Private equity firms are rapidly acquiring autism therapy centers across the nation, raising questions about the impact on kids in need of services.
More than 500 autism providers were bought up in the last decade by investment firms seeking to ultimately sell them for a profit, according to a new study.
Researchers at Brown University found that as of 2024, there were 574 autism therapy centers in 42 states owned by private equity firms, most of which were acquired during a recent four-year span.
Advertisement – Continue Reading Below
“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,” said Yashaswini Singh, a health economist at Brown’s School of Public Health and an author of the study. “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.”
Private equity firms have also invested heavily in recent years in disability service providers that offer residential care, home health, personal assistance and other services for people with intellectual and developmental disabilities. A report last year found that between 2013 and 2023 there were more than 1,000 private equity acquisitions of disability and elder care providers.
The boon in investor interest comes as autism diagnoses have soared. The Centers for Disease Control and Prevention now estimates that 1 in 31 children are on the spectrum, up from 1 in 150 in 2000.
States with higher autism prevalence and those with more lax insurance coverage limits were the most likely to attract private equity ownership, according to the study published recently in the journal JAMA Pediatrics. Acquisitions were most common in California, Texas, Colorado, Illinois and Florida.
Private equity firms are not required to publicly disclose transactions, so researchers analyzed proprietary databases, public press releases and manually verified archived websites to identify ownership changes at autism therapy centers.
Most of the purchases by private equity firms occurred between 2018 and 2022 through 142 different deals, the study found.
The trend is concerning, according to Daniel Arnold, a senior research scientist at the Brown’s School of Public Health who worked on the study.
“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.”
The researchers indicated that they now hope to study how private equity ownership is impacting changes in therapy intensity, medication use, diagnosis age or how long children stay in treatment, among other outcomes.
“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.”
