Fifteen years ago, Justin Funches left his position at private equity firm Ironwood Capital to assume the role of president at LEARN Behavioral, a Baltimore-based organization that provides specialized autism care services for individuals diagnosed with autism. Little did Funches know that over the next decade, LEARN Behavioral would go through three ownership changes, each bringing its own set of challenges and opportunities. However, despite these shifts in ownership, LEARN Behavioral has managed to stay the course, experiencing significant growth while maintaining its commitment to quality care. In a field as crucial as autism services, the company’s ability to navigate these changes is a testament to the stability provided by strong leadership and a well-defined strategy.
A History of Ownership Changes and Stability
In 2010, LEARN Behavioral underwent its first ownership change when Milestone Partners, a private equity firm, purchased the company. Six years later, in 2016, the majority stake was acquired by LLR Partners, another private equity firm. The most recent ownership change came in 2019 when Gryphon Investors, a San Francisco-based private equity firm, took control, with LLR Partners retaining a minority stake.
At first glance, these frequent shifts in ownership might raise questions about the stability of the organization. Private equity firms are often criticized for prioritizing short-term returns over long-term stability and care. Industry watchdogs frequently highlight concerns that such firms might push for financial gains at the expense of quality care or the long-term health of the business.
However, LEARN Behavioral’s leadership structure has remained remarkably consistent throughout these transitions. Despite the changes in ownership, the company’s management team, led by president Justin Funches, has stayed in place, ensuring continuity in both treatment and acquisition strategy. Funches himself is quick to point out that, for LEARN Behavioral, the key to success isn’t just in having the right investors—it’s about having the right leadership.
“Ownership hasn’t really changed the way that we have operated,” Funches told Autism Business News. “More important than your investor is your management team, and our management team has remained consistent.”
This stability at the leadership level has been instrumental in helping the company navigate the changes in ownership while keeping its mission intact.
Strong Leadership and a Focus on Long-Term Sustainability
A major factor contributing to LEARN Behavioral’s success has been the consistency of its leadership team. At the helm is Michael Maloney, the company’s founder and CEO, who has remained in charge since founding LEARN Behavioral in 2007. Maloney’s long-standing vision for the company has been a guiding force throughout its expansion. In addition to Maloney, the leadership team includes seasoned professionals like Hanna Rue, who has been leading clinical development since 2015, and Rob Haupt, who has served as executive vice president since 2010. Rue and Haupt are both certified behavior analysts, adding a level of clinical expertise to the company’s leadership.
Funches emphasizes that a company’s sustainability is more important than immediate financial returns. LEARN Behavioral is a private company, and while it has declined to provide specific revenue and cost figures, Funches has made it clear that the company is profitable and aims to remain so for the long term.
“We’re a business that wants to be sustainable,” Funches said, reinforcing the company’s commitment to stability and growth.
This philosophy has not only allowed LEARN Behavioral to weather the storm of changing ownership but also to maintain the quality of care that its patients have come to expect.
Growth Through Strategic Acquisitions
LEARN Behavioral’s impressive growth can largely be attributed to its strategy of acquiring well-established organizations in the autism care space. The company now operates in 18 states, with its geographic footprint spanning from the Mid-Atlantic to the Great Lakes, the Pacific Coast, New England, and the South. Over the past three years, LEARN Behavioral has made several strategic acquisitions, including companies like the Behavioral Analysis Center for Autism, Priorities ABA in North Carolina, Tandem Therapy in Nevada, Novel Responses in Michigan, and Total Spectrum ABA in Illinois.
These acquisitions have allowed LEARN Behavioral to integrate established teams that are already familiar with local regulations, licensing requirements, and insurance reimbursement processes. As a result, the company has been able to rapidly expand its reach while maintaining high standards of care. Funches explains that this strategy of acquiring businesses that are already embedded in their communities helps avoid the challenges that come with starting new operations from scratch.
“Because we have grown through acquisitions,” Funches explained, “LEARN Behavioral is able to work with companies and clinicians already known in communities, as opposed to bringing in new personnel. The approach also means a quick understanding of the licensing, regulation, and patient reimbursement process, all of which vary state-by-state.”
By acquiring companies that have already established themselves in local communities, LEARN Behavioral not only accelerates its expansion but also ensures that it continues to deliver the high level of care that its patients expect.
Revenue Streams and Insurance Partnerships
A significant portion of LEARN Behavioral’s revenue comes from health insurers who reimburse the company for providing Applied Behavioral Analysis (ABA) autism care services to children diagnosed with autism. ABA is a well-established therapy that is used to help individuals with autism develop key life skills, ranging from socializing to personal hygiene. According to Funches, more than 80% of LEARN Behavioral’s revenue is derived from these insurance reimbursements. Most of this funding comes from commercial insurers, although the company also works with Medicaid patients.
As the prevalence of autism diagnoses has risen in recent years, so too has the demand for ABA services. In fact, ABA has become the standard of care for children with autism in the U.S., in part because every state has passed laws requiring insurance companies to cover ABA services. With over 6,000 patients receiving ABA therapy through LEARN Behavioral, the company is well-positioned to meet this growing demand.
Balancing Billable Hours with Quality Care
In an industry where maximizing billable hours is often the key to profitability, LEARN Behavioral takes a different approach. Funches acknowledges the inherent tension between maximizing billable hours to satisfy insurers and ensuring that each patient receives individualized care. While some companies in the industry might push for as many billable hours as possible, LEARN Behavioral intentionally sets its targets for billable hours lower than many competitors.
“Our targets for billable hours are significantly less than many other companies,” Funches stated. Instead of focusing solely on billable hours, the company measures clinical outcomes in ways that prioritize patient well-being. These include tracking the promptness of prescription fulfillment and the ability of patients to “graduate” from certain services as they make progress.
This focus on quality over quantity has been a defining feature of LEARN Behavioral’s philosophy, ensuring that each patient receives the best possible care, even if it means foregoing some potential revenue from additional billable hours.
Addressing Labor Challenges and the Role of AI
One of the most significant challenges facing LEARN Behavioral is the ongoing labor shortage in the autism care field. There simply aren’t enough board-certified behavior analysts (BCBAs) and clinicians to meet the growing demand for ABA autism care services. The company currently employs more than 7,000 clinicians, diagnosticians, and support staff, but the supply of qualified professionals continues to fall short of demand.
Funches remains optimistic about the potential for technology to ease some of these challenges. While AI has the potential to improve back-office efficiency, he is skeptical that technology can replace the human touch required for ABA therapy. He notes that while virtual reality lessons and other forms of AI-assisted learning might help streamline certain aspects of care, there is no substitute for the clinical judgment and personal interaction provided by trained professionals.
“There are no magic pills or magic robots,” he said. “It will continue to remain a therapy that requires humans to deliver care.” This belief reinforces LEARN Behavioral’s commitment to investing in its clinical staff and finding innovative ways to support them in meeting patient needs.
The Road Ahead: Consolidation and Continued Growth
Looking to the future, Funches predicts that consolidation will continue within the autism care services industry over the next decade. As smaller companies face increasing competition and rising costs, larger organizations like LEARN Behavioral are likely to continue their acquisition strategies. Funches has indicated that the company plans to remain active in acquiring additional businesses to expand its services and geographic reach.
With its solid leadership, sustainable business model, and patient-centered care approach, LEARN Behavioral is well-positioned to navigate the challenges ahead. As the autism care industry continues to evolve, LEARN Behavioral’s ability to adapt to changes in ownership, labor shortages, and market consolidation will be key to its ongoing success.
In an industry where the intersection of private equity and healthcare can be controversial, LEARN Behavioral’s commitment to high-quality care, long-term growth, and sustainability sets it apart as a leader in the field. The company’s resilience, strong leadership, and unwavering focus on the needs of its patients make it a standout example of how private equity can successfully support the growth of healthcare businesses without sacrificing quality or integrity.
