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How to identify business opportunities in Rehabilitation/Physical Therapy?

Posted by Health Entrepreneur 10/28/2015

After understanding the basics of Rehabilitation/Physical Therapy, here we continue our discussion on how to identify business opportunities that is useful for further expansion.

At a Glance

  1. Translating health care opportunities into business
  2. Six steps for setting up rehabilitation business
  3. The take away

For Basics of Rehabilitation/Physical Therapy, CLICK HERE!

Translating health care opportunities into business

Many private equity firms and healthcare companies are keen in evolving the market of addiction into a business world. According to a report, the addition rehabilitation services has grown to $35 billion in 2014 from $21 billion in 2003. These numbers show promising growth in this sector.

Market trends

The rehabilitation therapy industry of the U.S. is greatly shattered. The top 50 companies in the health care resort to less than 25% of the revenue. Not even a single participant shares 5% of the total market revenue. Small scale health care centers contribute to approximately 45% of the physical therapy clinics.

However, their growth is limited due to-

  • Underdeveloped referral sources and infrastructure
  • Well-established organizations with  happening alliances

Figure 1- Reimbursement for Rehabilitation and Physical Therapy

The outpatient rehabilitation centers contribute $29.6 billion, that is presumed to grow by 7% every year till 2018. Physical therapy alone accounts for $26.6 billion, i.e. approximately 90% of the outpatient rehabilitation expenditure.

Figure 2- Competitive Analysis

Factors suggesting long-term growth

  • Aging U.S. population
  • Growth in employment
  • Unhealthy lifestyle among youth
  • Increasing penetration of physical therapy services
  • New government regulations (e.g., the PPACA) increasing patient access to physical therapy
  • Outpatient rehabilitation is significantly less costly than surgery or hospitalization, but with similar clinical effectiveness

Figure 3- U.S. Outpatient Rehabilitation Expenditures

Figure 4- Outpatient Rehabilitation Spending by Segment

Physician-owned physical therapy practices (POPT) from 10-15% of all physical therapy clinics and represent an ultimate market opportunity. They provide an excellent opportunity to the physicians to serve their patients better with greater convenience, enhanced results, and continuity of care by serving them in the office setting.

 

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