Acadia Healthcare Co.’s new CEO Chris Hunter plans to stay the course with the company’s targets of facility expansion and serving underserved markets.
“My goal is to build upon our strong momentum and extend our market reach to more patients and communities,” Hunter said during Acadia’s Q1 earnings call. “We will continue to execute on our strategic growth plans, as we address the unmet needs that exist across all service lines.”
This earnings call comes just three weeks after Hunter took over for former CEO Debbie Osteen.
Hunter said he plans to continue to build on the company’s main strategies including facility expansion efforts, growing its reach in underserved markets, building more comprehensive treatment centers (CTC) for opioid use disorder treatment and growing through M&A.
In total Hunter said the company plans to add 600 beds by the end of 2022 expanding bed capacity to existing facilities, opening new inpatient facilities, adding two new facilities with joint venture (JV) partners and at least six new CTC locations.
The company’s total revenue for Q1 was $616.7 million, an 11.9% increase from 2021’s Q1. The company’s EBITDA also increased year-over-year. In Q1 2022, the company announced an adjusted EBITA of $135.5 million, compared to $119.5 million in Q1 of 2021. During the company’s earnings call Hunter affirmed the company’s initial 2022 guidance of $2.55 billion to $2.6 billion.
“[I’ve] spoken to the board about the ability to grow the company, the strategic levers that we clearly have in front of us, and just how positioned we are with real tailwinds from a demand standpoint across all four of our lines of business,” Hunter said.
Looking to digital for the future
Hunter noted that he is open to incorporating more digital tools into the company’s arsenal in the future.
“I would say that I would like to see the behavioral sector, overall, probably embrace technology and digitization and take advantage of cost, benefits, and efficiencies and even revenue enhancements, and other ways to just further and enhance our platform,” he said. “But it’s really building off a base of foundational strength.”
Hunter, who previously served as the president of the employer group and military segment at Humana, is no stranger to digital health. He was previously president of TriZetto, a Denver-based health IT services firm and currently serves on the board of directors for AfterNext HealthTech, according to his LinkedIn.
While there may be more digital tools in the future, Hunter noted that digital won’t replace in-person care.
“[W]hile we don’t think it will ultimately be a replacement for our inpatient care, I think there will be an opportunity for us to continue to look at innovation and to potentially even think through whether it makes sense to partner in certain instances as well,” he said. “But any opportunity to leverage technology for the benefit of improving our health outcomes is something we would take a look at.”
Acadia sees an increase in revenue per patient day
This quarter Acadia saw an increase in revenue per patient day of 6.2% and an increase in the number of patient days by 2.2%. Commercial payers are a large part of that increase.
“We have a team that maintains a close and collaborative relationship with our commercial and our other managed care payers, and have worked with them very well at a local level and at a corporate level on those rate increases,” David Duckworth, CFO of Acadia said.
Currently the company is talking to commercial payers ahead of its annual rate increases. During these discussions Acadia is discussing the value they bring to payers.
“We’re talking to them about the value that we bring, the programs that we design for their members, and the investments that we make and the cost increases that we’ve seen in the services we provide,” Duckworth said. “So commercial has been — and we’re over 90% in-network across our commercial payers where we have long-standing collaborative relationships and commercial has been a source of good rate increases.
The company expects that CMS will lag behind commercial payers in increase.
“Our view is that it may take longer across all of our Medicaid and certainly Medicare to receive appropriate rate increases,” Duckworth said. “We’ve certainly seen a good environment for Medicaid in general, but the process can look different from one state to another.”