Acadia Healthcare Company, Inc. (NASDAQ:ACHC) Q2 2023 Earnings Call Transcript

Heather Dixon: So maybe I’ll speak to what I think you’re asking is the corporate overhead sort of cost. And if we see that stabilizing over the period to period, we would…

John Ransom: No, no, no. I’m actually asking the pre-overhead hospital margins in the high 20s, what do you think the feeling is not – it’s pre-overhead. What do you think the feeling is for the pre-overhead hospital margins as you sit today? Thanks.

Heather Dixon: Okay. Thanks. I understand. So, I would say that we continue – we expect, we can see that to be a continued strong margin as we look at what those will contribute.

John Ransom: And then the EMR spending for hospitals.

Chris Hunter: Yes, John, sorry, can you – you cut out on the tail end of that. What specifically was the question around EMR?

John Ransom: Sorry. So the EMR, you provided a range at your Analyst Day. But as you think about your EMR spending, have you landed on a kind of rollout schedule and a cost per hospital on that line item? Thanks.

Chris Hunter: Yes. We’re still working through that. I mean, I would say that what we’ve laid out in our Investor Day continues to be very consistent. We broke that out between CapEx and OpEx. And I would say we’re still very much tracking there. I think one of the things we’re looking at, just given the early results that have been very attractive as we’ve continued to bring a number of these acute facilities up on an EMR is can we even go a little bit faster. Right now, we’ve had a plan to roll all of our acute facilities out over a two-year period. And we’re looking closely with others help at whether or not it would make sense for us to accelerate that, but we’re still – we haven’t disclosed the cost per facility I think most importantly, what we laid out at Investor Day continues to be very much on track.

John Ransom: Thank you.

Operator: Our next question comes from Kevin Fishbeck with Bank of America. Please go ahead.

Unidentified Analyst: This is Nabil [ph] on for Kevin. Thanks for taking my question. Can you talk about how volumes trended across the different segments in the quarter? And how are you thinking about growth in the second half of the year?

Heather Dixon: Sure. So we have seen strong demand in patient volumes during the second quarter, as we’ve been saying. The last three years of same facility volume growth has been roughly in the 2% to 4% range, and we’ve been really highly focused on delivering volume growth acceleration. And the opportunities that we’ve identified have led us to really point to 4% to 6% growth expectation for 2023. We really attribute that and some record patient census levels to a few things. First is demand across the service lines. Second is optimization and our marketing and admissions processes. Third, the stronger occupancy rates that are driven by that demand and the operational execution. And then finally, I’d just point to the recent bed additions that we mentioned.

We had 212 that we added in the second half of 2022 and then we combine that with another 204 in the first half of 2023. And that’s really what’s driving us to be well positioned, I think, to hit that 4% to 6% range for the second half of the year.

Unidentified Analyst: Thanks. And then for the follow-up, can you provide us an update on redeterminations and what your guidance is assuming on the impact?