Staffing Industry Analysts conducted its 2019 Allied Health Staffing Benchmarking Survey and published the full results in October directly to the respondent organizations. Twenty-four companies participated in the survey, reporting a total of $707 million in allied health staffing revenue for the first half of 2019 ($1.4 billion on an annualized basis), which represents 34% of the $4.2 billion market size projected in 2019 for that segment by SIA. Key findings from the survey are below:

• Among survey respondents, aggregate allied health temporary staffing revenue grew 10% in the first half of 2019 from the first half of 2018, with an 8% increase in hours billed volume and 1% increase in the bill rate.
• Staffing of physical therapists (PT), clinical lab technicians & medical technologists (MT) and radiological/MRI/CT technologists (Rad) made up the three largest categories in the survey at 16%, 13% and 9% of reported allied health staffing revenue, respectively. Revenue from PT, MT and Rad staffing grew 3%, 22% and 17%, respectively, from the first half of 2018 to the first half of 2019.
• Overall, 33% of allied health staffing revenue accounted for in the survey passed through a managed service provider and 25% through a standalone vendor management system. Adding the two together, 58% of first-half 2019 allied health staffing revenue reported was generated through an MSP and/or VMS. This was up from the 54% reported for the first half of 2018.
• Among allied health occupations, the four cited as most difficult to recruit as of the survey date (on a scale from one to five, with five being most difficult) were catheter lab technicians at 4.3, physical therapists at 4.2, occupational therapists at 4.0 and speech therapists at 3.8.

The allied health staffing projected market growth of 4% for the full-year 2019 in SIA’s US Staffing Industry Forecast was lower than the benchmarking study’s reported 10% aggregate revenue growth for first-half 2019 due in part to lower therapist demand anticipated in skilled nursing in the latter half of 2019 as the new Patient Driven Payment Model (PDPM) took effect on Oct. 1, 2019. Under the Centers for Medicare and Medicaid Services Prospective Payment System, the new PDPM classifies patients into case mix groups based on specific clinical characteristics instead of the previous reimbursement model based on the volume of therapy services received.

According to Modern Healthcare, thousands of physical, occupational and speech therapists have been laid off or had wages cut as skilled nursing facilities transitioned to the new PDPM. One example is national chain Genesis HealthCare, which disclosed that 585 of its 10,000 rehabilitation employees were impacted by PDPM. Another example is Aegis Therapies, which has reduced its usage of per diem labor and contract labor therapists, according to Skilled Nursing News.

In its recent earnings call, AMN Healthcare reported 11% year-over-year organic growth in allied health staffing for the third quarter of 2019. “Overall demand in allied is up year-over-year,” said AMN Healthcare CEO Susan Salka. “However, the growth outlook in the next couple of quarters is somewhat tempered by lower staffing needs from our skilled nursing clients due to the implementation of the Patient Driven Payment Model.”

Effective Jan. 1, 2020, CMS will also implement the Patient Driven Grouping Model (PDGM) for home health services. Similar to the PDPM, the PDGM is intended to remove incentives to overprovide therapy services and rely more heavily on patient clinical characteristics to align payments more closely with patients’ needs.

According to a June 2019 survey conducted by the National Association for Home Care & Hospice, 48% of home health providers anticipate a decrease in therapy utilization due to PDGM, with 25% of providers expecting a greater than 10% decrease in therapy services, and 23% of providers expecting a decrease of less than 10%. Fifty-eight percent of home health survey respondents anticipate a decrease in contract therapy, with 36% of providers projecting a greater than 10% decrease, and 22% expecting a decrease of less than 10%. 

Overall, SIA projects the allied health staffing market to grow 3% in 2020 as staffing companies continue to shift their mix of allied health clinicians away from the therapy modalities and into the faster-growing imaging, respiratory and lab specialties.

Over the next decade, the US Bureau of Labor Statistics projects employment of physical therapists will grow 22% to 301,900 by 2028. Demand for physical therapy will be driven by both the number of aging baby boomers, as well as the increased prevalence of chronic conditions, such as diabetes and obesity, which require physical therapy in order to maintain mobility.