Cost-Effectiveness of OT and PT
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
| Citation for study on the economic benefit | Statement from results/discussion |
Post-stroke, Post-traumatic brain injury, Pre-/post-hip replacement | 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 | 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. |
Subacute Care
Diagnosis | Citation for study on the economic benefit | Statement from results/discussion |
Post-stroke | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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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Contributors
Sarah Lyon
OTR/L
Sarah Lyon, OTR/L, is the CEO of OT Potential. Sarah earned her BA from St. Olaf College and her master’s degree in occupational therapy from New York University. Her diverse clinical background spans multiple settings, including critical access, acute trauma, and state inpatient psychiatric hospitals. In 2011, she founded OT Potential to fulfill the industry's need for reliable, high-quality occupational therapy resources and continuing education.
As a recognized content creator, Sarah has collaborated with top healthcare brands like VeryWell Health, WebPT, and MedBridge. She blends her clinical expertise with a talent for creating clear, action-oriented content that empowers practitioners to excel. Passionate about elevating the OT profession, she has been featured on numerous industry podcasts. Sarah ultimately returned to her roots, running OT Potential and raising her family in her hometown of Aurora, Nebraska.
Alana Woolley
OTD, OTR/L
Alana is an occupational therapist dedicated to pediatric mental health and familial wellness. After obtaining her Doctorate of Occupational Therapy from the University of Wisconsin - Madison and completing a Capstone project with OT Potential, Alana has started her OT career as an inpatient therapist at an acute child and adolescent psychiatric hospital in Madison, WI. Her passion for evidence-based practice, trauma-informed care, active knowledge translation practices, and family-centered care are the foundation for her clinical practice. Some of her favorite occupations include bike riding, playing board games, and making things by hand.
