UHS(US:UHS)2020-07-28 17:28Financial Data and Key Metrics Changes - The company reported net income attributable to UHS per diluted share of $2.95 for Q2 2020, with adjusted net income of $2.93 after accounting for certain items [5] - Approximately $320 million was received from governmental stimulus programs, with $218 million recorded as net revenues in Q2, including $157 million from acute care facilities and $61 million from behavioral health facilities [5][6] - The company has close to $1.4 billion in aggregate available borrowing capacity and nearly $600 million in short-term cash investments as of June 30, 2020 [13] Business Line Data and Key Metrics Changes - Acute care facilities saw a rebound in patient day metrics beginning in late April, with volumes recovering sharply after restrictions on elective surgeries were lifted [7] - The behavioral health segment experienced a similar recovery, with patient days returning to near pre-COVID levels by mid-June, despite challenges from reduced referrals [10] - ER visits have been the slowest to recover, remaining approximately 25% below pre-COVID levels [18] Market Data and Key Metrics Changes - The second wave of COVID cases in late June did not lead to the same magnitude of non-COVID case declines as experienced in the first wave [8] - The company noted that most of its facilities are located in COVID hotspots, affecting overall volume trends [22] Company Strategy and Development Direction - The company has implemented cost reduction initiatives across all expense categories, including a reduction in planned capital spending and a suspension of share repurchase and dividend programs [11][12] - Management acknowledged the potential material impact of COVID-19 on future operations and has refrained from providing earnings guidance for the remainder of 2020 [14] Management Comments on Operating Environment and Future Outlook - Management expressed concern over the ongoing COVID-19 crisis and its impact on patient volumes and financial results, emphasizing the need for careful monitoring of the situation [14] - The company is optimistic about the underlying demand for behavioral services, suggesting that the stress of the current environment may lead to increased demand for care [20][60] Other Important Information - The company has faced challenges in obtaining timely COVID test results, which remains a concern [9] - Management highlighted the importance of maintaining a safe environment for both patients and employees during the crisis [11] Q&A Session Summary Question: Can you provide numbers around acute and behavioral volume trends exiting June? - Management indicated that both acute and behavioral patient days were averaging around 95% of pre-COVID levels in mid-June, but saw a decline in July due to the second wave of COVID [17] Question: What is driving the July declining volume? - Management noted that the majority of facilities are located in COVID hotspots, leading to broad-based trends in volume declines [22] Question: Can you discuss margin loss and revenue for the quarter? - Management explained that margins improved in Q2 compared to Q1, but fixed costs make it challenging to reduce expenses at the same rate as revenue declines [25] Question: What actions have been taken for expense management? - Management detailed broad expense reductions across categories, including labor adjustments and a reduction in premium labor costs [28] Question: How is behavioral demand performing geographically? - Management observed robust demand for behavioral services across various diagnoses, despite challenges from closed schools and reduced ER referrals [35][60] Question: What is the impact of telehealth on behavioral health strategy? - Management highlighted that telehealth has provided an alternative access point for patients, enhancing the ability to reach those hesitant to enter traditional care settings [50] Question: Can you disaggregate the Medicare accelerated payments and deferred government stimulus? - Management clarified that $375 million is from Medicare accelerated payments, while approximately $100 million are stimulus funds not yet recognized in income [52] Question: What is the status of behavioral business initiatives? - Management indicated that many initiatives were put on hold due to COVID, but there is hope to resume discussions with payers in the future [56][57]