Is Private Equity for the Pigeons?

A quick summary and what you can do to avoid takeovers.

Private Equity and its relationship to Applied Behavior Analysis (ABA) as practiced with persons with autism has been in the news a lot lately. Here are a few of the articles that have been written discussing the phenomenon:

• Private equity in autism care: The advantages and tradeoffs (advisory.com)
• As Private Equity Comes to Dominate Autism Services… | The Nation
• Private Equity in Autism Services: Big Money in Applied Behavior Analysis (ABA) and the Effect on Ethical Practitioners and Client Outcomes | Markets Insider (businessinsider.com)
• Private equity is the biggest player in the autism-therapy industry, and some say that's hurting the quality of care | Fortune
• Private equity is shortchanging kids with autism, parents, clinicians say (statnews.com)

What is Private Equity? Is it evil? According to Wikipedia (Private equity - Wikipedia), “Private equity (PE) typically refers to investment funds, generally organized as limited partnerships, that buy and restructure companies.” And it’s not inherently evil. PE ventures bring together people with an idea or practice and not enough money to take it to fruition and people with the money to fund who are looking to make a profit. In the ABA world, this could look like a struggling solo provider who has their practice bought out by a larger organization. Generally, that solo provider does not stay on to continue to run the organization but receives money as a buy-out. Yet with all states having some sort of mechanism to pay for ABA through insurance (Medicaid and/or Private), solo providers or small organizations may be doing quite well and thriving. This does NOT make them any less attractive to PE firms either!  

There are certainly pros and cons for having more PE organizations in the industry. Pros include: 

• Having more cash to get through environmental issues that affect companies (does the pandemic ring a bell with anyone?)
• More interaction with other professionals, both in and out of the profession
• Increased access to care for those in rural areas, both virtual and in-person
• Standardizations with respect to billing and human resources – something most Board Certified Behavior Analysts (BCBAs) are not trained to do!  

Cons may include:

• “Cookie cutter” or “assembly line” behavior plans and programming contrary to the individualized services ABA is expected to provide
• Higher turnover due to burnout
• A focus on profits and billing rather than the people being served
• An increased need to meet quotas (with bonus structure and other reinforcement – both positive and negative)
• Those making the company decisions not certified in ABA
• Parents feeling pressured to have their children participate in 40 hours a week of therapy regardless of goals, age, or needs

Worried that you won’t be able to resist the call of Private Equity? Here are a few things you can do:

1. Band Together
   Maybe you don’t know much about billing or creating policies since those subjects do not often find themselves on a class syllabus in behavior analysis. But there are experts in those fields who might have options that meet your budget. If not, consider pooling resources with other smaller organizations with like needs, e.g., share a biller or an HR representative. The author was recently in a meeting where a payor representative noted that she didn’t understand why all providers didn’t just get billing specialists. In the authors opinion, there is no reason billing should be that complex! Why can’t we make it easier? However, the fact remains that it’s sometimes necessary to realize when you are taking too much time on a task – time that could be better spent on treating your clients.
2. Find a Mentor or Peer
   In the spirit of banding together for the things you don’t know (like billing and human resources), smaller agencies don’t have the benefits of other BCBAs to bounce ideas off. With the pandemic came greater use and understanding of virtual technology. Put that technology to good use and start a coalition of peers you know and trust.
3. Take Advantage of Your Advantages
   Not running a cookie cutter operation? Feel like you are delivering outstanding, individualized services to your clients? Let your insurance company know! Leverage your strengths to negotiate higher rates. Let them know that you are a standout company and if you are to continue providing top notch service with superior outcomes, you need to fund that operation.  
4. Be Prepared for Missed Sessions
   It is an unfortunate part of life that things come up and technicians and clients will have to cancel sessions. Be prepared for this.  Cross train your technicians to be able to work with multiple clients on an emergency basis. Make sure your clients have seen the new technician before so that it’s not such a stressful situation when it happens (and it will happen!). Have ideas for things that your behavior technicians can do so that their time is productive when there is a missed session.
5. Take Advantage of Resources
   The field of ABA has recognized that BCBAs aren’t business specialists and many educational opportunities are now being offered. The Association of Professional Behavior Analysts (APBA) regularly provides mini conferences and workshops on this topic. They also have offerings such as 401K and health care options for the smaller shops who may not be able to easily get those benefits for their employees.
6. Know that Burnout is Real
   Know the signs and take advantage of the resources. Some states have means to help health care practitioners with their mental health. Check out one of the many webinars that are provided for ABA practitioners on recognizing burnout in yourself and others and ameliorating it.

We have to face facts that this industry can be difficult, especially when you are trying to closely follow the Behavior Analyst Certification Board’s Ethics Code (2020), and we don’t have all the answers.