Despite the growing popularity of outpatient care within the behavioral health industry, Acadia Healthcare (Nasdaq: ACHC) remains bullish about the acute care setting.
As Acadia’s largest services line, acute care accounts for about 47% of the behavioral health giant’s US revenue. And it seems demand and opportunities in the acute care space are only on the rise.
“Most of our new facilities and joint ventures have been in the acute service line,” Chief Financial Officer David Duckworth said. “And then even the [recent] bed additions to existing facilities have been more heavily weighted toward the acute service line. That’s a function of the demand and the opportunities that we see in our existing markets and in new markets.”
Duckworth made those comments Wednesday during Acadia’s presentation at the Credit Suisse 29th Annual Virtual Healthcare Conference.
Headquartered in Franklin, Tennessee, Acadia operates 582 facilities across 40 states, the United Kingdom and Puerto Rico. Its locations include inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers and outpatient clinics.
During the presentation, Duckworth highlighted the company’s 5% to 7% revenue growth target, which Acadia has consistently hit and expects to continue achieving. Acadia’s acute care service line is largely to thank, Duckworth said.
“Volume growth has been more in the acute [service line,]” he said. “Because of that, acute does tend to have a higher overall revenue growth.”
Overall, Acadia’s volume growth has been especially impressive as of late. Despite the pandemic, company leaders saw record-setting patient counts last month, which leaders highlighted recently on Acadia’s Q3 2020 earnings call.
“We actually hit the highest census in the history of Acadia in October,” CEO Debbie Osteen said, speaking about the company’s U.S. facilities specifically.
She attributed the growth to Acadia’s addition of hundreds of new US beds this year, as well as its ongoing joint venture strategy and de novo facility growth. In all three cases, growth has been more heavily weighted toward the acute service line. Still, all of Acadia’s services lines are helping propel the company forward into 2021.
“We believe — because of the strong demand trends and the fact that we have such diversity in the service lines — that this [high census trend] is going to continue into 2021,” Osteen said on the call.
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