The intellectual and developmental disabilities (IDD) treatment sector is on the cusp of a major transformation, driven by the promise of digital innovation. Experts at the Behavioral Health Business event, INVEST, highlighted that IDD technology investment is essential for the sector to reach its full potential. By adopting modern tools, providers can expand access to care, improve care management, reduce operational costs, and enhance patient outcomes. This surge in investment could mark a turning point for a field long reliant on manual, paper-based processes.
Tackling Antiquated Systems and Improving Efficiency
Many IDD providers are small, family-run operations with outdated systems that limit efficiency and profitability. Michael Kotzen, CEO of Community Based Care, emphasized the need for modernization: “What excites me in the near term is professionalizing that work—making it more automated and getting rid of carbon copies and paper, which still exist in the companies we acquire.”
Out-of-date systems also reduce the ability to collect reimbursements, directly impacting margins. Tom McMahon, VP of IDD programs at Circulo, noted: “If we are collecting 92% of what we bill… and I take that 92% and make it a 97%, I just dropped 5% to the bottom line.” Though seemingly simple, billing in the IDD sector is complex due to strict regulatory oversight, making IDD technology investment a critical lever for improving financial performance.
Incremental improvements in operational efficiency—from EHR adoption to automated billing—can produce meaningful bottom-line benefits while freeing staff to focus on quality care rather than administrative tasks.
Limited Technology Adoption in the IDD Sector
Despite these advantages, technology adoption in IDD remains limited. “There’s not a lot of IT that has been implemented yet in the sector,” said Matt Pettinelli, CEO of CapGrow Partners. MACPAC reports show that only 37% of private mental health organizations and 32% of private substance use disorder providers using Medicaid rely on electronic health records (EHRs). Psychiatric hospitals and practices also lag behind, with adoption rates of 49% and 61%, respectively. This is far lower than other specialties, where EHR use exceeds 85%.
Strong IDD technology investment can address this gap, enabling providers to better track patient outcomes, coordinate care, and scale services while meeting regulatory requirements.
Technology Solutions for Workforce Challenges
The workforce in IDD care faces unique pressures. Many direct support professionals (DSPs) and in-home caregivers are low-wage employees with high turnover rates. Rising labor costs across the economy exacerbate these challenges. Kotzen explained, “By adding technology and making the work easier, we hope to reduce turnover and make it easier for staff to perform their services.”
Circulo uses technology to streamline DSP tasks, track client needs, and provide real-time support, addressing workforce shortages while maintaining high-quality care. Remote monitoring tools and sensor technologies are also being explored to enable staff to support multiple clients efficiently. As Todd Rudsenske, partner at Webster Equity Partners, noted: “Are there ways to monitor individuals safely while allowing them to live independently? Technology makes that possible.”
Increasing IDD technology investment in workforce management can reduce burnout, improve retention, and allow DSPs to focus on direct care rather than administrative burdens.
Driving Value-Based Care with Technology
The IDD sector is well-positioned for value-based care, which reimburses providers based on outcomes rather than service volume. Long-term services for people with IDDs accounted for $400 billion in U.S. spending in 2020, roughly 10% of national healthcare expenditures, despite this population representing only 2% of Americans.
McMahon sees IDD technology investment as a way to enable shared savings models and value-based care: “There isn’t enough money in the system to pay for the things we need—a living wage, career ladders, and quality services. Technology can help coordinate care and lower spending.”
Platforms that integrate EHRs, remote monitoring, and automated reporting not only streamline operations but also provide the data needed for value-based reimbursement and outcome measurement.
Growing Investment and Opportunities in the IDD Sector
Private equity and startups are increasingly recognizing the potential of IDD care. Nashville-based startup Carebridge raised $140 million to expand a tech platform supporting home-based providers, with backing from health plans. While investment in IDD has grown—the Braff Group tracked 26 deals in 2021—the sector still faces challenges, primarily due to Medicaid complexity and regulatory compliance.
Pettinelli summed it up: “You’re going to see a lot more investment coming in; it’s just getting started. Figuring out the IDD industry is not easy, and Medicaid scares a lot of people.” This cautious approach underscores the importance of targeted IDD technology investment to modernize care delivery, improve workforce efficiency, and scale operations sustainably.
Looking Ahead
The future of the IDD sector is closely tied to technology. From modernizing business systems and billing to enabling workforce efficiency and supporting value-based care, IDD technology investment represents a critical lever for transformation. As more providers adopt digital tools and platforms, the sector can improve operational efficiency, enhance patient outcomes, and create a more sustainable, scalable model of care.
The coming years are likely to see IDD technology investment accelerate, driven by private equity, startups, and innovative providers seeking to modernize a historically underserved space. For organizations willing to embrace technology, the opportunity to improve care delivery, workforce satisfaction, and financial sustainability is unprecedented. With the right tools in place, the IDD treatment space can enter a new era of efficiency, innovation, and high-quality care.
