November 1, 2011 — Over the next five years, the chiropractic industry is forecast to grow to reach $14.8 billion, according to IBISWorld Inc.
This includes growth of 2.2 percent in 2012. A lack of evidence supporting chiropractic as a primary form of healthcare will restrain industry growth. As a result, employment is projected to increase marginally at 0.6 percent on average per year to reach 142,719 in 2016.
Despite slow growth, chiropractic is positioned to take advantage of newfound interest in complementary and alternative care by providing more integrative care and gaining more consistent referrals from other healthcare professionals. The aging population will also continue to benefit from chiropractic, and healthcare reform will bolster demand.
Often regarded as a fringe or vague science, chiropractic is slowly gaining greater legitimacy among other healthcare providers, insurance providers, and consumers. Studies concerning the effectiveness of chiropractic treatments, however, have produced conflicting results.
Consequently, revenue is expected to grow slowly at an average annualized rate of 1.8 percent to $13.0 billion in the five years since 2006. In 2011, revenue is expected to increase 1.4 percent after strong growth in 2010 that marked a rebound in the economic environment. In an effort to further integrate with other healthcare professionals, chiropractors have been joining multidisciplinary groups. This has contributed to a falling number of industry operators during the past five years, which is expected to decline an average 1.6 percent per year to total 56,524 in 2011.
According to IBISWorld analyst, Sophia Snyder, demographic trends are favoring the Chiropractors industry, as it has been shown to be beneficial for seniors.
“Also, a more diverse range of ethnicities is visiting chiropractors,” says Snyder. “While sales are on the rise, downward pressure from shrinking reimbursement rates has hindered industry profitability.” Private insurance companies and public programs, such as Medicare, are struggling with budgetary issues and rising healthcare costs, so they provide clients with less financial coverage for the medical services they obtain.
Accordingly, the amount of money chiropractors have been receiving for treating patients covered by such policies has been decreasing.
The passage of the Patient Protection and Affordability Care Act (PPACA) in 2010 is forecast to improve the health insurance situation. The PPACA-initiated national healthcare reform brings with it a historic first for the chiropractic profession. The act’s “provider nondiscrimination” provision aims to ensure that a group health plan and a health-insurance issuer will not discriminate with respect to participation under the plan or coverage against any healthcare provider that is acting within the scope of that provider’s license or certification under applicable state law.
In short, this federal law will make it illegal for insurance companies to discriminate against chiropractors and other providers relative to their participation and coverage in health plans. As the PPACA takes effect in the coming years and more individuals gain access to healthcare coverage, industry revenue is expected to grow at an average annualized rate of 2.7 percent over the five years to 2016 to total $14.8 billion.
Source: IBISWorld Inc., www.ibisworld.com