An estimated 1 and 44 children nationwide have autism spectrum disorder (ASD), with diagnoses having climbed by 10% since 2014. The need for therapy — along with infusions of private equity capital — has facilitated the growth of a $2.1 billion domestic autism care market, in which a number of providers have scaled up their businesses to offer services in new states.
Founded in 2016 by the husband and wife team of Ryan and Holly Lambert, Austin, Texas-based Action Behavior Centers specializes in serving youths ages 18 months to 10 years old with applied behavior analysis (ABA) therapy, which is widely considered to be a gold standard of autism care.
The Lamberts had previously worked in the corporate world and were inspired to establish Action after witnessing a family friend’s child — who had autism spectrum disorder (ASD) — struggle to receive help. A significant need for ABA services in the Austin area, along with a waitlist for patients at its Austin center, would lead to Action opening a second Texas clinic in suburban Dallas shortly thereafter.
By 2018, with more centers in its fold, Action had its eyes on making a name for itself outside of the Lone Star State. That was when Action received an investment from New York-based NexPhase Capital, whereby the private equity firm purchased the ABA provider.
Today, Action operates over 65 centers across Texas, Arizona, Colorado and Illinois. Leading Action as CEO is Hersh Sanghavi, who took over the role in June 2020 after Ryan Lambert retired following a bout with cancer (Lambert today is cancer-free and holds a non-operational board position with Action).
Sanghavi says much more is in store for Action, which he hopes to one day see in every state, operating increasingly from a value-based care standpoint with more payer options available for families.
Sanghavi shared these thoughts and more in an interview with Behavioral Health Business, portions of which have been edited for length and clarity.
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BHB: Talk about ABC, which in only half of a decade has become an operator of over 65 centers.
Sanghavi: The mission was initiated in late 2016. It was a husband and wife living here in Austin, Texas that had a close family friend with a child on the spectrum. They walked through the struggle of that family trying to get access, and they discovered the waitlist to receive ABA services — which are the gold standard for autism — was as long as two to three years. If you look at the medical advocacy for ABA, the strongest scientific evidence is for early intervention.
If the diagnosis is done between the ages of two to six, and therapy is initiated, you have the highest probability of success. When you think about the delays associated with both the diagnosis and starting therapy, that plays dramatically into the timeframe. That husband and wife had firsthand experiences of seeing their friends struggle, and they thought, “Why don’t we open up our own center?”
They were entrepreneurs, and they thought they could open up something that serves the community. The intent was just to start in one location, but that location filled up in just a few months. Hearing testimonials from other families, clinicians and physicians, they thought they owed it to the community to open up more centers.
Today, we’re the largest provider of applied behavior analysis services in the state of Texas. We own and operate more than 65 centers in Texas, Arizona and Colorado, and … we’re near Chicago.
When deciding on expansion to a new market, what goes into the thought process of ABC?
How we think about expanding services is this truly done in an organic way. In Austin, after opening up that first center, it got full. When we looked at where families are coming from, they were driving 20 or 30 miles to come to that one location. We said, “Well, it seems like many families are coming from the northern part of the city, near [the Dallas suburb of] Round Rock. Maybe we should open up a center over there to care for those families.”
We then opened up a center in Round Rock. Then Round Rock becomes full, and a lot of families coming to Round Rock are actually coming from Cedar Park and Pflugerville. Owing to feedback from families, pediatric neurologists and others working in child specialties, we would open those locations. By the time a location opens up, usually there is enough demand for services for those centers to fill up in just a matter of a few months. That’s been the organic strategy here in Texas.
More and more, there are transplants that come to Texas. We’ve had quite a few families from Texas that for personal- and work-related reasons would relocate to Arizona to Colorado. Many of them would give us feedback and say, “Look, there are some providers over here, but we really missed what ABC had to offer. Please consider opening up locations over here.” We would do our due diligence and work with payers. That’s the way through which we have expanded into states like Arizona and Colorado.
On ABC’s website, it talks of not wanting to be the biggest ABA provider, but the best. In your mind, what does that look like?
It comes down to creating value for, you know, for our key constituents. Number one, ABC’s mission is to serve kids that are on the autism spectrum and the broader community. Being the best means we are able to provide access to these services where there are still a fair number of barriers. Two, we are able to provide equitable access, regardless of where we are geographically located. We’re able to democratize access to those kids in need.
Three, it is the quality of our services. We never compromise on the quality of services, regardless of the demand. There’s more of a movement in ASD — just like in any other behavioral health space — to really quantify outcomes, which we spend a lot of time thinking about. If you think about ABA services, they’re delivered by a board certified behavioral analyst (BCBA) who’s licensed.
For many organizations, they will have 20 to 25 patients that are being served by one BCBA. At Action, that number is closer to six to one, and we have a cap that we will not go beyond eight. What that means is that a child and their family receives incredible, personalized attention to those services. So being the best means we preserve the integrity of the services and some of the key inputs, regardless of some of the strain that comes over us.
The other constituents that we serve are also our teammates, the clinicians. Being the best also means that we are serving our clinicians, because when we pour into our clinicians, they have the energy to pour into our patients. How we think about the career progression, growth, retention and professional development of our team is also how we assess our success.
Many children with ASD have sensory issues related to audio and visual stimuli. Yet, some ABA providers have turned to telehealth during the epidemic. Does ABC use telehealth services?
We’ve only partially adopted it for a lot of those reasons that you mentioned. There is a big portion of our training that relies on parents or guidance or parent training. We really adopted that during the pandemic, because we were able to provide that guidance to parents and guardians virtually.
We did a certain amount of BCBA supervision remotely, but I can tell you, what we found is there was significant compromise in the clinical quality. It’s difficult even with a child who is developing typically to hold his or her attention for many hours. A child who is two or three years old, with someone talking to them remotely, it’s just not effective, let alone for a child who is on the spectrum and has some special needs.
The pandemic presented tremendous challenges to us. We did numerous things, including proactive testing to ensure that we could continue to provide these services to our families. Around the time of the pandemic, we also expanded our service offerings to offer them in family homes.
To this day, we’ve continued our in-home offering as well. We’ve had a very sort of thoughtful assessment in terms of telehealth, and in some situations, like parent guidance, we’ve continued on and really embraced it. We also do it for certain assessments. But as far as true one-on-one intense therapy, especially for our younger patients, it’s not clinically effective to do it. We relied on in-person services and thought about safety protocols to make them as safe as possible.
Value-based care is becoming more part of the landscape across the behavioral health spectrum. Does ABC have these arrangements with payers?
Value-based arrangements are the future. But there’s a spectrum and a progression in developing these payments, with one end of the spectrum being fee-for-service payment. At the other end of the spectrum, the provider bears complete risk with some version of global capitation. Then there’s numerous iterations in the middle.
One way beyond fee-for-service is to really monitor and modulate the inputs of services. You may have risk sharing. There’s some upside to the providers if they perform certain outcomes, and then there are some ways to control that on the downside as well. There may be bundled payments, partial cap and then full cap payments.
From my perspective, ABA is in the third, or fourth inning, if you want to use a baseball parlance. What that means is, we’re getting to a point where we’re finally getting some amount of consensus on outcomes. Still, at this point, we’re not at a stage where capitation can be done from an outcomes perspective. A lot of the movement in ABA, as well as what we’ve been doing with payers, has been on the inputs.
If you think about the services, the predominant labor force are therapists. We’ve got agreements with certain payers that want to insist that our therapists are highly qualified. We’ve structured arrangements that stipulate that where there is a higher level of qualification of the therapist, the higher the reimbursement is. That gets to the spectrum of value based services.
But there’s so much more that we could be doing once we get full alignment on the outcomes. That’s the piece that we’ve been working on with many of the commercial payers over here that are progressive and truly want to embrace value-based care. If we’re completely aligned, it would make complete sense for incentives to be aligned based on outcomes versus purely inputs in a fee-for-service model.
Currently, ABC does not accept Medicaid in states that do not cover autism care services. In ABC’s own home state of Texas, autism care services have partial coverage. What do you think of the issue of patient access as it pertains to the Medicaid population?
It’s incredibly important. It’s a morality issue more than a business issue. One of my most fulfilling parts here at Action has been having conversations with families and them sharing the incredible impact that we have been able to have on their lives. The least fulfilling part has been talking with a family who we cannot serve.
In Arizona and Colorado, we are able to serve Medicaid patients. It just feels right to be able to do that, not only for myself but for our mission-driven clinicians that came into this field to serve all children, regardless of their socioeconomic background.
I remain cautiously optimistic that there will be a day where access to services in Texas will be broadly available to all, and not just a chosen few. It’s the right thing to do. It’s important to the future generation and an equity issue for folks that have chosen to make this a profession.
What are some short-term plans of ABC as it goes into 2022?
There are a few things that are top of mind, such as the pandemic. While some of the cases have eased, it’s still upon us. We’ve got some work to do in terms of adhering to the vaccination mandate, and we want to make sure that clinical care for the next few months is not compromised in any way.
The other piece that remains a massive area of focus is in continuing to invest in the training and development of our team, as well as developing future BCBAs. We’ve got some partnerships with local universities that we’re formalizing. If you think about it, the biggest barrier to services is having enough qualified providers. These partnerships will go a long way to create our next generation of BCBA leaders, which means that we’re able to serve families that need access to care.
And what are some of ABC’s long range plans?
The long term goal for Action is consistent with how we think about our mission. We want to provide high quality services to children on the autism spectrum who truly need it. What that means is expansion in our geographic scope, serving kids all across the country that have access to these needs. Our goal is to serve patients in every single state. Over the course of the next five to 10 years, my hope is that access constraints are a thing of the past.
Also, we want to be able to observe the growth and mobility of clinicians, and be able to accommodate their personal and professional goals such that they can lead productive lives for themselves. This is a heavy burnout field, so we try to be incredibly focused on making sure that our teammates who are serving patients also have their needs met as well.
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