Your Primer to Healthcare Mergers and Acquisitions

Plus Ça Change: 7 Evolving Trends in I/DD Services in 2015

Jan 20, 2015

by Tom Schramski

By Tom Schramski, PhD, CM&AA

Volume 2 Issue 2, January 20, 2015

The French phrase – plus ça change, plus c’est la même chose – (the more things change, the more they stay the same), is an epigram attributed to Jean-Baptiste Alphonse Karr, a 19th century literary critic.  Very simply, history repeats itself.

So it is in the intellectual/developmental disability (I/DD) marketplace.  What does this mean for today’s I/DD executives and owners, whether a for-profit or nonprofit organization?  Consider the following inter-related trends and their likely implications for your company’s future:

  • The new managed care-type environment – With the collision of healthcare reform, the complexity of healthcare management, and individual state fiscal challenges, states and others are increasingly looking to managed care organizations (MCOs) to administer human services including I/DD.  MCOs typically require more accountability from providers in all areas of operation than many state or local agencies.
  • Rate and authorization pressure – Many states are increasingly restricting service authorizations while looking to fund services at rates that result in slim margins for most providers unless there is a creative approach to human resource management, including the potential use of independent contractors.
  • The least expensive environment – When I began my career in the I/DD field, we talked a great deal about the “least restrictive environment” and, today, the push is for the least expensive.  This translates into a strong move away from facilities and small residential homes to foster care-type settings for adults/children and in-home support services like respite, whenever possible.
  • Emerging alternatives – Given the above, there is an expanded reliance on technology that is accessible to individuals receiving service, as well as service models that give individuals more control over their services.  In the latter category, options like fiscal intermediary/employer agent services are growing rapidly at the intersection of individual choice, flexibility, and reduced expense.
  • Technology requirements – Funding entities are requiring diverse technology capabilities for providers in many areas ranging from billing to medical records.  Eventually, these capabilities could become the basis on which states determine their level of reimbursement.
  • Expected consolidation – In order to succeed, service providers are increasingly exploring acquisitions, mergers, and selling their companies or assets.  This is often the foundation for enhancing operational sophistication in reference to the above and making the effective management of human resources a necessity.
  • Niche focus - Specialized services to niche populations like individuals with Autism Spectrum Disorder diagnoses and dual eligibles will continue to receive favored financial support.

As my title implies, we have been here before.  The variables and technology are different, but at their core, many of the market dynamics are similar.  They require an honest assessment of your organization, a wide- ranging assessment of your options, planning flexibility, and the courage to implement.

Tom Schramski

Tom Schramski PhD, CM&AA


Tom was the Founder and Managing Partner of VERTESS. He was a Certified Merger & Acquisition Advisor (CM&AA), consultant, and Licensed Psychologist with over 35 years of very successful national experience in the healthcare marketplace, including co-founding and building a $25 million behavioral health/disabilities services company. Tom represented sellers and investors across the healthcare spectrum and was recognized for his executive leadership in the 2005 Entrepreneur of the Year issue of Inc. Tom passed away in December 2018.

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