Acadia Healthcare (Nasdaq: ACHC) is a well-known leader in inpatient behavioral health care, operating a broad network of hospitals and treatment centers across the United States. However, the company is now pursuing a significant strategic expansion beyond inpatient services by growing its intensive outpatient programs (IOPs) and partial hospitalization programs (PHPs). This move reflects a broader industry trend recognizing the critical role that behavioral health step-down care plays in providing comprehensive, flexible, and patient-centered behavioral health treatment.
Expanding the Continuum of Care with Behavioral Health Step-Down Care Services
Traditionally, behavioral health treatment has been segmented into inpatient hospitalization for acute crises and outpatient services for less intensive needs. Acadia’s recent focus on expanding IOP and PHP offerings reflects the importance of intermediate care levels that serve as bridges between these extremes. Intensive outpatient programs and partial hospitalization programs provide structured, clinically intensive care while allowing patients to live at home or in community settings, thus improving recovery continuity and reducing relapse risk.
In 2023 alone, Acadia added 13 new IOP and PHP programs to its portfolio, significantly expanding its behavioral health step-down care offerings. This growth is significant, but CEO Christopher Hunter notes that the potential is far greater. Speaking on the company’s fourth-quarter earnings call, Hunter highlighted that many patients discharged from inpatient care could benefit from transitioning into behavioral health step-down care programs but currently do not. This “white space” represents a large opportunity for Acadia to expand its reach and improve outcomes for more patients.
Hunter emphasized, “The majority of our acute and specialty patients can clinically benefit from these programs as they offer a behavioral health step-down care level after discharge from a high acuity stay, but also enable patients to step up again in acuity as their needs change.” This flexibility is key — these programs not only smooth the path toward recovery but provide a safety net to quickly escalate care when needed, which enhances both clinical effectiveness and the patient experience.
Financial Performance Reflects Successful Execution and Growth
Acadia’s commitment to diversifying services and expanding access to behavioral health step-down care is reflected in its strong financial results. In the fourth quarter of 2023, the company reported total revenues of $742.8 million, a 10% increase over the same period in 2022. Same-facility revenue—a key metric measuring performance of existing assets—grew by 10.3%, demonstrating that both expansion and organic growth are fueling results.
For the full year, Acadia posted a 12% increase in revenue and 13% growth in adjusted EBITA (earnings before interest, taxes, and amortization), showcasing not only top-line expansion but improving profitability. These figures underline the company’s ability to execute its strategic plan effectively while adapting to a dynamic market.
Investment banking firm Stephens noted, “ACHC produced solid results in 4Q23 and continues to execute on its long-term strategic expansion plan, driving same-facility revenue growth of +10% and core adjusted EBITDA growth of +12% from 4Q22, excluding items.” Such analyst endorsements underscore growing investor confidence in Acadia’s multi-pronged growth strategy.
Tackling Workforce Challenges with Training and Technology
Like many healthcare providers, Acadia has faced workforce challenges amid labor market fluctuations and rising wage pressures. However, the company has made meaningful progress in controlling wage inflation. Hunter shared that wage inflation, which peaked at 8% in Q4 2022, fell to 5% in Q4 2023—a substantial 300 basis point improvement.
This improvement is attributable not only to market factors but to deliberate organizational initiatives. Acadia has invested in comprehensive clinical training programs aimed at enhancing staff skills and job satisfaction. Simultaneously, the company has deployed new technologies designed to streamline workflows, reduce administrative burdens, and improve employee retention.
A cornerstone of this technological investment is Acadia’s implementation of an electronic health record (EHR) system. Hunter highlighted the benefits: “The EHR has contributed to improved employee satisfaction and workflow efficiencies, which have helped with retention.” Beyond immediate operational advantages, the EHR is a critical enabler for Acadia’s long-term clinical goals. It facilitates measurement-based care, an approach that leverages standardized data to assess patient progress and outcomes objectively.
“These investments in our core infrastructure, combined with the EMR and patient care technology, provide access to better data to measure outcomes and provide a framework for value-based care,” Hunter said. By tracking outcomes more precisely, Acadia is positioning itself to align more closely with payers who increasingly reward quality and cost-effectiveness rather than volume of services.
Opioid Use Disorder Treatment: A Major Growth Driver Amid a National Crisis
Another significant area of growth for Acadia is its comprehensive treatment center (CTC) business line, which primarily focuses on patients suffering from opioid use disorder (OUD). The opioid epidemic remains one of the most urgent public health crises in the U.S., with approximately 9 million Americans misusing opioids annually.
Acadia’s CTCs demonstrated impressive performance, with revenue growing nearly 20% in Q4 2023. The company opened six new centers in 2023 and plans to launch an additional 14 in 2024, signaling a strong commitment to expanding access to evidence-based OUD treatment.
Hunter acknowledged the complexity and evolving nature of the epidemic, describing what experts now term the “fourth wave” of opioid misuse. “Drug users have evolved from prescription opioids to heroin, fentanyl, and now to poly-substance use, where fentanyl is combined with drugs such as cocaine and methamphetamine,” he said. This evolving pattern requires comprehensive, adaptable treatment approaches, which Acadia aims to deliver through its expanding network of CTCs.
Looking Forward: A Holistic, Data-Driven Behavioral Health Step-Down Care Strategy
Acadia Healthcare’s 2023 results and strategic announcements reveal a company focused on diversification, innovation, and meeting patient needs at every step of the behavioral health journey. By expanding behavioral health step-down care services like IOPs and PHPs, Acadia is filling critical gaps in care transitions, improving patient outcomes and satisfaction.
At the same time, investments in workforce development and technology such as EHR systems enhance operational efficiency and support value-based care models, positioning Acadia for sustainable growth in an increasingly complex healthcare environment.
Finally, the rapid expansion of opioid use disorder treatment centers reflects Acadia’s commitment to addressing one of the nation’s most devastating public health emergencies. This comprehensive, multi-layered approach underscores Acadia’s mission to provide high-quality, accessible behavioral health care across the full spectrum of patient needs.
As the behavioral health landscape continues to evolve, Acadia’s strategic moves position it well to lead in both clinical excellence and business performance — delivering better care for patients while generating strong returns for investors.
