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Thursday, June 21, 2018

The Autism Services Market

Autism services has already been an attractive industry for investors, particularly those looking to make a positive social impact. For such investors, the industry provides a very favorable opportunity for financial gains with the added benefit of empowering a growing segment of the population in need of support.

In the past five years, the market has become increasingly consolidated. As private equity eyes the increase in demand along with a more favorable climate for funding and reimbursement, we can expect to see even more consolidation in the future. As investors build national platforms by acquiring providers, these new national platforms are competing for dominance, and making it more difficult for privately owned companies to compete.

A benefit of this new landscape is that competition can raise the bar of service for any market. However, in healthcare especially, consolidation often stymies competition. By buying up a significant share of the market, larger players are able to effectively increase their bargaining power with insurers and suppliers. This gives them an outsized advantage over their competitors. That kind of market dominance prevents real competition and thus fails to improve quality. This is also why research shows that consolidation in healthcare typically leads to higher prices.