcomes. Treatment often includes exercises to improve flexibility, strength, and endurance. Physical therapists also use massage, electrical stimulation, hot or cold treatment, and ultrasound to relieve pain. These treatments may also be performed by a physical therapist assistant supervised by a physical therapist.
Occupational therapists treat many of the same physical conditions as physical therapists, but also work with individuals suffering from mental or emotional disabilities. Their goal is to improve patients’ ability to perform tasks in daily living and work environments, which can range from dressing and eating to using a computer or making to-do lists. Occupational therapists teach patients with permanent physical disabilities to use adaptive equipment, such as wheelchairs and aids for eating and dressing. Some therapists work with employers to arrange jobs for disabled individuals and identify modifications to the work environment to accommodate their needs.
Speech therapists, also called speech-language pathologists, work with people who have problems speaking correctly, such as lisping or stuttering; have problems understanding or producing language; want to modify an accent; have attention, memory, or problem-solving disorders; or have swallowing difficulties. These problems may result from stroke or brain injury, learning disabilities, cerebral palsy, cleft palate, hearing loss, or emotional problems. Speech therapists assess each patient’s condition and develop and deliver a treatment plan of exercises and drills tailored to their needs.
Respiratory therapists work to improve breathing function in patients suffering from diseases such as asthma or emphysema, as well as those recovering from inhalation trauma or infants with underdeveloped lungs. Respiratory therapists conduct diagnostic testing and treat patients using physiotherapy techniques and ventilation devices.
Rehabilitation therapy is performed in hospitals, inpatient rehabilitation centers, skilled nursing homes, outpatient clinics, and in a patient's home. Accurate and timely billing and reimbursement processes are critical for therapy practices, since nearly all services are paid for by managed care programs, commercial health insurance, Medicare/Medicaid, or workers’ compensation insurance.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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