U.S. Physical Therapy Services Market Size, Share & Trends Analysis Report By Application (Orthopedic Therapy, Neurological Therapy), By Settings (Outpatient Clinics, Hospitals), By Payer (Public Insurance, Private Insurance), And Segment Forecasts, 2025 - 2030

Market Size & Trends

The U.S. physical therapy services market size was estimated at USD 47.59 billion in 2024 and is expected to grow at a CAGR of 4.60% from 2025 to 2030. The market growth is driven by several factors such as, aging population, increased prevalence of chronic conditions, increased awareness of preventive care, and technological advancements. These drivers is expected to increase the demand for these services, by changing both patient behavior and the strategic direction of healthcare providers. For instance, in July 2022, CORA Physical Therapy introduced a new digital platform for enhanced patient convenience.

One primary driver is the aging population, leading to a higher demand for physical therapy services. As baby boomers continue to age, they experience a greater prevalence of musculoskeletal disorders, arthritis, and other age-related conditions that often require these services. According to the U.S. Census Bureau in 2020, the baby boom generation, was estimated at about 73 million, and by 2030, all baby boomers expected to be over 65, significantly increasing the proportion of the population that may benefit from these services. This demographic shift is expected to create sustained demand for therapeutic services, driving growth in the market.

Another significant factor is the growing awareness among the general public regarding the benefits of physical therapy for orthopedic therapy and pain management. As more individuals recognize that physical therapy can effectively address conditions such as lower back pain, joint issues, and sports injuries, there is an increasing demand for these services. The increased awareness led to more referrals from healthcare providers and increased patient engagement in seeking physical therapy options.

The significant cost savings associated with early intervention in physical therapy play a crucial role in driving market growth. Physical therapy can prevent increasing conditions that require more invasive treatments or surgeries later on. The cost-effectiveness benefits patients and reduces overall healthcare expenditures by minimizing hospital admissions and long-term care needs, making physical therapy an attractive option for individuals and insurers.

Market Concentration & Characteristics

The chart below illustrates the relationship between market concentration, characteristics, and participants. The x-axis represents the level of market concentration, ranging from low to high. The y-axis represents various characteristics, including a degree of innovation, level of M&A activities, impact of regulations, service expansion, and impact of partnerships & collaborations. For instance, the market is fragmented, with many small players entering the market and launching new innovative services. The degree of innovation is low, the level of M&A activities is high, the impact of regulations is medium, service expansion is medium, and impact of partnerships & collaborations is medium.

Innovation in the U.S. market needs to improve, with many practices relying on established treatment methods rather than introducing groundbreaking technologies or techniques. There are some advancements in telehealth and digital health platforms, while the core practices of physical therapy remain relatively unchanged. For instance, traditional modalities such as manual therapy and exercise-based rehabilitation continue to dominate treatment plans.

Level of M&A activities in the U.S. market is high, driven by the need for provider consolidation and expansion. Many companies seek to acquire smaller practices to enhance their market presence and diversify their service offerings. For instance, in September 2024, U.S. Physical Therapy, Inc. acquired a majority 70% stake in an eight-clinic physical and hand therapy practice in Pennsylvania, enhancing its presence in the Northeast and expanding the portfolio with local expertise.

The impact of regulations on the U.S. market is medium, as regulatory frameworks facilitate and constrain growth. Medicare reimbursement policies are essential to determine the financial viability of physical therapy, affecting how services are delivered and compensated. However, the regulatory environment remains stable, with periodic adjustments rather than extensive reforms, allowing providers to operate within established guidelines while seeking compliance.

Service expansion within the market is medium, with many providers exploring opportunities to broaden their offerings beyond traditional physical therapy. This includes developing specialized programs targeting pediatrics, geriatrics, or sports rehabilitation populations. For instance, in July 2024, Select Medical and Cedars-Sinai launched a specialized spine care initiative in Greater Los Angeles.

The impact of partnerships and collaborations within the market is medium, as many physical therapy providers team up with healthcare systems, fitness organizations, and technology firms to enhance their service delivery. These collaborations often aim to improve patient outcomes and streamline care pathways. For instance, in September 2024, Athletico Physical Therapy partnered with Ballet Des Moines, Iowa’s only resident ballet company, to become the Official Physical Therapy Provider for the 2024-2025 season.

Application Insights

The orthopedic therapy segment held the largest revenue share of 58.89% in 2024 due to its widespread appeal and functionality. Several key factors, including a rise in Musculoskeletal (MSK) disorders, such as arthritis, and an increasing emphasis on nonsurgical treatments for injury rehabilitation, drive the orthopedic physical therapy market. For instance, according to the CDC, in 2022, 18.9% of individuals aged above 18 years had arthritis. In addition, the growing awareness of the benefits of physical therapy in improving mobility, managing pain, and accelerating recovery from orthopedic surgeries is fueling demand. Advances in treatment techniques and increased sports-related injuries is expected to expand orthopedic physical treatment services as more individuals seek targeted, noninvasive rehabilitation options.

The geriatric therapy segment is expected to grow at the fastest CAGR over the forecast period. Growth of the segment can be attributed to the growing elderly population and the rising incidence of age-related conditions, such as arthritis, osteoporosis, Alzheimer’s disease, cancer, balance & gait disorders, neurological disorders, and mobility impairments. Moreover, technological advancements and the trend toward preventive healthcare & nonsurgical interventions have increased the demand for physical therapy as a preferred approach to managing age-related health decline. For instance, in March 2024, FOX Rehabilitation, a senior in-home care provider, partnered with a digital care technology company-OneStep-to incorporate Remote Therapeutic Monitoring (RTM) into its services.

Settings Insights

The outpatient clinics segment held the largest revenue share of 50.99% in 2024.Outpatient clinics are preferred for their flexibility, allowing patients to receive therapy without needing hospitalization. This setting caters to various conditions, from post-surgical rehabilitation to chronic pain management. It is a vital resource for individuals looking to improve their mobility and quality of life. In addition, the launch of new settings is expected to drive the segment growth during the forecast period. In November 2022, Physical Rehabilitation Network, a company with over 200 clinics, has launched its first outpatient PT clinic in Escondido, California.

The home healthcare segment is expected to witness significant growth over the forecast period, driven by an increasing preference for receiving care in the comfort of one’s home, especially among aging populations and individuals with chronic conditions. This segment gained significant attention due to the increasing demand for personalized care, advances in telehealth technologies, and the need for cost-effective healthcare solutions. As patients increasingly seek alternatives to traditional hospital settings, home healthcare services are becoming a vital option for physical therapy.

Payer Insights

The private insurance segment held the largest revenue share of 57.81% in 2024. The segment's growth can be attributed to the increasing collaboration between private health insurers, employers, and healthcare facilities. Many employers offer comprehensive health insurance plans that include coverage for physical therapy services as part of their employee benefits packages. According to a report published by the U.S. Census Bureau in September 2021, private insurance plans covered approximately 66.5% of insured individuals in the U.S. in 2020. This trend enhances access to physical therapy services and promotes preventive care, as patients are more likely to seek treatment early on when covered by their insurance.

The public insurance segment is expected to represent a significant market share over the forecast period. One of the primary drivers of the segment's growth is the rising incidence of chronic conditions, such as obesity, diabetes, and cardiovascular diseases. According to the U.S. CDC, approximately 6 in 10 adults in the U.S. have a chronic disease, and 4 in 10 have two or more. These conditions require long-term management and rehabilitation, typically covered by public insurance programs (Medicare and Medicaid). For instance, Medicare covers physical therapy services for beneficiaries diagnosed with certain chronic conditions, such as Parkinson's disease or multiple sclerosis, to help improve their quality of life and maintain independence.

Key U.S. Physical Therapy Services Company Insights

Facility expansion, strategic partnerships, and increased emphasis on inorganic growth initiatives are critical strategies followed by these players to strengthen their market position. In addition, other competitors are continually engaging in strategic expansion projects to build their footholds in new markets. Some of the notable emerging players are Ivy Rehab, CORA Health Services, Inc., and Enhabit Home Health & Hospice.

Recent Developments

• In September 2024, Athletico Physical Therapy partnered with Limber Health to enhance hybrid musculoskeletal care. This collaboration integrates Limber’s technology in over 900 clinics across 24 states and D.C., aiming to improve patient outcomes in orthopedic rehabilitation.

• In September 2024, NextGen Healthcare, Inc. renewed its partnership with Athletico Physical Therapy to implement NextGen Enterprise EHR and PM systems, enhancing clinical and financial efficiency across Athletico’s expanded service areas.

• For instance, in July 2024, Select Medical and Cedars-Sinai introduced a specialized spine care initiative in Greater Los Angeles.

• In March 2024, ATI Physical Therapy, Inc. formed a two-year exclusive partnership with the McDonald’s All-American Games, becoming the Official Physical Therapy Partner for this annual event in March, which showcases top high school basketball talent.

• In June 2024, Select Medical donates USD 5 million over five years to Harrisburg University to establish the Select Medical Physical Therapy and Movement Institute.

U.S. Physical Therapy Services Market Report Scope

U.S. Physical Therapy Services Market Report Segmentation

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the U.S. physical therapy services market report based on application, settings, and payer:

• Application Outlook (Revenue, USD Billion, 2018 - 2030)

  • Orthopedic Therapy

  • Neurological Therapy

  • Geriatric Therapy

  • Pediatric Therapy

  • Women Health

  • Cardiopulmonary Therapy

  • Others

• Settings Outlook (Revenue, USD Billion, 2018 - 2030)

  • Outpatient Clinics

  • Hospitals

  • Home Healthcare

  • Others

• Payer Outlook (Revenue, USD Billion, 2018 - 2030)

  • Public Insurance

  • Private Insurance

  • Out of Pocket