UHS(UHS) - 2025 Q3 - Quarterly Report

Facilities and Operations - As of September 30, 2025, the company owned and/or operated 374 inpatient facilities and 156 outpatient facilities across 39 states, Washington, D.C., the U.K., and Puerto Rico[133]. Revenue and Financial Performance - Net revenues from acute care hospitals and outpatient facilities accounted for 59% of consolidated net revenues for the three-month period ended September 30, 2025, compared to 57% for the same period in 2024[134]. - Net revenues increased by 13.4%, or $532 million, to $4.495 billion for the three-month period ended September 30, 2025, compared to $3.963 billion in the same period of 2024[152]. - Net revenues increased by 9.9%, or $1.165 billion, to $12.879 billion for the nine-month period ended September 30, 2025, compared to $11.714 billion in the same period of 2024[156]. - Net revenues from behavioral health services increased by $154 million, or 9.3%, in Q3 2025 compared to Q3 2024[197]. - Net revenues from behavioral health services increased by $399 million, or 7.8%, during the nine-month period ended September 30, 2025, compared to the prior year[216]. Income and Expenses - Income before income taxes increased by $155 million, or 46%, to $497 million for the three-month period ended September 30, 2025, compared to $342 million in the same period of 2024[153]. - Net income attributable to UHS increased by $114 million, or 44%, to $373 million during Q3 2025 compared to $259 million in Q3 2024[154]. - Income before income taxes increased by $331 million, or 31%, to $1.391 billion during the nine-month period ended September 30, 2025, compared to $1.060 billion in the same period of 2024[156]. - Salaries, wages, and benefits accounted for 46.1% of net revenues in the third quarter of 2025, down from 48.3% in the same period of 2024[152]. - Other operating expenses increased to 28.8% of net revenues in the third quarter of 2025, compared to 27.5% in the same period of 2024[152]. Medicaid and Legislative Impact - The company receives annual Medicaid revenues of approximately $100 million or greater from multiple states, indicating a significant reliance on state-based revenue programs[141]. - Recent legislation, the One Big Beautiful Bill Act, may limit Medicaid enrollment and expenditure, potentially impacting future revenues[141]. - Future Medicaid reductions and legislative changes may limit enrollment and expenditures, potentially impacting revenues[149]. - The company anticipates a reduction in aggregate annual net benefit from various state Medicaid supplemental payment programs by approximately $420 million to $470 million by 2032 due to legislative changes[329]. Inflation and Cost Pressures - The healthcare industry is experiencing inflationary pressures, particularly in personnel costs, which could adversely affect future results of operations[142]. - The company faces ongoing inflationary pressures, particularly in personnel costs, which have moderated recently but remain a concern for future operations[146][147]. - Increased interest rates have significantly raised interest expenses, impacting free cash flow and access to capital markets[142]. - The company has implemented initiatives to mitigate rising physician-related expenses in acute care, particularly in emergency room care, anesthesiology, and radiology[142]. Operating Metrics - Average daily census for acute care hospital services was 4,457.1 in the first nine months of 2025, compared to 4,425.8 in the same period of 2024[160]. - The occupancy rate for licensed beds was 65.6% for the nine months ended September 30, 2025, slightly down from 65.7% in the same period of 2024[160]. - The average length of stay for patients remained stable at 4.8 days for both the nine-month periods ended September 30, 2025, and 2024[160]. - The average length of inpatient stay was 13.6 days in 2025 compared to 13.5 days in 2024[204]. - The occupancy rate for behavioral health care facilities was 74% in 2025, up from 73% in 2024[204]. Reimbursement Programs - The Texas Medicaid supplemental payment program is projected to generate revenues of $322 million for 2025, with a net benefit of $194 million[266]. - The CHIRP program is estimated to increase reimbursement to hospitals by approximately $20 million to $23 million in program year 2026[269]. - Estimated net reimbursements from the expanded program are projected to be approximately $51 million for the year ended December 31, 2025[308]. - The Tennessee Directed Payment Program (DPP) generated $11 million in net reimbursements for the three-month period and $69 million for the nine-month period ended September 30, 2025, with no revenue recorded in the same periods of 2024[314]. - Estimated net reimbursements from the Tennessee DPP are projected to be approximately $83 million for the year ended December 31, 2025[315].