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Acadia Healthcare Ties Up for Improved Behavioral Services

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Acadia Healthcare Company, Inc. (ACHC - Free Report) collaborated with Covenant Health, which offers a diverse range of healthcare services in Tennessee. The tie-up intends to solve mental health issues, which remain quite unaddressed due to the dearth of resources in East Tennessee.

The partnership involves building a new behavioral health hospital, whose construction is likely to start in late 2020. The hospital, with an initial capacity of 90 beds, will have the space to accommodate another 48 beds if further demand arises. Scheduled to begin operations in 2021, the hospital will aim at providing in-patient services to adults, seniors and adolescents plagued with severe mental health disorders.

Apart from in-patient treatment, the hospital will also provide a range of out-patient services, which even includes intensive outpatient and partial hospitalization programs. So, the new hospital basically intends to provide a comprehensive and high-quality range of healthcare services for people residing in Knoxville and surrounding counties.

Furthermore, we believe that this announcement comes at a time when the entire United States is plagued with financial woes induced by the COVID-19 pandemic. At a time when unemployment levels are remaining high, financial burdens are bound to take a toll on the mental health of the Americans. Addressing mental issues at the earliest has become immensely important amid this pandemic.

Moreover, Acadia Healthcare has always been in a bid to partner with established healthcare systems. River Place Behavioral Health, Erlanger Behavioral Health and Southcoast Behavioral Health are some notable hospitals, which Acadia Healthcare has established by partnering with several healthcare providers. We believe such efforts are likely to boost the company’s revenues in the days ahead and also strengthen its global foothold.

However, shares of this Zacks Rank #3 (Hold) healthcare provider have lost 14.8% in a year compared with the industry’s decline of 16.3%.



Further, the healthcare system in the United States is already bearing the brunt of the coronavirus outbreak. Several restrictions imposed by the federal and state governments related to the suspension of certain operations have resulted in revenue declines for most hospital companies. Not only this, hospital companies have also witnessed an escalation in costs amid the pandemic. Nevertheless, with the easing of restrictions, such companies are witnessing a surge in admissions.

Stocks to Consider

Some better-ranked stocks in the medical space include The Ensign Group, Inc. (ENSG - Free Report) , Acorda Therapeutics, Inc. (ACOR - Free Report) and Abeona Therapeutics Inc. (ABEO - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ensign, Acorda Therapeutics and Abeona Therapeutics have a trailing four-quarter positive earnings surprise of 7.87%, 18.90% and 5.45%, on average, respectively.

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