Q1 2021 Acadia Healthcare Company Inc Earnings Call
[music].
[laughter] standby, we are about to begin.
As a reminder, this call is being recorded.
Please proceed.
Good morning, and welcome to Acadia <unk> first quarter 2021 conference call and Gretchen <unk> director of Investor Relations for Acadia. Our first provide you with our safe Harbor before turning the call over to our Chief Executive Officer, Debbie OTT to the extent and the non-GAAP financial measure is discussed on today's call.
And you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP on our website by viewing yesterday's news release under the investors link.
This conference call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, including statements among others regarding and Acadia is expected quarterly and annual financial performance for 2021 and beyond.
For this purpose any statements made during this call that are not statements of historical fact may be deemed to be forward looking statements without limiting the foregoing. The words believes anticipates plans expects and similar expressions are intended to identify forward looking statements you on.
Hereby cautioned that these statements may be affected by the important factors among other set forth and Acadia filings with the Securities and Exchange Commission and in the company's first quarter news release, and consequently, actual operations and results may differ materially from the results discussed and the forward looking statements.
The company undertakes no obligation to update publicly any forward looking statements, whether as a result of new information future events or otherwise at this time for opening remarks, I would like to turn the conference call over to Chief Executive Officer and <unk>.
Good morning, and thank you for being with US today for our first quarter 2021 conference call.
I'm here today, with Chief Financial Officer, David Duckworth, and other members of our executive management team.
David and I will provide some remarks about our financial and operating results for the first quarter of 2021 and guidance for 2021 for.
Following David's comments, we will open the line for your questions.
We are very pleased with our solid financial and operating performance for the first quarter, marking a strong start to 2021.
These results demonstrate consistent and successful execution of our growth strategy as well as strong cost management in the face of the impact from the resurgence of COVID-19 and one less day in 2021 due to leap year in 2020.
Before we get into the results I want to commend Acadia is dedicated employees and clinicians across our operations, who have continued to meet this critical demand and provide the highest quality care and a safe and accessible manner.
We have a proven operating model.
Supported by an experienced team as well as the financial strength to support our ability to reach more patients who need our services.
For the first quarter of 2021, our U S operations produced very favorable results driven by solid volumes and strong cost management.
Our same facility revenue increased seven 4% compared with the first quarter of 2020 <unk>.
Including a two 7% increase in patient days and a four 5% increase in revenue per patient day.
Acadia is well positioned to meet the needs of those seeking behavioral treatment with our diversified service lines, all of which provide high levels of exceptional patient care.
In 2021 and beyond we believe that there will be continued growth in demand for all these services.
While we are beginning to see some relief from the pandemic with increased vaccinations and a less restrictive environment.
Elevated levels of mental health and substance use disorders are expected to remain long after the COVID-19 pandemic and.
A recent study from Kaiser finds that about half of adults continued to report negative mental health issues related to worry or stress from the pandemic.
And we are prepared to help these individuals get the treatment they need.
We are also seeing higher demand and societal acceptance of behavioral health increases and coverage options for those seeking treatment expand and improve.
I would like to highlight a couple of trends in the quarter.
Overall, we continued to see strong demand and the first quarter and have seen the demand continue into April.
While there was some resurgence of COVID-19 that followed the holidays as always our facility management teams and clinicians did a great job and addressing this challenge by strictly adhering to safety protocols and processes.
And working in collaboration with local health departments.
And consistent and open communication, we were able to operate effectively and meet the needs of our patients.
Our specialty business, which focuses on inpatient residential programs.
Has been slower to rebound following the initial impact from the pandemic.
But we were encouraged by the strong trends and this service line as the quarter progressed.
As more people are willing to travel vaccination rates increase and restrictions are lifted we.
We are seeing higher admissions in these facilities.
On our fourth quarter 2020 call, we shared with investors our growth strategy going forward with our singular focus now on our U S operations.
We identified four distinct growth pathways that we believe will provide additional opportunities for acadia to reach more patients in new and existing markets.
I am pleased with our progress so far this year in each of these initiatives.
As we continue to make investments and key strategic areas that will support our long term growth across our service lines.
First facility expansions remain a primary focus of our growth strategy and accordingly, we added 92 beds to our existing U S operations in the first quarter.
As previously announced we plan to add approximately 300 beds. This year to meet the growing demand in our current markets.
Yes.
We also continued to identify underserved markets for behavioral health treatments, especially for treatment of patients with opioid use disorder.
As I noted earlier in addition to the many challenges presented by COVID-19.
Recent studies have shown that the pandemic has continued to affect mental health Inc.
Including a resurgence and opioid use in the wake of widespread unemployment and isolation.
New data also shows that more Americans died of drug overdoses in the year, leading up to September 2020 than any 12 month period since the opioid epidemic began.
To address this critical and growing need we opened two new <unk> and the first quarter of 2021.
Ctc's operate on an outpatient basis, and combined behavioral therapy and medication to achieve long term recovery from opioid use disorder.
We continue to see opportunities to help more individuals struggling with addiction.
And we are on track to open 11, new Ctc's in 2021.
Second following the end of the quarter, we executed on another priority for our continued growth by completing construction of a de Novo facility Glenwood behavioral health and 80 bed Hospital and Cincinnati, Ohio.
This facility will provide inpatient psychiatric treatment for those who are struggling with the mental health or substance use disorder.
We expect this facility to be fully operational during the second quarter of 2021.
Third establishing joint venture partnerships with healthcare delivery systems across the country has been another important growth initiative for Acadia and.
And we have been fortunate to partner with many leading providers in attractive markets.
In March we were pleased to announce a joint venture with Lutheran Health network of Indiana, one of Andy and his premier integrated healthcare delivery systems.
Together, we plan to build a new 120 bed behavioral health hospital, serving Fort Wayne and the surrounding counties.
The new hospital slated to open in spring 2022 will provide a full continuum of inpatient and outpatient care services.
We also announced a joint venture with Geisinger health.
<unk> and Pennsylvania's Premier integrated healthcare systems.
The new partnership will build two new 96 bed behavioral health facilities, providing comprehensive inpatient services in the central and north eastern regions of the state.
The first facility is expected to open in 2022 and the second in 2023.
Both the looser and health and guys and Gore health partnerships will leverage our combined expertise and resources with a shared commitment to.
And to provide quality care and achieve strong clinical outcomes.
We will continue to pursue this important pathway of growth for Acadia and the year ahead and beyond.
With a solid pipeline of joint venture projects and different stages.
We expect 2022 to be our strongest year for joint ventures with four to five facilities expected to open.
Finally, another important pathway to growth is through acquisitions.
Acquisitions have been and important part of Acadia is growth strategy.
And the fragmented behavioral healthcare industry provides ample opportunity for future acquisitions.
During the first quarter, we signed a definitive agreement to acquire the Leighow behavioral Ah 61 bed psychiatric hospital, and Vallejo, California from Adventist Health.
We are excited to add this facility to our portfolio.
And we will continue to identify additional acquisitions that meet our criteria.
We believe there are significant opportunities for growth for Acadia as we continued to expand our market reach through bed expansions.
<unk> de novo facilities stroke.
Strategic joint ventures and acquisitions.
Importantly, our balance sheet is very strong with ample capital to pursue these growth initiatives and also continue to make strategic investments in our business.
Now I will turn the call over to David Duckworth to discuss our financial results in more detail.
Thanks, Debbie and good morning.
Revenue from our continuing operations for the first quarter was $551 2 million compared with $509 2 million for the first quarter of 2020, a growth rate of eight 2%.
Net income attributable to Acadia stockholders was $9 7 million or <unk> 11 per diluted share.
Adjusted income from continuing operations attributable to Acadia stockholders per diluted share was <unk> 47 for the first quarter of 2021.
Adjusted income excludes income from discontinued operations as well as a $1 $7 million tax benefit related to ASU 2016, Dash Oh non transaction related expenses debt extinguishment cost and the income tax effect of the.
These adjustments to income.
Acadia is continuing operations adjusted EBITDA for the first quarter of 2021 was $119 $5 million compared with $96 7 million for the same period last year.
Same facility adjusted EBITDA margin improved 280 basis points to 26, 5%.
In March 2021, the company completed its expected debt repayment and refinancing plans following the completion of the UK sale in January.
We have strengthened our capital structure through the reduction and debt totaling $1 6 billion and the first quarter of 2021.
And as well as the refinancing transactions completed in 2020 and and the first quarter this year.
With the completion of these transactions Acadia is debt structure includes the new $1 billion $25 million revolving credit and term loan facilities $450 million of five 5% senior notes due 2028 and.
And $475 million of 5% senior notes due 2029 the.
The company's net leverage ratio was approximately two seven times.
March 31 2021.
Cash at the end of the first quarter was $179 million and we have $160 million drawn on our new revolving line of credit of $600 million.
Turning to our financial guidance as noted in our press release, we have increased the previous financial guidance for 2021 as follows.
Revenue and a range of $2.240 billion to $2 billion and $290 million.
Adjusted EBITDA and a range of 500 million to $530 million and adjusted earnings per diluted share and a range of $2 30.
For $2 55.
With the completion of our debt refinancings in March our interest expense for the remainder of 2021 is expected to be approximately $17 million per quarter.
And with our improved debt structure, our ongoing cost management initiatives and our disciplined capital allocation, we have a solid financial position to support our business.
We will continue to make strategic investments and the business, while aligning our cost and meet the ongoing needs of our patients.
We are confident that the essential nature of the services, we provide supported by robust demand will lead to growth through 2021 and beyond.
With that Christina we are ready to open the call for questions.
You if you'd like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal for richer.
Net.
Please limit yourself to one question and one follow up and you may re queue for additional questions again.
Press Star and to ask a question.
We'll take our first question from Frank Morgan with RBC capital markets.
Good morning first question on the strong same store top line growth.
Just curious when I look at that it looks like.
And nice growth and patient days and part of that driven by about 2% growth and length of stay. So I'm just curious what's driving that increase and then any color or any breakout on this for 5% on the pricing side and then second question is on just the margins and the sustainability there.
You've had some really good cost initiatives in place for things like purchasing but any other remaining areas of focus we should look for there even including labor.
I'll take the first part of that Frank.
I think when we look at our volume trends for the first quarter. Our acute senses continues to be just very stable and strong I think that what we were pleased with is that our specialty sensors.
Which had a slower ramp up during last year during the pandemic and also had a little bit of a slowness. After the holidays, we started to see.
And some very strong trends for specialty.
Debt, if we look at year over year growth both in February and March.
We were very pleased with that growth and the specialty area I think that what we're seeing there is that travel is starting to return to normal I think that we've also seen an increase and our out of state admissions and our volumes there.
We actually had the highest referrals from out of state.
<unk> that we've seen since January of 2020.
We always had I think consistent performance, even during the pandemic from our RTC and and our CTC service line.
But those trends are also very strong.
And have continued as I said in my remarks into April.
I think David if you want to add to that for and Frank picking up on the revenue per day, we did see a strong revenue per day or for 5% year over year growth here and the first quarter that is a continuation of a.
Strong trend that we have seen we were above 3% and the second half of 2020, our team at the facility and the corporate and and.
And those that manage our payer relationships here at the corporate office are doing a great job on rate increases across our service lines.
And in the Q and Q1, we're also seeing a strong payer mix.
And our commercial payer mix did increase slightly.
Just under 30% for the quarter.
That is a contributing factor to our revenue per day growth being at four 5% and part of that does relate to the specialty facilities and the volumes. We saw there at some or some of the higher revenue per day specialty facilities, where we are now seeing strong volumes as we exited the quarter.
That is a contributing factor to that strong revenue per day number for the quarter and Thats a trend that.
We see continuing into April and continuing into the year.
And I'll just add Frank on the margin I think that we had very good cost management and I have to give the operations team just a lot of credit they've stayed very focused on that area and I think we've been able to sustain the savings from our initiatives and in that we identified in 2019.
But we've also achieved other efficiencies and cost adjustments in 2020 that continued into 2021, we are looking for additional opportunities for savings, but as I just look at their effort and the first quarter. Our margin was had a very good impact from.
That cost management, but then also as David mentioned, our strong revenue per day. So those two things combined I think helped us and and that's why we saw the improvement and the margin and we believe that we're in a strong position to carry those efforts forward and we believe that.
The margin can be sustained.
And we're hoping to improve it from where we are right now.
Thank you very much.
Our next question from Kevin Fischbeck with Bank of America.
Okay, great. Thanks.
And just wanted to share your view on.
And then I guess for a couple of large transactions out there I'd love to hear your thoughts you mentioned your balance sheet strength.
Where do you think you'd be willing to take your balance sheet for the right transaction.
Going forward.
We do see capacity with our balance sheet and our leverage being at two seven and relative to our longer term range that we're thinking of for now U S. Only business for three to four.
We are not in a hurry to take the leverage to the high end of that range, but do think for the right opportunities at that is that the situation, where we would be at the higher end of the range, but any M&A.
Transactions that we evaluate.
And we're evaluating through our framework that we have established that we think will serve us well thinking of the strategic fit that market.
The real estate many other factors related to this specific acquisition that we look at and of course financial returns and <unk>.
<unk> specific factors. So we'll continue to look at M&A opportunities.
Using the criteria and the framework we have.
And for the right transaction, we would think about the right place to be within the leverage range.
And we're certainly pleased that we not only have that capacity, but we also have multiple options as we think about our growth and other.
Other force growth pathways that we talked about earlier I think M&A is part of that.
But there's also other options and multiple ways that we think we will continue to see those growth opportunities.
Okay, and then just I guess, we think about the debt.
And although growth is there anything we should be thinking about or are being prepared for against and the past, sometimes and you opened up a new facility.
Hey, guys startup losses for some period of time for you guys or are doing more JV developments next.
And next year, then you have and a long time and is there anything for thinking about from from a margin perspective.
We have talked about and the first year of operations for our new facility.
<unk> losses that we estimate around $2 million, we have for facilities right now in various stages of that startup process process with two facilities opening in the second half of last year and two more that are opening at various points in time this year.
So we do think.
And.
And that we can manage that number that should be a fairly consistent number of course, if we think about next year potentially higher number of new facilities, we could see just a greater overall number it's just going to depend on the timing of those transactions.
What we have seen though with the transactions we opened last year.
I think we have the.
Facility that is has been fastest to breaking even as we look back at the history of the company.
With the one that we opened and the third quarter last year being breakeven here and its third quarter of operations.
So I think part of that is the team that we have.
And just doing a fantastic job opening that new facility.
But also just the benefit of having a joint venture partner as we opened a new facility and certain markets, but we're seeing a faster ramp than what we've seen in the past so.
There is.
$2 million, so investment and those startup losses, but at the same time, we are doing a great job getting those new facilities open and and hope for a very successful year as we think about a greater number of those new facilities next year and.
And Kevin I'll, just add to what David said I think he mentioned the joint venture that we opened and this summer with tower and I think what we've seen there is what we're seeing really across the company and that is strong demand, we've had very solid pricing and good execution by the team.
On the ground to really get get the facility open.
We've just been very pleased we are looking at opening even more services there and the next.
<unk> or so so I think this is a growth pathway with integration as well as a day Nova is that we think.
While there is the short term impact.
The long term of both of those strategies, we feel are very positive for us and it.
And there are a number of markets that we think are underserved in the de Novo area in particular that we've identified and we think that we have a good pathway there as well as to the integrations.
Alright. Thanks.
Our next question from Ralph Jacoby with Citi.
Good morning, Debbie image and demands for sure.
You had mentioned other state referrals.
I guess are there incremental referral streams, you're seeing as well do you think you're just capturing greater share than maybe previously.
And any other strategies, particularly as we think about sort of more usage of telehealth and the behavioral space for deferral standpoint.
Yeah.
Well, Ralph I think if we think about the facilities the specialty facilities they pull from a wide.
Range really across the country and I think that during the pandemic we did see.
Those referrals were impacted because in the for the most part and less it's close to the state where our services are individuals' do fly and travel and that manner. So as we are looking at it for the first quarter. What we've seen is that there's more.
Comfort and in traveling and so these referral sources have really been with us for a number of years. They are very stable and steady I think now what we've seen is just.
<unk> been able to accommodate those referrals and they've been able to make their way to our facilities. We do have programs that we've opened in several of our specialty facilities that are.
And more specialized so I do think we're gaining and new patients as well as new referral sources that have a lot of cases ask us to provide those services. So I do think there is additional referrals that are coming but then we've seen a return of those that had been steady over a number of years and.
We have and excellent track record and reputation. So now that I think some of the pandemic and vaccinations are those are happening I think we're going to continue to see our specialty sensors, not only recover but build from where we are right now and we've certainly seen that in April as well.
Okay, and then what about what about on the powerhouse on in terms of referral patterns and relationships with some of those providers.
We have.
And through Telehealth, we really utilize that for our outpatient services and during the pandemic. It was used to access our services, but I think that and certainly through telehealth, it's really and access way for our patients to.
Availed himself of our services. So if we're in a rural area or even.
We are planning to try and expand telehealth.
In some of our acute and specialty service areas, where if someone is coming from a distance. We can then extend the continuum and and use telehealth as a way for them to continue their treatment with us and I think that.
Our referral sources during the pandemic and.
To some extent, even as we're seeing that start to become less of an impact to us our referral sources and our physicians for that matter are comfortable with telehealth they are using it.
And and I think that it just opens up a new area of opportunity for us. That's one of the positive things I think that occurred from the pandemic as we are looking at support for our existing services. We are looking at ways to expand the existing services and that's connecting with not only referral sources, but our patients.
And then also we're looking at growth into new service areas and that might be linking with someone.
That is providing does telehealth services, either a physician group or others that we might partner with.
Okay.
And then just quickly follow up I want to go back to the cost management and just wondering if there is anything more to sort of call out there and I guess, what I'm trying to reconcile is you've put up 7% same store revenue.
Against 20%.
So on the EBITA growth right. So obviously, you mentioned sort of balance sheet pricing as well as sort of the sustainability of margins on just trying to reconcile and understand and when do you need the pricing levels to sustain and to sustain these margin levels or if there's a way to sort of frame the benefit of sort of the pricing.
Through the margins relative to the sustainability from the cost initiatives. Thanks.
Okay sure, we do think debt.
Virtually all of the margin improvement is related to the cost management initiatives and I know we've talked about those over the last two years and all the tools that have been put in place to manage our cost.
The cost savings initiatives that we talked about and implemented last year, we do see those as the primary drivers of where our margin was for the first quarter and really.
Good way to think about that is if you look at the second half of 2020.
We were 27% 28% margin.
And that was sustained into the first quarter, we do see some seasonality and the first quarter related to payroll taxes and the calendar around the payroll taxes that has about a 1% impact on margin.
So if you think about where we were trending and the second half of last year that is being sustained into the first quarter with the exception of that seasonality.
And so that's probably a more helpful way to think about the margin and.
And of course on a year over year basis. It does reflect a higher level of margin growth.
Because of some of those cost savings that were implemented throughout 2020.
Got it okay. Thank you.
Take our next question from AJ Rice with credit Suisse.
Okay.
Hi, everybody.
First maybe just on the guidance range $10 million.
Both sides of the range is that purely just to confirm the Q1 outperformance I don't know where you were relative to your own expectations. I know you were about.
7 million ahead of consensus and then the.
Sequestration with the back half operationally and your view remaining unchanged and.
Is there anything about the first quarter outperformance that wouldn't continue into the rest of the year is.
Is it just too early to maybe make mega change and the outlook, but no no.
Nothing in the back half that somehow gotten a little worse.
Sure.
The main factors behind our increase and the guidance, where the first quarter beat and it was around $7 million ahead of our expectations as represented by the midpoint of our Q1 guidance range.
Which was $110 million to $115 million. So there is around 7 million their Medicare sequestration and the extension through the end of the year is $3 5 million dollar value to us we have about 11% of our revenue is is with Medicare there is another.
5% or so that is with the managed Medicare payer, but that sequestration is related to around 11% of our revenue and there's a $3 $5 million value there from April to December.
The other.
No other changes and our guidance I think our guidance as we entered the year already reflected continuing strong trends and our volume and and our margin.
And so with the trends we're seeing in April.
Part of our reaffirming and increasing our guidance is that we do see those trends that were part of our original guidance.
Now continuing for the year as we are seeing in April and a J there is nothing else that we.
And <unk>.
And the first quarter or <unk> and the year that we believe we need to call out those are the primary drivers of our increase.
Okay, that's great and let me just say on the follow up.
And obviously, you've got the uptick and JV as you think about heading into next year.
Youre expressing openness on Emma.
M&A tuck in and potentially larger deals too I guess.
What is the competitive landscape look like it seems like some other private equity guys and there were competing with you for transactions may actually be now sellers.
Is the competitive landscape gave a little better and maybe that's for the reason, we're seeing the uptick and jb's or.
Or is it about the same and has anything changed and the way youre seeing people pricing deals.
Yeah.
It's hard for us to know exactly what the competitive landscape is and and I know there may be private equity that sellers, but there may also be buyers within the same space and so.
Yes.
Does seem to be acquisition opportunities right now, but it's hard for us to really have a view on either the competition for that or the or the pricing. We'll see I don't think we have as many data points to look at it just looking back on the last several years so.
We don't have a view right now really on either the competition or the pricing.
Of course, as we think about our own framework for you like we have the right way to think about acquisitions as well as those other opportunities and so we will use that criteria as we evaluate opportunities and and we will see and I'll just say a J I think that our diversity and service lines gives us multiple opportunities.
<unk>.
For for certainly M&A, not just and our acute space and service line, but also the specialty and the CTC area I do think that we're.
We're well informed of the market.
As David said I can't really speak about the competition, there, but but I think that and as we look forward, we think there's going to be opportunity.
There are I believe companies that may not have fared well through the pandemic and if there's a way that we can look at those and they are attracted to us from a strategic and financial fit.
We will pursue those but we also want to as David said keep a disciplined approach.
And with our balance sheet, giving us really a lot of flexibility and and I think that thats why we feel that's going to be and important pathway, but we'll have to see how pricing looks and how it fits in our view of return on invested capital and other things that that we are going to be disciplined about.
Okay. Thanks, a lot.
Yes.
And we'll go to our next question from Brian <unk> with <unk>.
Jefferies.
Hey, good morning, guys congratulation.
And I guess just trying to go back to <unk> question earlier. So W think about this you are saying that we have seen some strength carryover into April so as I look at the admission trends from Q1, and I think it was up 80 basis points and then the pickup and the average length of stay and I think you've talked a lot about how specialty is pretty strong is that the right.
Way to think that these numbers should continue to firm up.
And theoretically that there is even further acceleration and.
And like the organic growth outlook for the back half of the year.
I think Brian that's a good way to look at it I think that as we saw the quarter and the progression and and then now we have visibility on on April I think that it's a good assumption that our trends are stronger and I think that we feel like.
And Theres No reason why those would not continue through the rest of the year with the demand and just again with the pandemic, becoming less of an issue still have a few markets where there are issues with the pandemic, but overall, we feel good about just the progression and also as we just saw March and April.
Numbers.
We think they are strong.
Got it and then obviously a lot of focus on big deals, but I think with your balance sheet being clean and focus now on the U S. Only how are you thinking about the opportunity for tuck ins, you're kind of going back to the Acadia for old where youre doing a few tuck ins here and there every quarter.
We do believe there will be tuck in acquisition opportunities, we do like those opportunities and we're excited about the one we talked about earlier and California, and so we continue to look for those and believe we will see more of those and they do present, a very good opportunity for us and.
The.
The benefit we can bring to that local hospital through the infrastructure and the <unk>.
Other initiatives that we've implemented make those acquisition opportunities more attractive.
And I'll, just say I think that one and particular Vallejo with Adventist health selling.
We believe that we will have opportunity to add additional bad just based on what we see with their volume trends, but also we have other facilities and in the area and we think they can work together to serve the patients and so it's got a strategic focus to it.
But also a way for us to to grow.
Over and above what were purchasing at this at this point.
Awesome. Thank you.
Thank you our next question from <unk> Chickering with Deutsche Bank.
Hi, Good morning, Thanks for letting me ask the questions can you help me understand the dynamics between same store admissions and length of stay.
We're not going to be like this to increase it was the primary driver of patient day growth. So the question is if the growth we'd like to stay as from managed care easing restrictions or does it increase and mixed with specialty and are finished.
Curious, what's the pushback on length of stay again do you think you can offset that pressure with increase admissions to keep the patient day is growing in the 3% range.
We do not view.
Any of our metrics is relating to a change and what managed care is doing its been a pretty consistent process pre pandemic and through the last year, we attribute our stats more to just the service mix that we see.
We do see a pretty consistent linked this day, but we have to look at it by service line and by facility and that it can vary but it tends to be.
Within a range and we've seen it trend consistently within a range.
And Pedro as you ask about admissions, we are seeing a number of factors that impacted our admissions during the quarter and we talked about.
Just coming off of the COVID-19 resurgence and the holidays and seeing a lower admissions, but then seeing a.
Significant progression throughout the quarter, and the admissions and and our patient day metrics and so going forward. We do think that there may be.
For similar relationship between admissions inpatient days, but again it can be impacted by the service mix that we see but with what we saw in March we are seeing nice admissions growth and we're seeing that into April.
Okay, Great and then to follow up on Ralph's question on the revenue per patient.
A day growth it sounds like this growth with myths and specialty and commercial and makes it sustainable over 2020. One as you mentioned that especially continues to ramp.
During March and April so there shouldnt be revenue per day increase from these levels and then on the margin side and if the revenue per day and continues to increase because of course on mix and specialty wouldn't that provides substantial and margin leverage beyond what you were able to achieve and first quarter.
We do think it will be a continuing factor as we move through the year of course and the second quarter.
And we'll be comparing back to the quarter that saw the most impact from COVID-19 for the company last year.
Second half of 2020, we saw very solid recovery and performance. So the comparison will be different and the second half of this year compared to the second quarter.
But we do expect to.
Continue to see that dynamic and our revenue per day and.
And to see strong revenue per day trends, especially in the second quarter.
There, we did see a greater impact like I said in 2020.
Yes, we do expect that trend to continue.
Great. Thanks, so much and great quarter guys.
Thank you.
Well go to our next question from John Ransom with Raymond James.
Hey, good morning.
Just to hit on labor for a minute and I'm curious.
Kind of where your metrics stand now versus say the peak of the pandemic in terms of having to step shifts with tariffs.
How many and your folks had been vaccinated turnover.
And like that would be helpful. Thanks.
Well John as I think you know we are located in 40 states. So.
And we'll have staffing challenges there they are fairly isolated I think overall, we've been able to accommodate that demand with our current staff.
We've actually seen an improvement and agency from from year to year and.
And it's all always spend very low before before that.
I think as we look at our process here, we try and be proactive and.
And that started and it was in place before the pandemic. So our team is supporting the facilities. We have a team here our recruiting team. We also have I think some very robust local efforts and we have used over time, when we need it.
But we've also I think just generally been able to handle our patients that are coming to us and making sure. We can offer services to them we have I think.
And some good and.
<unk> around retention, which I think is very important so we can recruit and we have some strong support there, but we also have I think some good focus around retention of all of our staff just generally across the company.
I think yes, we are continuing to see.
And our employees availed himself other vaccine I think that we're trying to really be very <unk>.
Supportive and with our education about the importance of the vaccine and certainly it varies by part of the country, but.
And we feel good about our employees and their interest, but also we want to make sure. We're educating them about the various vaccines and and also we have a partnership with Walgreens, where we are.
Using damage.
A provider and the vaccine and we also have health departments and in many of our areas that have come to our facilities and provided it so I think thats.
Continuing to increase and and again, we're just pleased that it's something that I think.
Across the country is going to be certainly a positive for all of US, but also for just those that need our services and didn't feel comfortable before now that Theyre vaccinated will we will seek our services out.
Great. Thanks, so much.
Thank you.
And we'll go next to Matt Borsch with BMO capital markets.
Yes, hi.
Could you just talk about how you're.
Thinking about demand.
Post pandemic I guess my question is.
Given.
The increase and.
Instances.
Mental health issues during the pandemic.
And to what extent I know you can't really predict this entirely but to what extent you think those will be some gains versus sort of staging.
Once things get back to normal.
Well I think theres two two parts to this and one is before the pandemic, one and five Americans already had and diagnose mental health condition. So that would be for the pandemic and I think one of the one of the positives that has occurred.
During you know the focus on pandemic, it's not just the public health crisis, but the mental health crisis, which you just mentioned, but I think the other part is that people are more accepting of seeking treatment. So I think we have this need that was there before the pandemic certainly.
And some increase from just the stress and the isolation, but also I believe stigma has its.
Not totally reduce but I think it's starting to.
Dues from the levels out and I've seen over my career and I think that we're going to see more people being willing to see Kale and I think that is going to continue and unfortunately I do think that this is not a short term issue.
There is research from other Pandemics that have shown that it really is a long lasting effect.
And we're ready to offer our services for those that might have PTSD healthcare workers I can think of a lot of individuals.
Certainly adolescence, there's been a lot of research about just the impact on children and adolescence with their mental health worse, and so if I think about it is where the demand trends in general we started out with strong demand. It's now increase but we also had more acceptance and I think this pandemic is going to.
Have long lasting effects.
Yeah and that makes sense. Thank you.
Thank you.
Sure Sir no further questions at this time I would like to turn the call back to Debbie O'steen for any additional or closing remarks.
Thank you well I want to thank everyone for being with US today and also for your interest and Acadia healthcare.
I am very grateful to our field and corporate leaders for their resiliency and their commitment to keeping our key growth and operational initiatives moving forward.
And at the same time responding to this unprecedented crisis.
Together, we look forward to the opportunities ahead for Acadia.
If you have additional questions today, please do not hesitate to contact us directly and have a good day.
Okay.
On today's call. Thank you for your participation you may now disconnect.
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