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.
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.
