Acadia Healthcare Co. Inc. (Nasdaq: ACHC) will continue its steady growth as behavioral health patient acuity increases.

On Wednesday, Acadia Healthcare CEO Chris Hunter and outgoing CFO David Duckworth described the company’s expansion plans during an appearance at the 2023 Jefferies Global Healthcare Conference. In short, Franklin, Tennessee-based Acadia, has positioned itself as a key partner to leading hospital systems struggling to meet behavioral health demands.

“Those that are coming to us for behavioral health treatment are increasingly sicker and sicker,” Hunter said. “More key health systems are coming to us with the recognition that this (behavioral health) is all we do.

“As they are frequently struggling to get some of these patients out of their ERs and to treat them with the highest quality care, they’re increasingly looking for a partner.”

Hunter also said that the organization’s occupancy rates are “strong.” Tailwinds from the COVID-19 pandemic, as well as destigmatization and continued drug use crises as demand drivers, he noted.

Acadia Healthcare claims to be the largest pure-play behavioral health provider in the U.S. It operates 250 behavioral healthcare facilities in 39 states and employs about 23,000 people. It provides inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers and outpatient clinics.

The company has announced 19 joint ventures in recent years and continues to add more to the pipeline, Hunter said. On May 31, Acadia Healthcare and Salt Lake City-based Intermountain Health held a groundbreaking for West Pines Behavioral Hospital, a new 144-bed inpatient behavioral health hospital in Westminster, Colorado.

“That has been just a fantastic way for us to deploy capital, but it takes a little bit of time,” Hunter said. “These are definitive agreements that we’ve signed. So we do have visibility.”

Using West Pines Behavioral Hospital as an example, Acadia Healthcare signed its agreement with Intermountain Health over a year ago, Hunter said.

“There’s just a longer lifespan on the JVs,” he added.

On top of the strong JV pipeline, the company is prioritizing same-facility bed expansion as part of its quest to double revenue and grow to 14,000 beds by the end of 2028. The company presently operates about 11,100 beds. It has also not ruled out strategic M&A.

Acadia Healthcare has also secured steady rate increases from its payer partners. Duckworth said the company, on average, gets mid-single-digit percentage increases in the past. This is the right target for the company going forward. However, specific rate increase targets vary by payer and by market.

He also pointed to patient demand and increasing interest in behavioral health on the part of payers as drivers of rate increases.