Why ABA Provider Acorn Health is Growing as Market Leaders Shrink

Why ABA Provider Acorn Health is Growing as Market Leaders Shrink

Vicki Kroviak, CEO of Acorn Health, rejects the “dots on a map strategy” for growing autism therapy companies.

Under Kroviak’s leadership, the applied behavior analysis (ABA) provider has grown its footprint by 47% since 2018.

At the same time, others in the space have had to downsize – laying off staff and even giving up entire state contracts.

Most recently, Acorn Health acquired seven sites from Maitland, Florida-based Breakthrough Behavior. Terms of the agreement, reached on September 19, were not disclosed.

Acorn Health offers in-office and home-based ABA services at 75 sites following the Breakthrough Behavior agreement.

For Acorn Health, growing while others shrink comes from thoroughly considering all options before taking the plunge. It also helps to expand into areas that the business already knows about or even has existing infrastructure. Much of the company’s growth relies on working in its existing markets, Kroviak, who is also the company’s founder and president, told Behavioral Health Business.

“We do our homework before entering a new market,” Kroviak said. “He’s a perfect example in Breakthrough Behavior. We understand what we have.

“It’s highly unlikely that we’ll be surprised by what the job market is telling us at any of their establishments, because we…already understand that.”

Strong local knowledge also provides insight into payer dynamics, allowing for even further planning, Kroviak said.

The autism space has seen two competing forces collide in 2022, precipitating hundreds of layoffs.

On the one hand, privately-funded autism treatment companies have for years gobbled up smaller offices to gain market share and potential leverage with payers. This has accelerated in recent years, according to exclusive data sources.

On the other hand, COVID-induced salary pressures have resulted in high turnover rates in positions for Certified Behavioral Technicians (RBTs), the practitioners who most often work directly with patients. This, combined with limited increases in reimbursement, has caused some of the biggest autism treatment providers to cut staff to cope.

“I think there’s a lot of risk when you approach your growth in a dotted way, especially in the year we had such significant labor issues,” Kroviak said.

The for Autism and Related Disorders (CARD), based in Plano, Texas, is closing operations in 10 states, reducing its market footprint to 14 states. Since December 2021, the company has reduced its office footprint by 30%. Following the announcement of the closures, the company said it regularly reviews and evolves its operational footprint and assesses its centers in terms of capacity, staffing and reimbursement rates.

Earlier in the year, CARD closed its Oregon office and 360 Behavioral Health closed 9 locations. At least 665 employees were affected. It is not yet clear how many people will be affected by CARD nearly halving its state footprint.

Kroviak founded the company in Coral Gables, Florida in 2018 with backing from private equity firm MBF Healthcare Partners. In 2021, MBF Healthcare Partners sold Acorn Health to the Ontario Teachers’ Pension Plan (OTPP) Board. At that time, Acorn operated 51 locations in Michigan, Illinois, Virginia, Florida, Maryland, Pennsylvania, and Tennessee.

Teachers’ takes a long-term view of the ABA industry, Kroviak said. It also allows Acorn to strategically plan for the future. Like his company, Kroviak said Teachers’ understands the ins and outs of autism treatment and isn’t fazed by recent trends in the workforce.

“This period of three to five years [holding period] in private equity pressure creates some impatience,” Kroviak said.

Although the terms of the agreement have not been released, Teachers’ website lists Acorn Health with its “major investments” on its website. It defines major investments as those valued at $200 million or more. Investment bank Brentwood Capital Advisors estimates the value of the deal at $245 million.

A long-term strategy enabled by the owners of Acorn Health is paid maternity leave and other workforce development efforts. Other efforts include professional development and mentorship programs.

Paid maternity leave is especially important in the ABA space, as women hold 85% of BCBA, RBT and other ABA-related certificates, according to data from the Behavioral Analyst Certification Board.

The same dataset shows that approximately 64% of certificate holders are between the ages of 18 and 45.

“So it’s women and younger women,” Kroviak said of the workforce. “We came to this decision by really doing the work to listen to our workforce.”

The company announced the new policy to the public last week.

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