After a slow dealmaking year in 2024, private equity is eager to get back in the game. While the M&A landscape is ripe to surge, it might not be a season of crowing about deals. Still, getting paid for services rendered will likely be a dicey prospect.
Add on top of those trends in the workforce, technology and service offerings that are likely to continue to nudge the industry into previously unexplored territory.
After covering the industry for a few years and hearing from several top executives about the year that was and the year to come, I’m laying out five predictions for the autism therapy industry in 2025.
Get ready for cuts
With the rise of services in total, the number of claims and payouts naturally increases. The number of appointments from a large cohort of autism therapy providers has increased by about 40% when comparing 2022 to 2024, according to data from the electronic medical record and practice company CentralReach. There have been multiple studies showing rocketing increases in the rate of diagnosis. But data tying that to an increase in claims is hard to come by. The scuttlebutt among behavioral health professionals is that behavioral health generally and autism therapy services especially are service lines that are seeing extremely increased claims that they are eager to tamp down.
Payers don’t really have any other options, outside simply posting a loss, than to cut their rates for autism therapy as the fast-growing market increases their costs. The other option would be increasing premiums. That’s not as likely of an option. In the case of Medicaid, they can’t. In the case of private insurance, rate increases beyond the norm run the risk of losing clients and 100% of that clients’ revenue.
We’ve seen this play out already: UnitedHealth Group, via Optum, has a plan to cut rates and otherwise hack back at what it is spending on autism therapy claims within its Medicaid-contracted business. Now that one payer has broken the ice, others might more seriously consider making the plunge.
Aside from the cut-and-dry moves like rate cuts, the industry is seeing more subtle tactics from notable payers. For example, ABA Centers of America highlighted its challenges with Point32Health engaging in allegedly inappropriate billing practices with the hallmarks of payer ghosting.
Rise in people going towards RBTs
The number of people enrolling in college and leaving without a degree is on the incline, while the overall number of enrolled students at American universities has been on the decline since 2010, slightly accelerated by the pandemic. In short, more people than in recent memory are opting to start their legal adult lives in the workforce, as opposed to going to college. With increased costs, pressure on young people and families to pay for college and the incidental costs of doing so will only make the prospect of getting a degree even harder.
The work of registered behavior technicians offers a compelling career path on its own and a remarkable entrance into the world of outpatient health care. What’s more, it could be a path to a degree for some people. More and more autism therapy providers are willing to help cover training and certification costs. Moreover, the crushing mismatch between the supply of board-certified behavior analysts and the demand has made it in the best interest of autism therapy providers to push ambitious RBTs toward that work, and often with financial help too.
Plus, with the upcoming economic agenda of the Trump administration, which includes heavy tariffs on imported goods and might include a federal minimum wage hike, there is likely to be at least temporarily unsettling as the economy adjusts to a new normal. During that time, people may look for work that has the job stability often attributed to the health care industry.
The hangup will be differentiating from non-health care jobs that don’t deal with the deeper challenges of health and humanity generally. RBTs are often treated as entry-level employees despite their proximity to children’s health care. Still, RBTs face high burnout rates, making retail, food service, and logistics positions—which require similar education levels—attractive alternatives.
Hidden deals
While there have been some rate cuts, the Federal Reserve has signaled fewer rate cuts in 2025 than some previously predicted. This will be enough to get some buyers and sellers off the sidelines and into necessary deals. Private equity firms need to deploy capital that has piled up during the pandemic and the following increase in the inflation rate.
What’s more, there are a handful of private equity-backed autism therapy companies that are due for a trade in the autism therapy space. One large platform recently did change hands, acting as a potential harbinger for the industry.
Goldman Sachs Alternatives announced in early December that it has acquired autism therapy provider Center for Social Dynamics. On a smaller scale, the much newer platform Proven Behavior Solutions acquired Prism Autism Education & Consultation to expand its footprint into a new state.
However, what I predict will make 2025 different is that a not insubstantial number of deals will happen and be covered up. The economic pressures over the past five years have been immense. These trades might feature clear financial losers that won’t be eager to have people looking at an exit they are making. Or even on the less intense end, down rounds in a much more sober dealmaking environment might not get announced after several firms made much ado about their previous high-valuation investment investments. In short, some of these deals might be unimpressible, perhaps embarrassing affairs, for some parties. Private equity already has a default expectation of secrecy. They have all of the motivations and clear means to keep deals hush hush.
The indications are that deals will get done in 2025. There are many reasons to suppose that 2025 will be a strong deal year relative to the slump following the peak of 2021. I don’t expect them to talk about some portion of those deals.
AI co-pilot gets locked in
I’m not saying that AI co-pilots take over the industry. But there are several good reasons to see these tools increase in popularity, to the point, as I predict, that they will become a permanent feature of the industry. But the scale at which this happens is anyone’s guess.
The AI craze is real for the software industry. After watching the proliferation of any number of AI tools — especially generative AI after the last few years — every software company has likely had conversations about adding that kind of tech to its offering. Autism therapy-related software is no exception.
While the case is much more obvious for tedious back-office tasks, the more potentially controversial but maybe helpful use case is that AI co-pilots will help keep RBTs on track or best handle new or unusual circumstances within the confines of a company’s care protocols and the patient’s care plan.
Autism therapy executives are eager to bring technology to bear on the pain points of their organizations. One such pain point is the oversight and management of RBTs by BCBAs. As BCBAs get stretched thin with their managerial and clinical duties, they are less and less likely to be unavailable to ensure quality implementation of care plans by directly overseeing care. So, implementing an AI chatbot-like tool that could be a companion to or housed in existing data collection software makes a lot of sense from an operational point of view.
Multidisciplinary organizations make things harder for everyone else
An increasing number of organizations are making greater use of services other than applied behavior analysis (ABA), the cornerstone of the autism therapy industry. And for good reason.
The parents of autism therapy patients — most of which are children — often face a challenging daily chore in coordinating and transporting their children to multiple appointments with multiple care specialists. Up-and-coming providers such as MySpot and JoyBridge Kids see meeting this need as the next chapter for the industry.
On top of being a hot trend in the industry, as these organizations use the investment dollars they are attracting to scale, they have the best case to make for innovative fee-for-services contracts, something else resembling value-based care.
Firms that stick to narrower care offerings will likely get ignored by the collective private equity and health plan industries, which fund the industry from an investment and cash flow perspective. These multidisciplinary providers will likely have greater gravity in both industries and will probably attain greater mass.
Furthermore, there is a degree of stabilization that happens when health care providers diversify their service lines. That stability goes a long way to lessening uncertainty about the future. It can also be a key offering to serve specific high-need populations that aren’t being served by any one organization in its totality.
