Acadia Healthcare, the nation's largest, for-profit owner of psychiatric hospitals, is embarking on a strategy of joint venturing with not-for-profit hospital systems to open psychiatric beds.
The location currently houses Ochsner's River Parishes' Emergency Room, the site of a former LifePoint Health hospital that Ochsner acquired. Ochsner intends to move the free-standing emergency room to a new nearby site, and Acadia will refurbish the building for the psychiatric hospital, the companies said in a release.
New Orleans is “radically under-bedded” for psychiatric patients, creating long wait lists for care in the area, said Acadia CEO Joey Jacobs. The hospital is expected to open in 2018.
It's a situation that has been spotlighted in many markets as public awareness of mental health issues increases, said Rod Laughlin, a founder and former CEO of Acadia who is now building his own chain of psychiatric hospitals, Perimeter Healthcare.
Ochsner is Louisiana's largest health system with 28 hospitals. The LaPlace hospital with Acadia is expected to cost about $18 million, according to a story at theadvocate.com.
At the Baird 2016 Global Health Conference last week, Acadia President Brent Turner said Acadia is getting interest from not-for-profit hospital systems in jointly developing psychiatric hospitals and units that take specialized management to run.
After launching the initiative in recent months, Acadia has two such joint-venture hospitals and two more “in the works,” Turner said.
The attraction for the not-for-profits is that they treat many people with mental disorders in their emergency rooms but have to refer the patients out of their system if they don't have facilities for them, Turner said.
The joint venture allows the hospital system to split the capital cost with Acadia and tap Acadia's clinical expertise, he said. Typically, Acadia pays for 75% of the cost of the new hospital and gets an equal amount of equity in the joint venture.
Franklin, Tenn.-based Acadia owns 90% of the 587 behavioral health facilities that it operates in 39 states, the United Kingdom and Puerto Rico. It is the tenth-largest investor-owned hospital chain with 258 hospitals and 2015 revenue of $1.79 billion.
Having the not-for-profit hospitals involved in opening the beds is helpful to Acadia as well because they provide a natural referral source, which is the hardest part of opening a hospital, Turner said.