IMPACT OF DRIVING FOR PROFITABILITY
I think BHCOE (under 500 companies) and CASP (under 300 members) do great work. Organizations that seek credentialing are seeking to establish better business practices but better business practices don’t always align with fair treatment of staff and ethical decision-making. For many companies, those two objectives don’t align.
Many BHCOE organizations are owned by PE-backed companies. It would be fair to say that the most egregious ethics violations in terms of HR and business practices – unpaid nonbillable hours; minimal breaks; unpaid training; unpaid driving time, bait and switch hiring tactics, lack of training and support for BTs/RBTs, inadequate supervision, cherry-picking easy clients, establishing arbitrary minimum billing requirements, firing “difficult” clients, etc. – are being perpetrated by these organizations because the primary objectives of these businesses are to increase profits. Often at all costs.
A profit-seeking company will always find ways to maximize profits. A short-term-oriented profit-seeking company will do so without regard to the damage it is doing to clients, staff, and the health and sustainability of the business because they’re playing a short game.
As PE-backed companies always have a short-term investment horizon of 5 to 7 years, you can understand their motivation to extract immediate gains during their investment horizon.
As a general rule of thumb…
Private Equity-backed companies will ALWAYS seek to exit their investment. The typical investment horizon (time to flip) is 5 to 7 years. Their primary objective will always be to maximize profits because profits equal enterprise value. And enterprise value equals how much money they will get at the time of exit.
BUT not all PE-backed companies are evil. Some are ethical.
Independent ABA agencies, particularly those owned by BCBAs, often have a longer investment horizon (especially since most don’t even have exit strategies) and focus primarily on helping clients. Some are smart enough to know that in order to help clients, they have to have committed, dedicated staff.
We spent over 2 years creating a national database of ABA organizations. Although this number is constantly in a state of flux because there are so many new agencies being created by disenchanted BCBAs and those going out of business because of the inability to compete against PE-backed companies (M&A activity has slowed down considerably), our database stands at around 3,500.
Through the Ethics Standards Board of ABA Providers (ESBAP), an organization that we created to establish ethical business standards for ABA provider organizations, we will be publishing this database in late March / early April.
Our goal is to use data that we collect from parents, RBTs, BTs, BCBAs, funding sources, and others with a vested interest in protecting the field of ABA – it may not be objective, but it will be actionable data – to drive behavior change.
