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IDD Industry Trends to Watch in 2023

From rate increases to new services, a look at the trends that will shape the IDD industry in the coming year.

The IDD industry is constantly evolving, from discovering better methods of delivering services to experimenting with new funding models.  

 

Many of these changes happen gradually over the course of several years as providers and funders gather data on how the changes impact client outcomes.  

 

As such, many of the trends on our list this year are an extension of what we reported on last year — but with some new twists for 2023: 

1. The staffing crisis will continue.

Staffing shortages are not a new phenomenon; in fact, in 2022, ANCOR found that 83% of providers turned away new referrals and 63% discontinued programs and services last year due to a lack of staff. But many believe that today’s staffing shortages are worse than in the past and are likely to persist beyond 2023.  

 

Indeed, many of the agencies we talk to view the staffing crisis as the new norm, and are working to adapt accordingly. For example, some agencies have begun experimenting with alternative scheduling strategies to ease their staffing woes. Meanwhile, others are focused on cultivating a strong brand and company culture to make their workplace more appealing to potential employees 

2. M&A activity is on the rise.

To reduce administrative overhead, larger agencies are buying smaller agencies and smaller agencies are combining to become larger entities. This is something we predicted last year, based on the uptick in mergers and acquisitions (M&A) activity we were seeing at the time.  

 

In 2023, M&A will continue to pick up steam, with more money flowing into the industry from private equity firms. Deals will be focused not just on acquiring agencies, but software vendors as well. This could be worth noting for any organization evaluating software to consider asking about the vendor’s long-term plans. 

3. There’s a changing of the guard at IDD agencies.

Along with the inevitable restructuring that comes with M&A activity, we’re seeing a changing of the guard at IDD agencies and across the workforce with older executives retiring and younger people stepping in to fill those roles. These younger generations have different values and viewpoints than previous generations, and with that can come operational ethos changes.  

 

We’re seeing new leaders who aren’t afraid to shake things up, and they’re embracing innovative approaches to service delivery that will change how individuals with disabilities receive support for years to come. They’re also rethinking their workforce models, offering perks like on-demand pay and more flexible working hours that will help them attract the next wave of workers. 

4. Legislative advocacy efforts will move the needle on reimbursement rates.

Last year, we predicted that some states and services would see much-needed increases in reimbursement rates. We believe this trend will continue into 2023 — thanks to the tireless advocacy efforts of providers across the country.  

 

In Washington state, for example, the Community Employment Alliance is advocating for a rate increase to stabilize the workforce. As part of this initiative, the state conducted a time study to gather current costs of delivering employment and community inclusion services. Data from the study supports significant rate increases for both employment and community inclusion services. On a larger scale, their efforts offer a model that providers in other states can learn from and replicate to get increases in their states as well. 

5. Competition among agencies is leading to more creative service offerings.

Over the past few years, we’ve seen more states embracing consumer-directed service models. These models give individuals with disabilities and their families more freedom and control in choosing their services. They also create a more competitive marketplace — one that is based less on referrals, and more on the value providers deliver.  

 

As a result, agencies are increasingly looking for ways to differentiate themselves from their competitors. For some, this means investing in branding and advertising to highlight their unique characteristics and attract new clients.  For others, it means diversifying their service menus and offering more nontraditional options like social enterprises that help them stand out from other providers.  

6. Software adoption will grow across a broader range of programs.

As predicted in 2022, we’ve seen widespread adoption of IDD and disability service software across employment and community services especially. Going forward, we are expecting to see a more diverse range of providers adopt digital tools to help them streamline service delivery and documentation.  

 

This includes university- and college-based programs that provide services to individuals or consult with provider agencies. Likewise, it also includes school districts that need to manage information related to transition services.

Stay tuned

As the year ahead unfolds, we’ll keep an eye on these trends to see how they evolve. Be sure to subscribe to our blog for updates on these and other developments in the industry.  

 

Now over to you: What are your predictions for the upcoming year? What new ideas or changes are you considering in 2023? Let us know on Facebook or LinkedIn! 

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