Private Equity in Intellectual and Developmental Disability Services

Private equity business interests in providers of services for the nearly 10 million people in the United States with an intellectual or developmental disability (IDD) poses a significant shift in the operation of critical supports for this population at varying levels of healthcare. Many people with IDD rely on service providers for not only medical care, but also supports in independent living, employment, and other daily life skills. This business shift represents a potentially radical change from non-profit and religiously affiliated providers to profit-driven interests.

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People with IDD experience profound health and social inequities: lower life expectancy, higher rates of long-term co-occurring disorders (such as diabetes, obesity, and cardiovascular disease ), pregnancy complications, and depression. These disparities stem from a variety of structural and social factors, including barriers to accessing appropriate healthcare and social services, and inadequate education of the healthcare workforce to meet the needs of people with IDD.

There is a wide range of IDD services and supports, including residential facilities, home care, supported and independent living services, fiscal intermediary services, adult day programs, occupational therapy, physical therapy, and others.

While the provider landscape for these services has historically been a fragmented market of non-profit community and religious organizations, this has begun to change. Private equity firms, which have increasingly set their sights on buying up companies that provide healthcare and related care services, have been quietly acquiring and consolidating companies that provide services for people with IDD, from group home operators to homecare providers.

The private equity business model is driven by uniquely high profit-seeking combined with a very limited level of disclosure or regulation. Firms typically seek to double or triple the value of their investment in 4-7 years, which is challenging to do in IDD services without cutting costs in a way that compromises the quality of care. In an industry where companies provide such encompassing and essential services as IDD services and supports, private equity’s entrance poses a serious threat. That threat is amplified further by the social and health inequities that people with IDD already face.

This report attempts to document the scope of private equity in a range of IDD services and examine its implications for the people they are meant to serve.

Key Points

• Private equity firms have been acquiring companies providing services for people with intellectual or development disabilities (IDD). This includes residential facilities, home health and personal care, supported and independent living services, and others. These services were historically provided primarily by non-profits and religious organizations.
• Through recent buyouts and consolidation, several large private equity-owned companies have emerged with tens of thousands of employees at numerous locations across the United States. In some cases, these companies have achieved regional market concentration obscured by complex ownership structures and disparate branding.
• Case studies in this report illustrate the risks that the private equity business model poses to IDD providers and the people they serve, including:
  • Sevita (Centerbridge Partners, Vistria Group)
  • Help at Home (Centerbridge Partners, Vistria Group)
  • Broadstep Behavioral Health (Bain Capital)
  • Texas Medicaid HCBS provider landscape
  • Advoserv/Bellwether Behavioral Health (GI Partners, Wellspring Capital)