Demand for autism care is soaring. The system is struggling to cope

AUTISM IS A spectrum disorder, meaning people with it have a wide range of traits, strengths and support needs. That diversity is on display at the Cortica therapy centre in Burlington, Massachusetts, where a group of toddlers work their way through an obstacle course. One girl completes it carefully, head down, avoiding eye contact. Another darts into a corner, squeezing her eyes shut, pressing her fingers into her ears and shaking her head. Elsewhere, a boy screams.

Roughly 3.2% of American children are on the autism spectrum. In severe cases a person may be unable to speak or dress themselves. Those with milder forms might struggle to communicate or regulate their emotions, but often attend ordinary schools. Autistic children are also more likely to have gastrointestinal problems, obesity, sleep disorders and seizures.

One upshot is that autism care has become a multi-billion-dollar business in America. Demand for treatment has surged, attracting private-equity (PE) firms to the sector (Cortica is backed by a roster of venture-capital and corporate health-care investors). But the system is deeply flawed, with incentives that push up costs. State budgets are straining under the burden. And autistic children may not be getting the care they need.

These are growing problems in a country where autism diagnoses have quadrupled over the past 20 years. That rise is partly down to improved screening. But the definition has also broadened. Last year an analysis by epidemiologists at the University of Wisconsin found that, between 2000 and 2016, the number of autism diagnoses among children with mild, minimal or no adaptive impairments rose markedly, while moderate to severe cases remained mostly flat (see chart 1).

One explanation is that an autism diagnosis unlocks care—and insurance coverage—for other conditions. “If your kid has social anxiety, that can look a lot like autism, but it’s really hard to get services to address that,” says David Mandell of the Children’s Hospital of Philadelphia. The Wisconsin study, he says, “shows, in part, the willingness of clinicians to give the diagnosis, and of parents to seek it out”.

Once diagnosed, many children receive Applied Behaviour Analysis (ABA), which relies on reinforcement to encourage desirable behaviours and reduce disruptive ones. (Early forms using shocks, restraints or unpleasant tastes or smells have been discarded.) ABA’s popularity is in part the result of a sweeping shift in policy. In 2014 federal regulators clarified that Medicaid, the government health programme for the poor, must cover treatment for autistic children. Data provided to The Economist by Trilliant Health, an analytics firm, show that between 2019 and 2025 visits to ABA therapy centres rose from just under 7m to 28.5m (see chart 2).

The effect on budgets has varied, but the overall picture is troubling. In North Carolina, which introduced Medicaid coverage for ABA in 2019, the therapy is on pace to become one of the state’s largest expenditures, with costs rising from $121.7m in 2022 to an expected $1.1bn next year. In Nebraska, sky-high reimbursement rates made ABA a lucrative market for providers. Visits to therapy centres increased by 2,560% between 2019 and 2025. As a result, Medicaid spending on ABA rose from $4.6m in 2020 to $85.6m in 2024. The state has since lowered its rates.

Fraud is a concern. In December 2024 the Department of Health and Human Services began releasing audits of state Medicaid spending on ABA. Four have been published so far; all found improper or potentially improper payments. The most recent report, on Colorado, noted problems ranging from uncredentialled therapists to billings for children who did not have autism, and found $285m in questionable payments over two years.

But the system also allows money to be wasted in perfectly legal ways. ABA is often paid per hour, creating incentives for over-treatment. Because the recent surge in diagnoses has been driven by milder cases, the marginal child should have received fewer hours of care. But in Colorado, for example, the share of children receiving more than ten hours of care a week doubled to 58% between 2019 and 2024. Nationally, the average number of visits per patient increased by 17% between 2019 and 2025, according to Trilliant Health.

A growing market, predictable funding and fragmentation have attracted PE firms. Between 2017 and 2022 they accounted for 85% of all mergers and acquisitions in the sector, according to the Centre for Economic and Policy Research. A study by researchers at the Brown University School of Public Health identified 574 therapy centres owned by PE firms as of 2024. This has raised concerns that profitability may be put ahead of patients’ needs. In Colorado half of the rise in billable hours in 2024 was driven by PE-backed centres.

Despite all the money flowing into autism services, the quality of care is uneven. Studies show that in controlled settings ABA can help children speak, socialise and, as Dr Mandell puts it, “get through their day-to-day”. But more hours of care are not necessarily better, and much depends on the skill of those delivering it. An increasing reliance on lightly trained labour is raising concerns. The number of registered behaviour technicians, who administer ABA, jumped from 328 in 2014 to 246,000 last year. They are often paid modestly, with few opportunities for advancement. High turnover is therefore a problem. For autistic children, who depend on routine, that is especially disruptive.

Another problem is that, because autism is heterogeneous, children often need different types of care. At the Cortica centre children move from room to room, sounding out words with speech therapists, practising motor skills with occupational therapists and seeing a paediatrician who monitors their nutrition and medications. Such co-ordinated care is essential. It is also all too rare. ■