Forces Shaping the Next Round of Innovation and Investment:

Supply & Demand Imbalance

The healthcare industry is becoming acutely aware of the growing behavioral health crisis affecting a significant portion of the population. As the impact of this crisis has reverberated across the country, providers and payers are assessing the impact on patients, parents, caregivers, and communities and developing strategies to respond.

While there is growing recognition, and belief in the importance, of behavioral health as a component of broader health and wellness, we believe we are only seeing the ‘tip of the iceberg’ when it comes to understanding these problems and finding solutions (See Figure 3).

The statistics portray an alarming imbalance that will continue to drive demand for new services, and tax an already stressed provider ecosystem.

The demand for behavioral health services has increased by 25% after the COVID-19 pandemic, while the supply of therapist and support staff has not kept up. This imbalance has led to increased workload and stress for employees working in this field, and delayed access to quality care for individuals in need.
The behavioral health crisis uniquely affects nearly every demographic and geography, from under-diagnosed youth conditions to seniors. Almost 36% of individuals report feeling lonely, an issue that has garnered increased attention as a leading indicator for behavioral conditions.

The senior age group, in particular, has seen a steady increase in loneliness, anxiety, and depression. This was due to their increased need to isolate themselves from others during the pandemic because they were more susceptible to the effects of COVID-19 as a population.
The number of adolescents facing behavioral issues is growing. According to the Centers for Disease Control and Prevention (CDC), one in five children has some form of mental, emotional, or behavioral disorder.

Consistent with the broader focus, understanding, and growth across behavioral health, the treatment of individuals with ASD, a distinct behavioral health condition, has also seen continued growth. Today, one in 36 children have some form of autism, much higher than the one in 44 statistics from 2021, and the one in 110 statistics from 2006.

FIGURE 3: FORCES SHAPING INNOVATION AND INVESTMENT IN AUTISM

In large part, this growth is driven by increased awareness, decreased stigma, and advancements in the identification of ASD. The leading methodology for treating those with autism is ABA therapy, which requires highly individualized attention and sessions among patients, trained clinical staff, and therapists.

Like other parts of healthcare experiencing labor shortages, the autism sector is no different. According to the Behavior Analyst Certification Board® (BACB), over the past 12 years, demand for behavior analysts holding certification in the United States has increased by over 5,800%.

Unfortunately, this increased demand is not being met by a sufficient flow of new autism therapists. The recruitment and retention of therapists can be challenging, and the sourcing of new therapist talent is difficult with only a limited number of higher education institutions offering degrees that support BCBA designations. This combination of forces shines a light on the critical role of employee retention going forward.

Countering this focus on employee retention is the harsh reality of employee burnout in the ABA job market, with approximately 72% of the employees in the field experiencing medium to high levels of employee burnout. The intense nature of the work and personalized approach of ABA, which requires considerable time and resources to help one patient, is one contributing factor. Many clinicians also cite the voluminous work, high-stress levels, and challenging patient behavior as additional reasons for employee burnout.

To address the high burnout rate and improve employee retention, employers are implementing strategies and techniques to improve work/life balance, create a more positive work environment, and relieve job stress. In fact, according to WTW 81% of employers have identified burnout as a top workforce challenge. Unfortunately, employers only have so much control over burnout – as any remediation tactic ultimately requires the engagement and participation by the employee.

Collectively, the combination of labor shortages, insufficient higher education, and employee burnout highlight the critical role of workforce management in this next phase of investment and growth across the autism sector.

Therapist Turnover

Turnover at the therapist level is one of the most persistent and impactful problems facing current ABA providers. Behavioral therapists (BTs) are typically paid hourly and often are applying for therapist positions early in their career. Operators often compete for hourly talent with other healthcare positions (home health aides, CNAs, etc.), as well as other hourly based positions across various industries like retail, manufacturing, and service/hospitality. Given the patient and volume-driven nature of ABA therapy, it is not uncommon for BTs to have inconsistent and variable hours. Combined with an often stressful and intensive work environment, BT rolls have consistently high churn rates, with some providers nearing 100% churn over a given 12-month period. Elevated turnover has been exacerbated over the past 18 months as inflationary pressures have buoyed up wages across industries while simultaneously putting pressure on operating margins.

Top operators in the space understand that dedicated, stable therapist teams are crucial to ongoing success for the business across operational categories including hour fulfillment, clinical excellence, and client satisfaction. Successful platforms have made meaningful investments in human capital management focusing on key areas such as:

Streamlined Recruiting: Partnering with feeder universities to attract senior BT talent, and local schools and community resources to fulfill hourly staffing needs.
Accelerated and More Productive Onboarding: Targeted strategies to accelerate the timeline from initial hiring date to deployment into the filed for clinical billing in addition to mitigating the clinician fall-out during training.
Consistent Experience: Providing guarantees for minimum hours, accessible scheduling and load management systems to monitor staff caseloads and availability.

Career Growth: Many entry BTs are using the role as a foothold into the healthcare industry and have interest in continuing their education or working into operational roles. Providing access and support for career advancement can have a massive impact on staff retention.
Comprehensive Benefits Package: Because providers are competing across industries for many BT and operational positions, its crucial to provide a competitive benefits package alongside wage compensation.

With labor rates showing signs of stabilizing across healthcare, ABA platforms that have made investments across human capital management will be well positioned to compete and retain talent. As platforms start to achieve scale, employing thousands of BTs and hundreds of BCBAs and specialists, decreasing turnover by even a few percentage points can have a meaningful impact on operating margins and financial performance.

With the tremendous demand for ABA therapists and finite resources in this space, there is an opportunity to innovate this therapy through new techniques, technology, and business models. This innovation can help alleviate the supply and demand imbalance, provide higher-quality care to patients needing therapy, and enhance the work effort for employees already working in the autism sector. As business models continue to evolve, they also will need to stay in sync with changing legal and regulatory changes that impact both care delivery and reimbursement.