Financial Data and Key Metrics Changes - The company reported a net income attributable to Universal Health Services per diluted share of $4.96 for Q4 2024, with an adjusted net income of $4.92 per diluted share [6] - Adjusted admissions to acute care hospitals increased by 2.2% year-over-year, while same facility net revenues in the acute care segment rose by 8.7%, driven by a 5.3% increase in net revenue per adjusted admission [6] - Cash generated from operating activities was $658 million in Q4 2024, compared to $452 million in Q4 2023, and $2.067 billion for the full year 2024, up from $1.268 billion in 2023 [9] Business Line Data and Key Metrics Changes - Same facility revenues at behavioral health hospitals increased by 11.1%, primarily due to an 8.7% increase in revenue per adjusted patient day [8] - The company recorded $50 million in net incremental reimbursements from various state supplemental Medicaid programs during Q4 2024, exceeding prior projections [9] - Operating expenses were well managed, with premium pay declining to $60 million in Q4 2024, consistent with the previous two quarters [7] Market Data and Key Metrics Changes - The company anticipates a slight decrease in total consolidated Medicaid supplemental payments for 2025 compared to 2024 [13] - The demand for behavioral services remains solid, with a forecasted growth in same facility adjusted patient days of 2.5% to 3% for 2025 [14] Company Strategy and Development Direction - The company is focused on expanding its outpatient presence and broadening its continuum of care, with plans to open new facilities and enhance technology investments in behavioral hospitals [10][14] - The company aims to maintain a leverage level in the high twos, approaching three, while using free cash flow primarily for share repurchases [61][62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a more stable operating environment in 2025, with expectations of mid-single-digit EBITDA growth [13][20] - The current political environment presents uncertainty regarding Medicaid reimbursement, but management believes there is significant political support for Medicaid programs at the state level [15][49] Other Important Information - The company spent $944 million on capital expenditures in 2024, consistent with forecasts, and has plans for new hospital openings in 2025 [10][11] - As of December 31, 2024, the company had $1.17 billion of available borrowing capacity under its revolving credit facility [12] Q&A Session Summary Question: What is driving the higher underlying growth in 2025 despite state supplemental payments forecasted to be down year over year? - Management indicated that core EBITDA growth is driven by solid volume growth, robust pricing, and effective expense control, with a more stable operating environment expected [20] Question: Why is the guidance range for 2025 wider than usual? - Management acknowledged that items beyond their control, such as government reimbursement changes, contribute to the wider range in guidance [24] Question: What is the main reason for the decline in DPP payments? - The decline is primarily due to recognizing DPP payments related to prior periods in 2024, rather than significant changes in specific programs [29] Question: How adequate are the malpractice reserves? - Management stated that they have moved towards the higher end of the range for reserves, hoping to avoid further adjustments in 2025 [32] Question: What are the assumptions for acute revenue growth in 2025? - Management expects mid-single-digit revenue growth in the acute division, split evenly between price and volume [73] Question: How does the company view the impact of the flu season on Q1? - Management noted that while the flu season has been strong, it typically does not have a significant impact on earnings [131] Question: What is the expected impact of new hospital openings on consolidated revenue and EBITDA? - New hospitals are expected to be EBITDA positive, but may cause some cannibalization of existing business, affecting same-store metrics [120]