Acadia CEO breaks down strategy: Focus on joint ventures, expansion of existing facilities
Acadia Healthcare (Nasdaq:ACHC) will prioritize joint ventures as it seeks to double revenue.
The Tennessee-based behavioral health giant also plans to build de novo facilities and add beds to existing facilities, CEO Chris Hunter and CFO David Duckworth said at the J.P. Morgan Healthcare Conference yesterday.
Acadia Healthcare previously developed its value proposition and Ambitious five-year plans On Investor Day in December.
Aside from de novo and existing facility expansions, Duckworth described other planned efforts as “additional” to its revenue and profit forecasts when compared to joint ventures and expansion of its existing facility base. He also emphasized that Acadia Healthcare does not need mergers and acquisitions to grow and that acquisitions must meet ideal conditions.
“We have a very strong balance sheet. But we also have the ability to discipline M&A knowing we have these different ways to grow,” Duckworth said. “We can really be selective and look for the right M&A opportunity with the right valuation and the right return for the company.
“And we can compare that to what we can do with these other growth paths.”
In addition to increasing the company’s presence, it intends to enrich its service lines and increase significant investments in its technology.
“There are very few parts of the health care industry today that still have the level of paper that we still see in the behavioral health industry,” Hunter said. “There is still a real shortage of electronic medical records and analytics in our industry that has not been taken advantage of to the extent that you see in other parts of healthcare and the broader economy.”
Acadia works with health systems
Hunter also highlighted the “immature” and “fragmented” nature of the behavioral health industry as an opportunity for Acadia Healthcare.
Duckworth said hospital systems have recognized the exponential increase in demand for behavioral health that is being driven by COVID-19. The systems are also concerned with increasing the integration between behavioral health and physical health.
“They just didn’t have the right place,” said Duckworth. “They may have a unit in the hospital that is dedicated to behavioral health.
“But they haven’t historically had this more modern, more therapeutically appropriate facility to provide that treatment and that’s what we’re building with our partners.”
Duckworth said Acadia Healthcare hopes to partner with “strong, reputable partners” in several markets. The company has identified 100 metro stations that do not have enough behavioral health beds as potential expansion sites.
The company opened 9 out of 18 joint facilities that announced.
On the expansion side of the facility itself, Acadia Healthcare has a clearer path to return on investment. It is a strong opportunity for the company due to the strong infrastructure, local knowledge and relationships at the local level.
“This is the company’s highest return opportunity because we have an existing process that we can leverage,” Duckworth said.
The United States suffers from a shortage of psychiatric beds. Part of that crisis resulted from Medicaid’s refusal to cover mental health services in mental facilities. Some investors, developers and operators Hoping to enter the void Left behind are the state psychiatric hospitals that once defined how the United States cared for the mentally ill and disabled.
Over the course of a few years, healthcare real estate investment trusts (REITs) She appeared as another partner To support the development of a behavioral health facility.