Mental Health Therapy TAM
The estimated mental health therapy total addressable market, TAM, in the US in 2018 was $155.75 billion and estimated to reach $251.39 billion by 2029. Also, the research team calculated the number of people in the US expected to need mental health therapy by 2029 to be 60.15 million, up from 46.6 million adults in 2017, and 47.6 million in 2018.
Mental Health Addressable Market
- In 2017, about 20% of the adult population in the US got diagnosed with at least one mental health condition, which represented a total addressable market of 46.6 million adults. Out of this number, just about 41% (or 19.1 million people) sought therapy, according to NIMH.
- As of 2018, a report by NAMI showed that the number of adults in the US diagnosed with a mental health condition went up to 47.6 million (a growth of 2.15%).
- Assuming a similar growth rate of 2.15% yearly over the next decade, the estimated TAM for the mental health therapy industry will increase to about 60.15 million by 2029, using the CAGR calculator.
- According to a report by Northwestern Mutual, the minimum yearly cost of mental health therapy was $3,200 in 2017.
- As per data by Statista, the average inflation rate for the US dollar from 2010 to 2024 was projected at 2.25% annually in the rise of prices generally.
- Based on the dollar inflation rate data by Statista, the estimated minimum yearly cost for mental health therapy in 2017 (USD3,200) would be $3,272 in 2018 and $4,179.36 by 2029, as per the CAGR calculator.
- Thus, assuming the 47.6 million people diagnosed with a mental health condition in 2018 needed mental health therapy at an estimated minimum (inflated) yearly cost of $3,272, the estimated TAM in 2018 was $155.75 billion.
- Also, if the 60.15 million projected to have a mental health condition by 2029 seek mental therapy, at the expected inflated rate of the dollar in 2029 ($4,179.36), the TAM for mental therapy by then would reach $251.39 billion.
- Assuming a similar rate of people who sought mental therapy in 2017 (41%) still do so by 2029, that would be about 24.67 million American adults seeking mental health therapy, by 2029. For this percentage, the TAM would be around $103.10 billion.
Research Strategy and Calculations:
We began by researching reports and studies published by relevant health organizations such as NAMI, NCBI, AHA, and others. Specifically, we looked for studies with any information on the number of people seeking or in need of mental health therapy in the US. From here, we discovered the 2017 and 2018 number of people diagnosed with a mental health condition in the United States who needed mental health therapy. Unfortunately, this investigation did not yield data projecting the number of mental health diagnoses of people who may need mental health therapy up to 2019; neither was there data on the TAM in monetary terms.
Next, we turned to examine industry and employment directories, hoping to find data published in connection with projected employment rates for the relevant period or the TAM expected of the health therapy sector. However, while we could locate the projected employment rate of the sector via the Bureau of Labor Statistics (BLS), there was no data relevant to this request on the BLS portal or other sites like CareerOneStop and others researched.
As a third strategy, we examined reports on relevant media portals, including Thumbtack, Thervo, APA, and others, looking for reports with any information on the TAM market size of mental health therapy or the cost associated with it. This time, we found a report by Northwestern Mutual, which provided the minimum yearly cost for mental health therapy in the US in 2017. However, there were no reports with the projected yearly cost or growth rate for mental health therapy cost; therefore, we researched the average inflation rate of the US dollar and used it as a proxy for calculating the needed TAM.
Due to the lack of the need information, we switched strategies to calculate, using data available in the public domain. For this, we started by calculating the estimated growth rate based on the percent change in the US mental health population data from 2017 (46.6 million) to 2018 (47.6 million), giving 2.15% via the percentage within the period. Then, we applied this percentage (2.15%) annually to the next 10 years to determine an estimated TAM by people for the year 2029 (60.15 million), using the CAGR calculator. Next, we used the CAGR calculator to determine what the minimum yearly cost for mental health therapy in 2017 (USD3,200) would amount to in 2018 ($3,272) and 2029 ($4,179.36) based on the 2.25% annual dollar inflation rate reported by Statista.
Finally, we multiplied the number of people diagnosed with mental health illness in 2018 who would need mental health therapy with the estimated minimum annual cost for therapy in 2018 [($3,272 x 47.6 million) = $155.75 billion], as well as for 2029 [($4,179.36 x 60.15 million) = $251.39 billion], to determine the needed TAM data.