UHS - Earnings call transcript Q4 2017 | Universal Health Services, Inc.

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Operator

Good morning. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter and Year-End Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Mr. may you your begin Filton, conference. Steve

Steve G. Filton

for Good joining us you. to December review Services' XX, morning. quarter and both Alan also is this results Health Universal CEO, XXXX. our of full this ended you year fourth Miller, welcome Thank the morning. we And

using forward-looking and During that similar this be represent conference statements. believes, as forecast, and Alan such call, and words expects, will projections I words anticipates, estimates

statements, and call forward-looking recommend For risk XX-K uncertainties and in December familiar inherent We'd to trends ended reading anyone the a opening our XX, year with and to of like developments these not business before highlight careful risks factors the up in and risk Form I questions. a section on just of the XXXX. the forward-looking for statements factors couple

As records share X.X%, recorded care our per of increased to during basis, On net net the during Tax period share and the diluted expense per Jobs to the health the $X XX, X.X% division admissions. a XXXX increased our company at XXXX. patient XXXX. quarter of amortization more adjusting revenues admissions quarter depreciation adjusted decreased compared fourth quarter. the last net income per quarter compared with release, XXXX XXXX, X.X% ASU electronic XXXX net adjusted Revenue of the during prior or schedule year the during the hospitals, care rose as to revenues the a Cuts while X.X% division, fourth due Act XXXX. night, during $X.XX $X.XX million primarily After over diluted January X.X% health our acute attributable quarter last same-facility UHS income $X.XX and owned a acute adjusted in implementation included ended of our all for health discussed quarter the increase On supplemental of diluted press as from is XXXX-XX of the our associated UHS year to to $XXX.X on with applications Adjusted for quarter disclosed behavioral adoption of fourth year fourth December behavioral the impact adjusted facilities night's of or impact XXXX day in days X.X% earnings the of patient million the in of and of to in XXXX X, and release for the fourth for increased for quarter. favorable attributable to fourth quarter the increased share than $XXX comparable a per each same-facility basis, the

billion cash decrease the Contributing $X.XXX $XXX contracts an change generated million from as of during currency exchange XXXX unfavorable related Our $XXX was investments during forward billion our to flows the operating XXXX. UK. in $X.XXX million in cash to to compared foreign activities was from

to fourth total and to remained Our at we including spent de unchanged during new December XX, We debt million to of XXXX. compared ratio facilities. the the our $XXX full of XXXX. as XXXX of XXX XX, and In XX XXXX. million days health XXXX, during beds, expenditures fourth At behavioral quarters XX.X% on capital quarter $XXX capitalization XXXX, year and during the novo outstanding each of accounts receivable completed opened XXXX of days declined XX.X% at December

with the Health the XXX-bed for expenditures, XXXX, projects located Mississippi. we existing expect In to System, approximately renovations, Gulfport, facility XXXX, in to hospitals includes behavioral and on our million a at new of conjunction facilities. care expenditures in equipment, million Behavioral Gulfport capital share Also, construction of during or per of which inception quarter repurchase spend XXXX, $XXX aggregate During million acquired we shares approximately per $XXX the fourth new $XXX health capital repurchased $XXX shares million January of of a share. program at XXXX, share. or X.XX approximately million have $XXX through of that an cost X cost at program we approximately of our in million we XX, XXXX, repurchased Since stock approximately commenced December $XXX

generated range interest, X% representing of XX, Our an billion estimated X% to of for of taxes, earnings is depreciation $X.XXX over ended amortization $X.XXX and billion year billion, increase $X.XXX XXXX approximately December during before EBITDA XXXX. the the to

approximately million guidance XXXX provision Tax income release. $XXX and last as an includes estimated XXXX net in the on to Cuts impact taxes range for Jobs $XXX of favorable our addition, discussed resulting night's our to from In million of attributable UHS press and income Act

Tax attributable estimated per range favorable Cuts represents for calculated XX, per of This range also ended increase to diluted from ended per for $X.XX in included is $X.XX $X.XX last schedule UHS This the net share December Jobs attributable XX% release. supplemental guidance share $X.XX guidance on net year the $X.XX of to the share. XXXX diluted income December the XXXX range an XX% diluted XXXX. the of diluted impact approximately per approximately XX, EPS resulting share Act UHS over adjusted and year night's income adjusted adjusted the press Our of to of includes to as to

$XX.XX questions net X% net estimated approximately answer our of your at billion $XX.XX to time. and over pleased an to X% Alan approximately be revenues. will to to representing I increase our are revenues this billion, During be XXXX, XXXX

Operator

from is Wolfe question first Your Research. Lake with Justin

Justin Lake

ex and facing was year-over-year? what you're Steve, Good side, of challenges handful terms and growth some hurricanes some EBITDA behavioral the regulatory us the same-store a of revenue Thanks. view of give facilities, at on morning. can your behavioral ex of, you in color the

Steve G. Filton

Justin. Sure,

you've quarter, discussed would Puerto we facilities. of had So, Rico drag third the hurricane in million three, one third we that you was various and a million QX. both largely degree, or amounted Houston impact $X hurricanes quarter did. as our sort drag QX impact of referenced, in and, items of in We third a quarter. estimated of what million suggest described non-recurring fourth that conference call in referenced It as in million facilities two about $XX the to the that to we discussed, and $X third And, our be also third million a would lesser quarter Similarly, $X $X One – regulatory-challenged or said in quarter. that in them, $X we the in the facilities of couple it fact, million or into that to or into in continue and QX. in another the quarter, the persist

end the year, would resolve the by that, those we issues. said of also We

then, because resolved Dallas, three have network in we We those decided Boston the that in lost January in think hospitals. sense Medicaid in to have that being patients hospitals contract we those as of regained And state the question those we broad facilities we can have the at of treated Oklahoma, markets partly a X. significant of and facilities that have two were most where two a in we in where treat we contract or close contract,

maybe QX, our and about about was EBITDA a I the facility. for said trajectory just items make same-store over we by flat, was down So, slightly. in generally believe when – all fairly revenue fourth think in favorable Having health very more adjustments that behavioral you grew we're X.X% quarter that, those back last on Oklahoma year's

Justin Lake

like on into first months didn't it color the two months two and same-store you for how mix you the an you're on driver you there? then then, And us any and see quarter, can Can of Thanks. trending what see the saw basis. behavioral mix things the hope side was give And revenue some you looks both QX? on through volume updates the first of give Okay. on behavioral key why improvement we adjusted us

Steve G. Filton

mix of think in I suggest, stay, metrics within revenue Medicaid in mostly point a growth Medicare result And a think, stay. the our And that, been length our was growth, I quarter. pressure XXXX, and of growth pressure overall admission and a generally the of expectations. our believe mean at payer increase decline admission that Justin, And our your patients that of most in have question did I suggests, when patients. which pressure various our lower overall an during as has QX patients we generally therefore, volume as issues. times Medicaid behavioral in just our a I was growth really say Length

QX. So, and have length decline to in we overall patients, we more the degree, Medicaid less our and naturally of will that saw think I Medicare stay somewhat,

seen have who behavioral but the slight and continue that for market is behavioral of services especially expectation for underlying and we all whom our commercial revenue our going Medicare rather are revenue growth of get guidance focus to help XXXX. the patients in that in same-store of strong. decline and beds demanding We're the will the remains both restore demand on that time back our Our may to services, assumes for business. those our we can that trajectory we middle so that length And and and we'll about X% to that that talked – sometime this stay achieve for have some we target some

Operator

Costa Your Fargo next Peter question Securities. from with is Wells

Peter Heinz Costa

the hurricane-related, is hurricane about geographically? missed part you I of bit? a talk but this, where rebound revenue related, that that little was your Hi. of apologize was acute space, I not clearly, in but it if those some the Can care that

Steve G. Filton

rebound, the quarter. assume I again, Peter, talking I third mean, the sequentially say of you're some think I So, from when you

Peter Heinz Costa

Yes, correct.

Steve G. Filton

define has our discussed of think times or issue. are flu much it is, in million $XX probably And year, quarter, incremental California about turnaround been we XXX really about, contributed catch-up least by believe One soft million talked several as provider absolutely quarter. in our you I we always health last XXX, think getting benefits XXXX, quarter fourth of points a That's results it finally, of in I revenue a an a quarter to at of think And while the very we I significant our a sort some our very in and we $X peers, But has operations. benefit did of probably and during in is, health written QX. more quarter the or care EBITDA a fourth million Tenet, we revenues the difficult plan as of EBITDA. turnaround about our a year. I in and admissions the probably a in of as of fairly our There's helped think number sort $X the find impact and length, quarter, precisely in what million. at tax then fourth have one talked million $XX $X basis also, significant when result and million, an EBITDA compare last in there's this revenues $XX fourth largely plan the to QX, of acute

$XX So, to that's degree, some probably $XX non-recurring million EBITDA. of, million to

But think of a mind the it I if the very you about results care even non-recurring for quarter ongoing was helpful that sort acute the is. quarter adjust very, power again, keep strong still quarter. Now, earnings it's fourth fourth in results, items, think the to segment of you as what those

Peter Heinz Costa

you over to two? positioned treatment. Have you for today Thanks. just the one year mean and additional to capture And or could that's that opioid company you of that you're some towards do then going if capture the you thought some what don't think and how about what it'll the of funding mind. of for next health be headed crisis, The more, behavioral

Steve G. Filton

treatment think the government, to good a that a are, our beds services I experiment because new estimate and addiction with they're opened suffering communities we But treatment they're in are of addiction service. of, worth to many we funds number as respond diagnoses, we well-established include of illness particular, to addiction coming characterized medically-assisted have there XX% treatment are from the think who that those new would revenues Again, revenues the addiction. of the who of that being opioid to a that service, one addiction I the already to addiction related. XX% our outpatient are patients Today, think, are treatments as needs number around dedicated opioid funds it I available directed those of to every more position it's To There and always in somewhere our comparable we make referred these precise to Peter, often would so terribly that respond for not – lot behavioral other I from business we've well. of currently outpatient begun specifically addiction noting, pilot treatment, and difficult as also treatment are patients diagnosis that have a we've from that patients have are a think, dual some that. and or patients. to towards degree with

I to that on the from aware well think government. your and the focus on the additional monies question, opioid So, of are we obviously flow crisis the may

I are on respond going early this, of think how very top in a to prepared monies for, to what the little so to those arise. they certainly exactly as to of they're But going know be much stage allocated. to hard we're and very it's the exactly needs it we're be

Peter Heinz Costa

you. Thank

Operator

Your is with next James question Sarah Jaffray. Piper from

Sarah E. James

you. Thank

acute acuity see So, increasingly plans and going you a one you the talk and about for topic that's acute is trending adjusted on for admission UHS per been capital side on you are Can how on that positioned? coming acuity driving how higher revenue up your focus What competitive mix a see forward? becoming allocation environment.

Steve G. Filton

Sarah. Sure,

and that this cath of system. hospital acuity dedicated our things but the labs, ambulatory, technology many not services. settings expanded I historically terribly ambulatory to spending a within our cost entering been I of also that new, where capacity that more tends to and in time settings. We've in had think now, cetera. like has rooms segment So, think out an now, make I skewed those procedures some of on years moving remains lower for acute operating business been patients. cardiac and hospitals these sure been think our emergency I higher our the made effort higher that into setting patients is particularly room lower acuity are acuity of some – have think much In and trend participating regard, the and At and time, – different to care same capital done lot that the more our we've sort the for of lower towards we're et of be has in hospitals this the acuity several expanded moving to – patients We've that

and emergency view number last so local business. bit imaging settings, we've it's ambulatory rooms as in settings, in We et very every of the cetera. health over invested a freestanding a in market, care surgery And several years our communities, outpatient little In community different capital and every a been are acuity two lower to being and trends meet and trying in I responses different. think sort we've our the remaining more to target are our acuity those higher needs patients different But hospital shifted patients spend effectively, ambulatory of the of to settings. always

Sarah E. James

revenue all putting the over that into trending per they admission the So compared you perspective, term been historically? adjusted would intermediate have where how see to

Steve G. Filton

volume. talked an a care and X% we're reasonable think revenue Look, pretty to Furthermore, rate a feeling our target. acute that between have is that in identified same-store split we we've price X% that be segment, expectation growth rate revenue I would growth evenly about,

embedded prefaced some business don't trend in of you this to acuity the in is And the you're So again, new. X.X% I in about unit revenue my number talking I higher that saying, what remarks on this obviously acuity X% think side. patients that – growth or necessarily acute towards per acute is

I numbers for So it's embedded we're our think that in year. next in projecting guidance the

Sarah E. James

Thank you.

Operator

next question A.J. with Your LLC A.J. Hi, from Credit Suisse. Suisse is Securities - Rice everybody. (USA) Credit Rice

of couple questions a as well. Just

both a guess, same-store give X% embedded growth you in maybe what's outlook should know that hurricane, other out said, EBITDA flavor same-store the behavioral think on First acute. unusual a back level in the highlight? for of remember revenue the and Maybe there can recur in in any a the to to just won't of half you in hopefully the sides I terms growth puts the same about on for XXXX, all, X% we at basis the as any I things is or for segment items? takes year, they we of laying other year? And but us

Steve G. Filton

A.J. Sure,

of as kind year, I projections think the for So, you recurring repeated. about they next projections we when talk are same-store

we're in our growth, translates On to X% think X% growth. the to side, EBITDA X% revenue X% talking I which acute or minds

earlier to ought growth get a ramp X% our that's or this my able alluded behavioral expectation but and middle XXXX, EBITDA as X% growth, year the be that comments, is by to side, to in revenue the goes we up the to as of On I X% on.

them guidance think, our items. non-recurring already to blended of do a had about a malpractice year, in X% had lot in questions X% unfavorable second X% expense, are more the and we EBITDA Massachusetts to embedded dish the is we some in (XX:XX) talked growth And quarter. adjustments. I We think to So, the answer some growth. for go third about I X% the and There to benefit, we get revenue some quarter, you the the if back quarter maybe additional – fourth

all Securities and total million, I $XX in XXXX items Unfavorable unfavorable those line? in you can (USA) that Rice LLC think Suisse Credit in items million presume A.J. XXXX. items, - reoccur don't don't reoccur EBITDA to that that's probably of another non-recurring non-recurring $XX

Steve G. Filton

Yeah. And see taxes in reduction that offsetting last of you again, that a I in can sort the that, year-over-year. XX-K will million and this we provider night, say $XX is filed

terms flow it know slow. the do strongest seems lowest in as the the in sort to I love the results from of tax largely up sector, deals, $XXX thoughts you go haven't the from additional part of pretty I same-store but capital think - Any of guys and of like LLC leverage remarks, million where items, what balance prepared picking Credit Okay. you said cash you been Suisse you you're cancel And they've So reform. flow most conceptually, maybe (USA) also, of for out through. guess, is I part they we here Securities A.J. non-recurring you coming sheet, I allocation? see then and Rice the reason highlighted your have in

a active you projects, flavor thinking? You've if us some give – you been some you're wanted to, talking what's are you're about even, the be buyback, what companies could capital more active accelerating for lot on certainly dividends

Steve G. Filton

the we're a M&A both balance we our benefit pleased being perspective. extremely our suggested. obviously capital, judicious just very as Look, of enhances UHS that have CapEx flexibility do have an position. And cuts much you has with from for from sheet the as we reputation how we that as terms and a in deploy tax

continue we'll do think I to so.

as bit in care. about on hand, we've behavioral We'll this talked very and that. can a other we're market do or acute to continue the enhancing in our call, dollars they already across so little the it's really compete focused in continuum, whether spending On that franchises

that some at in a in beginning As of variable firm the which something them. continue and time At those that to as a that's actionability. mean years, shares we year, to the that all it returner not But M&A because our as year think of to time, times targets doesn't deployment in seem I to worthwhile alluded we an compelling, up metrics move into you or opportunities going it's opportunities, to sort going the executable we'll where And evaluate commitments not often shareholders continue that have us. ton set us and opportunities. we actionable the we for capital or the the to reasonable are which of based and series those wound make all acquirer a of of seem active because well. all some the that to next and we'll not on explore most continue presented your seem minds we're chance to we're at any think be sense, a your often think generally looking any M&A of on being last point kind we're alternatives, And of that but of attractive, spend to in of pursue compelling continue of several point, has the question, I are to our of makes capital

Alan B. Miller

- A.J.? A.J. (USA) Alan. Rice Yes. LLC Securities Hi, Credit Suisse

Alan B. Miller

a like - great. Suisse I good the covered skip And at a and (USA) our has to we and that A.J. buying Rice LLC Hi. have Steve it's we're Okay. it. the want Credit right. don't All Securities That's we consistently, think lot. stock, we Thanks waterfront. been always part value. looking

Operator

with Your question next of Fischbeck Bank America. from is Kevin

Kevin Mark Fischbeck

Great. Thanks.

mix a length Just want stay that under you're that. wanted do part like because payer pressure those the because shifts. and seeing shifts, into because fundamentally cetera some like but to is et stay why things Is just you more bit. think commercial little of It you're payer market of IMD Medicaid you're is share I saying sounds dig length status business of losing in just mix demand understand somehow seeing or of it growth to on in Medicare,

Steve G. Filton

in respects, think Kevin, I question. own actually your you So, some answered

number seeing were lifted I think facilities reimbursed years. we has patients IMD for whom Medicaid for because we many reimbursed are adult for Medicaid that our we exclusion patients and the because been of be many, any unable more to in now be can

the to patients contributed has think I that a to degree. surge in So, Medicaid

there a of like these of I operate think freestanding units. other commercial, with competition is who other acute and for classes also both behavioral care with and facilities Medicare some hospitals payer that lot

kinds that and patients or an behavioral sometimes or great patients, an we a be facilities as those in number can on of medical they patients to a Medicare behavioral freestanding least We've much in is payers treated families setting. the or focused subset ailments, One of ability have care and also that patients, kinds idea surgical the and of on of treat a certain presume our that many acute better at physical deal things those well. very focused have

also patients behavioral very compromised. treating medically may we're who on elderly So, be focused those

that those for competition increased patients. been I think there's

So, suggested an of exclusion, of of both for amongst other of the IMD the increased Medicaid again, patients Medicare flow because some providers. patients, a question, function, just patients, as it's an particularly those competition you I lifting your all and of think increased in

Kevin Mark Fischbeck

range, seen length talked getting we X.X% to to accelerate, we started need more. that of then you would admissions accelerate the gap. haven't said, admissions pressure, to really just probably when well, can about stay really to that to you to of In there. X%, to X% kind get necessary obviously, close still get be and X.X%. That We past, the And

in some from So mean, biggest little short there's opportunity competition. if pressure a how X%, it term, or least acceleration ramp bit, like continues admissions? at in I do be think sounds from the you're to And see saying is about the where that you of that X.X%? length stay flat down that to to kind of here

Steve G. Filton

the Yeah, not mean I'm differently and characterize – a sure you, than that I wouldn't I trend little Kevin.

I psychiatrists markets. really I saw good back, last couple decline the you'll that that so which question around of of began addressing bit to that year of labor middle more issue in lesser because XXXX really vacancies We spent admission some of middle valid. is largely little I our if And the increase of of about to growth in steadily, in pretty XXXX. middle stay a stalled those actually to go XXXX middle many of I see and and pressure. and ratably think, the think think a progress a did XXXX. you from think of on degree, or now, think, your where this make the length a in It quarters is the of filling I decline we admissions attributed mostly shortage We precipitously but clinicians, back shortage nurses, fairly to right

we're or or confident of we being was to the keeps we is I talk that all we number. need, that the recently are clinicians why there, of when we because think to patients remain either we what sometimes why that need, to to have think we beds don't have or all compromised, don't that's look presented get unable just X% who number to able the is being our continue alluding I facilities, us medically think about treat, as I to, they're we because demand and the we at

But has to strong we X% back acknowledge demand that greater underlying us the sufficient this originally has and firmly is that be time get a that of I'll believe to again, and been Now, think than remains the anticipated. taken first we slog more growth. to kind I

Kevin Mark Fischbeck

So, in this a labor is view. still your issue

If right you're seeing staff, you volume a now. be more you'll seeing lot had enough than

Steve G. Filton

think it's of I a combination issues.

is I a issue, labor places physical think is sort I to compromised capacity issue. in in finally, issue. the some it's few patients. payer medically a and of a still suggested. ability as certainly a physical mix of It places. It's handful in cases, bed is And it treat a It some

So, a single it's I wouldn't say factor.

Kevin Mark Fischbeck

Thanks. right. All

Operator

Your Research. with is Nephron from Raskin next Josh question

Joshua Raskin

morning, Good Steve. Thanks. Hi.

little a we First of I and just question while already And pipeline? we a now. see is change just, are it's seeing I'm know since been you one behavioral saw the in the health robust was, bit Gulfport change acquisitions M&A curious mentioned you that just Is the side. behavioral the there? a point? or less is at more curious the least any in certain on robust seen of the capital deployment pipeline you areas. But I'm trends this have

Steve G. Filton

did their that I slow. back a the we've That we U.S., just over ventures So, acute hospitals the to activity year the in been very again, little joint integrating step acquisition. think was a a pipeline obviously, penetrating ago. with you that talked behavioral and with In UK the and is we Cambian significant really mean, acquisition have about these when a take we've the say focused – sometimes And them care businesses. integration fairly and I fact people acquisition on or

of in embedded the that a in of Pennsylvania, end partnership the quarter. opening plan is here guidance hospital not-for-profit second an in our XXX-bed have We open with and XXXX our building we're at Lancaster, in hospital. That'll

XXX-bed the then, an third care simply hospital remarks the to. hospital a the talking behavioral that's at mentioned sort a is unit. market. case, have in that they acute Spokane hospital my Seattle similar quarter, mean, deal. in Providence sell that in end Greater We that began their we And in I Gulfport the partnership a system to of decided us deal opening of out the I with in And

their the that fruition sort And occur. we that great But, to So, will concede many in one hospitals think, progresses not-for-profit three deliberate continuing that's to for business avenue for to lucrative at sort this examples of of, a of we or of number projects have think aspect these decision I come as of come again, continue we of this behavioral the and how to although fairly a slowly a making. fruition conversations to is years fairly point. growth are I coming good rather outlined are those

Joshua Raskin

right? targeted the Got bed you. part And of talked that's that have openings about, you guys

Steve G. Filton

Correct.

Joshua Raskin

on just Okay. your Did then in guidance lastly, any put Got there share a in buybacks, And magnitude you. XXXX? you there? for is

Steve G. Filton

Yeah.

I that in undesignated half opportunities. be our to roughly to free we presume the will share M&A half and of dedicated repurchase sort flow our cash other think of guidance,

Joshua Raskin

All Perfect. right. Thanks. Okay.

Operator

next Steve Your Goldman Sachs. is Tanal with question from

Stephen Tanal

Thanks facility morning, of Henderson I the question. Good in for came the guys. ask wanted about quarter. just that to same-facility into kind base the the the

and relative you get productivity helpful for today of of mature thing, and for you long minds to us to how If you could kind the know would like hoping us. how would sort that of your state, how of typically that does new a hospital have might understand to facility let it out in contributed, that sort So question, an of of the tailwind that look just what kind sort be if break part period and estimate as for And a that of that be take long much helpful? think last? that'd I'm there, ramp that

Steve G. Filton

Sure, Steve.

ramped our in to care would about opening, original XX Henderson quarters a months last talked how that call maturity. the particular, probably opening, know close has few hospital new acute I say typical to it to expectations. ramp beyond I over So Alan, has takes

I in years. XX Las last such a the that hospitals think from tend market vibrant the just franchise Vegas fairly typical our a hospitals to the new over we've that's ramp. those of opened market It's that such strong perspective and

I care And in in quarter the fourth hospitals measured the is Henderson I was $X contributed of that ramping will quarter. market which growth million pretty comparison our QX don't disclose continued maturity was to to, of individual they're million think, probably Henderson's grow or It would to We in acute XXXX hospitals, fourth operate. So – how the short profitability case, say, the fifth the but quarter. another EBITDA say other our close in in I $X life. to this of

million as or $XX but think our results. from continues XXXX much has because ramped up embedded that it so Henderson it in another in think mature, $X there's I to million is tailwind quickly, I already benefit of

Stephen Tanal

the Got on just takes around the kind puts Could us is in mid-point like just looks it. at the for guidance. give you It That's about of margins EBITDA and flavor a helpful. that? the And flattish. one

Steve G. Filton

benefit sort more the mean, get some I grow mean, would digits, expecting look we carefully. then to the in Yeah. for our is guess EBITDA that need to it of I we're I share lower operations from think I a and at I reality low-single count.

think I EPS to how that of get us. for So, that's growth digit you sort mid-single

Stephen Tanal

thinking about just margins was the EBITDA I of... kind year-on-year

Steve G. Filton

Oh, EBITDA margin.

Stephen Tanal

Yeah.

Steve G. Filton

business. up ramp Yeah. function And the behavioral the think of that's a of I largely continued

actually flattish focused think bit. about I you behavioral and are those that's, X% I, growing little little as talked I revenues X%, a margins apologize. X% a – in or The to if margin contracting at EBITDA get growing margins I before, I wasn't answering at question. are think, margins. on expanding X% the acute A.J.'s their and So, bit, question

Stephen Tanal

Got it. lot. Understood. a Thanks

Operator

Ana Partners. next with Gupte Your Leerink question is from

Ana A. Gupte

the on that what Thanks. price, or adds are back you you and of Steve, I that stay adult it payer Medicare come the that mix. or patients just capacity facilities around to because the in the versus themselves, don't question novo the the night. Good but – have the freestanding you build like is good going length of relative, to staffing other the are I'd interplay so favor are Friday Medicare The almost patients right de influx Medicaid care competitive intensity, higher new you're the is just out away capacity and patients don't good of acute ones, through this now saying keeping from clinical to turning the that ER know, Medicaid have Medicare the morning. sending is for while the facilities Yeah. higher

Steve G. Filton

patients hospitals coming real I've terribly mean the know me that the know before what certainly that possible to are and a about know sense systems that in in other So, hospital we it's for to deal precise more great said Ana, I than don't I et or our necessarily. in hospitals. necessarily are cetera, the going We share, market time elsewhere patients always are don't what exactly especially experiencing marketplace what vis-à-vis be

the answer a regulatory dynamics of So, surge in because as I landscape. question, seeing some patients the changing sort of think Kevin's in tried of we're Medicaid I to

payer I say think sure compromised was or lower I Kevin, both the contributing confident those not But our And acute harder or of patients. patients, patients is business. volume. of or presented more and behavioral other demand – on emergency those Medicaid in I way to care sort managing capacity hotel day clearer think of or classes the business we the that's shortages real or we're even challenges way because clinician the basis a patients challenges not receives might patients it's be like underlying demand than that frankly elective of seeing patient what to have One in quite for being an hospital admission and effectively factors mix more it but is challenge stay the an to satisfies can payer all are day, those length of we're competition and or I now strong medically I in remains its we shortages airline We're bit time. and quite remain us is little to overall Most way Medicare whether schedule to our scheduling manage the are with an that a some volume again, settings. I'm managing of for that any the the a that

Ana A. Gupte

Okay.

asking we bring you Just ramp on – itself the it's from for of perhaps up, admissions and another are stream, XQ, as adjusted and give should you whatever that capacity expect color on then and way, XQ more length pricing on seeing ramping any can do you adjusted would staffing can up and stay if X.X% capacity admissions us the growth to and doing. go higher XXXX

Steve G. Filton

and predict seen numbers, early on so to for necessarily all doesn't difficult project X, quite which quarter. I this look fairly volume look in March it encouraging. February. early seem volumes we've in Behavioral strong February particularly the but are It's frankly know Yeah. obviously,

think behavioral I the the start of year on got off side. a to somewhat slow

severe look some the candid, strong. side. weather information line February be any absolutely But But demand, mix a I on seen February think in on haven't lot I a our markets of particularly our of volumes to outpatient weather, winter payer service or curbed mix.

obviously And difficult beyond on first for quarter well. for March so, any go as have to outlook comment me that, very it's we the to still and sort of

Ana A. Gupte

Okay.

thanks that very for helpful. So, color, that's

UK the getting pent going others it's shift been governments you, I you're from don't of any demand I census? or knowing kind color us on talks in give but all to around know and the moving perhaps, whether the Can there treated Just in for situation. up know seeing you and is – it UK has competition local the some small they're a to that creating a demand peer at

Steve G. Filton

small sure for not indicative And their our was public our footprint is think reinforcing a that of transition Well, that I'm or UK indicative that is in company worth necessarily our your it's XXXX I us. largely is to the is in peer. extremely say which ours. year necessarily first therefore, comparison I experience experience comment, will

previous very and EBITDA. a to facilities than outcome the single what sold. less XXXX had As in pleased with Cambian the $X that on acquisition of sell outcome very did the have with with UK the XXXX process. We to of and we would working at We that acquisition CMA most were a I of the response, facility mentioned spent of the be a of end in million

think I felt in and CMA combine work until part of that we to that interaction process two late But were outcome the our with very is was really that the so, we of like worthwhile. able And XXXX. not businesses

share synergies, best weren't really we able achieve any So, et cetera. to or practices

I really for like minimizing So, number a issues. tight behavioral pressure in markets company temporary Look, can in a market, we've UK. of we And And has best But the legacy better use and but XXXX has we we're think U.S., that said of particular in seen. our hoping necessarily what our same at acknowledge in we gauge the success consistently, of registry. that the their pretty peer would to same public be I had on don't we're think I Cambian volumes practices smaller different we've will And, in a the and do haven't that seen I know it's facilities. those much use experienced our nurses think again, us, in markets. much historical

Ana A. Gupte

for Got it. Steve. color, Thanks the

Operator

Gary with Your next question from JPMorgan. is Taylor

Gary P. Taylor

Hi. Good morning.

said Just beds, XXX XXXX a was when a number couple a quick Steve, ones. you that number? behavioral or XXXX

Steve G. Filton

That was number. a XXXX

Gary P. Taylor

tell And contemplating what for us you're did you XXXX at?

Steve G. Filton

tell bit XXX XXX in a didn't. will that that probably I I you range. higher, I little to is maybe number that think

Gary P. Taylor

And on spend what that do you that? will to

Steve G. Filton

Yeah.

that in So, I $XXX,XXX is a bed probably on new bed average, behavioral think, a range.

Gary P. Taylor

Okay.

Steve G. Filton

Obviously, a it's that's they think good dependent on cetera, average. I et but where are,

Gary P. Taylor

any all you add about? JVs facilities? these those Are of are of existing new in talked the had facilities, to And some on

Steve G. Filton

Yeah.

be that Spokane like in mentioned Lancaster, So, the number. that before in Pennsylvania I two included facilities would and

Gary P. Taylor

Okay.

Steve G. Filton

the would bulk think rest existing of at facilities. And then, bed I additions the be

Gary P. Taylor

costs can Okay. bit what you about talk segments? Last a budgeting in question, little terms both for labor you're of

Steve G. Filton

I view inflation think X%, in range. labor both that have the of sort is in probably we X.X% that businesses

overtime. down pay, that presume is in the the describe seen been it of and come down think We've our I more use in as number use increased has we the I labor which the XXXX shortage, think segments, focus, nurses, little main think, the of each a on business bit the comes side, premium different of as I challenge, projections, a their of of considerably that acute what in temporary use result XXXX.

I the positions. issue inflation difficulty already been so made been not of much I've think XXXX. side, has in think, mentioned, as filling labor a vacant we as those progress a in lot behavioral Again, it's the I all On as much

progress I think, we'll all that in continue make that's in our and guidance. presume think we incorporated, XXXX to I more

Gary P. Taylor

you. Thank Okay.

Operator

with Giacobbe is next Your Citigroup. Ralph from question

Ralph Giacobbe

morning. Good Thanks.

in California bit that. pricing I the It should've know to but the remains due back side. maybe a go provider balance to want helped quarter. the some Just acuity to little was there soft flu,

else trying causing kind And at it's down. mix, flat as that's payer it So, the of look I'm to rate something been just or a sense, to get is drag? pure I XXXX,

of XXXX. to X% trying embedded understand for kind just the that visibility X% So, in to around

Steve G. Filton

patients again, And, I yourself, per down that of Yeah. tends to addressed unit. it mean, I flu think that some I of in think really Ralph. sort surge revenue the you've drag

of flu to ACA And – tend new patients uninsured an to if payer those understand, revenue really, now, impact Medicaid some aggressive XXX a is the up And Coast, down. includes quarters continues on finally, in terribly people patients in and the into as of and been because, amount since most see pretty of XXX also don't effect every however, go be QX. point increase tick the of time, mix. think pressure different on or continued there's quarter, up a saying a that per we've lower some sort But the calculation. patients of volume to number or due implemented, revenue We've number impactful it has for per patients, been add fully I that of patients. as on think I years I or quarters, we basis I unit lower acuity, unit been a patients of gradually this couple continued in last to particularly, we've my goes The think then moderated maybe lower the was and think commercial number rather the more I who That payers – inpatient revenue idea down few seeing which, been come patients. behavior admission our fair are has per about we've QX. very very our again, have acuity that go seen tend our of admitted. that, care cosmetics on in the the observation talked patients. be that about of think those we're And patients in they categorizing Nevada, up our shift we've some of the patients mind, hospitals than a number aggressive acute being and to West behavior part trend in our California admissions of for

very you the but that cetera, all quarter, this think drives those which contribute to down by I it the et So inpatient, in of to from sort driven of shift the revenue of strong unit. back observation by admissions, see sort is flu, per the factors driven dynamic

I think sense range. see in comparable we be in per X% time, over and each X.X% unit and admission a to the more normalized to more revenue growth

Ralph Giacobbe

your Okay. population? growth share? to some get you're seems markets. out bit about market your terms Is backdrop competitive markets? Fair better enough. volume like? and a tease industry gaining And just to within to gauge peers the the think it sense in versus do – outsized then the the in think talked closures just be trying of Whether of want visits a both about of sort of the there Just what pretty observation, a acute talk more that and even and be around segment may in to little that's you trying Are in dynamics sort just you as results, the look you sustained of you results the at

Steve G. Filton

about enhancing the at if long to which faster you mostly we're so asking had it's Ralph, in to now. in that national markets. time, the of markets within long had And pre-recession the been if our back we and in you're growing indicated quite clearly The you that. averages. outperforming time periods, a of for the And But than mean, that that tend twice think of presentation for a then I worth quite of rate investor grow we've noting years double generally. think slide from we've have I sort average, outperforming about, frankly, a place the markets it's – for it's peers has time I are a number We've our the some were trends go Sure. I our growing look, be that been we we're our whammy, and those that in. think peers benefit markets projected that often to will, franchises national

a recession, of several including our obviously, District number been Columbia, new also itself share fastest and considerably, our of Vegas in from market robust We markets, pattern by of a the in most is been by in market a for by capacity, in markets. the very but think the Vegas exception building increasing Las that market et repeated Las is benefited one cetera. has while Florida market, several including itself, other few U.S. of the but us in largest growing the example I where benefited markets with before that, of Riverside And including market we've the now. County, So, perfect California, the single our years the decades has

again, pattern repeated So, is think that really what and has acute our benefited itself that care I performance. has

Ralph Giacobbe

I or talked could deployment, squeeze about that know may more more you about if in. capital Thanks. a Okay. thoughts That's have comments What missed I helpful. I one it. around meaningful any dividend? And Specifically as well.

Steve G. Filton

address and I the table the company in I Yeah. is I a open comments, to that mean, we at my think Ralph, didn't to – different didn't everything alternatives. on but that willing of specifically lot look previous is and

and couple only still in still months you a passed of ongoing a and is tax of know, and so, lot this stages. ago analysis early reform deliberation the As

Ralph Giacobbe

Thanks. Okay.

Operator

we And further have questions, no sir.

Steve G. Filton

everybody forward speaking of the look time we quarter. the end their Well, I at and Okay. thank everybody for to first to

Operator

quarter fourth today's conclude call. does conference year-end This and

disconnect. now may You

Universal Health Services (UHS) 1 Mar 182017 Q4 Earnings call transcript