[co-author: Mike Coppa of RSM US]

In recent years, the autism services market has been robust. At the recent Annual Healthcare and Life Sciences Private Equity and Finance Conference in Chicago, experts discussed market trends in the autism services industry.

Experts included Mark Brock, Managing Partner & Co-Founder of Granite Growth Health Partners, Daniel Etra, CEO of Rethink, Mike Miller, CEO of Caravel Autism, and Nicholas Scola, Partner at Abry Partners. Peter Erickson, Managing Director of Triple Tree moderated the panel discussion.

Here are three key points from the panel discussion. While this panel was held prior to the COVID-19 economic shutdown, the points below will continue to resonate in a post-COVID-19 landscape.

1. M&A. While the competition within the autism services industry has increased slightly in recent years, the opportunity for additional growth within the industry is still incredibly high. The experts agreed that there is a high number of single providers and small practices left in the field, which leaves room for significant organic growth, despite the number of private equity entrants into the sector. As the industry grows, the sector is becoming more sophisticated from a seller’s standpoint. Providers are seeing the M&A activity within the field of autism services and are recognizing the opportunity to scale their businesses. Overall, the autism services industry remains an attractive industry for M&A opportunities and private equity investment.

2. Technology. Like many industries, the autism services industry is also seeing an increase in the investment in technology. As the industry has grown, technology geared toward autism services has been created, but frequently the founder-run clinics cannot afford such technology. This is another area in which private equity-backed investment can offer solutions. The scalability of service platforms can provide the necessary capital to heavily invest in technology. Further, technology can also implement standardization across platforms. For example, technology can assist platforms in creating a single electronic health record for every client and a record of every visit. According to the panel, a single electronic health record can be something that is very challenging for providers to maintain without the proper technology. Additionally, as payors become more focused on outcomes, technology allows providers to track outcomes in a sector in which outcomes are difficult to track. Technology helps providers gather data from the very beginning of a client’s treatment, which ultimately assists in tracking their treatment outcomes.

3. Outcomes. As noted above, the panel discussed the importance of outcomes, particularly when it comes to payors. For autism, there is no single determinant of progress or a single treatment plan, so it is a challenge to assess the quality of services. This is something investors should be aware of as they consider business opportunities in this field. When discussing outcomes, the panel also discussed in-center treatments versus in-home treatments. Overall, the consensus was that the client outcomes are not adversely affected by location. However, the experts agreed that clinic-based treatment typically uses resources most efficiently.

Beyond these key issues, autism service providers face several other challenges as they seek to expand their business locally, regionally and/or nationally, including integration of acquired service providers and ability to attract and retain quality staffing. Successful partnering with private equity-backed investors can provide business owners with the needed experience to integrate acquired service providers quickly and efficiently to capture all desired synergies, as well as capital to enhance methods for identifying and securing quality providers who will be critical to growing and branding its services in the marketplace.