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Acadia Healthcare (ACHC) Forms JV to Boost Service in Detroit Area

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Zacks Equity Research
·4 min read
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Acadia Healthcare Company, Inc. ACHC recently formed a joint venture (JV) with Henry Ford Health System with an aim to build a new behavioral health hospital to cater to the Detroit area. Notably, Henry Ford has not only been providing a diverse range of inpatient services across the state of Michigan but has also been playing the role of a leading academic medical center across the United States.

The construction of the new behavioral health hospital is likely to start post regulatory approvals. The hospital, with an initial capacity of 192 beds, will have space to accommodate further in accordance to demand for inpatient services in the Detroit area.

Scheduled to begin operations in late 2022, the hospital will aim to provide in-patient services to adults, seniors and adolescents severely plagued with severe mental health disorders. Hence, the new hospital basically intends to offer a comprehensive and high-quality range of inpatient services in Detroit and neighboring counties.

Through the new hospital, Acadia Healthcare aims to solve mental health issues in Detroit and the surrounding counties, which remain quite underserved. The latest move also seems to be time opportune as there is an alarming need to address mental issues at the earliest, which has been aggravated further by the COVID-19 pandemic. At a time when unemployment levels remain high, financial burdens are bound to take a toll on the mental health of the Americans.

Apart from in-patient treatment, the hospital will also fulfill the role of a destination academic site, where inpatient psychiatry residents, medical students, nurses and other healthcare professionals will be offered proper training.

Shares of this Zacks Rank #2 (Buy) healthcare provider have surged 46.5% in a year compared with the industry’s growth of 6.2%.

Moreover, the latest joint venture clearly indicates Acadia Healthcare’s efforts to bolster presence in the state of Michigan and Henry Ford seems to be a suitable partner to fulfill the same. It is worth mentioning that Henry Ford Health has not only been effectively catering to health needs in the Detroit area for more than 100 years but also been training around 40% of Michigan’s physicians through accredited programs.

With focus on meeting growing need for behavioral health services, Acadia Healthcare has been making every effort to partner with established healthcare systems for broadening its treatment network and nationwide presence. This July, the company inaugurated a behavioral health facility named Tower Behavioral Health as part of its previously announced JV with Tower Health.

The company had also collaborated with Covenant Health in June as a result of which a new behavioral health hospital named East Tennessee Behavioral Health with an initial capacity of 90 beds will open in fall 2021.

Furthermore, River Place Behavioral Health, Erlanger Behavioral Health and Southcoast Behavioral Health are some notable hospitals that Acadia Healthcare has established by partnering with other healthcare providers. These initiatives have definitely contributed to the company’s revenues and are expected to do so in the days ahead.

Other Stocks to Consider

Some other top-ranked stocks in the medical space are Quidel Corporation QDEL, Cardinal Health, Inc. CAH and Molina Healthcare, Inc. MOH. While Quidel Corporation sports a Zacks Rank #1 (Strong Buy), Cardinal Health and Molina Healthcare carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Quidel Corporation, Cardinal Health and Molina Healthcare have a trailing four-quarter earnings surprise of 30.74%, 21.42% and 14.80%, respectively, on average.

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