Mike Suiters, CEO of Positive Development, on choices for Autism Spectrum Disorder therapy

Background

Earnings season is always a treat for the nerds here at HTN. Hearing what is top of mind for executives across the healthcare services ecosystem — from large insurers to care delivery organizations to hospitals to tech infrastructure companies — gives us a peek around the corner at what threats or opportunities are coming for the rest of the system. 

This past quarter for the big insurers, though, was rough. A combination of regulatory uncertainty cutting across multiple lines of their business and a much higher than anticipated medical spending trend that dented already small margins were the big themes. Behavioral health spending in particular was cited frequently as a factor for Medicaid Managed Care lines of business.

Sarah London, Centene’s CEO, called out a specific therapy modality as a significant driver for their quarterly earnings miss: Applied Behavior Analysis, known as ABA Therapy. During her prepared remarks, she cited ABA as “an accelerating pressure point across a number of our markets. In response, we have formed enterprise-wide behavioral health and ABA task forces to further support our markets in aggressively managing this trend.”

According to the CDC, 1 in 31 children is diagnosed with Autism Spectrum Disorder (ASD), up from 1 in 150 in the year 2000. The growth in prevalence of the disorder has been met with a sharp uptick in demand for Applied Behavior Analysis services from Board Certified Behavior Analysts:

This demand has generated interest from private equity in the space, and the combination of supply and demand mismatch and the growth of diagnoses has created a challenging environment for public payers like Medicaid, as children with an Autism Spectrum Disorder diagnosis were twice as likely to have coverage from a public payer like Medicaid than private payers and families who pay out of pocket. 

As Centene’s ABA task force searches for ways to manage the trend and state Medicaid directors weigh the tradeoffs of cutting reimbursement rates and limiting access to therapy, a McLean, Virginia-based startup called Positive Development is offering a compelling alternative: the combination of a different therapy modality called developmental therapy and a technology platform that they say is delivering outcomes at 50%+ lower costs when compared to ABA. 

Coming off a recent $51.5m Series C led by aMoon Fund, B Capital, and Flare Capital Partners in early August and a recent partnership announcement with Centene in Oklahoma, we had the chance to sit down with CEO and co-founder Mike Suiters to talk about challenging a standard of care in behavioral health, managing similar outcomes at dramatically lower costs, and the relative merits of being first mover in an environment that’s friendlier to later entrants. 

Questions

1. When we hear about therapeutic approaches for children with autism, we often hear about Applied Behavior Analysis (ABA). When a child is diagnosed with Autism Spectrum Disorder (ASD), what are the options they have for therapy? Why has ABA historically been the default choice?

2. Positive Development uses a different framework, developmental therapy, which has a distinct care model and philosophy from ABA. Can you explain the main differences in terms of approach, practitioners, and costs? Are there specific demographics, acuities, or co-morbidities that benefit from one approach over the other?

3. What does access and network adequacy look like today? Are children who need therapy mostly able to access it? How can access challenges for families be best addressed? 

4. One of the things we heard on payer earnings calls this past quarter was that behavioral health costs were driving an elevated medical spending in Medicaid. Centene specifically called out ABA “as an accelerating pressure point across a number of markets.” From your perspective, what are the biggest drivers of these cost increases in ABA? 

5. State budgets are generally in a pretty fragile place right now, and Medicaid budgets specifically will continue to be stretched tightly due to recently passed legislation. We read a recent article in Behavioral Health Business about Nebraska, which appears to be trying to manage a 1,747% cost increase between 2020 and 2024 via pretty drastic rate cuts. How are you seeing states and payers try to manage these costs?

6. In your recent fundraising announcement, Positive Development cites “outcomes at 50%+ lower cost than traditional ABA therapy”. That’s an impressive comparison, especially given how much ABA costs have increased for payers. Can you talk about how you’re able to achieve such dramatically lower costs while maintaining quality for your patients? What specifically is driving cost savings? 

7. A challenge in behavioral health is agreeing on a definition of success from a clinical perspective. How do you think about measuring success from a clinical perspective, and how does that differ from ABA? Should we think of outcomes in terms of clinical milestones, school performance, long-term independent care, or something else?

8. You have a background in value-based care at Evolent. I’m curious to hear how you think about fee-for-service and value-based care in behavioral health generally and therapy for ASD specifically. How are your contracts with payers structured today? Is there room or appetite for anything beyond FFS, like bundled payments? Do you see value-based care as a key part of your model? How are you structuring contracts today to get alignment? 

9. What’s your framework for thinking about new market entry?  What are the factors that make a region or state attractive for you, and tactically, how do you spin up a new Positive Development location?

10. I would imagine you need to do a lot of education as part of your go-to-market motion, given the ubiquity of ABA. Can you talk about how you approach that? How do patients come to Positive Development? How do you think about partnerships with schools and community-based organizations?

11. In addition to building the clinical network, you’re also building a tech platform. What role does the tech stack play in your care model? Is it more of an operating leverage advantage, where it helps your providers see more patients more efficiently, or clinical decision support or documentation and evidence for payers? Can you give us your rationale for employing therapists directly versus something more asset-light like a Managed Services Organization?

12. Private equity has made significant investments in Applied Behavior Analysis over the past decade. This has drawn some criticism along standard lines, that PE firms are buying out practices and retaining profits themselves that could be reinvested in patient care. What’s your view on the impact of private equity being so active in this market broadly?

13. A concept that I heard a few years ago from a healthcare investor that has stuck with me is that being a first mover in healthcare innovation can actually be a disadvantage for a business. The reason is that you end up burning through cash building market awareness of a new model, which is inefficient compared to fast follower models that can ride the wave of momentum the first mover makes. In the case of Positive Development, it seems like you are a first mover for developmental therapy for autism care and need to educate MCOs and states on this as an alternative to ABA therapy. How do you process that dynamic and think about building a market in a way that potentially invites competition to come in and execute a similar playbook more efficiently?

14. When we first chatted, you mentioned that ABA coverage is so ubiquitous because it was the first to get high-quality research showing it was effective. From your vantage point, are there other examples in health care that rhyme with this, where you see something that maybe isn’t optimal from a cost or therapeutic perspective but has stuck around and is now ripe for a Positive Development style disruption?

15. As Positive Development grows in the market and people become more aware of developmental therapy as an alternative to ABA therapy, how do you see the market evolving? Presumably, ABA therapy will be right for some, while developmental therapy will be right for others. Is there a split you’re hoping to reach over time? What does success look like to you? 

Interview

Q: When we hear about therapeutic approaches for children with autism, we often hear about Applied Behavior Analysis (ABA). When a child is diagnosed with Autism Spectrum Disorder (ASD), what are the options they have for therapy? Why has ABA historically been the default choice?

For most families, treatment options begin and end with in-network providers. Since autism interventions are time-intensive and expensive, few families can afford out-of-pocket costs. Today, ABA is typically the only therapy modality covered as an in-network benefit.

ABA's adoption is relatively recent. Around 2000, Autism Speaks led an incredibly effective lobbying effort to mandate commercial insurance coverage for ASD across all 50 states. The downside? Many mandates were narrowly defined around one intervention – ABA. At that time, ABA was the most well-researched option available.

But a lot has evolved since then - more than 80% of all autism intervention randomized controlled trials (RCTs) have been published after 2010. From 2010-2020, research supporting other approaches – including Developmental Relationship-Based Interventions (DRBIs) – really matured. Given challenges with access, clinical effectiveness, and evolving preferences of families and autistic people themselves, payers and states are rapidly expanding coverage to include all well-researched options.

Several large states (CA, NJ, IL, MN) and many leading commercial and Medicaid insurers are already making this shift and covering DRBIs. The AMA and other leading medical institutions have updated their policies to encourage coverage for developmental interventions as well. Autism is a spectrum, which means treatment should never be one-size-fits-all. It's a multifaceted condition that deserves multiple therapy options for families, especially cost-effective ones.

Back to Questions.

Q: Positive Development uses a different framework, developmental therapy, which has a distinct care model and philosophy from ABA. Can you explain the main differences in terms of approach, practitioners, and costs? Are there specific demographics, acuities, or co-morbidities that benefit from one approach over the other?

At Positive Development, we specialize in Developmental Relationship-Based Interventions (DRBIs). While developmental approaches have been used since the 1970s with thousands of clinicians trained nationally, it’s only now coming into the spotlight from a research and insurance coverage perspective.

From a philosophical standpoint, our approach builds up an autistic child's developmental foundation – the abilities to self-regulate, navigate sensory challenges, and build meaningful relationships. We're very intentional about building trusting relationships with clients and focusing on what a child naturally finds fun and playful. We encourage family participation because stronger relationships accelerate progress.

ABA focuses on skill acquisition using reinforcement. A clinician identifies a skill, creates a situation for the child to use it, prompts the child, and provides positive reinforcement if successful or repeats the prompt if not.

Another critical difference has to do with staffing. We use interdisciplinary teams of licensed speech, occupational, and mental health therapists, plus paraprofessionals – all extensively trained in our developmental approach. ABA typically uses licensed Behavior Analysts supervising teams of paraprofessionals.

Lastly, when it comes to costs, ABA programs require 20-40 hours weekly and can cost upwards of $60,000 annually per child, plus additional costs for speech and occupational therapy. Our typical DRBI care plan consists of 6-8 hours of integrated therapy weekly and costs 50%+ less than comparable ABA programs.

Back to Questions.

Q: What does access and network adequacy look like today? Are children who need therapy mostly able to access it? How can access challenges for families be best addressed?

Our current waitlist is about three months – roughly half the industry average of six months or more. Even that frustrates parents looking for support, and we're working hard to shorten it. Simply put, there are more families seeking services than providers to serve them.

This is particularly problematic because research consistently shows early interventions delivered to toddlers and young children have the greatest impact. Parents feel time is of the essence, yet families are forced to wait. The best solution is increasing the number of high-quality providers in insurance networks.

Back to Questions.

Q: One of the things we heard on payer earnings calls this past quarter was that behavioral health costs were driving an elevated medical spending in Medicaid. Centene specifically called out ABA “as an accelerating pressure point across a number of markets.” From your perspective, what are the biggest drivers of these cost increases in ABA? 

It comes down to four things:

First, ABA is inherently time and cost-intensive. A typical 20-40 hour weekly program costs $60,000- 120,000 annually. This intensity level is core to the clinical model and industry guidelines.

Second, autism prevalence nearly doubled in six years, according to the CDC – from 1 in 59 in 2019 to 1 in 31 this year. More families are seeking services.

Third, stigma around diagnosis and support has thankfully dropped, so more families pursue diagnosis and the funding (and expensive services) it unlocks.

Finally, as private equity capital flooded the space, more dollars became available for marketing and operational performance. As a result, more families are becoming aware of and electing ABA. At the same time, ABA organizations are now able to consistently staff 20-40 hours a week of therapy in a way they couldn’t when their staffing and clinical operations were less mature.

The slide below is from Colorado’s Department of Health Care Policy & Financing and does a good job of summarizing the mounting challenge from the point of view of a state Medicaid program. The states and payers we speak with see no end in sight for the cost growth trend illustrated by these graphs.

Back to Questions.

Q: State budgets are generally in a pretty fragile place right now, and Medicaid budgets specifically will continue to be stretched tightly due to recently passed legislation. We read a recent article in Behavioral Health Business about Nebraska, which appears to be trying to manage a 1,747% cost increase between 2020 and 2024 via pretty drastic rate cuts. How are you seeing states and payers try to manage these costs?

Unfortunately, payers and states often default to rate cuts and utilization management, which face massive resistance and typically gets reversed.

The long-term solution is simple: lean into choice. Providing multiple affordable, covered options could cut costs immensely. We work with payers who believe 50%+ of autism intervention services could eventually be developmental. We are certainly seeing that demand for developmental services among families. At a 50% cost discount, the opportunity represents a 25%+ savings at the population level or tens of millions for smaller payers and hundreds of millions to billions annually for the largest. 

Back to Questions.

Q: In your recent fundraising announcement, Positive Development cites “outcomes at 50%+ lower cost than traditional ABA therapy”. That’s an impressive comparison, especially given how much ABA costs have increased for payers. Can you talk about how you’re able to achieve such dramatically lower costs while maintaining quality for your patients? What specifically is driving cost savings?

I always ask: "Why does ABA require such high intensity to achieve outcomes?" Take preschool, for example, it's often scheduled for half days because kids need time to rest, play, explore, and independently practice what they learn. I know my son comes home from a half day of preschool exhausted! We want kids to practice what they build in therapy during time outside of therapy.

Our model involves fewer highly impactful hours, centered around meeting the child where they are. We typically schedule 6-7 hours weekly for most clients, with a maximum of 12-15 hours for higher support needs (about 5-10% of our population). We also have lower support clients, so our average ends up in the 6-7 hours range. Our clinicians amplify the impact of these hours by emphasizing parent coaching, which empowers families to practice our strategies at home, developing stronger relationships while reducing parent stress.

Lower intensity consistently yields outcomes equal to or better than ABA on broad measures of development and autism symptom severity.

Back to Questions.

Q: A challenge in behavioral health is agreeing on a definition of success from a clinical perspective. How do you think about measuring success from a clinical perspective, and how does that differ from ABA? Should we think of outcomes in terms of clinical milestones, school performance, long-term independent care, or something else?

I want to share a story about my co-founder, John. His son was diagnosed as a toddler, and they tried multiple approaches. John always shares that the hardest part during this stage was that he and his son both longed for a deep father-son connection, but his condition was like a barrier between them that neither had the tools to cross. Then they found developmental approaches, which focus explicitly on helping families build those bridges and the family relationships they always wanted. These relationships within the family became the foundation for his son to build relationships throughout his life, which are, in turn, the foundation for endless lifelong learning and agency.

When I talk to autistic people and their families, everyone discusses relationships and quality of life. Those two things go hand-in-hand. Beyond relationships, it's about understanding and strengthening physical and emotional capacities to better navigate a neurotypical world as a neurodivergent person.

Quantifying this is imperfect, like measuring human development in any context, but that's no excuse not to try. Beyond incredible family stories, we use widely accepted scales like the Vineland Adaptive Behavior Scale and Childhood Autism Rating Scale that measure development and autism symptom severity more broadly.

Back to Questions.

Q: You have a background in value-based care at Evolent. I’m curious to hear how you think about fee-for-service and value-based care in behavioral health generally and therapy for ASD specifically. How are your contracts with payers structured today? Is there room or appetite for anything beyond FFS, like bundled payments? Do you see value-based care as a key part of your model? How are you structuring contracts today to get alignment? 

As a self-identified healthcare nerd, I have been incredibly fortunate to have some very fun jobs in value-based care! From my experience building at Evolent and investing with Sandbox/Blue Venture Fund, I learned to keep it simple. We believe there's a fair way to split the value created by our cost effectiveness, and it's better to align upfront on sustainable pricing for all parties.

Our preferred method is simple value-aligned alternative payment models (APM) like case rates – essentially, monthly rates per member adjusted for case complexity across three tiers. Since behavioral health is in the early stages of value contracting, this aligns with market maturity. If plans prefer, we'll contract fee-for-service and work toward APM. 

Back to Questions.

Q: What’s your framework for thinking about new market entry?  What are the factors that make a region or state attractive for you, and tactically, how do you spin up a new Positive Development location?

Ninety-five percent of the work involves a) securing contracts and b) building a world-class clinical team. Payer contracting is the first priority – we need contracts with regional density, often with Blue or Medicaid plans, since we're predominantly in-person. Then we find high-quality clinicians, sometimes through small acquisitions, other times it’s building from scratch. Many of our senior clinicians and advisors have been trained with the best clinicians across the country, so we are able to use those networks to quickly identify exceptional clinicians to build around.

Back to Questions.

Q: I would imagine you need to do a lot of education as part of your go-to-market motion, given the ubiquity of ABA. Can you talk about how you approach that? How do patients come to Positive Development? How do you think about partnerships with schools and community-based organizations?

Surprisingly, families are far more educated than many healthcare institutions. Ask any parent of an autistic child about the frustrating knowledge gaps in pediatrician offices or schools. They often become experts themselves, and many are well-informed about options beyond ABA.

While we do invest in educating parents, physicians, schools and community organizations about our model, it’s a relatively light investment now, especially because we already operate off a wait list. That list speaks to the appetite that already exists for alternatives among families and referral partners.

Back to Questions.

Q: In addition to building the clinical network, you’re also building a tech platform. What role does the tech stack play in your care model? Is it more of an operating leverage advantage, where it helps your providers see more patients more efficiently, or clinical decision support, or documentation and evidence for payers? Can you give us your rationale for employing therapists directly versus something more asset-light like a Managed Services Organization?

Technology helps us accelerate scale while improving quality and clinician experience. Clinical workflow was our first priority because a standardized workflow is key to quality and scale, and no existing platforms fit our model.

Second, we focused on measuring population-level effectiveness for quality, and because reimbursement will likely depend on proving outcomes. Now we're investing in technology to simplify administrative complexities and speed families from inquiry to ongoing care using automation.

We employ therapists directly because we know some of the activities that are newer to this space – like clinical standardization and rigorous outcomes measurement – will be critical to the long-term success and adoption of DRBI. These are must-haves, not nice-to-haves, and we need to ensure that they are prioritized.

Back to Questions.

Q: Private equity has made significant investments in Applied Behavior Analysis over the past decade. This has drawn some criticism along standard lines, that PE firms are buying out practices and retaining profits themselves that could be reinvested in patient care. What’s your view on the impact of private equity being so active in this market broadly?

There's no doubt more children have access to services because of PE's influence on ABA. PE-enabled technology and infrastructure investments that wouldn't otherwise exist and allowed ABA to scale rapidly. Quality is mixed – some practice owners are highly quality-focused, others aren't. PE firms are similarly a mixed bag.

My main concern has to do with the time commitment. What if 20-40 hours weekly of ABA isn't the right approach for a child? New research questions this intensity, but all sides resist change. Billions in leveraged buyout equity and debt back businesses with projections predicated on 20-40 hours a week of therapy per child. Health plans should expect incredible resistance to rate cuts and utilization management because owners have deep interests in preserving the status quo and deep resources to do it.

Back to Questions.

Q: A concept that I heard a few years ago from a healthcare investor that has stuck with me is that being a first mover in healthcare innovation can actually be a disadvantage for a business. The reason is that you end up burning through cash building market awareness of a new model, which is inefficient compared to fast follower models that can ride the wave of momentum the first mover makes. In the case of Positive Development, it seems like you are a first mover for developmental therapy for autism care and need to educate MCOs and states on this as an alternative to ABA therapy. How do you process that dynamic and think about building a market in a way that potentially invites competition to come in and execute a similar playbook more efficiently?

Most innovative healthcare companies with the largest impact were first movers: Oak Street, One Medical, Hinge, Livongo, Evolent, and many more. We started Positive Development to change the system and make a huge impact for these children and families. I couldn't pursue a fast follower strategy, nor could our team of contrarians and innovators. We're leaders, not followers. Healthcare systems need rebellious energy to fight through inertia and make change.

Operationally, our business is complex. We've invested years building infrastructure, technology, and processes to scale effectively. It might take someone 2-3 years to recreate something like Positive Development at a tremendous expense, while we'd continue growing and investing. They could try, but I don't think they'd catch up.

Back to Questions.

Q: When we first chatted, you mentioned that ABA coverage is so ubiquitous because it was the first to get high-quality research showing it was effective. From your vantage point, are there other examples in health care that rhyme with this, where you see something that maybe isn’t optimal from a cost or therapeutic perspective but has stuck around and is now ripe for a Positive Development style disruption?

There are far too many examples: branded drugs prescribed when generics exist due to prescriber habits; MRI imaging when X-rays are equally effective; overuse of cardiac stents; back or knee surgery when physical therapy might work equally well. The commonality is that provider economics favor the costlier option.

Back to Questions.

Q: As Positive Development grows in the market and people become more aware of developmental therapy as an alternative to ABA therapy, how do you see the market evolving? Presumably, ABA therapy will be right for some, while developmental therapy will be right for others. What does success look like to you? 

Success means no unreasonable wait times for diagnoses or services because there are enough in-network providers to meet demand. We want families to have multiple evidence-based options, allowing them to feel empowered and educated to choose what's best for them.

Eventually, I hope we better understand differential response based on individual differences, leading to more tailored, effective, and cost-effective therapeutic options. We’d hope that a family in any state in the US would have access to Positive Development through their insurer, commercial or Medicaid.

Success also means significant system savings. Serving just 10% of members at half the cost saves 5% population-wide. We believe the majority of children on the spectrum would be ideal DRBI candidates, saving 20%+ relative to current costs. This represents huge savings given the billions spent annually on autism care, with less risk than typical cost-cutting methods like utilization management or rate cuts.

Finally, I hope autistic people themselves have a much larger voice at the table about what constitutes quality and outcomes. Their lived experience should be a huge influence on our decision-making, but unfortunately, today it’s not prioritized nearly enough. Positive Development and other neurodiversity-affirming providers are working to try to change that by honoring and acting on input from autistic self-advocates, and by hiring neurodivergent staff.

Back to Questions.