Nashville, Tennessee-based Newport Healthcare is moving out of the San Francisco market and directing demand in Northern California to its Sacramento entities. <\/p>\n
The move is part of the company\u2019s sustained effort to optimize its residential treatment footprint, which consists of home-like facilities or facilities based in residential settings, for long-term sustainability. Newport Healthcare treats adolescents and young adults. <\/p>\n
\u201cThese decisions allow us to better align our capacity with current demand and evolving payer dynamics,\u201d Brian Setzer, Newport Healthcare CEO, told Behavioral Health Business. <\/p>\n
The move impacts four locations in the San Francisco market. The company said in a statement that it has \u201cslowly\u201d been redirecting business to Sacramento. The process of winding down is still ongoing. <\/p>\n
San Francisco presented the company with what it described as \u201can exceptionally complex environment in which to operate.\u201d While populous and home to a relatively large population that would likely be able to pay for gaps in insurance coverage, the region is also among the most expensive to operate in. The company also cited evolving payer and real estate dynamics for the pivot away from the market. <\/p>\n
\u201cThis was a market-specific decision based on local dynamics, not a reflection of the value or effectiveness of our housing-based programs,\u201d the company said. \u201cWe remain confident in our housing model in markets where it continues to meet client needs and operate successfully.\u201d<\/p>\n
The company did not disclose the number of staff layoffs that will occur during the process. Once closed, Newport Healthcare will operate 43 programs in California, including residential and outpatient sites.<\/p>\n
Newport Healthcare announced a similar repositioning effort<\/a> in October. <\/p>\n More recently, the company has promoted Dr. Brent Nelson to work directly with the CEO as chief innovation and optimization officer to improve clinical products and optimize efficiency across the company. <\/p>\n The company was acquired by Onex Corp. in July 2021: it holds a 23% economic and 92% voting interest in the company. The company\u2019s latest annual report<\/a> states that its value decreased in 2025 and 2024.\u00a0<\/p>\n The youth-focused residential treatment space has been a difficult one for several providers to operate. In years past, Embark Behavioral Health has pivoted away from its wilderness programs, deprioritized residential care and focused on integrating behavioral and physical health care.<\/a> Along with a pivot, it has flattened its leadership structure<\/a>, parting ways with or letting go of dozens of executives and middle managers<\/a>.<\/p>\n