The Opportunities for Investors in Autism Services
The landscape for investment opportunities in autism services is growing and changing at a dizzying pace. As the diagnosis rate of children identified with autism spectrum disorder approaches 2.5 percent—nearly tripling since 2002—the demand for services is mushrooming.
The marketplace is also beginning to demand more sophisticated models of care and opportunities for autistic individuals. There have been multiple recent acquisitions of autism service providers and the land grab continues.
Considered the gold standard for autism treatment modalities, reimbursement for ABA is now mandated in 46 states, twice as many as in 2010. ABA is a scientifically-validated approach that encourages family involvement in treatment. ABA focuses on techniques that bring about positive changes in behavior, particularly in improving individuals’ abilities to care for themselves.
Recent acquisitions—including FFL’s investment in ALP, Blackstone’s investment in CARD, TA’s investment in BHW, and many others—illustrate the intense, continued interest in this sector. Although valuations are high and questions persist about the quality of management at many providers, other large investors are reported to be shaking the trees, searching for the best point of entry into the industry.
The investment space is not yet mature, making this the time to get in. Industry leaders are just now beginning to recognize the need for standardized outcome measurements that reflect the actual experiences of autistic children as they grow into adults.
Autism services offer investors interested in social impact a financially profitable opportunity. The autism services industry is badly fragmented, typically characterized by well-intentioned, clinically-focused, but inefficient businesses lacking the ability to attract top staff or scale and manage growth. It is primed for savvy-but-conscientious investors who can improve outcomes while generating a financial return on investment.
The combination of good business practices, shrewd servant leadership and focus on clinical outcomes can improve both the bottom line and the lives of people with autism spectrum disorder.
The autism services industry is ready to reward investors who bring those three together, which is why we’re already seeing the leading edge develop in a big way.
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