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Thursday, March 14, 2024

NBC Report on CARD and Private Equity

At NBC, Gretchen Morgenson reports
Many of the companies swarming the autism services industry are backed by private-equity firms. These entities use borrowed money to buy companies they hope to sell quickly for more than they paid. The industry has taken over a vast array of health care businesses in recent years, even as research has shown that patient care declines at some entities run by private-equity firms. A recent study by academics at Harvard University and the University of Chicago, for example, found that patients at hospitals owned by private-equity firms experienced far more infections and falls. And on March 5, the Federal Trade Commission and Department of Health and Human Services announced an inquiry into private equity and other corporate takeovers of healthcare entities to understand how the transactions might “increase consolidation and generate profits for firms while threatening patients’ health, workers’ safety, quality of care, and affordable health care for patients and taxpayers.”

Among buyouts of autism services companies from 2017 to 2022, 85% were done by private-equity firms, according to Rosemary Batt, a professor at Cornell University’s School of Industrial and Labor Relations. With Eileen Appelbaum, co-director of the Center for Economic and Policy Research, Batt co-wrote a study: “Pocketing Money for Special Needs Kids: Private Equity in Autism Services.” The research estimates that some 135 private-equity firms invested in for-profit companies providing ABA therapy. Because these companies are private, it is difficult to determine the total market share the firms control in autism services, but the top 12 private-equity-backed companies employed 30,000 people and controlled almost 1,300 locations nationwide, Batt and Appelbaum found.
For ongoing CARD customers, things seem to be improving. The company’s founder, Doreen Granpeesheh, bought back most of its operations last August. A psychologist and board-certified behavior analyst, she told NBC News she’s dedicated to reviving the company’s services.