Mental health operator Acadia Healthcare (Nasdaq: ACHC) made major strides in 2022, adding 600 beds through joint ventures, Mental Health M&A, and the growth of comprehensive treatment centers (CTCs). Headquartered in Franklin, Tennessee, the company has made a strategic push to expand its CTCs, particularly focusing on opioid use disorder treatment, addressing the growing national demand for specialized behavioral health services. In the third quarter alone, Acadia opened two new CTCs and is on track to open six by year-end, marking a significant step in its broader expansion strategy.
“We do have a very strong pipeline of future CTC locations. There’s a significant need and a very low percentage of people that need treatment currently receiving it,” said David Duckworth, Acadia’s CFO, during a Q3 earnings call. “This is a tailwind that will continue to support future CTC de novos. We have a refined and detailed process to identify those markets.” This approach reflects the company’s data-driven methodology for targeting underserved areas, ensuring that new facilities not only expand capacity but also fill critical gaps in behavioral health care access.
Founded in 2005, Acadia has grown into one of the largest pure-play behavioral health operators in the United States. Its portfolio now includes 239 facilities with 10,600 beds across 39 states, spanning inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers, outpatient clinics, and therapeutic school-based programs. To strengthen its operational leadership in CTCs, Acadia appointed Dr. Nasser Khan as operation group president of its CTC business. Khan, who started the role on September 6, brings experience from his previous position as senior vice president of operations at Walgreens Boots Alliance’s Shields Health Solutions. In addition, Acadia added Bill Priest as chief compliance officer and Andrew Lynch as chief strategy officer, reflecting a broader strategy to reinforce leadership capabilities across the organization.
Analysts have responded favorably to Acadia’s ambitious growth plans. Jefferies noted, “[Management] has laid out plans to add 1,000 beds in CY23, boosting bed count by almost 10%, which lays out the base for ACHC’s growth algorithm. Increasing interest from health systems for behavioral hospital JVs, along with further rate growth and margin expansion, should translate to organic EBITDA growth in excess of 10% over the next several years and drive positive earnings surprises.” These projections highlight investor confidence in Acadia’s ability to execute its expansion plans while maintaining operational efficiency and financial stability.
Joint Ventures and Academic Partnerships
Acadia’s growth strategy goes beyond organic expansion and acquisitions—it also leverages joint ventures (JVs) to strengthen both operational and academic capabilities. The company currently has 18 joint ventures nationwide, with a strong pipeline of potential new partnerships nearing announcement. Current partnerships include Henry Ford Health System, Tufts Medicine, Covenant Health, and Thomas Jefferson University.
CEO Christopher Hunter emphasized the role of these JVs in supporting workforce development, particularly in addressing the clinician shortage that affects roughly 130 million Americans. “We continue to find ways in many different markets to improve the training of future clinicians and play whatever role we can play in that, which we believe will help the industry and Acadia over the long term,” Hunter said. These academic partnerships are designed to ensure that the growing demand for behavioral health services is met not only through additional beds and facilities but also through a robust and sustainable pipeline of trained professionals.
Mental Health M&A: Driving Strategic Expansion
Acadia’s acquisition strategy, often referred to as Mental Health M&A, is another key growth driver. In January 2022, the company acquired CenterPointe Behavioral Health System, a Missouri-based provider with 260 acute care beds, 46 specialty beds for substance use disorder, and 10 outpatient locations. Additionally, in 2021, Acadia purchased the real estate of three non-operational facilities in Chicago, signaling its intent to maintain strategic flexibility in market expansion.
Despite macroeconomic headwinds such as rising debt costs, Acadia plans to continue pursuing Mental Health M&A opportunities. “Given our strong balance sheet and the fragmentation of this market, there are many smaller players that will look to a partner over the next several years,” Hunter said. Behavioral health M&A has been growing rapidly, fueled in part by the acceleration of value-based care and alternative payment models, with the COVID-19 pandemic further jump-starting dealmaking.
Industry experts predict that Mental Health M&A activity will remain robust into 2023, as larger operators like Acadia consolidate fragmented markets and expand access to care. While private equity buyers may adopt a more cautious approach due to economic uncertainty, Acadia’s position as a leading operator allows it to remain competitive in acquiring high-value targets. By combining strategic Mental Health M&A with CTC development and joint ventures, Acadia strengthens both its operational footprint and clinical capabilities.
Financial Performance and Reimbursement Gains
Acadia reported $666.7 million in revenue in 2022, marking a 13.5% increase year over year. Revenue per patient day rose 6.9%, while patient days increased 3.1%. A significant driver of these gains has been improved reimbursement rates, a long-standing challenge for behavioral health providers. Duckworth noted, “The key driver for our revenue per day growth is pay-rate increases we’re seeing broadly across our service lines, markets, and payers.” Medicaid accounts for roughly 50% of Acadia’s business, and the company has already observed positive rate adjustments in many markets, which may continue to increase in response to inflationary pressures.
These financial improvements, coupled with strategic expansions, position Acadia Healthcare to continue its leadership in behavioral health services. By combining CTC growth, joint ventures, and targeted Mental Health M&A, the company is addressing both the supply and workforce gaps in mental health and substance use treatment across the U.S.
Looking Ahead
Acadia Healthcare’s growth trajectory signals a strong commitment to meeting the nation’s rising behavioral health needs. With plans to open additional CTCs, strengthen academic partnerships, and pursue targeted Mental Health M&A opportunities, the company is well-positioned to expand access to care, improve clinical outcomes, and maintain sustainable financial growth. The combination of operational expertise, strategic leadership appointments, and investment in workforce development ensures that Acadia is not only growing in size but also in its capacity to provide high-quality, comprehensive behavioral health care to communities across the country.
