UnitedHealthcare made waves last month by announcing that, starting in 2017, Applied Behavior Analysis (ABA), the most common treatment for Autism, will be included as part of its standard benefits package, which will allow for a greater number of individuals affected by Autism to receive the proper amount and quality of treatment. This decision, along with the vast increase in the number of those afflicted with autism and the rising lifetime cost to individual and society, serves as a significant indication of growth for the ABA market and an opportunity for autism-related healthcare providers.
Autism Spectrum Disorder (ASD), previously classified as Autism or Asperger’s, is now a fully encompassing categorization to describe varying related mental diseases and is evaluated by levels of severity. The prevalence of ASD has increased 119% since 2000, making it the fastest growing developmental disability, with the Centers for Disease Control’s latest estimate that approximately 1 in 68 American children currently fall on the ASD spectrum. The prevalence may be even higher still in American children, as recent surveys suggest that the total affected is 1 in 45 for those between the ages of 3 and 17. In addition to the skyrocketing ASD population, the lifetime cost of treatment is also growing. Depending on the severity of the disorder and the level of intellectual disability, the lifetime expense — inclusive of health-related costs, special accommodations, and education, including early intervention services—averages $1.4 – $2.4 million, with some sources citing upwards of $3.2 million per individual. With such an immense individual financial burden, UnitedHealthcare’s decision will likely prove to be momentous in providing greater access to ABA treatment for a larger amount of individuals who may not been able to afford appropriate treatment otherwise. This increased access will accelerate growth for existing providers and can create an opportunity for new services and treatments in the market.
Recognized as a safe and effective treatment for ASD, ABA consists of a variety of techniques and principles used to increase useful behaviors and reduce harmful behaviors or those that interfere with learning. The treatment uses basic skills and exercises that can be built upon over time and through repetition to help those with ASD overcome typical challenges such as reading, conversing, and understanding situations from others’ perspectives. While there exists a wide variety of ABA techniques for those afflicted, one constant across all age groups and spectrums of the disorder is that proper treatment requires an enormous commitment of both time and money. Prior to United’s announcement, the coverage mandate was made on a state-by-state level, as insurance companies and lobbyists argued that autism is a development disability—which should be the responsibility of the department of education and not of health services. It wasn’t until 2001, when required by Indiana state legislature, that any state required private insurers to offer autism coverage. Although 44 states have since followed Indiana’s lead, the mandates have varied widely; requiring some insurance plans to cover ABA in some cases, with recent estimates suggesting that only 36% of Americans have access to coverage. Decisions like United’s could hint at increased coverage nationwide and, with it, an increased demand for the services of autism-care providers such as Florida Autism Center, LearnIT, Pacific Child & Family Associates, and Trumpet Behavioral.
While some providers have already attracted private equity investments in the space, it is likely that the decision made by UnitedHealthcare, coupled with the increasing needs of services, will drive significant room for growth and innovation in the ABA services space, and with it, meaningful opportunity.
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