UHS(US:UHS)2023-07-26 15:34Financial Data and Key Metrics Changes - The company reported a net income attributable to UHS per diluted share of $2.42 for Q2 2023, with an adjusted net income of $2.53 per diluted share [67] - Adjusted admissions in acute care increased by 7.7% year-over-year, while overall revenue growth was 9.7% [53] - Same-facility EBITDA for behavioral hospitals increased by 12% in the first half of the year compared to the prior year [55] - Cash generated from operating activities was $654 million in the first half of 2023, up from $478 million in the same period in 2022 [55] - Average hourly rate, including premium pay, was 4% lower than Q2 2022 [68] Business Line Data and Key Metrics Changes - Surgical growth was up about 5% year-over-year, with outpatient procedures increasing by 8% and inpatient procedures only up by 1% [14] - Same-facility revenues at behavioral health hospitals increased by 7.8%, driven by a 6.2% increase in revenue per adjusted patient day [54] - The company experienced a $75 million premium pay in Q2, reflecting a 10% to 12% decline from previous quarters [53] Market Data and Key Metrics Changes - The company noted that facilities in Texas and Florida have been recovering at a more rapid rate compared to other geographies, impacting performance comparisons [25] - The Nevada market showed improvement, with expectations for a favorable impact from a new state-directed program in 2024 [73] Company Strategy and Development Direction - The company is focused on expanding acute care capacity, with 24 operational freestanding emergency departments and additional facilities in development [56] - The behavioral health segment is investing in new facilities, including a 120-bed hospital in California and a 96-bed hospital in Michigan [57] - The company is pursuing aggressive rate increases from payers in the behavioral health division, aiming for a revenue per day increase of 4% to 5% moving forward [22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the trajectory of acute care volumes, noting strong performance in the first half of the year but uncertainty about future moderation [77] - The company anticipates that physician subsidy expenses will level off in 2024 after experiencing significant increases due to current disruptions [48] - Management believes that the long-term trajectory for the behavioral business remains positive, despite a slowdown in Q2 [95] Other Important Information - The company spent $337 million on capital expenditures in the first half of 2023 and repurchased approximately 20% of its outstanding shares since 2019 [70] - The company is awaiting further guidance from the state regarding the Nevada Medicaid program, which could have a materially favorable impact [36] Q&A Session Summary Question: How is the Reno hospital tracking against expectations? - The Reno hospital is expected to contribute about $25 million to $30 million in turnaround, with approximately $4 million to $5 million improvement in Q2 [8] Question: Are you now able to find clinicians for behavioral health? - The company has been able to hire more clinicians, although there is some inefficiency due to less experienced hires [11] Question: What is the outlook for behavioral health margins? - Historically, revenue per day in the behavioral division has increased by 2% to 3% annually, but during the pandemic, it rose to 5% to 6% [19] Question: How are acute care volumes expected to trend in the back half of the year? - There is uncertainty about how acute care volumes will moderate, but early indications in July suggest continued strength [77] Question: What impact do you expect from Medicaid redeterminations? - The company anticipates some impact from Medicaid redeterminations but believes that many individuals will qualify for better-paying commercial products [108][109]