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N. Adam Brown is a practicing emergency physician, entrepreneur, and healthcare executive. He is the founder of ABIG Health, a healthcare growth strategy firm, and a professor at the University of North Carolina's Kenan-Flagler Business School.
Follow Private equity (PE) has become a powerful and often invisible force reshaping how care is delivered across the country. A recent report from the Private Equity Stakeholder Project shines a light on one of the latest, and most concerning, developments: the growing role of PE in services for people with intellectual and developmental disabilities (IDD). This trend is alarming not just because of the populations involved, but because of what it reveals about how healthcare is increasingly being treated -- not as a social good, but as a business opportunity ripe for financial exploitation.
The Lifeline of Medicaid-Funded IDD Services Many of the services supporting individuals with IDD -- residential facilities, home care, adult day programs, physical and occupational therapy, and more -- are funded primarily through Medicaid. For nearly 10 million Americans with IDD, these programs represent far more than care: they are the foundation of daily life, independence, and survival. Historically, these services have been provided primarily by non-profits and religious organizations.
And yet, as PE firms continue to acquire companies that provide these services, we must ask a difficult question: What happens when profitability becomes harder to maintain, especially when Medicaid dollars are cut or restricted? The answer, based on past precedent in other areas of healthcare, is not promising. The PE Playbook: High Returns, Low Transparency PE firms generally operate on a 4-to-7-year investment horizon. Their goal is generally to double or triple returns during that short window.
In order to get results quickly, PE firms often resort to significant cost-cutting, rapid scaling, and creating "operational...
N. Adam Brown.
