Demand for Physical Therapists and Occupational Therapists Will Increase Due to Regulation and Demographic Changes Aug 30

By Sterling Medical Staff

Three factors are changing the demand for physical therapists and occupational therapists:  changes in state/federal funding of health care, the modification of requirements in state acts for physician referrals of patients to receive therapy, and the reimbursement limitations of private insurers. Areas of physical therapy that have appeared to have the greatest likelihood of increase are services for youth, older adults, and wellness programs.

Legislation has continued to affect the Physical Therapy profession. The Balanced Budget Act of 1997 (BBA) is known for changing the way in which skilled nursing facilities are reimbursed by Medicare from a “retrospective to a prospective payment system” (2). The BBA put a ceiling on annual total payment for physical and occupational therapy services and put therapy payments in the “same schedule as physician payments” (3).

Another piece of legislation to directly affect the field of occupational and physical therapy is the Individuals with Disabilities Education Act (IDEA). This act affects physical and occupational therapy by influencing provider interest while also putting into question the financial feasibility of providing such services. However, the effects of the IDEA on school system therapy have not been extensively explored.

Potential growth areas of physical and occupational therapy employment are:

  •  Older Adults:  There has been a steady increase in the proportion of older adults to current population. This increase shows a positive correlation to increased need for physical therapy providers. While correlation does not necessarily prove causation, it is known that roughly 45% of older adults are limited in activities due to chronic conditions (4). This number shows that the baby generation will have an increasing need for physical therapists to help them cope with these “chronic conditions”.
  • Children: Recently, there have been calls for therapy services in schools. Occupational therapy is known to be important for the management of behavioral issues in the schools. Today’s parents are more knowledgeable than ever of the benefits of occupational and physical therapy for their children’s conditions or problems.
  •  Wellness Services/Programs: One reason for the increase of wellness programs and services is due to the aging population mentioned above, and their use of these programs. Neither physical nor occupational therapists seem very poised to take advantage of this opportunity. There is a lack of entrepreneurship in the field; few therapists want to move past “traditional” practice.

When the fields of physical and occupational therapy are looked at from afar, a shortage of workers is seen. In simple economic terms, supply is decreasing and demand is increasing.

The increasing demand for physical therapists and occupational therapist in the areas of wellness programs, the therapy needs of children, and the therapy needs of older adults, will continue to rise.



  1. Hack, L. M., & Konrad T. R. (1995). Determination of supply and requirements in physical therapy: Some considerations and examples. Physical Therapy, 75, 43‐55.
  2. Kahn, C.N. and Kuttner, H. (1999). Budget bills and Medicare policy: the politics of the BBA. Health Affairs, 1999 Jan‐Feb;18(1):37‐47.
  3. Olshin,J, Ciolek, D, & Hwang, W. (2002). Study and report on outpatient therapy utilization: Physical therapy, occupational therapy, and speech‐language   pathology services billed to Medicare Part B in all settings in 1998, 1999, and  2000. Accessed March 30, 2007, at‐99&sortByDID=1&sortOrder=ascending&itemID=CMS057266
  4. Wilmoth, J. M., Longino, C.F. (2006). Demographic trends that will shape U. S. policy in the twentyfirst century. Research on aging, 28(3), 269‐288.