Private Equity Ownership in ABA: What Behavior Analysts Need to Know

Introduction

The field of applied behavior analysis (ABA) has seen rapid expansion, with the industry now valued at approximately $4 billion. As the demand for ABA services grows, private equity (PE) firms have become more involved in shaping how these services are delivered.

Private equity ownership introduces a for-profit model to the ABA industry, with the goal of increasing financial value for future resale. While this model has become common in healthcare, mental health, and education, it raises important questions about its impact on clinical outcomes, service quality, and the well-being of behavior analysts and their clients.

This blog post will:

• Define private equity ownership and how it functions
• Explain its key characteristics in the ABA industry
• Explore both the potential benefits and risks
• Discuss its overall impact on ABA services

By understanding the effects of private equity in ABA, behavior analysts can make informed decisions about their careers and the future of their field.

What is Private Equity Ownership?

Private equity refers to a form of investment where a group of investors purchases and manages companies with the goal of increasing their value before selling them for a profit. This model differs from other business ownership structures in several key ways:

• Nonprofits vs. For-Profits – Nonprofits reinvest revenue into services, while for-profits, including those owned by PE firms, prioritize financial gains for investors.
• Sole Proprietorships & Partnerships – Unlike independently owned ABA practices, PE-backed companies often undergo frequent financial restructuring.
• Corporate vs. PE Models – While large corporations can own ABA service providers, PE firms typically operate with a short-term focus, aiming to sell the business within a set time frame.

Private equity’s increasing presence in ABA has led to significant changes in how services are managed, funded, and delivered.

Key Characteristics of Private Equity Ownership in ABA

1. Funding Structure

Private equity firms raise money from investors to acquire ABA companies. Their primary goal is to maximize returns, which influences financial decision-making:

• Profits are controlled by the PE firm, often prioritizing financial targets over clinical considerations.
• Funding allocation shifts, with emphasis on cost efficiency and higher revenue rather than reinvestment into staff development or client services.
• Operational changes may include reducing overhead costs, consolidating locations, or modifying billing practices.

2. Short-Term Ownership Model

PE firms typically acquire companies for a limited time, usually between 4 to 10 years, after which they attempt to resell for a profit. This can create instability within ABA organizations:

• Frequent ownership transitions can lead to new management teams with shifting priorities.
• Staff turnover increases, especially at the leadership and clinical levels.
• Service delivery may be disrupted, affecting clients who rely on consistent care and provider relationships.

3. Financial-Driven Decision-Making

Once acquired, PE firms actively manage ABA organizations but often appoint business executives rather than clinicians to leadership positions. This shift in control can lead to operational changes such as:

• Higher caseloads for behavior analysts, reducing time spent with individual clients.
• Budgetary cuts in staff training, research, and resources, limiting professional development.
• Reduction in administrative and non-billable positions, increasing workload for clinicians.

While these strategies may improve the company’s financial standing, they can also affect service quality and long-term staff retention.

Potential Benefits of Private Equity in ABA

Despite concerns, private equity ownership does offer some advantages:

1. Business expertise – Professional management can help streamline administrative processes, allowing clinicians to focus on treatment.
2. Access to financial resources – PE firms may invest in technology, training, and operational efficiency.
3. Expansion opportunities – Increased funding could lead to new clinic openings and broader access to services.
4. Networking advantages – PE firms often have industry connections that can benefit business expansion and organization-wide improvements.

When managed ethically, private equity investment could contribute to the professionalization of ABA businesses. However, challenges remain regarding the prioritization of financial goals over clinical ones.

Risks and Concerns of Private Equity in ABA

While financial and operational efficiency may improve, researchers and professionals have raised concerns about the broader impact of private equity ownership in ABA. Some key challenges include:

1. Profit-Driven Decision-Making – Emphasis on financial targets may lead to cost-cutting measures that negatively impact service quality, training opportunities, and staff well-being.
2. High Staff Turnover – Increased pressure on behavior analysts, combined with cost-cutting, may lead to burnout and a revolving-door workforce.
3. Inconsistent Service Quality – Frequent organizational restructuring can limit continuity of care for clients, disrupting treatment progress.
4. Reduced Clinical Autonomy – Decisions made by non-clinicians can interfere with best practices in ABA, making it harder for behavior analysts to make ethical, client-centered choices.

These concerns highlight the need for increased transparency and safeguards to ensure that financial interests do not compromise service quality.

The Future of Private Equity in ABA

As the ABA field evolves, private equity-backed companies will likely remain a significant part of the industry. However, behavior analysts should remain informed about the potential trade-offs between financial efficiency and ethical service delivery. Considerations for the future include:

• Greater professional advocacy – Behavior analysts must voice concerns and push for ethical business practices in PE-backed organizations.
• Stronger regulatory oversight – Policymakers and professional organizations may need to implement safeguards to maintain service quality under PE ownership.
• Informed Decision-Making – Behavior analysts choosing to work for PE-owned agencies should carefully evaluate job conditions, clinical autonomy, and long-term career growth opportunities.

As private equity continues to shape ABA service delivery, it is crucial to balance financial sustainability with ethical, client-centered care.

Conclusion

Private equity ownership in ABA presents both opportunities and challenges. While financial investment can bring growth and efficiency, the emphasis on short-term profitability may pose risks to service quality, staff stability, and clinical decision-making.

Behavior analysts should stay informed about the evolving landscape of ABA ownership and advocate for ethical practices that prioritize the well-being of clients and clinicians.

For a deeper dive into this topic, we encourage you to read the full research article:
Morris, C., Grauerholz-Fisher, E., Ellsworth, M. E., & Crocker, C. E. (2024). Private Equity Ownership in ABA. Behavior Analysis in Practice, 17, 967–976.

By understanding the implications of private equity in ABA, professionals in the field can better navigate the future of behavior analysis while keeping ethical service delivery at the forefront.