Acadia Healthcare's new beds generate Q2 revenue growth

Behavioral health provider Acadia Healthcare met its own expectations for adjusted earnings per share and revenue, but it is struggling with shorter patient lengths of stay.

The Franklin, Tenn.-based company's revenue was $765.7 million in the second quarter, which ended June 30, up 7% from $715.9 million during the same period in 2017. Net income was $58.8 million, compared with $49.6 million in the prior year.

Expenses grew at a slightly faster clip than revenue, rounding out the quarter 7.2% higher at $696.5 million.

Acadia's total same-facility revenue increased 5.2% compared with the second quarter of 2017, including by 5% among its U.S. facilities and 5.6% among its U.K. facilities. The company's total same-facility earnings before interest, taxes, depreciation and amortization margin declined 60 basis points to 25.7%.

Patients' average length of stay declined by 2.3% on a same-facility basis in the quarter, and by 5.5% on a total facility basis.

Universal Health Services reported a similar challenge in its own earnings report last week. UHS' adjusted patient days dropped 0.3% during the quarter, in part because of the increasing proportion of patients entering Medicaid managed-care programs, under which the hospital chain's chief financial officer said payers tend to be more aggressive in their utilization revenue.

Acadia CEO Joey Jacobs said in a statement that the company's revenue and adjusted earnings per share of $0.70 met its expectations during the quarter. Revenue growth was driven primarily by the addition of nearly 900 beds during the 12 months ended June 30, 155 of which were added during the second quarter of 2018, he said. By the end of 2018, Acadia expects to have added more than 800 beds to its existing and new facilities.

As of June 30, Acadia operated 585 behavioral healthcare facilities with about 17,900 beds in 40 states, the U.K. and Puerto Rico. The company runs inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers and outpatient clinics.