State Policies on Private Equity and Autism Treatment

 The Politics of Autism includes an extensive discussion of autism service providers.  Private equity firms now own many of them.   Insurance mandates and Medicaid spending have contributed to the growth trend.

Ryan Leitner at the Private Equity Stakeholder Project:

States may want to consider policies that help address some of the specific concerns surrounding private equity ownership of ABA providers. A May 2026 article in Health Affairs both describes those specific issues and proposes regulations that could help improve oversight of ABA services and private equity’s role.

Yashaswini Singh, Corrie Mook, Jared Perkins, Nathan Hostert, and Daniel R. Arnold, the authors of the Health Affairs article,noted that, in general, private equity investment “alters workforce composition and clinician turnover,” and that the rapid growth of private equity-owned ABA services can lead to higher costs and limit access to care. The authors found that in Colorado, “PE-backed centers accounted for half of the increase in billable hours in 2024, prompting concerns over unnecessarily intense treatments that lack clinical benefit.”

To allow for greater oversight of private equity-backed ABA providers, the authors recommend:

• Generating higher quality Medicaid data with more details, including state identifiers;
• Requiring ownership transparency for provider organizations; and
• Enforcing existing anti-kickback statutes, including to investor-backed management companies.

The authors also suggest that policymakers engage with patient advocacy groups and community organizations to provide insight into how to refine reforms more quickly to avoid unintended consequences.

"The Science Is Beautiful but the Industry Is Very Ugly"

The Politics of Autism includes an extensive discussion of autism service providers.  Private equity firms now own many of them.   Insurance mandates and Medicaid spending have contributed to the growth trend.

 Sarah Kliff and Margot Sanger-Katz at NYT:

A New York Times investigation has found that this rapid expansion has played out with little regulatory oversight and brought allegations of children being harmed by profit-motivated practices. In interviews, dozens of current and former clinic workers described how clinics frequently overprescribe hours — even recommending that some families remove children from school so they can receive more therapy.

Marquisha Richards worked at two private-equity-backed chains in Texas. She said she became disillusioned about how financial considerations repeatedly drove care decisions. “The science is beautiful, but the industry is very ugly,” she said.

Nationwide, Medicaid spending on autism therapy nearly tripled between 2020 and 2024. In some states it grew much faster: Colorado Medicaid now spends more on autism therapy than on all emergency department visits. North Carolina, which spent $121 million in 2022, projects it will spend over $1 billion next year.

...

Autism treatment did not become big business until the mid-2010s, after state laws began requiring insurers to cover it. Medicaid soon followed, and the industry boomed.

In North Carolina, the number of clinics owned by autism therapy providers grew from 61 in 2019 to 409 in 2026, according to data compiled by Daniel Arnold, a health economist at Brown University.

...

The clinics are enticing to health care investors: Demand is high and payment rates far exceed labor costs.

Medicaid often pays about $70 per hour ($83 in North Carolina) for therapy largely provided by workers with high school diplomas who earn around $20.

Private equity firms have acquired at least 500 clinics over the past decade. “There’s just huge opportunities to grow these businesses and help increase access to care,” said Jon Krieger, a managing partner at Calex, a financial firm that assists with autism clinic mergers and acquisitions. He estimates the market could grow to $90 billion.

...

Nationally, clinic visits have grown longer since private equity entered the business, from a median of four hours in 2019 to 5.5 hours in 2024, according to an analysis of 34 million Medicaid claims by the health data firm Trilliant.

Autism Business

In The Politics of Autism, I discuss the day-to-day challenges facing autistic people and their families.   Scams plague the world of autism. Some involve shady or abusive providers.

Christopher Weaver, Tom McGinty, and Anna Wilde Mathews at The Wall Street Journal:

The business of providing therapy to children with autism has surged in recent years across the U.S., fueled by taxpayer-funded Medicaid payments. Some companies have found lucrative opportunities to capitalize on the growing need for such care, sometimes outpacing regulators’ oversight, the Journal’s analysis found.

The number of companies offering such therapy—individualized treatments meant to help patients manage behavior and develop daily living and social skills—almost doubled between 2019 and 2023. Direct payments from state Medicaid programs to autism therapy providers grew to $2.2 billion in 2023, from $660 million just four years earlier, according to the data. Private insurers administering Medicaid benefits paid hundreds of millions more.

That made applied behavior analysis, or ABA, as the therapy is called, the fastest-growing service in Medicaid, the state-run program for low-income and disabled people. Federal taxpayers financed about 70% of Medicaid spending during that period. Entrepreneurs and investors, including some private-equity firms, have piled into the business.

 ...

Indiana became the nation’s hotbed of the booming autism therapy industry, home to nine of the top 10 providers by per-patient spending in 2023. A big part of that was because the state started reimbursing providers 40% of whatever they billed. Unlike the fixed prices that most states use to cap costs, Indiana’s approach became a kind of blank check and therapy providers flooded in to take advantage of the generous reimbursements.

Medicaid spending on autism surged—from $21 million in 2017 to $611 million in 2023, according to a state report.

“Over time you saw an explosion of the children who were diagnosed and in billing practices that in my opinion were the epitome of abuse,” said Mitch Roob, the current secretary of the state’s Family and Social Services Administration and interim Medicaid director.

No one monitored providers’ billing practices during those years, said Roob, who was appointed last year. “If you’re a kid and no one was looking at the cookie jar and the lid was off, would you take another one?”

...

The state scrapped the old billing system in 2024, replacing it with a flat rate of $68 an hour for services paid for by the state. Officials are planning an additional 6% cut this year and also plan to cap lifetime hours of service at 4,000 per child.

Private Equity

The Politics of Autism includes an extensive discussion of autism service providers.  Private equity firms now own many of them.   After its purchase by Blackstone, the Center for Autism and Related Disorders went bankrupt.

A release from Brown University:

Private equity firms have acquired more than 500 autism therapy centers across the U.S. over the past decade, with nearly 80% of those acquisitions occurring over a four-year span, according to a new study from researchers at the Brown University Center for Advancing Health Policy through Research.

Study author Yashaswini Singh, a health economist at Brown's School of Public Health, said the work highlights how financial firms are rapidly moving into a sensitive area of health care without much public scrutiny or data on where this is happening or why.

"The big takeaway is that there is yet another segment of health care that has emerged as potentially profitable to private equity investors and it is very distinct from where we have traditionally known investors to go, so the potential for harm can be a lot more serious," Singh said. "We're also dealing with children who are largely insured by Medicaid programs, so if private equity increases the intensity of care, what we're really looking at are impacts to state Medicaid budgets down the road."
Study findings and national context

The findings of the analysis were published in JAMA Pediatrics and offer one of the first national assessments of private equity's growing role in autism therapies and services. Autism diagnoses among U.S. children have risen sharply in recent years, nearly tripling between 2011 and 2022, and the condition has been in the national spotlight amid political debate falsely linking autism to childhood vaccines.

The researchers, Singh said, did not evaluate the impacts of private equity ownership on access to treatment, quality of care or the experience of families seeking services. The findings do suggest that investment has been concentrated in states with higher rates of autism diagnoses among children and states that have fewer limits on insurance coverage.

The researchers identified a total of 574 autism therapy centers owned by private equity firms as of 2024, spanning 42 states. Most of those centers were acquired between 2018 and 2022, the result of 142 separate deals. The largest concentrations of centers were in California (97), Texas (81), Colorado (38), Illinois (36) and Florida (36). Sixteen states had one or no private equity-owned clinics at the end of 2024.

States in the top third for childhood autism prevalence were 24% more likely to have private equity–owned clinics than others, according to the study.

The scale and speed of acquisitions underscore the growing trend of private equity's entry into the market. According to Singh, researchers were prompted to investigate after hearing anecdotal reports from families and health providers about changes following private equity takeovers.

The primary concern is private equity firms putting money over families, said Daniel Arnold, a senior research scientist at the School of Public Health.

"It's all about the financial incentives," Arnold said. "I worry about the same types of revenue generating strategies seen in other private equity-backed settings. I worry about children receiving more than the clinically appropriate amount of services and worsening disparities in terms of which children have access to services."

To establish a baseline of where private equity firms are investing and why, the team used a mix of proprietary databases, public press releases and manual verification of archived websites to track changes in ownership. Unlike public companies, private equity firms and private practices are not required to disclose acquisitions, making data collection challenging and labor-intensive.

The team now hopes to examine how private equity ownership affects outcomes, including changes in therapy intensity, medication use, diagnosis age or how long children stay in treatment. They will determine whether these investments are helping meet real needs or are primarily a way to make money.

"Private investors making a little bit of money while expanding access is not a bad thing, per se," Singh said. "But we need to understand how much of a bad thing this is and how much of a good thing this is. This is a first step in that direction."

Report on Private Equity

The Politics of Autism includes an extensive discussion of autism service providers.  Private equity firms now own many of them.   After its purchase by Blackstone, the Center for Autism and Related Disorders went bankrupt.

Private Equity Stakeholder Project, "Private Equity in Intellectual and Developmental Disability Services."  Executive Summary:

Private equity firms have been acquiring companies providing services for people with intellectual or development disabilities (IDD). This includes residential facilities, home health and personal care, supported and independent living services, and others. These services were historically provided primarily by non-profits and religious organizations. Through recent buyouts and consolidation, several large private equity owned companies have emerged with tens of thousands of employees at numerous locations across the United States. In some cases, these companies have achieved regional market concentration obscured by complex ownership structures and disparate branding. Case studies in this report illustrate the risks that the private equity business model poses to IDD providers and the people they serve, including:

• Sevita (Centerbridge Partners, Vistria Group)
• Help at Home (Centerbridge Partners, Vistria Group) \
• Broadstep Behavioral Health (Bain Capital)
• Texas Medicaid HCBS provider landscape 
• Advoserv/Bellwether Behavioral Health (GI Partners, Wellspring Capital)

...

 PE Cost-Cutting Tactics & Impacts 

• Reducing staffing 
• Failing to provide adequate training 
• Underpaying employees, resulting in high-turnover and understaffing 
• Failing to hire employees with adequate licensing (which can be more costly) 
• Cutting services (e.g., therapy or educational services) 
• Failing to maintain facilities, leading to unsafe or unsanitary living conditions

Medicaid Reimbursement Rates

The Politics of Autism includes an extensive discussion of insurance and Medicaid services for adults with intellectual and developmental disabilities.

Morgan Gonzales at Behavioral Health Business:

Medicaid reimbursement rates are largely trending upward for autism therapy providers, but burdensome regulations still pose significant hurdles to growth.

To overcome these challenges and improve rates, all players in the autism therapy industry, including private equity firms, must become involved in advocacy work, industry insiders said at the Behavioral Health Business Autism & Addiction Treatment Forum.

“No margin, no mission,” Darren Patz, partner of government affairs and public policy at international law firm DLA Piper, said at the event. “You get the rates, and everything can flow from that.”


Medicaid reimbursement for services performed by registered behavior technicians (RBTs) and board-certified behavior analysts (BCBAs) is relatively new, according to Patz, so states are still in the process of determining rates.
...

Private equity-backed ABA providers must also join advocacy efforts, Patz said. Group advocacy work also provides a platform for providers to share best practices, he added.

Private equity has played an increasingly prominent role in autism therapy dealmaking. Private equity firms completed 85% of all M&A between 2017 and 2022, according to research. The federal government has also increasingly scrutinized private equity activity in behavioral health, launching a probe into private equity’s role in health care in March.

Colorado Closures

 The Politics of Autism includes an extensive discussion of autism service providers.

Some are closing.

Nick Coltrain, The Denver Post:

Since 2021, at least 13 companies—operating about 35 clinics of different sizes—have closed or left the state over reimbursement rates that haven't kept up with rising costs, according to research by the Colorado Association for Behavior Analysis. Those closures have affected treatment for some 1,380 patients, and an estimated 1,000 Coloradans lost their jobs, according to the group.

"Colorado is relatively unique in the Medicaid landscape right now because of the number of programs that have closed and/or exited the state," said Mariel Cremonie-Fernandez, the vice president of government affairs for the national Council of Autism Service Providers.

..

Rebecca Urbano Powell, executive director of Seven Dimensions Behavioral Health, said she watched her waitlist balloon from two months to six months as the industry contracted in recent years. And with low reimbursement rates, she's lost entry-level staff to Starbucks and Walmart, she said, effectively cutting off entry into the behavioral health workforce before workers can get their feet under them.

"They could choose to work with kids with very severe, dangerous behaviors, or go work at Starbucks as a barista, and make the same—if not more—as a barista," said Urbano Powell, who also is board president of the Colorado Association for Behavior Analysis.

 ...

The growing role of private equity investment firms also complicates matters, HCPF warned, as firms buy up providers and close down autism services when they don't hit profit goals.

HCPF cited a national report from the Center for Economic Policy and Research that found private equity firms "move in and skim funds to pay high salaries to executives and outsized returns to private equity partners." The study did not cite any Colorado-specific impacts but noted that many of the firms it looked at operate in dozens of states.

While some budget committee members were "agnostic" to ownership structures of autism providers, as one put it, Sen. Jeff Bridges was more skeptical. While the Arapahoe County Democrat ultimately voted to increase funding, he worried it would set a precedent that investment firms could demand money to pad profits to their liking—and hold autism services hostage to do so.

"To me, it feels like a monopoly," Bridges said. "There's a real problem here if private equity is coming in here and doing what they did to other markets to autism providers. If those folks are getting in the way, then we absolutely have to take the fight to them."

NBC Report on CARD and Private Equity

The Politics of Autism includes an extensive discussion of autism service providers.  Private equity firms now own many of them.   After its purchase by Blackstone, the Center for Autism and Related Disorders went bankrupt.

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.

Retracted Article on Private Equity

The Politics of Autism includes an extensive discussion of autism service providers.  Private equity firms now own many of them.  There are critics.

Retraction Watch:

 An article that proposed potential benefits of private equity firms investing in autism service providers has been removed from the journal in which it was published.

The article, “Private equity investment: Friend or foe to applied behavior analysis?” was originally published in the International Electronic Journal of Elementary Education as part of a January 2023 special issue devoted to applied behavior analysis (ABA) for autism.

... 

The sole author of the article, Sara Gershfeld Litvak, “decided to retract the article due to her commitment to scientific integrity and ethical values,” following “a rigorous review process,” according to the undated retraction notice on page 266 of the special issue. Litvak is founder and CEO of the Behavioral Health Center of Excellence (BHCOE), a company that offers accreditation for organizations that provide ABA services, and she co-founded the Autism Investor Summit, an annual meeting focused on the business side of autism services. She is also an advisory board member for Calex Partners, a firm that provides advice on mergers and acquisitions for autism-related businesses.

The original retraction notice did not mention any specific issues with the article, which is no longer available on the journal’s website. A correction notice to the issue’s introduction, published 4 October, says that the editors retracted Litvak’s article “due to the use of Artificial Intelligence (AI) that led to numerous inaccuracies within the reference and the body of the paper.” A close examination of a PDF copy of the article obtained by Spectrum and Retraction Watch revealed that nearly two-thirds of the article’s references appear to not exist.

Doreen Granpeesheh Gets CARD Back

 The Politics of Autism includes an extensive discussion of autism service providers.  Private equity firms now own many of them.  There are critics.

Dietrich Knauth at Reuters:

The Center for Autism and Related Disorders, which operates 130 treatment centers in the U.S., received bankruptcy court approval on Wednesday to sell itself back to its founder for $48.5 million.

The Nevada-based company, which is majority-owned by private equity firm Blackstone (BX.N), filed for bankruptcy in June, saying its business had suffered from higher labor costs, unprofitable long-term contracts with government and commercial healthcare providers, and a long-term shift to telehealth services.

U.S. Bankruptcy Judge David Jones approved the sale at a court hearing in Houston, Texas, saying he was "pleasantly surprised" the company's bankruptcy auction had managed to drive up the sale price from an initial $25 million bid.

"This is an important asset," Jones said. "Not only does it provide jobs and fill a spot in the market, it also provides a very valuable service to a segment of our population that needs help."

CARD Developments

 The Politics of Autism includes an extensive discussion of autism service providers.  Private equity firms now own many of them.  There are critics.

At Forbes, Phoebe Liu reports on the Center for Autism and Related Disorders:

By the time Blackstone took over, the company had already been struggling with employee turnover, especially that of entry-level therapists, due to a combination of low wages, the emotionally taxing work and frequent cancellations that led to an unstable income and schedule. [Doreen] Granpeesheh says CARD’s wages were “competitive” and emphasizes that its 24% turnover rate at that time among therapists was fairly standard in the autism treatment industry—not CARD-specific issues. Granpeesheh stayed on as CEO until the end of 2019. She wrote in a LinkedIn post in January this year that she stepped down because she was “tired and wanted time with [her] family … 40 years was long enough.”

Things got worse during the pandemic. Closures followed.

On June 11, 2023, CARD filed for Chapter 11 bankruptcy with just $2 million of cash in the bank and more than $240 million in debt, according to court filings, which also show that Granpeesheh now has a 21% stake in the bankrupt CARD. (Employees who reinvested some of their shares have 9% and Blackstone has the remaining 70%.)

Two days prior, as part of the bankruptcy proceedings, Granpeesheh and her business partner Sangam Pant—a managing partner at CARD from 2014 to 2019—entered an agreement to purchase the company for just $25 million, on top of assuming some of CARD’s liabilities. Granpeesheh says she can’t disclose the exact breakdown of the deal but that she is the majority owner; court filings say she will be responsible for 60% of guaranteed debts.

...

But she will have to face an environment that isn’t as friendly to ABA as it was in CARD’s fastest-growing days. Although punitive measures in ABA like using electric skin shock to correct behavior are mostly phased out, the therapy still has its critics, who say it prevents autistic children from engaging in self-stimulatory behavior like repeated motions or noises that can bring them relief. The University of Stirling’s Botha says the therapy is based on a “cruel” premise of making autistic people “appear normal.” The American Medical Association voted to remove its explicit endorsement of ABA at its annual meeting in mid-June, citing a need for more research on ABA’s potential negative effects and on treatment alternatives.

Outcome Standards

Uncertainty is a major theme of The Politics of Autism.  In the concluding section, I write:

A key question in autism policy evaluation is simple to pose, hard to answer: How do autistic people benefit? How much better off are they as a result of government action? While there are studies of the short-term impact of various therapies, there is surprisingly little research about the long term, which is really what autistic people and their families care about. As we saw in chapter 4, few studies have focused on the educational attainment of autistic youths. For instance, we do not know much about what happens to them in high school, apart from the kinds of classes that they take. One study searched the autism literature from 1950 through 2011 and found just 13 rigorous peer reviewed studies evaluating psychosocial interventions for autistic adults. The effects of were largely positive, though the main finding of the review is that there is a need for further development and evaluation of treatments for adults.

Jamie Pagliaro at Health Affairs:

For children with autism, there are several competing forces at play that could potentially impact their futures. In an effort to help these children lead the most productive and successful lives, legislation mandating coverage of applied behavior analysis (ABA)—the current gold standard of treatment for autism—is making this valuable treatment accessible to all.

ABA is a systematic approach to teaching new skills such as communication, social interaction, and pre-academic and daily life skills, and reducing behaviors that may interfere with learning or present danger, using behavioral principles such as positive reinforcement. But the rapid explosion in demand for ABA and infusion of private equity into the industry raises concerns about the limited number of providers and the quality of services they deliver. In 2021, more than 50 private-equity firms held or previously held a majority stake in an autism service platform. And there are questions about how to transition from today's fee-for-service model to one focusing on patient-centered care, which is key to making quality a top priority, even in the face of economic pressures.

...

Getting lost in the fray is how providers can ensure patients achieve the best clinical outcomes. By changing the focus, the industry has the opportunity to set the stage for value-based care arrangements. This approach is one in which funding is based on outcome rather than the traditional fee-for-service model, which is the current payment structure for ABA with most health plans. However, even if the industry can agree on changing the focus, a critical component is still missing.

 The current void relates to generally accepted methods of measuring or predicting outcomes for individuals with autism receiving ABA treatment and standards for determining treatment dosages.

CARD Closures

 The Politics of Autism includes an extensive discussion of autism service providers.

Laura Lovett at Behavioral Health Business:

The Centers for Autism and Related Disorders (CARD) is shutting down – or has already halted – operations in 10 states.

Backed by private equity firm Blackstone, CARD is one of the largest autism providers in the U.S. At the end of 2021, CARD was operating in 24 states across the country and had 221 locations. Following these closures, it will operate in 14 states.

...

The company was acquired by Blackstone, whose investments also include virtual behavioral health provider Ginger and consumer genomics giant Ancestry.

The decision to pull back in certain markets comes after key CARD leadership changes. In February, Jennifer Webster came on board as CEO to replace Tony Kilgore, who resigned for undisclosed reasons.

CARD is just one of the many autism providers downsizing.

Looking at the autism space overall, investors and ABA providers grew national platforms as quickly as possible to try to gain market share and leverage in payer rate negotiations. Throughout 2022, some of these companies were forced to cut back operations to match economic realities in local employment markets and limited reimbursement increases.

ABA and Private Equity

The Politics of Autism includes an extensive discussion of autism service providers. Since the book's publication, a big change has consisted of a massive increase in private equity investments.

Tara Bannow at STAT:

ABA has long been viewed as the gold standard for kids with autism, so much so that every state mandates insurance coverage. For some families, it is the only option that insurance will cover at all.

But like other pockets of the health care industry, this one has been transformed over the past decade by a flood of investments from private equity firms, drawn by the promise of insurance reimbursement and the rising rate of autism in children across the U.S., now estimated at 1 in 44 kids.

Families and clinicians who once believed fully in the promise of ABA say the financial investors’ fixation on profit has degraded the quality of services kids receive, turning it into the equivalent of fast food therapy. They’ve grown disillusioned with the industry, they told STAT. Some are now questioning whether the therapy is helpful at all, or even harmful, especially after a recent Fortune article detailed an allegation of physical abuse at one chain.

...

But several people working in the industry say that private equity, in an effort to save money on time-intensive assessments, often uses “cookie cutter” treatment plans that are at times simply copy-pasted from one client to the next, which they said runs counter to how the therapy is intended to work.

...'

One board-certified behavior analyst — the master’s-level clinicians who supervise ABA technicians — said she was shocked when she started working at Autism Learning Partners in Texas. It was very different from her experience running a small, independent ABA firm there that shut down during the pandemic. She said she felt like a “billing machine, trying to make as much money for private equity as possible.”

Unanticipated Consequences: Insurance, Private Equity, and ABA

The Politics of Autism includes an extensive discussion of autism service providers.  Since the book's publication, a big change has consisted of a massive increase in private equity investments.

The law of unanticipated consequences is at work.

Erica Fry at Fortune:.

[State-mandated nsurance coverage] has revolutionized access to autism services in America, making early intervention affordable for families. The shift, reflected in a recent CDC-led analysis, is striking: Per-child spending by employer-sponsored health insurance plans on young children with ASD increased 51% between 2011 and 2017 (over the same period, spending increased just 8% for kids with no ASD diagnosis). Annual per-child spending on intensive behavioral therapy, i.e. ABA, increased 376% in that period, from $1,746 per child to $8,317 per child; for 14.4% of kids with ASD, spending on that therapy in 2017 exceeded $20,000.bers suggest, insurance reform turned ABA into a big business. The mandates unleashed a gold rush, with large investors working to consolidate the fragmented provider landscape and build up regional platform companies specializing in the expensive, time-consuming therapy. “It’s like vultures now,” says Michi Medley, an Oklahoma-based family advocate and autism professional. “All these companies are coming in, and there’s so many of them, families don’t know who’s who.”

Between 2012 and 2021, the Braff Group, a health care M&A Advisory firm, identified 223 deals done in this sector. Nearly 90% of transactions over the past five years have involved private equity, according to the firm’s proprietary analysis; what Braff calls the most “frenzied” period, from 2017 to 2019, was characterized by PE firms buying up ABA providers at 10 to 15 times their annual profits: Big names like Blackstone, KKR, TPG, and Cerberus have all made investments in the space. One of the Braff Group publications compared investor enthusiasm for autism services to that of “fan boys to the latest Star Wars release.”

...

Lorri Unumb, the parent advocate who now serves as CEO of the Council of Autism Service Providers (CASP), remembers being dumbfounded when an industry investor boasted that his company hired a supervising therapist for every 40-50 patients (10-15 is the industry standard). Having been so involved in the advocacy that created the industry’s funding stream, Unumb now feels responsible to ensure quality in the industry. “These kids don’t get a do over,” she says. “You can’t just put a shoddy program out there and waste these children’s most important window to change the trajectory of their lives.”

Another urgent question is whether the autism-therapy workforce is trained and equipped to deliver effective care. The ABA industry heavily relies on two categories of workers: Board Certified Behavior Analysts (BCBAs)—the graduate level professionals who design and oversee a child’s ABA program—and Registered Behavior Technicians (RBTs), the industry workhorses who implement the therapy and work with autistic children many hours a day. RBTs, who are sometimes called ABA therapists, get 40 hours of training for the job, and are supposed to be supervised for 5% of their hours.

In general, the workforce is very young and inexperienced. As of July 2022, there were 57,000 BCBAs in the country, up from 20,000 in 2015, along with 120,000 RBTs, all of whom have been certified since 2014 when a professional certification program was created.

The varied readiness and competence of this workforce worries Erick Dubuque, director of the Autism Commission on Quality, a non-profit accreditation body for organizations offering ABA services. “We have a real serious issue with our training programs,” he told me, explaining that many programs get away with offering the “bare minimum,” despite the vulnerability of the population workers will be serving, because of high demand in the field. In a 2020 study, Dubuque and colleagues identified more than 20,000 additional providers that claim a BCBA credential but don’t actually have one. Individuals who work in the field and spoke with Fortune shared concerns about feeling ill-equipped for the job, which sometimes involves managing difficult situations where they might be kicked, hit, or bitten by a combative child. Others commented on a lack of professionalism among their colleagues, sharing stories in which therapists made fun of their clients’ autistic behaviors.

 

Private Equity and Layoffs

 The Politics of Autism includes an extensive discussion of autism service providers.  Since the book's publication, a big change has consisted of massive increase in private equity investments.

Chris Larson at Behavioral Health Business:

The autism therapy space got a shock to the system with hundreds of layoffs at major operators.

With the demand in services growing, investors and operators have seen the autism space as a golden investment opportunity. However, this rash of layoffs reveals the opportunity in autism comes with deep-seated challenges. A severe supply and demand imbalance sits at the core of them.

While demand for autism services is very high, steep workforce shortages have driven up labor costs. In turn, high turnover and high labor costs have tormented profit margins, according to several sources BHB interviewed for this story.

The raft of investments that came into the autism space was meant to capitalize on the supply and demand imbalance. The lack of services was seen as a greenspace opportunity to scale up operations to meet the demand.

But the workforce shortage has complicated that approach. Further, the new investment brought its own pressures to the autism therapy space.

The reported prevalence of autism has increased in recent years.

At the same time, autism services — specifically Applied Behavioral Analysis (ABA) — grew in popularity. ABA advocates secured insurance coverage requirements in all states, further enabling ABA’s popularity. This is true of ABA as both a service and an investment.

That popularity as an investment gets magnified when considering how underserved the industry is.

The Braff Group data shows that the number of private equity investments per year tripled or quadrupled from 2018 to 2021 compared to 2015.

See for instance, the closure of 10 clinics in Oregon. 

Critical View of ABA and Private Equity

  In The Politics of Autism, I write:

As long as government funds so much research, politics will shape the questions that scientists ask and determine the kinds of research that receive funding.  Politics will even influence which scientists the policymakers will believe and which findings will guide public policy. In the end, science cannot tell us what kinds of outcomes we should want.  ABA “works” in the sense that it helps some autistic people become more like their typically developing peers.  Most parents regard such an outcome as desirable, but not all people on the spectrum agree.  

The book also includes an extensive discussion of autism service providers.

 Ariana Cernius at Fortune:

Private equity has shown initiative in its jump into autism services in recent years–a move that acknowledges the support autistic individuals and their families need.

In 2018, Blackstone acquired the Center for Autism and Related Disorders, the world’s largest autism therapy provider. Similar acquisitions by other firms soon followed.

In their efforts to streamline responsive services for this population, investors and others within and outside of the autism community should be aware of the paradigm shift happening around autism services as new evidence emerges, and particularly Applied Behavior Analysis (ABA) therapy, one of the main interventions for the disability.

ABA has been in my family’s life since my younger brother was diagnosed at the age of four in the 1990s, and I was about six years old. It is based on theories of behaviorism and operant conditioning, and is known as the gold standard by many in the caregiver and professional community.

However, several factors in recent years have compelled me to break away and try to shed some light on a troubling dynamic that exists in this space–and elevate the voices of those who have been hurt by ABA, in the hopes that others in both the professional and consumer communities will listen.

Last year, I retracted an article I wrote as a law student in a Harvard law journal, which gave a history of how health insurance came to provide coverage for ABA and argued for expanded access to coverage throughout the U.S.

The process of writing the initial article brought me into contact with several parent advocates and professionals in the community who then invited me to work with them as they launched a new organization centered around litigating to improve access to autism services, and primarily ABA, throughout the nation.

At the time, I didn’t realize the set of experiences I’d have over the next few years would be as significant and perspective-altering as they turned out to be.