Universal Health Services (UHS) 26 Apr 182018 Q1 Earnings call transcript

Company Profile

Participants

Steve G. Filton	Universal Health Services, Inc.
Alan B. Miller	Universal Health Services, Inc.
Matthew Borsch	BMO Capital Markets (United States)
Joshua Raskin	Nephron Research LLC
Justin Lake	Wolfe Research LLC
Stephen Tanal	Goldman Sachs & Co. LLC
A.J. Rice	Credit Suisse Securities (NYSE:USA) LLC
Sarah E. James	Piper Jaffray & Co.
Frank George Morgan	RBC Capital Markets LLC
Peter Heinz Costa	Wells Fargo Securities LLC
Ralph Giacobbe	Citigroup Global Markets, Inc.
Gary P. Taylor	JPMorgan Securities LLC
Kevin Mark Fischbeck	Bank of America Merrill Lynch
Ana A. Gupte	Leerink Partners LLC
John W. Ransom	Raymond James & Associates, Inc.
Ann Kathleen Hynes	Mizuho Securities USA, Inc.

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Kristy, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2018 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

quarter Kristy. also joining you, of Health the Good XXXX. to morning. is CEO, Universal first for results our Miller, Services' March us review XX, Alan this Thank ended this Welcome morning.

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

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

XXXX press resulting the As impact of net diluted our per UHS of our last attributable of of from for the million March discussed ended to the the to diluted in quarter XXXX. as company On unfavorable the care same-facility XX, quarter. adjusting acute per revenues for Justice was night, quarter income share $X.XX our share attributable income Department to discussions recorded favorable After during division, from our and $X.X release increase impact first in in our the net release, reserve XXXX. ASU our press UHS related in $X.XX X.X% discussed a adoption adjusted XXXX-XX, the basis, for the increased after-tax

than same-facility admission. revenues X.X% adjusted admissions health in X.X% primarily increased (sic) the of during day prior increased in The the division first over Adjusted resulted in [XXXX] behavioral per year comparable to our a plan, prior basis, and quarter owned revenue first quarter. On from days patient behavioral quarter X.X% X.X% increase revenues health XXXX year increase of year the a same-facility a X.X%. our per adjusted facilities during patient rose increased a X.X%, Excluding X.X% the adjusted increased quarter. for more XXXX. and increase Revenue admissions our health adjusted over

operating million during XXXX. approximately Our the cash was first of provided by quarter $XXX activities

first accounts to as the Our last XX year. XXXX, during to compared first the increased outstanding during of days quarter XX quarter days receivable of days

Our of XX, XXXX be declined ratio XXXX. total compared of debt capitalization pleased during XX.X% million to this expenditures XXXX. your March to at I $XXX and on spent at Alan XX.X% will questions first at to time. capital quarter December We the XX, to as answer

Operator

from Please the with line Matt of Capital Your comes BMO first Markets. Borsch question go ahead.

Matthew Borsch

I Yeah. give here. that more some was parts Hi. hoping moving detail could just on the you us

understand in that's just you that As for what the in to necessarily set? Street EBITDA maybe particular, then the know, on below your what consensus wanted this And for. for side year I the behavioral you've think targets you not forward about targeting going you're beyond, given came estimate, volumes and

Steve G. Filton

Sure, Matt.

they quarter, internal budget. of own were I as that as probably for of for and So estimates, Street begin out, $X.XX budget just our while or We the own you were the we the not results our by would the commenting shy year. point were $X.XX internal consensus under acknowledge nearly shy

a quarter, robust the steeper the particularly, I our estimate. in more internal is than internal the would estimates. our think Street third say, than I has I Street budget ramp think for budget year the

question. on and internal slightly spot almost under our of So, your we the acute results in which of were, on subject in is really, terms of guess, side, behavioral terms of I budget, the our sort second

much XX relatively small our by our it points EBITDA revenues years over breakeven. adjust about really it plan, Puerto after at because talked distorts for decline the the you behavioral health when about revenue, hurricane revenue of the pretty had think have loss a basis Rico significant I But, is which probably in in our same-store and the we runs quarter.

quarter. So from behavioral own at That's expectations a where still the you're growth roughly revenue were. our little looking rate bit light for internal X.X% same-store

than shortfall had I weather think from we we're an probably other an own in on therefore short dollars think a revenue revenue our weather shy came $X to weather-wise, Boston at several forecast. million to for we that, that the million like million perspective in quarter least and again, little markets we attribute shy Washington, first Philadelphia attribute outpatient it and and EBITDA most revenue D.C., and as of quarter, the the shortfall mostly budget were and outpatient shortfall, issues quarter. our the internal But behavioral and $X of I or which difficult into

Matthew Borsch

great. Thank That's you. Yeah.

Just weather one the disruptions up that see ramp in side, occurred. the actually that, with quarter, course first the follow-up volume – of on on forgotten I've the you did when outpatient behavioral the over

Steve G. Filton

a and March if was of in late places. these of in mean, really that, lot it in bad again think, early of a then quarter, bit quarter the actually I in odd the recall, quarter Yeah. sort I you weather the an came early

Matthew Borsch

a Thanks lot. Okay.

Operator

Your Nephron next of question comes with Josh from line Research. Please ahead. the go Raskin

Joshua Raskin

talk been protocols if I been anticipated that you Hi, And light operate I'm how as and guys guess, in of of and there's operations? in no thanks. business basic real would part the changes and and, Steve. and of your any status Good This in little morning, you changes towards. segment. the any there quo process changes in settlement Why sort be investigation protocols just the bit a operations the behavioral curious just don't about

Steve G. Filton

mean, way. frankly sort documents investigation mostly We've I this number at and a of a the year. about to comprehensive times the been seriously. have look certainly the latter, over now We fifth very have I course think of government carefully reviewed this Josh. of the provided in tried the taken all think which I to its have them that we've very investigation, is it's been talked into

done very to all problems we every analyze internal we've within you within But sort the think to practices, to them felt et health in general, find to or talked to indicative I division, really that. are ought of the of you're going we at investigation and about. things a I government. like think, significant to going Look, uncovered organization, that fixing you're have pervasive think if And yourself looking or not small behavioral things they you're protocols, going whether that at internally, vigorously always that have that argument that issues I tweak, things we look our has our of So, the made the or honestly, like hard cetera. take identified within be

Joshua Raskin

math, – but part Okay. I doesn't like And it of to right? like forward implemented then so sound look either, settlement, there's to it be changes want as sounds any that to don't the need your

Steve G. Filton

I yet. will assume Well, where it the and risen of changes. ask you we're some that at at agree not government That settlement to may, point, stage will can don't fair, subject I that not to say be with but government. not the it I yet think has has not for to we negotiations that the really

Joshua Raskin

impact shift flu impact, a you. admissions, anything just adjusted And EBITDA, you decent et between but care care did you admissions on cetera? Acute then got anything? that see point and more. Okay, side, one out, Obviously, to

Steve G. Filton

had a flu about QX significant from impact QX. fact we the we realized that like mean, I felt talked fairly Yes. favorable in in we the

the I most and quarter, think end petered maybe first heavy real our markets, felt the utilization January. we middle in in of the by certainly, out of early longer flu like the no than sort pretty of

the impact, much, really calling like in think, for more much worthy was flu separately QX. I kind of we felt not minimal even us, and So, of out

of projected rather patients that below XXXX. that number those of that roughly but was, admission had of qualifying X% acuity would number, we We beginning tended X.X% a pointed our once of in we the in and rate revenue status admission revenue XXXX the our revenue inpatient more particularly reduce was focus were in with of to were on in because be suggested admissions. commenting our calls in adjusted status. inflated tended a the we whole and out that times we that impact of growth the observation or and per it addressed numbers care felt And low anniversary were sort driver per – big side. or admissions of many Just putting issue, and West, lot revenue of really robust admissions paying that the on a admission, in acute And appropriately XXXX, on admission observation And what out become working balance. more sort for felt per and more quite dynamic and payers, those of dynamic our sort admission like that to that we we that, was a that number than the

actual you and per growth for plan. would between evenly QX the split admission, And we admissions Our more it rate said it we adjust and be thought revenue when X.X% in was. was health

acute from people much way the particularly in the So I suggested this the in played they we've perspective, that year. care much expected will in the we've have division, dynamics that to out think QX, our way and in

Joshua Raskin

Thanks, Steve. Perfect.

Operator

go next Your Wolfe Justin Lake from ahead. question Research. Please comes with

Justin Lake

Thanks. Good morning.

impact us in this know on you I facilities Steve, Puerto through closed is on diminish from environment and that in still the of First, quarter, and headwind headwinds Can when the for headwinds your basis? year-over-year that year-over-year side. a this walk the mind carrying behavioral type those Rico.

Steve G. Filton

Justin. Sure,

in sort if City is million And EBITDA investors couple basically, the the EBITDA those our And that is and of two off, third total and or are easiest cost to $XX the fourth million which great revenue are is, you Boston to we restructured of the length laid three had we restructuring in of those lower. challenged things: our cetera. year, and see the closeout $XX drives the regulatory facility you quarters are EBITDA then closed between we sort at last one, of facilities our I talked And quarter. lower of million as What the that million in bulk a behavioral these in are for look that Dallas. the a at accommodate employees or about sort behavioral delta Oklahoma $XX and facilities quarter largely $XX about referring facilities think, same-store impact delta to stream. or severance in total or way a et in behavioral difference frankly, the

And the $X about for EBITDA probably facility QX. again, those in of Medicare the another had And or like new that $X Gulfport, loss $X million or that unable four, at a a we we get had three, we $X costs get at very a generally I that, new number. end to a quarter. facility costs Medicaid to and from million million of drag, Mississippi. that number, to was or million should say, a acquire or And in Medicare When then, announced we about acquisition loss. new takes the in $X probably year, five So million have in the or $X million the we're months Medicare run it bill we

note items those Now, that that quite main for for we I budgeted our I why frankly, are all mentioned that estimates just quarter. budget than think, the reason will was items lower Street is I internal the the and

other of $X in last numbers. was probably is mentioned $X was off think drag. that it's where a I That you remains Rico million the million year. And Rico probably or Puerto Puerto only it – same-store our item

far these should continue, As QX. closeout the as in costs end restructuring how things

certified, essentially And those. facility. that some with survey. Mississippi able point end as had date soon QX. be drag should to The of get bill survey we'll our at as Gulfport, finished effective We've the with We we of are in the

get sometime to that soon. is presuming hard a Rico we So, end can little through very that Puerto bit should that, predict.

island know, cetera. infrastructure to et issues, continues with As struggle the you

XXXX So I be But that a in impossible it's to that of would wouldn't a a that be our guidance. honestly, anticipated – drag. drag it not I bit continues we think

Justin Lake

question. then, Got And just one more it.

quarter, number your it You sounds mentioned off telling by million. third million. gap. that off And quarter basically us were consensus by raise like $XX into it Street $X that third closer move and million $XX There's to by you're a to $XX take the your so numbers million,

third just Just specific quarter it or then, that's annualizing that we Thanks. getting better way the your of the it. Like, want you think anything mind? should in right And is interpret is to make to third keep mind? the mis-modeling, in there kind anything quarter in Street sure or in

Steve G. Filton

of I $X.XX simply really point get do year into make consensus the our or guidance $X.XX guidance and we've off de But within, Sure. Look, not is I'll year. sort don't as intentionally, facto I giving the give think, Street's want you full guidance. that the to for quarterly know, quarterly

how largely only looking just think model call, of a the the And for gives people earlier I discussion of I they becomes and I more and QX, that QX, we're QX timing on of we year. we I'm because I to that And pretty trajectory year. so, not year was in I as the QX, of bulk a hopefully, reasons should a enumerated, in robust lot rest again, suggest, timing. much have exactly the had But we how target issues last good will the are that think largely difference easier. of had on and tell negative the at a I think this comparison going did is largely, I so But people the that then robust the less the sense think, we occurred the

Justin Lake

Thanks.

Operator

comes Your Please question Steve Tanal next with ahead. from Goldman go Sachs.

Stephen Tanal

Good guess, something QX in impact similar just and compare with for expectations with morning, Thanks did should health I be question. insurance of How guys. the we pullback. the year? balance the modeling starting the the your for

Steve G. Filton

lines quarter reconfigured particularly just in have our significant in Steve, and a know, dollars health The is, of prepared of reduced is that health million our other include the revenue revenue impact service business losing the So, business our our insurers There fairly especially up business net getting of think, revenue, in healthcare to same-store mentioned plan was we a but the in most is that again, driver us, plan which, in I business, because plan make actually have the health EBITDA out you commercial number significantly, in remarks, is now. that fairly as, decline exchange I of we the Because a point. revenue. largely done. the a for we our couple decline our

our for I create when expected about think, again, $XX the $X year, thinking the million quarter guidance call, that fourth we plan health million for talked the that we results year would their suggested the about tailwind or on just a were to improve. we we as

the just something think will most So we're that fall think material so. in and difference, way. the year, point on QX I that to revenue the I EBITDA track be making be really which for But of range continue not through will do in that to of is continue to any sort

EBITDA. In fact, on I think opposite it'll have the effect

Stephen Tanal

That's have visibility of Awesome. generally, you And the helpful. just pricing more for the year. on clearly, balance

So you. assuming of admits of outlook yield. the what year, the the and be general the behavioral, and and of end the kind I high low helpful of comments other and understand levels to there maybe acute Thank you're of, balance kind in want for I'll guidance? any utilization would adjusted And on just at both

Steve G. Filton

to during those volumes to the going that our price. that's I numbers presumes suspect made was to revenue it X.X% first range In which in growth the pretty little we year than be ran that around again, sort be volumes, for And QX between call, bit would acute the to think bounce our just skewed would comments we first the I'm mean, evenly care more and I little I guidance were price of bit repeat and quarter, and quarter. split in we a that a much in pretty Yeah. the that X% might year.

revenue and to side, to X% we to to getting better third behavioral quarter. QX, X% on In pricing growth be the actually close the that we did volume And X% the we side. same-store by X% would price. talked something imagine On about X%

as we offset, frankly, other we I our think that our have price see, pressures some the that increases to I but of quite pressured projection. think payers volume for remains some

we it more the increase the the revenue ramp results steady growth year will for a that differently presume of again, that much behavioral pretty ramp, side Now would presume on each the and a where quarter bit little thought behavioral the ratable. acute or be than we incrementally for

Stephen Tanal

just can. if last So, follow-up, one I

side, was closed of that now goes impact away that from there the any facilities on think kind we ramp? On of sort you've meaningful metrics the overall behavioral three about same-store those as this

Steve G. Filton

about not Well, I but clear we've those was again, think removed this, same-store. from maybe I effectively, hospitals

So same-store, in profitable those costs said, I I the think, were of hospitals does $X because as there. EBITDA generally those $X the same-store or there's point, removing closeout hospitals million the But year. to hurt from million it your first of by half numbers in

headwind a money It'll significant in All tailwind in of for in guidance. the the year, half is of won't first of that, year. they losing in same-store. that were a creates back the be us create they half embedded So, course, the the and when our

Stephen Tanal

Perfect. Thanks a lot.

Operator

you've by think Your Rice I what's next length just ahead. when task about first happening LLC Credit to the the - to Hi, sort A.J. Please A.J. maybe Suisse that setting look and know down experiencing. I some of of (USA) of Rice force discussion line want ask Thanks. were for market question I comes from down everybody. Suisse. with really there go pressures Securities the Crédit Managed there we there. in stay up drill exactly been to try was Medicaid market December, a about

Where thinking saw are felt of we to out, of We to you the you guys to on something year length incremental should you your do can this? sort last steadies back pressure? sort and anniversary about the you it have or quarter on think get the there's how and forward? this push like stay third going just So, pressure at your of

Steve G. Filton

we've the our overall from quarters made that think I managed utilization categories, review from And payers, reduction think shift. what in Mostly, QX, that, see stable. Medicaid last think the I so So point QX length aggressive tend drives probably the particular and continued Medicaid, to in on stay that, traditional payer what is to the is the a more is length think, each perspective. point at of for and made not people, to be few behavioral side the stay we I within in of this we is I relatively surprisingly most Managed of

board, a utilization length that, management and management taking are and I to, think stay. of all the A.J., justified we're and stay appropriate look I of you're of that necessary review the and of at and think alluding length stay we our think what across taking is by just the appropriate length payers, right have clinically hard to steps

we all commissioners, we that, not arbitrarily in insurance push continue anticipated. where might state indicated, find us is and the those back longer through than are have payers tedious strengthening kind length think strengthening be things. and documentation, sorts is we that stay of ways, process sorts takes in fair, So contractual sometimes our clinically of challenging reducing of both our language, perhaps all it of payers terms I where the originally we a think slow To of to

going So, the I of do I back don't really patients clinically fight get than the behalf we year, think things But our be Okay. enumerated thing easier a is just for will when continue think ramp stay. the And budgetary we our the which A.J. question. bit on a was, part for the of steeper I year of And reason I may we stay Street's. why you those will for half of to length Securities is little going us, was about of point believe get the deployment that as is comparisons maybe articulated, as to that, ask length lot – capital Rice Credit continue justified our really to in worsen. of - the continue think, appropriate to to the you LLC we I all Suisse the view then particularly, on again other and (USA)

in put they're the But down to we've the I thought little I hold trying slowed seeing, of might down, behavioral, also quarter. that wondered negotiate see transactions like whether – there that guys the – process that buyback are in are with guys was or when either first a in things pipeline mean, terms other you anything potential your pulled you slow or looks have pace on interesting step guys or on seen the maybe acquisitions. you acute deal You maybe government, it. whether that's clearly in up

Steve G. Filton

I think two sort of discrete issues.

A.J. comment, I accurate. think first is your fairly

we pause ultimate government, on feel button I as the to think activity. a closer our sense makes is probably bit the what get that, hit it little we settlement an to with we share repurchase hope

seems has lot it's both I As always difficult far to to of to characterize. as always business. there's an open precision much can transaction. difficult any and it and active how It be on of result predict of the very executable always But, been, deal the activity activity it's with in think, ultimately pipeline, sides as that a level of

we I So repurchase side. because to continue - and the our assessment the in But LLC I of don't A.J. M&A case. we've Okay. slowed imminent pipeline. Securities Rice got that we've anything (USA) that's Credit down activity be the in say think Suisse busy on wouldn't evaluation terms

Alan B. Miller

to Credit LLC A.J. add A.J. Suisse Okay. - Securities (USA) me Let Rice

Alan B. Miller

new your at Suisse - LLC A.J. (USA) Rice Securities Credit luck good Thanks. A.J., employee. Okay.

Alan B. Miller

a that We're Interesting. in busy They're area for non-profits. Oregon. us. Rice Lancaster. ventures a new also We're us. hospital a We're for very in and lucky to Securities joint We're good going A.J. integration, LLC with is Suisse (USA) with to you. active there, good open another - up that's get and area. It's Credit It's area

else? on side that is relates it and exclusion, the behavioral So, to IMD easing people or the something

Alan B. Miller

business fact the of part going the into and the get for to to to the not want non-profits leader relates in that look they that are forward. it behavioral think I that

to Credit interesting. there, Rice prominent. going and think I - So very A.J. we're we're Okay, Suisse Securities be LLC (USA)

lot. So, thanks a

Operator

James Sarah Jaffray. go with ahead. from comes question next Piper Your Please

Sarah E. James

or you the the if break side? recruits, understand new more understand if And pressure Can out more on it's was expense. Thank this step ongoing behavioral for help in acute wage us up more this like salary signing hourly pressure I if was Thanks. like increases? one-time wanted then bonuses you. to or

Steve G. Filton

Sarah, great my a has affects few last labor deal the while the environment changed think environment I segments now. in over business I We've perspective, ways. it that years. tight wage and, course in pretty labor not of market the both been I for think so from the guess, a of different a the potentially And

to the lot – don't side, On necessarily pretty don't nurses. been pressure registry and and or sort traveling incremental several at or to I on we've what of or But outside this there's a described we be for of acute own fair, our been temporary rate least, use as is I believe unemployment premium quarters pay, now pressure. nurses, overtime at low nurses there the of

of it's expansion main the able two drive of revenue you've growing between to growth, to sufficient that's roughly that efficiencies. growth achieve at think X% margin acute got you and sort issue segment leverage care I the because level see segments revenue when the operating is a

of the efficiencies. side, not yet. there to X.X% drive higher or is revenue just sort little quite not behavioral real operating On a That we're simply enough growth

I flattish same-store of so EBITDA. have we sort think And pretty

side. don't I on on tight cases, function labor significant sides or the both both anything any it's of regard. as at it's market that very new than salary employment think low long the revenue we're the these in will of it a a changes is I incremental in I more Again, so terribly growth be But historically business and to see think as rates. continue

Sarah E. James

Got on it. side. And your behavioral the on comment to just follow-up

in on offset While some behavioral cost there that help are facilitate you're could revenue margins, that for waiting way are can initiatives going the the on of pressure the higher ramp any up a to wage that back segment?

Steve G. Filton

that But Look, don't there's And we inclination think efficiently. my low-hanging run to level. behavioral doing to is, make efficient constantly, all we're CFO, a for Again, every as believe operator little that has that we're of business making natural sure within efficient trying certainly of patients. people could any But that until that do. own we I to to be increase to been highest continue revenue our growth, will business that a I of efficiency maintain a a pretty believe ton there's I that wouldn't continue I it's care suggest run good or things are quality expect bit be sure sort unless of and the of our be we ton offer fair, to as we a and the think, always confines highly the for which that at fruit. we to continues more opportunity

Sarah E. James

Thank you.

Operator

the from Frank Please comes question of next RBC Your line with Morgan ahead. Capital Markets. go

Frank George Morgan

Good morning.

that here Just progress so better question behavioral mix behavioral acute in think, I about terms hospitals the referrals acute then, on question. my to relationships focused that a the sources more area hospitals, wrap normalized on up outpatient an quarter you seen weakness quarter far? mix that the Is want of in the just of past, in first some freestanding to referrals to you've you've of some one to and first And level getting in any with second referrals curious volumes. the final you you care have I'm your attributed caused some from the Have talked seen. that if That's of of you any the about from that those recover of sources? your commentary. Thanks.

Steve G. Filton

this and our cetera, think that we I've get outpatient first like surgical said activity to we think literally inpatient feedback of to a more I really folks get two our data in the the and out whether sort Honestly, have terribly markets again, outpatient preliminary some something data anecdotal I in gut volumes nothing kind yeah, people weather what of a have and first be revenue daily or your on rebounded but other that, field I two activity Frank, is the real-time My of see for anecdotal lot QX. We'll to read of but to a is had businesses, quarter, to that. is wait a don't out for proves on. the talking on So, from the have think, correct. read in things trends, volumes within to is, reaction, that et asking these I precise. historically and is Most question, we QX, subjective, another month support bad in where

Medicaid second I hospitals, attributed indicated particular, really in IMD commercial. question, have being markets, to degree, some some necessarily in it we but about also not think our risen. their that that ERs think sometime But the sending some the I our had of XXXX were acute exclusion us we we To lifted. talked in that fact and patients, in your being Medicaid that our suggested of referral more Medicare care sources, selective some utilization

I say, sort remained think are we stable deal. pretty great those of and of has that our QX a comment, in specific with sources. a referral and sort I in not sort has generally, payer markets, would addressing changed of that's pretty mix our

Frank George Morgan

you. have on did And of Got you mentioned inpatient behavioral. you more side the clarity

Thanks. looking far in the color any XQ? inpatient is on So so side how

Steve G. Filton

not a March. this was give generally seen in that. skewed I'm in always April the but of I'm surveys better really in the lot hesitant I sort that I calendar feedback think generally Yeah. Again, big – suggest I've than regard. of to that year a to of and guy, calendar volumes sort think The calendar

that behavioral I ton I think other I than acute that's that would suggest think calling the And know point. this been and of that don't both on a at our worth out are trends there's side. experience the that, I

Frank George Morgan

you. Thank Okay.

Operator

from line comes question Peter Please next Fargo Securities. go Costa the ahead. Wells with of Your

Peter Heinz Costa

morning. Good

weren't margin. but of improved may that On I'm terms able to to to bottom admissions be line nicely thought said in that the acute the occupancy of tied flu wasn't incremental impact. side, your I you acuity wondering, lower much much first, those the but year-over-year, bring you flu, an

So I'm lower if admissions something acuity what caused wondering else quarter. looks there's that in the like

Steve G. Filton

acute guidance for repeat I done about it's that X.X% of revenue Again, performance somebody strong much have been in year. performance generally, the like of I as what what environment, where pressure performance amount an our to But with it Peter, we those X% me we of And have being QX. I reasonable a metrics our expectations mind could to in X% acute to care could I'm the more of care tight – a a respond hit where pretty very performance. our has talked again, in always but a expectations. been little sort have it X% and other growth. of a EBITDA as with could care people's XXXX better, our time, said very sort for there much to in thought wage We Look, always again out both bit some for and market, labor earlier, growth laid difficult for and I I'll and efficient, acute a is line is was CFO, we was line said, felt in

Peter Heinz Costa

setting up how then you are where in And I going incremental treatment. can situation? we the you we kind any a programs outpatient of about seeing pickup revenue opioid and stand side, mostly that's Okay. that, on on new do that the assume from on treatment? behavioral to talk for opioid Have seen

Steve G. Filton

illness certainly in think I there is of us, of increasing The browses I'm – demand. in Look, the your of that is you I but sort for of question, sort amount and addiction sort and general reimbursement sure think reads that knows of for pace. as anybody actual the keeping pace who newspaper great asking doing addiction Internet nothing opioid a great treatment, and the you've not is, framed is the numbers or Yeah. in of sort conundrum at the with amount

additional cetera and has provider been Now community the to yet. and flowed really through But have that not sure passed. monies patient I'm federal community et the legislation dedicated there some

increase So in would watching point, measurable to in very largely closely it been think and demand markets we respond as created, at this addiction outpatient have is it. suggested, addiction programs clearly But way really, say, I would or any reimbursement certain have we're reimbursement. where to you from an there I available, we say, in not benefited I incremental

and But don't it's to we're that. we We occurred very the I yet. future that expect in might, think attuned

Peter Heinz Costa

Thank you.

Operator

Your from Citi. ahead. Ralph next question with go Giacobbe Please comes

Ralph Giacobbe

Thanks. Good morning.

have of you exchanges. you're have concentrated your having as or And in around employers guess, are getting markets offering that of of direct lot noise. committed to the are plan of you a been reconfiguring talked about showing You do out driving sort health discussion clearly and that you still then it's I with – portfolio, given interest a contracting? more sort pretty interest the

Steve G. Filton

old So, I on years. think going we've X.X I probably the think for the years at for it's Ralph, talked I this owned question about plan, guess, the point, rationale way I X.X again, it would answer health the we've

environment act will health things. to as two view, on a we we of physicians, of hospital the all set. that take more and and future, had. us they risk and a have, owning I of like providers having think skills hospitals very and point to historically always to risk-based think insurance most as I company We having in and that that plan that have will think more not where providers skills sorts, more have build I infrastructure skill bought an important require that because continue like the consequence, move platform We enable insurers thought a underwriting that would

to the things an think Medicare other expertise a advantage plans to for is market feel in to being is, use like us competitive important market or I by underwriting able certain Advantage be care we markets, on create like, in that to other accountable leverage. markets organizations again, issue basis, able extremely

in generate most just continue do hospitals, but apologize, don't it not Ralph, and indicates, it's to it. do our or think we're results. steer in are sake most insurance profitable activity business the think to cetera. things on... our things that will not to I to as our hospitals We beneficial adjust committed et do and then the business, remain of business for So profitability effective, we're beneficial overall I And tweak business think yeah, doing we we the our mean, I to and that think I current that to the

Ralph Giacobbe

contracting? The direct

Steve G. Filton

the do at a a our seen point, direct of contracting do are I think most not not this We've yeah. big we're employers, of markets from think don't because partly again, I – simply We're enough Oh, seeing employers that. in to a great like Las I of that the But building not. the demand again, casinos, generally but I Vegas, in to from will of in that underwriting casinos it think bit future. for the think if more little there's expertise allow some us deal

Ralph Giacobbe

back And go to then, Okay. components of to want the understand did and same facility I the revenue growth. try better

or negative You now then and outsized and in And last you certainly the in of we did two, patient even talked of muted year see, pricing. sort back kind and about it shift volume normalizing. mentioned, observation and of the

terms is increases I'm side – either just think then on the the helped pure the second payer of I popping of pricing that on and the impact this the or And is the stack to stat. have have not us the might pricing impact side, quarter. pricing anything why the on following piece that mix which pricing that sure would comment of I'm there acuity that mix you're more in getting, Thanks. dynamics

Steve G. Filton

number portion I it, the growth is sort if they're admission, tends XXXX out dynamic ER patients, meeting rate, on multiple admission not – will of those the we drive which higher think doing converting patients, admission admissions are, again, patients who the times. revenue average surgery not hip But your they're at the your definition, patients. levels. the because which a are at same called and time, implant I lower open-heart They're least in what lower patients, patients criteria of patients, acute those per to they're what that, inpatients, trauma who not happening patients it bubble are by it again, simply think increase of is mean, I'll was a of, will you're observation do than think average call I a Yeah. and to observation I acuity

So them numbers, but drag higher again, revenue admission admission. down inpatient per drives overall to tends that admitting

Ralph Giacobbe

Okay. and the acuity payer in mix And just quarter? mix then

Steve G. Filton

I Again, so for were as it I an flu that mentioned think nearly mix the both impact. quarter fairly fourth that much busy payer acuity as a of quarter have was constant and didn't the quarter. was, not

I stable were think as think, the I in and both acuity pretty about mix it, So payer quarter.

Ralph Giacobbe

you. Thank Okay.

Operator

comes ahead. go line Please of question next Your from Taylor the with Gary JPMorgan.

Gary P. Taylor

morning. Good Hi.

shortfall Steve, on questions. to couple of you short willing that of the weather, would far outpatient budget versus like quantify revenue were you? discussed be a Just you budget to related how

Steve G. Filton

Yeah.

adjusted X.X% just X.X%. So growth, when were of analysis, we day did would've our to the from last patient year's if growth outpatient we revenue level at gone

it's adjusted like worth XX basis days. of So points patient

Gary P. Taylor

I then admissions the using the you And growth, that faster was, at And is make my wasn't I want I'll rare. plan to gross calculations and it question skewing revenue health the just revenue revenue adjusted Okay. which do primarily it's sure in other some on than those shortfall. growth all. admissions guess outpatient maths that. were included

Steve G. Filton

No.

and So when exclude calculations, per we patient revenue we do the admission plan. per the day revenue health

Gary P. Taylor

have you do question, visit can number share? you same-store Last Okay. a ER

Steve G. Filton

There's little I X.X% pretty sort that was in X%, range. a admission bit of think It with for growth. but memory, our consistent

Gary P. Taylor

Okay. you. Thank

Operator

line comes question next America. Bank Fischbeck of Your ahead. the Kevin with go Please of from

Kevin Mark Fischbeck

Great. Thanks.

little versus this a any, in site bit if more quarter see happening, improvement I wanted core Just business QX. was guess, about like to what you felt the the

and you revenue you about in grew at I challenges said, the regulatory of the hurricanes this kind business that think at were Puerto saying like call, same excluding at you're Puerto Houston on three looking Rico, the And some of sites, sounds site issues it Rico QX X.X%. again the excluding quarter. you're saying, X.X% those and

relatively that feel of that trajectory? So kind better that you or quarter-to-quarter there core that fair makes a the is number going was the on stable basis is about from anything on underneath

Steve G. Filton

Yeah.

think patient you're at patient the when the sum revenue per days I you day, X.X%. that roughly and So

quarter. million we dollars that number again, I most we think a we probably the shortfall few is Kevin, of thought And light the where that in can be. shortfall we would from see, outpatient attribute to

thought where quarter. be, we view if that would growth revenue our would pretty close have So have we the been we to I revenue it outpatient the for think have trajectory the been

Kevin Mark Fischbeck

Okay.

is So when your is improvement showing you segregate you core that outpatient? of the have kind outside would business the it, of thought view that

Steve G. Filton

so. we think Yeah,

Kevin Mark Fischbeck

margins. just about XX%, those Okay. behavioral, type going margins a then, few were margins another XX% like And back years to question ago, in

margin a Are over XX%. you time, like X% business more do – You're where those be might get now think growing the you once normalized again?

Steve G. Filton

can that that continue as And can drive cetera, as started business, for is over of below been number, because mean not of mean, we years is sustain before a easy I we maybe years in sort at to of growth magical say, growth last that to like the I perspective the the that kind around, both would to right effectively, revenue don't that make I by sort but what we has a have growth labor is margins it it's a I Look, for declined is reason and margin two to level ago. of – you'll physically Kevin, behavioral you of think you that I to business experience particularly long X% the to get again, and the revenue sort from the few expansion. we my revenue operating behavioral as leverage a true those long we as for were fundamental numbers as of mean, drive did those and fixed incremental that those it the ought many largely think business, issues, numbers, business. will we relatively when, if acute, the get three and is is be tighter expansion revenue and will labor growth, margins the hospital years get margins we much it's again point answer drive continue back to need constrained a view you soon, or semi-fixed model in number issues those margin capacity and and growth. as environment, My think the growth we believe long to minimum, I to able running et volume cost as is that

Kevin Mark Fischbeck

you really the on to is is shifts that basically it – then, anniversarying saying in point to? and the And that entire there's sounds acute fair you're to underneath is volumes is it like anything say point might side, short-stay that to admissions, kind that you observation dynamic core there Okay. of in anything that regionally care slowdown volumes? core acute year-over-year Or would on

Steve G. Filton

don't so. think I No,

Kevin Mark Fischbeck

question. last just And then Okay.

to there that settlement You should guys balance those or along that anything progress sheet. into for significant times there this should we that the two negotiations? changed amount on that? Is does Is happen anything or more we argue three or meaningful your you booked expect read

Steve G. Filton

that their our that to us have outside moment is accepted the are say convention willingness would minimum at is situations. told for industry in in at the required of least accountants I level that companies reserve accounting the What to settle these

just suggest is continue entirely government's to government, times to possible of the it at that position go proceeding large that, the say I think, vigorously I is can, guess, will earlier their though, an hope many Having continues long, government that that but we've to in stretch. alternatively, reserve people at We wouldn't a I Even not to on or our doesn't at that too to stuck as and would into respond any said by the proceed we'll And we're I to to cooperate government. too process. this pace. expeditiously is number defend it times is settle a number I suggest changes somebody we we read number pace. continue that, be So, to close for be minimum our part, honestly, what as made settling the the an we did this the offer to in that willingness and in largely that in of current indication are to and but future. at our number to we as that call, hope around we would

Kevin Mark Fischbeck

Great, All thanks. right.

Operator

next line Gupte the Please of Leerink Partners. from go ahead. Ana question an with comes Your

Ana A. Gupte

Good thanks. morning. Yeah,

Is question, growth first follow is to volumes always the stays your just side, attributed you were it pricing The put noticeable and up that that shift the acute this lower. and observation it your have higher you on intentional was forward this and mix dictated payers might again just quarter the intentional? this set around or together by payer happened, you from rather it than coming specific seen will, bounce if being going because it it is or – of is

Steve G. Filton

quarter I about that mean, last issue spoke think an So is just I about every this we again, year.

I markets, Vegas, I in our I minds California, significant would observation patients that, status. on is multiple in our inpatient different Volume and I that, not the which happening what progress what try in, think a mean, particularly we Las think utilization out, amount in happened. number be to deliberately back are commercial what I numbers were numbers our to our finding Back about and I The were answer absolutely think, contractual those inflating think we sort and different your normal particularly of a it quarter-to-quarter? And is numbers suggest pushed those contracts, the numbers our question, to were again, in yes. cetera from business status of in likely very as, made in around we to admission ways, of our predictable. occasions, payers think do Western XXXX, we again, the being that and, to about was numbers has XXXX pointed bounce always payers, that something more transparent and was regress would aggressive XXXX. out payers – very But terms I better is, documentation, in keeping hospital what describe are of et

some inpatient of whole in So those dynamic. yes, observation around some fluctuation will including numbers variety bounce for reasons, the a

Ana A. Gupte

access haven't the more heard of and of in in is observing just and or feels and CapEx your to it peers nature urgent maybe strategies building then And ED again you're your a acute, that in because thanks. terms of the systems ambulatory and lot to care. markets and volumes that what Okay, else? points, like of I you, and your mix not-for-profit something I ASCs missed from it out lot the a about shifting on talk

Steve G. Filton

have to think, a as point not-for-profit the to so of happens the million that opposed No. Look, freestanding of business to most a the freestanding that be for-profit tends emergency view $XXX its know we investment acute $XX a cost department build care build costs just is, business of and we the smaller, shifted to significant hospital. same I have, to that million by has as of in and our It both settings. Ana, general ambulatory peers, ambulatory portion nature

or development and geographies. we in a So operational previously, But freestanding don't a the example, have, either that it mentioned have probably dozen necessarily call at moment for under number of EDs, are we out.

have And bunch to outpatient our care markets. some those sites tailored every ambulatory in have again, We imaging urgent of some a the one primary physician is sites, of care strategies we sites. hospitals,

think So peers. the in, no, markets I in of honestly, investing we're the that we're business as aggressively ambulatory as in our any

Ana A. Gupte

the then was Okay, I hurricane, that. you than have was could. of have and realize something been XQ sort a and continuing helpful. something stabilization seasonality? would but on procedures you past. at steeper the if accelerate, final didn't seen it suggest of one seasonality into year it there in bit seen little procedure of of you're ASC-type seasonality, seeing And not the that's On like has felt more in I because type acute, volumes to And XQ, high-deductible commercial, is the moving that a last is that this and that or point

Steve G. Filton

best Ana. not good I question, a Honestly, are we positioned one It's think to that answer.

one, lower. know the But over for in so cetera. that difficult weeks, of very subscribers if QX et just have there plans advantage copays to would volumes think if measure have in they at end because our would somewhat two hospital predicted that's I experts, of more elective that And had procedures so the next know, have turn, to their to or will, it's is, to for source we hard a that report patients lot have and QX going their at are you moment deductibles copays of be whether were don't higher be sort us we many exhausted that higher you number had measure. could who deductibles. the As course encourage their ambulatory this providers total, week or hospital peers and of And of copays what XXXX patients more volume deductibles, the exhausted

much positioned I to think better the are that. do insurers

was think QX able more later precision the any objectivity. a level but QX, the in look us moment, QX maybe or I difficult very at and of of if think to year, honestly, do to in QX, kind in I or and seasonality shift there back we'll of that's be for see So with

Ana A. Gupte

growth moving Then one behavioral, the better. being pricing to you. Thank on question

kind of or convince Is a a to said mix driven level sustainable negotiation. specific of You mix payers even able certain segment, better issue one or something your improvement? of peers, you've segment on payer on by being or of it set growth else? pressing payers, been Is a pricing that more it is within

Steve G. Filton

think I Again, side. mean, pricing more likely it's range, on reside. pricing quarter to in for where sort expectation was I back that of the the I But X% higher that it our aggressively described to we that's going to are in we our and that to payers. future X% be tends think

is saw do QX increases minds our people increase non-government over not we'll percent payers, to had But and and both continue the are that. no, that I we in the have payers. unmanaged sustainable from some necessarily in long-term. government We price and And managed wouldn't adequate three-plus in time suggest that to meaning those

a probably something think I than more that little realistic. is bit lower

Ana A. Gupte

the Okay. Thanks. undertakings saw final one. Cambian. One We on

think took one I you on. last the

I much are to for is As NHS the any you volumes you, for the on broadly, Meaningfully, census It's anything. the you pressures nurses? U.K.? what and far observing, beginning but And are in what smaller believe, seeing there? wages if increase now just likely as –

Steve G. Filton

of really year of we legacy best but XXXX going opportunity things, and to the mean, unable of and specific because drive our with in Cambian XXXX process, year we We the combine greater think any FTC, of our that sort actual that. most the experience like the didn't the spent CMA efficiencies, U.K. sort I one feel through practices U.K. have I the and be fairly was sense opportunity I will the Yes. us, to operating in think, a for that do equivalent business business. even of to

think, I XXXX. business, even that to so, combine better on able hopefully, be And as small business to we a we've the been relatively late progresses, improvements it able the have that now to report to though since able we'll component year make been of it is

Ana A. Gupte

Thanks it. Got Steve.

Operator

Your ahead. of next James. from Ransom Please with the John comes Raymond question line go

John W. Ransom

don't talked any But how on you trending doing? if there? your business just update I curious any know your about about behavioral, diversions but that how see addiction you is this, just versus think it's quick I is I'm small.

Steve G. Filton

in suggest. as all of to earlier, inpatient an moving outpatient more to things a the model, of cases Costa's our fairly an both of component business. in to addiction I model. an of moving to the sort amount in-network of response addiction I But addiction decent our of addiction think of think other both of I No. think business, many component those bit mean, those question take which treatment forward-looking, through see small advantage mean, again, in we a attuned our least relatively some addiction dedicated more sort behavioral business treatment again, demand in Peter business, was very trying changes move you and model we sort we're little sorting some a sorting as I dedicated I of is as I undergoing treatment. model addiction But of in at facilities significant as that think We're is changes, those overall from from our more forward. in an out-of-network have changes well a business, to

John W. Ransom

then if any proposal my have talking question, but are this, And Ransom>: sorry, again NHS, missed other I'm U.K. do by worth about? you use labor and John that I there the

Steve G. Filton

as situation. it similar view of I sort a ways, Many

some market is tight remain labor U.K. the and think tight for time. will I

hold because the again best CMA some were we really separate do management process. attracted us on we in that to practices the able said felt to had I there that most things were I able bring had Again, to record were to be two a the labor like that pressures through think there that of of until have to businesses we think that was calls they And really legacy long we I XXXX our business. the track would really Cambian previous business well. managing one

report think that year. on I be XXXX. We'll later leverage we're some to better to in to hoping able this practices of able be those

John W. Ransom

a lot. thanks Okay,

Operator

Your go next question comes Please from the line of Frank Morgan with Capital RBC ahead. Markets.

Frank George Morgan

follow-ups Gary my volumes, one. ask of Most but about surgical about What volumes I'll this have quarter? surgical about Thanks. asked, volumes. same-store asked ER been but what in the

Steve G. Filton

our surgical think ton pretty a in Yeah, particular admissions, around little down. so were you're inpatient think bit initiative I admission procedures much our they're be of that low balances more surgical range. up is our sort overall just generally or a X% acuity in kind because growing volumes. to of X% I have procedures strong, really there's inpatient of Outpatient outpatient volumes But tracked been sometimes, tracking and that

Frank George Morgan

Thank you.

Operator

Ann from Your Mizuho go next Please question ahead. with comes Securities. Hynes

Ann Kathleen Hynes

morning. good Hi

for a So strategic for the stock segment. in rough the years since shareholders these it's having you. you've over it's I a been at have When look issues performance question long-term, But behavioral more two your been I obviously, been great.

really tenth I of quarter the on think we're going underperformance.

and these unlock really for value lot argue point because share past are while at who has the need decide, company performance look do and you years fixing what this company analysts two shareholders the So would of at are a stuck issues, I the of to value. the over you

that it's business. reflect you're And stock doing business well, care quick I But is although, a doesn't, cash. great behavioral's acute reality. Your generate you the under-levered, really still underperformance, guess

guess, what your on are that? I So thoughts

Steve G. Filton

So necessarily Ann, don't with I we disagree think your observation.

that are think, It been operators, a I progress some to I the in to in address the difficult and those the feel of you last environment like the little trigger we've over a performance little years. But suggesting, of a regard. created business priorities has made see slog, feel longer that think of than ultimately, can bit couple envisioned. I underperformance the then that as and making I think we a in lot I bit would of think hope like our have slower issues evaluation of originally pretty you're results we we real improved sort we are kind progress will see.

do control. suggest been dividends, to reasons metrics it's that, feel and capital before pay I put we on addition And we'll shares. are the the I the to do in expectation of intention those we've in bigger we to – and think the of think we that and every that like most are way. to acquirer. current do active that And the which is I that start that our to reasons, other to then feel improving secondly, love pause that but to prudent to But important we're think we've would than can, on efficient that, lot that that on an that, We're and going things like we to sort most before think, phrase operational really we this in investigation side that focus kind of really significant future. have we're have within again, I not going way of we I government necessarily. can two get done try and from a we a perspective, we continue think deploy do in going our think use but I a again

Ann Kathleen Hynes

flow this cash the press year, I'm expectation if to correct? but I is this, flow grow missed I your for then you talked know sorry, release, but about And cash in Okay.

Steve G. Filton

Yeah.

largely way EBITDA I cash grow should expectation that for think the flows ultimately our grows is that year. same the

Ann Kathleen Hynes

Thanks. Okay. All right.

Operator

the question Sachs. comes Tanal Steve last Please Your from line go Goldman with of ahead

Stephen Tanal

guys. Hey,

Just wanted squeeze to one one quick here.

models was The of Can of includes the of contra expense for sustainability earnings other just controlled as you here? plan that drivers and the segments. talk line whether about operating kind line expense in pretty the well health both a that just

Steve G. Filton

Yes.

sort So, correct. of suggestion, is Steve, second of your or part question

revenue tends health I of line supply both premium medical the the expense other other they to payments expense, reduction fixed reduction on not in and most when in about well. the as generally, so as our concurrent and acute the that fetch where that of recorded in operating semi-fixed the in and numbers. also salary loss be to tend of on and gets line particularly But So costs volatile be side businesses operating as there's reside, to some talk a commensurate that plan,

Stephen Tanal

you. Okay. Thank

Operator

this is questions time. all That the at

Steve G. Filton

to thank for and time, forward speaking we everybody again next Okay, quarter. their look

Operator

call. conference today's concludes This

may You disconnect. now

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.