New report exposes private equity’s growing influence in disability services

New report exposes private equity’s growing influence in intellectual and developmental disability services

Private equity cost-cutting and consolidation threaten care for millions

A new report from the Private Equity Stakeholder Project (PESP) reveals how private equity firms are rapidly consolidating providers of services for people with intellectual and developmental disabilities (IDD), introducing financial pressures that could jeopardize quality of care. Historically provided by non-profits and religious organizations, these essential services—including residential care, home health, and personal assistance—are now increasingly controlled by private equity firms seeking to extract short-term profits.

The report, Private Equity in Intellectual and Developmental Disability Services, details how private equity-owned companies have amassed tens of thousands of employees at numerous locations across the United States, often operating under obscure branding that hides their market concentration. The study highlights case studies—including Sevita (Centerbridge Partners, Vistria Group), Help at Home (Centerbridge Partners, Vistria Group), Broadstep Behavioral Health (Bain Capital), and others—that illustrate the risks of private equity’s entry into the IDD services sector.

“Private equity firms are fundamentally altering these services in ways that put some of the most vulnerable members of our communities at risk,” said Eileen O’Grady, Director of Programs at PESP and lead author of the report. “The private equity model prioritizes short-term financial gains, often at the expense of staffing levels, service quality, and even basic client safety.”

Key Findings from the report:

• Aggressive buyouts and market concentration – Private equity firms have acquired IDD service providers and  consolidated regional providers into large national platforms while obscuring their ownership through complex branding.
• Regulatory failures and repeated violations – State investigations have uncovered severe care deficiencies at private equity-owned IDD providers, including improper use of restraints, medication mismanagement, and severe understaffing. Florida regulators moved to revoke the license of a Sevita subsidiary (NeuroRestorative) after repeated violations, before entering into a settlement with the subsidiary that waived the sanction revoking the license. Illinois regulators shut down Broadstep Behavioral Health group homes after finding “chronic deficiencies” in medication management, staff training, and safety measures.
• Client harm and safety risks in multiple states – Private equity cost-cutting has paralleled horrifying outcomes. In Indiana, an individual under Help at Home’s care died of neglect, weighing just 71 pounds and suffering from 11 pressure sores, including one exposing bone. In California, Sevita gave up -operating a group home following reports of chronic understaffing and regulatory failures that endangered residents.
• Financial engineering over care – Some firms have extracted hundreds of millions of dollars through debt-funded dividends, while regulatory records showed issues with care quality, including cases of abuse and neglect. For example, Centerbridge Partners and Vistria Group paid themselves more than  $600 million in dividends from Sevita and Help at Home, even as care standards declined.

“Home and community-based services are essential for hundreds of thousands of Americans with disabilities,” O’Grady said. “Private equity ownership imperils the effective delivery of these services and puts individuals with disabilities at risk.”

The report lists multiple policy recommendations to curb the negative effects seen with private equity investment in the IDD space. For instance, PESP urges policymakers to increase transparency, oversight, and enforcement in the IDD services sector, including stronger financial penalties for violations, improved Medicaid reimbursement standards to prevent profit-driven cost-cutting, and implementation of the new Medicaid Access Rule to track care quality and funding distribution.