Acadia Healthcare Company Inc., a leading provider of behavioral health services in the U.S., is entering 2022 with bold momentum and a clear mission: expand access to care through large-scale facility growth. With demand for mental health and substance use treatment at an all-time high, the Franklin, Tennessee-based company is launching aggressive behavioral health expansion plans that will add hundreds of new beds and facilities to underserved markets nationwide.
In 2022 alone, Acadia intends to add 600 new beds. That number is projected to climb to between 600 and 1,100 new beds per year in both 2023 and 2024. This surge follows a highly productive 2021, during which the company expanded by 681 beds through a mix of acquisitions, joint ventures, de novo facility development, and existing site expansions.
Strategic Growth Backed by Strong Financials
Acadia’s expansion efforts are fueled by solid financial performance. In 2021, the company posted $2.3 billion in revenue and turned a $669 million loss from 2020 into $190.6 million in net income. Although annual earnings per share (EPS) came in at $2.10—below analyst estimates of $2.59—investors responded positively to the company’s growth strategy, pushing its stock up 5.4% to $62.14.
CEO Debbie Osteen emphasized that rising national demand for behavioral health services—largely driven by the ongoing mental health fallout from COVID-19—is validating Acadia’s behavioral health expansion plans. “This pandemic has pushed the need for mental health and substance use treatment to the forefront,” said Osteen. “We are encouraged by the favorable trends in our business and believe we are well-positioned to capitalize on the expected growth.”
A Multi-Pronged Expansion Strategy
Acadia is taking a multi-channel approach to growth. According to CFO David Duckworth, expanding existing facilities is one of the most efficient and profitable routes to scale. In 2022 and through 2024, the company plans to add 300 new beds annually by expanding its current facilities—an integral component of its behavioral health expansion plans.
In addition to internal growth, Acadia is actively evaluating more than 100 underserved U.S. markets for de novo development. Not every market will meet the company’s criteria, which include favorable reimbursement rates, staffing availability, and manageable construction costs. However, several high-need areas are already slated for development, including a 60-bed children’s hospital in Chicago and an 80-bed facility in Indio, California.
Each year through 2024, Acadia anticipates opening two new inpatient hospitals and between six to ten new comprehensive treatment centers—further strengthening its outpatient services and network of care.
Expanding Through Joint Ventures and M&A
Acadia’s behavioral health expansion plans also rely heavily on joint ventures and mergers. In the fourth quarter of 2021 alone, the company completed the acquisition of CenterPointe Behavioral Health System, Missouri’s largest dedicated behavioral health provider. It also launched three new joint ventures and acquired three non-operational facilities in Chicago, which will be redeveloped into the Montrose Behavioral Health Hospital.
Duckworth highlighted that joint ventures allow Acadia to quickly gain market access and benefit from partners’ existing payer relationships and community reputation. In 2022, the company has two joint ventures slated to open, with expectations to increase that number to four or five per year in 2023 and 2024.
“These ventures are a core part of our behavioral health expansion plans because they open doors we might not otherwise have access to,” Duckworth noted.
Managing Labor While Scaling Operations
Even as the company scales rapidly, it remains focused on its workforce. Acadia has centralized its recruitment processes and uses real-time data to identify staffing needs across its portfolio. Although the Omicron surge made onboarding more difficult in late 2021 and early 2022, the company reports stable staffing levels overall.
Osteen credited the company’s employee retention efforts, which address financial compensation, scheduling flexibility, and work environment, as critical to keeping staff engaged during a challenging period for healthcare workers. “The team has done a very good job of managing labor challenges without restricting our growth,” she said.
Despite labor-related cost pressures—such as premium pay and sick leave—Acadia continues to prioritize hiring and workforce stability as a key enabler of its behavioral health expansion plans.
Leadership Transition and Future Outlook
As Acadia enters this new phase of growth, leadership transitions are also underway. CEO Debbie Osteen, who announced her retirement in late 2021, will remain on through March 2022 to support a smooth transition. The company has not yet named her successor but expects to make an announcement soon following a selective search process.
Looking ahead, Acadia expects to increase earnings before interest, taxes, depreciation, and amortization (EBITDA) by 10% annually for the next several years—another signal of confidence in the success of its behavioral health expansion plans.
With a diverse and scalable strategy that includes de novo facilities, joint ventures, and strategic acquisitions, Acadia Healthcare is positioning itself as a national leader in behavioral health access. As the demand for psychiatric and addiction care continues to grow, Acadia’s multi-faceted model may serve as a blueprint for how to scale behavioral healthcare effectively in a post-pandemic world.
