Inside the New $65M Joint Venture Between Acadia Healthcare, Tufts Medicine

Tufts Medicine is teaming up with behavioral health provider Acadia Healthcare Company (Nasdaq: ACHC) on a new joint venture. The goal: to build a 144-bed behavioral health hospital in Massachusetts.

The new facility will be built on the site of Malden Hospital, a community hospital that closed its doors in 1999. As part of the joint venture, Tufts and Acadia will invest more than $65 million in building behavioral health resources in the Boston area.

The hospital, which emerged out of the rising need for behavioral health facilities, will include intensive outpatient services, adult inpatient services and pediatric inpatient services.


This news comes at a time when there is a large shortage of pediatric mental health providers in the U.S. According to the CDC, 1 in 5 children have an emotional or behavioral disorder. However, only 20% of those patients will receive care from a specialized mental health care provider.

“We have seen prior to COVID, and through COVID, just increasing numbers of people that are waiting in emergency departments for beds,” David Storto, Tufts Medicine’s chief strategy and growth officer, told Behavioral Health Business. “We have, for some time, evaluated different opportunities to use a site that used to have the Malden hospital as a community hospital.”

This new venture is a long time in the making. Talks between Tufts and Acadia began before the pandemic, but the surge of COVID-19 put the behavioral health hospital on the back burner.


“So we picked it back up a little less than a year ago to try to see if we could structure a relationship,” Storto said.

Putting a behavioral health hospital in a residential neighborhood, though, came with its own set of challenges.

“We were very mindful going into it that building a behavioral health facility in a residential community was going to probably result in some level of anxiety,” Storto said. “And so we’ve really started to work very, very closely with the coalition of our public officials.”

This list of officials include the mayor of Malden, state senators and city councilors.

Storto noted that the public officials have been a champion in moving the project forward.

Still, there is some work to be done around local and state permitting before the venture can break ground on the new project. Storto said that the JV partners are estimating that they can begin building in six months. Razing the existing building will be the first step in the construction process.

The JV structure

Acadia will be the managing organization of the new facility. Tufts will be the minority shareholder.

Even so, the joint venture will have a 50/50 governance structure. This means that half of the board of director seats will be allocated to Tufts and the other half to Acadia.

“[Acadia] has a national presence and has a lot of expertise,” Storto said. “They have another relationship in Massachusetts with Southcoast Health that we were able to spend some time with to really see, touch and feel the experience there. We were very impressed with the physical structure they built the program there, and the continuity of leadership, with the provider staff.”

This is Acadia’s 17th joint venture partnership. The publicly traded behavioral health provider currently operates a network of 238 behavioral health care facilities in 40 states and Puerto Rico.

“We’re really impressed that they’re serving a lot of the involuntary population,” Storto said. “And basically, open to all payers and a significant need obviously exists amongst the MassHealth population. And so we’re really pleased that we’ll be able to provide that kind of access.”

Boston-based Tufts Medicine serves 1.5 million patients a year and already has inpatient and outpatient behavioral health programs at existing locations.

This new behavioral health facility will serve as a teaching hospital for students and residents from Tufts University School of Medicine.

“As we have proven in operating our joint ventures, we will bring the best practices of both organizations and expand access to quality behavioral healthcare services providing healing and hope to those in need in the surrounding communities,” Chris Hunter, CEO of Acadia Healthcare, said in a statement. “We will continue to partner with leading health systems to combat the mental health care and substance use crises across our country.”

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