The Development
A recent study from Brown University’s Center for Advancing Health Policy through Research has shed light on the significant and largely unscrutinized expansion of private equity (PE) firms into the Applied Behavior Analysis (ABA) therapy sector. Researchers identified a total of 574 autism therapy centers across 42 U.S. states that were owned by private equity firms as of 2024. This represents more than 500 acquisitions over the past decade, with a striking nearly 80% of these deals occurring within a concentrated four-year period between 2018 and 2022, involving 142 separate transactions.
Yashaswini Singh, a health economist at Brown’s School of Public Health and a lead author of the study, highlighted the unique nature of this investment trend. She noted that private equity is rapidly entering a sensitive area of healthcare that is distinct from their traditional investment targets, raising concerns about the potential for more serious harm. The study also found that investment was concentrated in states with higher rates of autism diagnoses among children and those with fewer restrictions on insurance coverage for ABA services.
The states with the highest concentrations of PE-owned centers included California with 97, Texas with 81, Colorado with 38, and both Illinois and Florida with 36 centers each. Conversely, 16 states had one or no private equity-owned clinics by the end of 2024. The research indicated that states ranking in the top third for childhood autism prevalence were 24% more likely to have private equity-owned clinics compared to other states, underscoring a strategic alignment with market demand.
Market Impact
The rapid scale and speed of these acquisitions signal a significant shift in the ABA therapy market. Researchers were prompted to investigate this trend following anecdotal reports from families and healthcare providers who observed changes after private equity takeovers. A primary concern articulated by the study authors is that private equity firms may prioritize financial gains over the clinical needs and well-being of the children they serve.
Daniel Arnold, a senior research scientist at the School of Public Health, emphasized that these concerns are rooted in the financial incentives inherent to private equity models. He expressed worry about the potential for
Source: brown.edu
