By MATT BLOIS
American Addiction Centers, an addiction treatment company based in Brentwood, reported major problems getting new patients in the door after a change to Google’s search algorithm last summer sharply cut new admissions.
With $5.4 million left in the bank, the company took out a $30 million loan last week, at an interest rate of 11 percent, to keep operations running.
New admissions — excluding several new facilities the company purchased in 2018 — fell by almost 20 percent in the last few months of 2018, compared to the same period last year.
Outpatient visits fell by about the same amount during that period and the average number of patients on a given day fell by about 14 percent.
The struggle to find new patients started last summer when Google made a change to its search algorithm that the company says caused a 30 percent drop in calls to the company’s call centers.
In November, the company reported the decrease in call volume led to a nearly 10 percent decrease in its patient census. American Addiction Centers reported a net loss of about $11.5 million for the third quarter of 2018.
The company hired a new executive to direct digital marketing and made changes to training for call center employees to address the problem. According to a statement from CEO Michael Cartwright, admission numbers have only recently started to improve.
“The census downturn that we experienced in the last several months of 2018 was more significant that originally anticipated,” he said, according to a press release published on Wednesday. “However, admissions have begun to improve in early 2019, with average admissions per day improving by more than 20% through February 2019 compared to December 2018.”
On Wednesday, the company released operational results for 2018, but not its financial results. American Addiction Centers planned to release its full year financial results, but couldn’t finish it in time. The company also rescheduled its planned conference call to discuss the results.
Going forward, the company is looking to improve its balance sheet by selling off real estate, possibly leasing it back from buyers.
In addition to taking out a $30 million loan in March, the bank lending to American Addiction Centers also increased the interest rate on a loan from 2017.
The company hasn’t scheduled a new conference call or announced when it will release financial results.
Despite the bad news about patient admissions, in his statement Cartwright still expressed some optimism about the company’s future.
“2018 was a challenging year for us,” he said, according to the statement. “But we’ve started this year with positive momentum and we expect to see continued improvement.”