The ongoing process to deinstitutionalize people who experience intellectual and developmental distinctions has met with its most formidable challenge to date. The Private Equity Investment Firm. Harsh language, I suppose, but true, in my view, nevertheless.

For well over 40 years family members advocates and professionals committed to the idea that human beings can learn, have rights, and belong in safe communities where they loved, can reciprocate that love and experience positive engagements creating socially valued roles regardless of their variations in form function and socio-economic experience, have worked tirelessly to develop and build a system of supports for our friends family members and fellow citizens who experience intellectual and developmental distinctions. That work has resulted in expanded civil and legal rights, the closing of state schools and institutions, and the ability to access Medicaid funds to cover the cost of support while living at home, in the community setting of choice, and in the least restrictive environment. Despite its ongoing challenges of siloing, fragmentation and challenges meeting the needs of the most vulnerable sectors of the IDD population folks I call multi-system participants those with co-occurring diagnoses and chronic health conditions, a vast home and community based system built upon the fundamental idea that all people are created equal in their humanity, have the right to work for a competitive wage, be free from abuse neglect and exploitation and strive towards the good life an everyday life that they create.

All of which is now in jeopardy. The most obvious attack on the needed support system has been the Trump Administration's gutting of Medicaid, the source of funding for Home and Community-based Services. A lot of noise was made by a lot of people to try and stop this tragic attack on the source of support for millions of people, including the most vulnerable populations, like those who experience IDD/A. But the most insidious threat to four decades of progress is the private Equity Investment firm. The return to warehousing and segregation is looming over the horizon, disguised under the cloak of efficiency. Which, when you know the history of the Disability Rights movement and deinstitutionalization, is very disguised language at all. One of the main reasons Asylums, State Schools, and State Institutions were established and functioned the way they did was rooted in the professed efficient manner in which to provide care. The trend of Private Equity firms consolidating multiple provider agencies into larger conglomerates represents a form of trans-institutionalization—a return to warehousing. Not a new trend, PRFs have quietly and slowly, over several years, been building investment portfolios for their client base by acquiring companies that provide healthcare and related services. The trend in recent years has shifted toward consolidating group home providers and other service providers whose primary customer base consists of people with IDD.

First, let's understand terms. What is a private equity firm (PEF), and what is its primary focus? A PEF is an investment management company that specializes in acquiring an ownership stake in organizations and companies that are generally not listed on the New York Stock Exchange, meaning they are not publicly traded. Private equity funds are what is known as pooled funds. These companies obtain capital (read: money) from wealthy individuals and institutional investors. Private Equity is generally not open to small investors like you and me. That alone should send a signal. But let's continue. PEF uses that money to purchase ownership stakes in other companies, which become part of its portfolio.  It is a profit-seeking strategy designed to maximize profits for investors. One strategy employed by PEF to increase the value of the companies in their portfolio is for the PEF to collaborate with the executives and leadership of the portfolio companies to identify ways that the companies can become more valuable. So far…nothing in this sounds like human services. Nothing about PEF strategy, purpose, goals, and mission strikes me as being even remotely close to providing care, support, and a system of services to people in need. But let's continue. Working with the leadership teams of the portfolio companies is a strategy called value creation through active management. Now

A critical feature of the private equity business is the limited degree of transparency and regulation. How do PEFs maximize the value of the companies they buy? That’s a good thing. Right? PEFs are investing in these smaller IDD service providers to enhance their operations and improve the services they offer. Right? Wrong.

The primary focus or purpose for existing is to maximize profits for the investors by doubling or tripling the value of the initial investment. According to the DREDF report, Heasley (2024) writing for Disability Scoop, and Brown (2025) in his MedPage Today Article, the primary reason PEF is investing in the IDD service providers is due to its growth in demand, and it is generally resistant to recession. It's a recession-proof, safe investment platform for wealthy individuals to invest their money during uncertain financial times. Typically operating from the premise of a longer-term investment in areas of specialty, the newer model under which PEFs operate in the IDD and healthcare space is looking at, in many cases, a turnaround time for increasing the value of the assets within 4 to 7 years.   A strategy employed by PEFs includes distressed investments, leveraged buyouts, and venture capital, as well as active management and Value Creation. This is where private equity firms collaborate with the management teams of the companies in their investment portfolios. The primary goal is to enhance efficiency, boost profitability, and ultimately drive value. Not always, but in many cases restructuring, implementing new strategies, and facilitating additional mergers and acquisitions are the pathways to such stated goals.

 ProPublica asserts that PEF controls more than $6 trillion in assets in the United States. Ultimately, the primary objective of the PEF is to acquire control of the business, identify opportunities to enhance its value, and subsequently resell the company at a profit.

The Antithesis to System Thinking

Let's wrap some terms around it. Donella Meadows, Gareth Morgan, Russell Ackoff, and other prominent thinkers in systems and organizational development have asserted that organizations function by the paradigms or thought processes that brought them into existence. Therefore, the primary function of the PEF will represent the ideology and mindset about investment that led to its creation.

A report issued by the National Disability Rights Network asserts that the mechanism through which PEF operates and the sheer scale of the conglomerate IDD service organizations “obscures the significant differences between institutional and community living”. What is happening, in purely systems terms, is that IDD services are being mass-produced and shaped into a vast, industrialized complex system. This is the complete opposite direction in which the current human service delivery systems should be heading. HSOs have been stuck in the machine age for decades, operating as rigidly controlled, centralized bureaucracies that attempt to implement systems thinking, person-centered theories, and models of support. Human service delivery systems that adapt to our changing paradigms about meeting human needs should be moving in the direction of integrated, holistic systems thinking service delivery models, rather than reverting to large industrial service complexes. What can be expected from this alarming trend, left unabated…Profit over people, the eventual erosion of person-centered care, the rise in abuse, neglect, and exploitation, and quite simply, a modified return to institutionalization with a more profitable bottom line for its investors.