Occupational therapy and physical therapy do more than just help people recover from injuries or manage health conditions—they improve quality of life by helping individuals get back to the things that matter most to them.
OT and PT professionals address a broad variety of needs across some of the most common clinical conditions, often intervening early to prevent decline or downstream health issues before they even start.
But the value of rehab therapies goes beyond our profound impact on individual and community health—OT and PT are also recognized for their economic value in our increasingly expensive healthcare system.
Research consistently shows that investing in OT and PT can help reduce overall healthcare costs by preventing more severe downstream health concerns and by avoiding expensive surgeries, emergency visits, hospitalizations, and long-term care.
And all for a tiny fraction of overall healthcare spend! (In 2021, Medicare payments on outpatient occupational therapy services totaled $1,614 million, whereas total Medicare spending that year came to $8,394 billion.) Using those numbers, occupational therapy outpatient services make up just 0.019% of total Medicare spend.
In a time when healthcare costs and policies are rapidly shifting, it is more important than ever to demonstrate that rehab therapies are not only effective and impactful—they are also highly cost-effective.
In this post we highlight some of the strongest research from the past 10 years on the economic value of occupational and physical therapies. And the overall takeaway from the literature is clear:
Investing in OT and PT services makes good sense for individuals, communities, AND our health systems.
Cost-Effectiveness Research Across the Continuum of Care
Acute Care
Diagnosis | Citation for study on the economic benefit | Statement from results/discussion |
| Post-stroke, Post-traumatic brain injury, Pre-/post-hip replacement Acute/Subacute | Economic Effects of Occupational Therapy Services for Adults in Acute and Subacute Care Settings: A Systematic Review. (2023) | The findings suggest that occupational therapy for adults poststroke and post–traumatic brain injury, acute discharge planning, and pre– and post–hip replacement is cost-effective. |
| Heart failure, pneumonia, and acute myocardial infarction Acute Care | Higher Hospital Spending on Occupational Therapy Is Associated With Lower Readmission Rates (2017) | We found that occupational therapy is the only spending category where additional spending has a statistically significant association with lower readmission rates for all three medical conditions. (And OT was only .3% of spend.) |
Subacute Care
| Diagnosis | Citation for study on the economic benefit | Statement from results/discussion |
| Post-stroke Subacute | Cost effectiveness of the occupation-based approach for subacute stroke patients: result of a randomized controlled trial (2017) | The results show that the occupation-based approach is associated with significantly improved QALYs and has potential cost effectiveness, compared with the impairment-based approach. |
| Post-stroke, Post-traumatic brain injury, Pre-/post-hip replacement Acute/Subacute | Economic Effects of Occupational Therapy Services for Adults in Acute and Subacute Care Settings: A Systematic Review. (2023) | The findings suggest that occupational therapy for adults poststroke and post–traumatic brain injury, acute discharge planning, and pre– and post–hip replacement is cost-effective. |
Primary Care
| Diagnosis | Citation for study on the economic benefit | Statement from results/discussion |
| Adults with multimorbidity Primary Care | Cost-effectiveness of an occupational therapy-led self-management support programme for multimorbidity in primary care (2018) | The OPTIMAL intervention appeared to be cost-effective relative to usual care at 6 months follow-up for the full patient population. |
Outpatient Care
| Diagnosis | Citation for study on the economic benefit | Statement from results/discussion |
| Musculoskeletal Disorders Outpatient | Cost-Effectiveness and Outcomes of Direct Access to Physical Therapy for Musculoskeletal Disorders Compared to Physician-First Access in the United States: Systematic Review and Meta-Analysis (2021) | Direct access to physical therapy is more cost-effective, resulting in fewer visits than physician-first access in the United States, with greater functional improvement. |
| Low back pain Outpatient | Cost-effectiveness of physiotherapeutic interventions for low back pain: a systematic review (2020) | Excluding one study, all studies reported that the physiotherapeutic intervention was cost-effective compared with the control arm. |
| People with cognitive and/or functional decline (This included people with mild cognitive impairment, dementia, multiple sclerosis, Parkinson’s disease, Huntington’s disease, motor neurone disease, arthritis, frailty, falls and hip fracture) Various settings | Economic evaluations of occupational therapy approaches for people with cognitive and/or functional decline: A systematic review (2018) | The findings of this review suggest that there are trends indicating the economic benefit of systematic, or multicomponent, occupational therapy interventions for people experiencing cognitive and/or functional decline. |
| Osteoarthritis of the hip or knee Outpatient | Incremental clinical effectiveness and cost effectiveness of providing supervised physiotherapy in addition to usual medical care in patients with osteoarthritis of the hip or knee: 2-year results of the MOA randomised controlled trial (2018) | Individually supervised exercise (physio)therapy is cost-effective and clinically effective in addition to usual medical care at 2-year follow-up, and leads to cost savings for the health system and society. |
| Physical Therapy Various Conditions | The Economic Value ofPhysical Therapy in theUnited States (2023) | Physical therapy services demonstrate significant net economic benefit per episode of care for all 8 conditions analyzed. |
Community and Home Care
| Diagnosis | Citation for study on the economic benefit | Statement from results/discussion |
| Independent-living older adults Community | Cost-effectiveness of preventive occupational therapy for independent-living older adults (2002) | Preventive OT demonstrated cost-effectiveness in conjunction with a trend toward decreased medical expenditures. |
| Older adults Community | Effectiveness and Cost-Effectiveness of Occupation-Based Occupational Therapy Using the Aid for Decision Making in Occupation Choice (ADOC) for Older Residents: Pilot Cluster Randomized Controlled Trial (2016) | The results suggest that occupational therapy using the ADOC for older residents might be effective and cost-effective. Interventions based on occupation-based goal setting using the ADOC had greater potential for cost-effectiveness than an impairment-based approach. |
| Parkinson’s Disease Home Care | Economic evaluation of occupational therapy in Parkinson’s disease: A randomized controlled trial (2015) | Home-based OT for Parkinson’s disease does not significantly impact total costs for patients but is cost-effective for caregivers. |
Our Power in Prevention
One of the most powerful ways OT and PT save health costs is by intervening early in disease progression and providing preventative care that reduces the need for more expensive specialty care as conditions progress.
Here are two examples of how early referral to perinatal OT may prevent significant health costs for both mother and child:
Conclusion
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