The private equity industry is now making a play for this lucrative market. Blackstone acquired the Center for Autism and Related Disorders for a reported $700 million in 2018. The next year, Rothschild acquired New England ABA. Civitas Solutions, LEARN Behavioral, and Autism Learning Partners have been operating in Massachusetts as subsidiaries of other private equity firms since 2017. How have these acquisitions influenced the quality of clinical care? How many more agencies are courting investments?
We may learn the answers only after it is too late to refine the questions. Carolyn Kain, executive director of the Massachusetts Autism Commission, told me that “some discussion” has alighted on the issue. The Autism Commission is charged by statute to make policy recommendations in this area. “To be honest with you,” Ms. Kain replied to my inquiry, “I don’t have a lot of experience, information, or knowledge about private equity firms purchasing autism organizations. It was something that was raised, but there hasn’t been any further examination.” The trend has not attracted interest from researchers either. A 2019 editorial on “Private Equity Investment in Behavioral Health Treatment Centers” in JAMA Psychiatry, a journal of the American Medical Association, found “no peer-reviewed literature” on this subject. A handful of articles and papers report that agencies acquired by private equity employ under-trained, unlicensed therapists and engage in serial abuse. Those impressions appear to comprise the extent of disinterested knowledge.
In the ABA field itself, the private equity prospect evokes stronger feelings. I spoke with Vincent Strully, founder and president of the nonprofit New England Center for Children (NECC), a leading ABA agency provider. With an annual operating budget north of $100 million, NECC’s services include early intervention, day schooling, residential treatment, and professional training. NECC operates 65 “partner classrooms” in New England’s public schools, where ABA is the exclusive service model. For all these reasons, private equity has been circling NECC for years. “It’s running wild,” Strully laments of the private equity “craze.” Rather than joining established agencies, he told me, autism entrepreneurs in Massachusetts are striking out on their own, reaching $10 million in annual revenue, and then “recapitalizing” their organizations for venture capital’s bigger bucks. The investors are expecting a 15 to 20 percent return in five to eight years. “My advice to everyone involved is: ‘Don’t do it,’” Strully opined. “I think inevitably it is incompatible with quality service delivery. I think it is a mistake.” Strully declines to take what he regards as a radical leap. He foresees the current boom will crash when insurers balk and venture capitalists recalculate and realize they have overpaid.
“It’s astounding to me that you can become a multimillionaire behaviorist.” That is Dr. Paul A. Dores, a psychologist and behavior analyst in practice for 50 years, answering my further query. Dores worked as a behaviorist for many years in Massachusetts, concerning himself with ethics, before moving his practice to California. He points an accusing finger at a misalignment between the mechanisms of payment and treatment. “In the autism field,” he told me, “the people who are paying the money are separated from the people evaluating the results, and the ones connected to the results don’t always know good results from bad results. And so the feedback loop that would normally tell you, if you are bad at what you do, you should be out of business—that’s broken. There’s not enough accountability, and there’s more work than there are people to do it, and as a result we have a lot of really bad behavior analysis that’s going on while the people doing it are getting rich.”
Saturday, April 3, 2021
Private Equity and Autism
