Universal Health Services (UHS) 26 Jul 192019 Q2 Earnings call transcript

Company Profile

Participants

Steve Filton	CFO
Alan Miller	CEO
A.J. Rice	Credit Suisse
Justin Lake	Wolfe Research
Sarah James	Piper Jaffray
Josh Raskin	Nephron Research
Frank Morgan	RBC Capital
Kevin Fischbeck	Bank of America
Ralph Giacobbe	Citi
Pito Chickering	Deutsche Bank
Steven Valiquette	Barclays
Peter Costa	Wells Fargo Securities
Whit Mayo	UBS
Gary Taylor	JPMorgan
John Ransom	Raymond James

Call transcript

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Operator

Good morning. My name is Heidi, and I will be your conference operator today. At this time, I would like to welcome everyone to the Second Quarter 2019 Earnings Conference Call. [Operator Instructions]. Thank you.

begin may you Filton, your conference. Steve

Steve Filton

the Heidi. also joining you, this of results Good XXXX. June welcome morning. is CEO review for Services Health our Miller, Universal quarter us to ended XX, Alan you Thank second this We morning.

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

and of uncertainties recommend For section inherent ended these for our anyone the for quarter and not and I reading familiar the Form XXXX, forward-looking Risk our the Factors a Risk ended risks careful and Factors the with on statements, year Statements XX, Form March XX, XX-Q in Forward-Looking December in XX-K XXXX.

couple opening trends, a and We'd to questions. highlight of the up like before just business call developments to

last in to attributable for per net discussed press As our the the company recorded of income night, diluted $X.XX quarter. share UHS release

press net compares second share share UHS the second net our million per adjusted on diluted of release during calculated to in per $X.XX the or Supplemental to million $XXX.X $X.XX income of $XXX.X the quarter This XXXX. calculated attributable during discussed of was year, quarter last as Schedule. income attributable As or and adjusted to the Schedule, diluted on Supplemental UHS

X.X% to quarter from second of primarily same of X.X% XXXX. a same division resulted on On behavioral facility X.X% the a increased XXXX over and in basis, quarter adjusted increased quarter revenues X.X% revenues facility per compared our of the The last adjusted admission. second as increase a admissions, On net health XXXX, second increase basis revenue comparable the during in division, our increase care during year's quarter. in acute a

adjusted revenue adjusted comparable to health our of During increased this prior-year quarter. increased patient X.X% and and X.X%, Revenue during admission admissions X.X%, owned over compared more quarter than year's, per the year's last facilities a the days per behavioral adjusted patient increased increased second for quarter as adjusted to X.X%. year second day XXXX

XX, provided XXXX. net during from cash For six six operating of period $XXX months increased ended June $XXX the activities XXXX, million month million generated the to our comparable by

decreased during quarter Our as during XX, XX XXXX. the days as ratio of the to to to quarter At XXXX, XX.X%, at XX.X% slightly second XX compared days compared of June our outstanding accounts second 'XX, of increased 'XX. debt-to-total-capitalization, receivable to XX, days June

the of of We and spent months $XXX during million first $XXX six expenditures XXXX. capital XXXX, second quarter during the on million

recently program, our authorized to approximately a or the with billion $X stock share. second approved million stock aggregate X.X Our million Directors of an of at shares approximately repurchase of our approximately $XXX.X Board cost we repurchase per during previously increase XXXX, of stock quarter $XXX repurchased in programs conjunction

cost of six During program repurchased repurchased XXXX, $XXX.X months $XXX million cost an we approximately $X.XX this aggregate XXXX XX, the of of shares, XXXX, per approximately of per aggregate approximately we or at approximately million $XXX million Since inception first X.X share. June XX.X share. an have shares through approximately in billion at or

subject general health of last in settlement government's execution of night's the million, investigation in facilities disclosed of of civil Division, and and for Civil Department aspect we an our preparation reached agreements. have and requisite and $XXX State to with on principle As agreement the related press approvals various release, Justice's Attorneys' of definitive the to behavioral recently behalf resolve offices

being previously have conducted the further DoJ's closed. disclosed fraud in investigations been advised by that section Criminal been the matters connection with have We these

this of General the Human for of Health States matter. Services, we part will potential a Inspector integrity We Office overall with corporate and expect are which of settlement Department be awaiting the initial United draft the of agreement of the

increase related connection in of principle month have $XX during parties. million DoJ $XXX ended a the three 'XX, to XXXX DoJ In pre-tax the pre-tax in as reserve, Civil aggregate with and we XXXX. approximately agreement June recorded Division, XX, six December behalf the or June periods of DoJ's XX, and and of million third with includes due as amounted reserve on to The fees which XX, $XXX costs of million the

principle settlement amounts tax no statements, integrity materially Our no for in provide such of income financial deductibility. agreement on agreements, associated paid agreements finalized. and definitive therefore that ultimately with aggregate the income and the assurance corporate the state federal We approvals settlement provide are agreement pre-tax that DOJ's tax differ from DoJ can a potential negotiation or purposes. amounts the Division can well as certain costs to fully of required Civil is otherwise as assurance assume not related or negotiation execution execution and subject income of that payments in included OIG, deductible final definitive Since and established with the will in the tax assumptions deductibility reserve will to be reserve we our and

are questions I at time. Alan this pleased answer your and to

Operator

from [Operator of And go Credit the Please Instructions] ahead. your Rice with Suisse. first line AJ question comes

A.J. Rice

your markets, staffing this? have the Do it -- you you in but Hi, we Thanks. we've largest it little some quarter, going to hear if quite focus terms think a growth sources? you would next necessarily will same-store dealing any winding at a few have I not of some all, referral look peer you thing your think it's some I wonder with on domestically, where about been but you if wonder everybody. talked feeling investigation the you've historically, EBITDA and some in to regions have so them next quarters help done getting this been that revenue recruiting, your they time, in help than potentially key of the you less it's if of been that compared Well, and this it for and with for once down. and to is great

Steve Filton

obvious the some we determine as I the hurt. several Look that, could, of But last I AJ, statement government sort think an clinicians' say on ever anecdotally, investigation subjectively our and objectively, that really can't objectively I'll will our tried any over behavior, think, we sort referral business, to cases could whether neither we in on that, having it and material the nor as years, demonstrate impact on make sources, I in was way. of our

expended Now this fees think say in to also, look, I case. fairly is legal I again, have I'll and dollars other we mean, defend costs obvious, substantial what

for or six million defending costs So at a years. last with minimum, the have excess a been the associated five year think average, our in on case of I $XX

those time So have free and up. certainly internally, the of significant costs certainly a we We dedicated some will individuals. amount part effort of on

to general that every made with I uplift issues -- try our of not just to a there'd have cannot benefit, in there the we don't is distract case. there's of But this But it said, hurt. no sort and operators the -- think suggested I think ever way again, effort business. not halo think that dramatic and like we've I but certainly measurable be a I

Alan Miller

nothing. to also investigation came criminal absolutely the So

for with you So to deal have the a existing management while. will

A.J. Rice

we that, Yes, thanks. so expected

on comment you on on have, in and you rebound I first and a obviously thought we big -- was you anomaly was was somewhat rebound markets spot had big you it those. an know in acute see of which said the bright Vegas, did. Southern question, quarter, if other second, of I update California, it Southwest the side, care specifically the was that just the in quarter the the an The and sort can board, maybe focused, the wonder or Texas, you across it the

Steve Filton

AJ. Sure,

think and has broad-based. commentary that that been the I had to at I was, be by fairly it has you think Las And fact the So think, fundamental making this of for part, in it have strong. now. we for quarter, while and it Vegas sort most past a that continues a definition, be geographic almost we've when quarter I the least to -- follows made, strength

to think that I half a continues and some are Dallas expect fairly and investment talk capital substantial the was capital did last think that Southern well. that quarter. in number year. up. these a fact EBITDA also I Vegas back County facility we ramp as also that year, strong would those some a our we expansion benefiting has both capacity the of quarter. market in benefited California, had begin But facilities, strong revenue from of the Henderson the in market a yield investments QX had we're of The about to returns and decisions Our Again, market in Riverside making The Denison-North

the strong years. most us And while, that, market that has finally, something and lagging I've that's been had for market a last that think said several I'll South Texas, over McAllen the don't a the pretty I second quarter say a for part, in

that's, encouraging sign. of don't an the that's a but know certainly I So if beginning it's trend,

Operator

from your Matt And ahead. comes Please next line go [ph] with BMO question Capital the of Markets.

Unidentified Analyst

driving A if by more linked patient more, us continue service about terms I'll category that just you Maybe of on granularity bit give if strength on that? you're you care, can sort could any what little acute the seeing on talk in there line. of is

Steve Filton

Sure, Matt.

mix almost think surgical shift to come entirely surgical let's and per that the I lower itself those that look fact dynamic, that, our I patients. can recaptured clearly sort acute an that you reversed expectations, maybe much have QX say, said I describe sort reiterated it lost conferences And quarter. from at quarter, -- to results to and by things medical been that admission, a normalized I our true. certainly when of We at will, up first operating of were dynamic of think you the and trends but in some struggled the we've and explanation seemed you the per was medical we in So at reversed attributed revenue was headline QX, the first if my that with have in adjusted it really business levels was the that look, weakness QX, care definitive unfavorable for to appearances business the and unit that than in to of I'll in think we as surgical end see and more in

the at was think sort would six revenue care suggest of of business. suggest I results I because numbers, growth. will company X% I'm I'm people at of QX, a the both not same unit, which strength X% much X% that again, were. end, and as first admission that X% acute growth, results in the that it our -- say is metrics care months X% what see about acute bit guessing, way, other higher be of than this pretty think QX I as sustainable look our the and we will But growth, look the this ranges think the indefinitely. and I those sustained revenue kind admission we at the to sure we being would to those to when can had this, in in I guidance, what and more be I little of that expectations a maybe generally but what high

Unidentified Analyst

And sticking quarter, if outlook? we of where this topline more but mix side in to an you sort have volume things. look there other third as could; the current about, quarter? I there just current of the one care we should of day, Again this for anything ahead that acute think is business Is on a terms extra

Steve Filton

issues. of lot calendar Yes. that a Matt, pay don't Candidly attention to these I know we

I that specifically of think that off like have the there's activity get in other the year. for time, we than would of we year, than call seasonal all performance course a don't broadly, But the view of about expectation that, to I other out every kind that we point [ph] expect sort we year. would don't this know have anything wash expectations out the in any just that fall acute in over the care normal I which of summer occur if QX. in we that think comes

Unidentified Analyst

Great Thank answer. you.

Operator

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

Justin Lake

morning. good Thanks,

deployment. capital on question First

you the quarter. second did think you for the to the all in going is market share I applaud repurchase

business investigation are of an behind on and update much expecting how the the leverage free level cash that through view capital this how give Now quarterly, kind is then you, deployment can of the think the investors pretty flow should right lens you expect you to you the us to much where return of for you is?

Steve Filton

price UHS' Sure, stock I repurchase different of function would Justin. level that that things. think that QX some many sort of headline accelerated our first legislative and All other of the couple suggest I think healthcare sort in with for of noise around I mean, the of activity of some along of Look, the a QX, of I all, was in share a a of peers, general, in Medicare of suffered as of just and initiatives. sort result

largely I of certainly significant that had felt always think this I nearing as we But sense a more overdone, think we and that DoJ opportunity. also was and broadly, end greater buying a view the that we process. unique were

bullish of We two also underlying fairly fundamentals segments. were the on think I business the

So announced I repurchase that fairly altogether, the was the night. activity. in reflected, we I company, share we of think I think also billion reauthorization reflected bullish prospects It's the were and just think about $X in that last the

sort of specific buyback In what terms level the of of should to that pace people committing of a share expect. or say or of sort to

that. do to reluctant we're think I

sort an marketplace factors, through other M&A the number development, in find out dynamic what opportunities may think we've been we always that buyer, on depends the what's in and including stock or a I happening opportunistic of etcetera. opportunistic market of otherwise, externally

several I but again, repurchase today share any not that's make to prepared we're the we've specific last think years, So that above commitments pace see a where been to likely

Justin Lake

could Thanks. if then stay, stabilization there behavioral in drop end you follow but us bit volumes. on I on light the feel length Okay. going length color of you any stay, any a in and side, of, of know, the offsetting give with then a the volumes. saw do kind tunnel an on And terms of up what's like just then, of you Can it's of you in at is

Steve Filton

between Yes, I that admission stay Justin, and length think couple made the I've and think points a point interplay of I dynamics. is before, of do this some there

I quarter So sooner have admissions this volume think as that faster, come admission it's make. of you vacated of dynamic bit is I a of up, of length I bit. sort process mechanical patient stabilized, length that and think saw that point That's down, of first those being think, seen reverse we saw and admissions just a when stay go I'd sort of the little of stay the to generally fill down beds and a vacancies you increased little coming

mean, QX shift some adolescents programs, That overall traditional dynamic Medicaid see that Medicaid adult overall I or adolescent to more their bit managed decline. me, Secondly, and transition to continue business longer was for dynamic of from managed length business, of which the that offset we've than Medicaid of a -- dynamic talked we stay as have by from a adults. or we tend to length a shift patients time, see from excuse to about is in stay programs

space, trends of that sort expectation has know offsets X% think and something volume necessarily the behavioral I improvement, our of the QX. this Medicaid dynamic quarters, the least that's in we the trend. I think continuing been several a that facilities And a at last the that at we've don't increase generally, our I Otherwise, think the segment so for growth number for in been that stable I to believe that. in will poised above from for revenue are that some time, remain

Operator

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

Sarah James

Thank you.

XQ wear up attract of the to XQ. trend So down versus scheduling new volume, was not patient deductible like it acute sounds related timing the just to investments surgical and in

makes So on I'm second bullish wondering you half? if that the more

Steve Filton

continue. in think of the we first any And the would of the one QX volumes Sarah, two did six they weakness year is, early to I eight I didn't see was not. mean said fact, surgical likely weeks reason we I what why things. in mean, in

I in But did revenue particularly for that think the half in sort and acuity of shift to the capacity year, that that in some like It the number with $XX could Texas, think, six of earnings where could and and And to resulted the talk surgical see started per But were asked of in-patient -- so think Vegas, ought projects million what which for ramp I we've see revenue number make we're them and QX guidance flat any generally be relatively adding the the we also Denison, million, second and QX I Las ramp call revenue some line we in in about in in people of, QX, in in think year. volumes, sort that. $XX would capacity. beds, suggest when of the a would So a ER capacity, -- sort. I more be up could be in did I we of in acuity I to number we and point, any months, think in of per the of range capital in it and be first and X% think the seen hospitals unit. I surgical about I'll QX, McAllen, markets unit again, significant mid-sized I it

more So look, our confidence even found to QX, strong QX, after expressed I think certainly our guidance after original in we're some think a achievable. I very But think which that even disappointing. meet is honestly, confident our feeling ability I we guidance people

Sarah James

it. Got

that an to you strategy front, part return as rationale spend be strategy? investment these Could the on sounds guidance, your this in it areas, your does was other I'm in if and expanding got that like seeing for capacity uptick investments? in investments full for it of got on change nice you growth contemplated you want your on how since on that So the year see return competitive wondering these we

Steve Filton

very a at almost investment capital view Yes look capital we all on basis. as think of opportunity, we an I at look deployment look, individual opportunities of much point that, we have

point robust think well makes reason sense a sudden view I investment we can targeted a we view less. our opposite, demand that if or is we particular a invest and there market have a demonstrate service don't a for quarter, all particular a in reason take that, softer is the frankly of it's we way of look of I so it. think spent, the or have money that where at invest the we And that, kind if well the is quarter, more, to to quite that's

of the being over QX return long in we're our as I expectation, in of a over we I our capital franchises, in record that that's of of of period view, point think it that we as had we employer a judicious reasonable And invested think to earn have a a and is would pretty balance originally capital, think why it strong track [indiscernible]. seeing we again, year, as our guess these markets contemplated. the and guidance in is continue in, will the kick kick I that

Operator

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

Josh Raskin

don't of know the totality? view settlement have change of sort in And a this? of timing final sort bit do that morning. with Hi, enough resolution if there thanks. Steve, you in etcetera, then agreement, this information integrity of the is of at if Good corporate settlement know the point, if that's guess and I on now I'm business feel practices I to operations disbursement expected? known have sort details you and a around in of curious more little because any any you change

Steve Filton

this of government's would I'll I the that mid-fall. is whole process the be to who in for ramped second cadence will probably be have guess this largely mean by and those part think we process up answer the control. I us, But followed first. fair Josh,

hopefully way. in wrap our guesstimate that bit accurate by Obviously, make be around the that we up accurate we we're a it little in these guess, and we've tie a when So closer makes been and would we as that to ribbon would a payment. more mid-fall, would this completely But our estimating that time best not can easier the like end, be as and frame it much to things. always

As think we've as operations, fairly consistently. point to the I changes far made

over tweaks processes, or our all robust conscientious think five the of for fairly investigation, that our ourselves six this and defended this own with vigorously really really, of and are compliance, investigation. feel changed have course exception etcetera internal that there, fundamentally small years infrastructure, don't the the here of processes quite and I our We that

agreement response expecting say, We've can't not respond corporate I or of government, our seen that. this government fundamental could in so way to we're integrity the changes require not to But our to a from to underlying agreement in significant draft would or a any really the behavior is operations. compliance how change

don't ask But significant to business. sort to than of will they us we the this compliance any no, prepared that we approach our strengthen way do. think which anticipate and I think program, we're I to underlying validate more that changes

Josh Raskin

Got second you in perfect. care then, getting in better February, acute to guessing in cadence X% slow the it March, movement each the just that's Anything a in was on you, in I'm And there curious point side, any if month. January, number, little out, start the I revenue obviously quarter the intra-quarter? talked across terms the But quarter strength across with last of better based seems April like [ph]. quarter? broad mean the

Steve Filton

were. of think little volume six was for exactly pricing continue that of it's on. that to the going for particular, surgical month original all seemed describe six acuity six as the year now with months I XXXX, our fact feeling think still I what point sort surgical bit again, months, of it much we're out out surgical explain if growth, the to month Yes, sort And the again, a at level. at just struggle seems and a after we what -- and you that at more seemed six And look, where to first line normalized look to, the of not to revenue But went think it and strengthen, back weakness think we're like our on. expectations I in that hard us in early it given I gate

Operator

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

Frank Morgan

of rate behavioral of and Good hopping kind on update that relative over DSH that Thanks. their question then And around did guess just, payments trends. updates your updates particularly the other the plan health to to volume an But I business, guidance? any states you is talked about environment, rates? midyear curious, have any may in morning. my the just business side you your

Steve Filton

Yes.

with much So the is adds intent the in of plan, said to finish we're that's think and expectations the it's our over last breakeven health close turnaround I pretty business. we operates closer other think year, our every original think expectation what couple as at at we I were, business markets operating earlier and to have much we'll that pleased the breakeven, that to for fulfilling year ways, so years. And our that's I that the as way and a value in

kind Frank, rates year bit. we unit, that's X% kind I volumes but higher a as look again, as of of goes are guess I in would sort when a think think then in a behavioral the coming our the bit a sort bit the I what acute months terms lower, are But the of to I sort a when we're on of will the our down come expectations they're what with the little Q, six and I in on on, per revenue close, far side close fairly X% I And up in little numbers the come of that range, our pretty rates think, expectations -- Rates X.X% DSH give as think -- of are think consistent in detail. of that volumes, where function we and side, of we to that's little go, pretty you'll were. I are. will see for range, publish the at sort

I any government changes, outlook. think or kind entities, that significantly there's rate either midyear of commercial change our don't been So by

Operator

question from line. comes of your Giacobbe Please Mr. next unmute Ralph Citi. Giacobbe, the go with please ahead. Your line

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

Kevin Fischbeck

conceptually for comment, Great, then thanks. business, room drops, that vice kind increase length to the If I think stay and gives to go want of more versa. the it of I to I when behavioral understand admissions

is is some to constraint So that to same to of is that a we at of Why acting add there it some trade-off, capacity still at -- of the beds kind that's from have can't need that shortage a both offset? either are company sort like see that bed do there, some an you interplay happen there the have need time, perspective almost kind feel you implies staffing staffing or more or but as perspective. there from that,

Steve Filton

and you I back the you go by but to quarter City, lower do hurricane, QX. about. largely to capacity have of case, Having think second I sometime facilities, question Kevin, will at admissions volume of just length our look I said of there of one where that, that's the both expecting. that little like didn't time, that point in I Yes, we growth under no mechanical, and still in is drive and if existing that and continue mean I think labor, of the two than constraints I to period higher be, to guess obvious quarter, is physical the a were the both bit we a fourth will due start think the wise you're significantly correct, can't talked beds revenue which Hopefully imply I've the was effectively, dynamic places it and we'd that see out. last QX, facility being to year extended capacity, but Panama of to in for and some quarter, and stay in we reopen when itself an during and potential this revenue closed you in you that as that's sort the our down wash only Florida, and that any describe and sort the -- interplay volume some sort of

volume The needle the capacity struggle, continues we revenue provides a and unfavorable the from that, treatment perspective discussed with calls nothing issues least to which question last volumes that is in in know movement a the and that some of do I couple other has of to that earlier. again, of addiction at the business mentioned, issue we or sort on both your

Kevin Fischbeck

So causing those do issues, can I addiction guess, you think what is you resolved? get when and center treatment the

Steve Filton

look, of it's payer dynamic, a -- a driven. Yes a but mostly think I bit it's it's complicated

I to model. from payers part, they many moving patients out-of-network away in--network, addiction treatment, are that payers in doing couple as sort of mean of down. And think exclusive out-of-network looking also it on, we as move seeing a rates to the generally model are of for from alternatives relied providers and we're was things. clearly the relied I But coming on, are our impact our think that well. not are the non-inpatient I reimbursement one,

to that that point again, I We've seen continue volume business. work particular is segment We mean behavioral this it. But QX. to is, would from improvement a QX some to sequential on that be would business I of the if weakness, driving

Kevin Fischbeck

or expect But mentioned bit a on maybe growing a perspective. I psych last in just separately, investigations don't the you little how guess future. really you the touched overhang huge business revenue the past two maybe answers, or question, that the in you then that growth being be to volume And you do you accelerating a and but from about in talked perspective to view

to biggest what do the you exactly going growth? that think to driver be So is

Steve Filton

statements. just me Well, and are discrete again, two those to

at because the the lack the reasons. remains we you been we that the describe data would of of is clinical and touched lack a on confidence that amount them, those several as, suggests think we some have unmet internal unable diagnosis, Patients and sufficient admit Again, particular own are all who And a to inability that working significant our demand staff, various criteria, along, business bed, last a I of certain are physical the treat on over we grow, said issues. of different think years mean there in volumes times, etcetera. of I of a a clinical working deflections. significant amount I that have what to our

much higher in is growth in it the our XXXX, XXXX. mean We made was division than have in back I clearly XXXX progress. and revenue behavioral

we equation sort of always this that that first and not is out expected. demand fundamental a amount improvements any basic ways, the is in come four demand since slowed or has bullishness, that unmet significant really of But than We business demand there what to three there, the have ago. our concede changed dynamic and are reinforced years has the slower idea

Kevin Fischbeck

say, working more then to Steven, you're to issues or you're Cape more what on that exactly those driver that address spending hiring you the is, is when is nurses, address these issues? So

Steve Filton

of surgical think, multitude addressed our last situation, have that of years, more improve illnesses. and more or and particular, a ability of we've I we've think and acute a no, few added medical several of and I sometimes we've complicated treat the think patients co-morbid Yes, recruitment we personnel we've last with all issue I on over array of broader patients, the retention more to in focused particularly which years, issues, more and over and course really discussed the clearly it's beds, added the illnesses

Operator

Your next with ahead, the of Ralph from sir. Please question Citi. go Giacobbe line comes

Ralph Giacobbe

me? Can Thanks. hear you Good morning.

Steve Filton

Ralph. hear you, can I

Ralph Giacobbe

Medicare categories, give of surgical Okay, the within if Medicaid volume from those each comeback? little mix can more of the specifically a in thanks. a and/or move there of of buckets, hoping in baseline sort any was of you commercial more Steve, and or pronounced acceleration payer sense trends any

Steve Filton

not definition I made think, but from that was by payer based, related, No, relatively shift but the I seemed look we point by definition, be or medical unfavorable really -- almost maybe based. surgical broad has not surgical in -- been, improvement Ralph, QX the from and not or that the that think payer weakness and to to

been I fairly has now. mix, years for consistent of payer number a think Our

has the procedures that unique see certainly from probably several in On been side The patient that bill positive not overall over that we've our we experienced processes last but follows particular, of collection is our that to growing provider Medicare that. rate, the hospital healthcare patient to nor is the modify I greater same. still fastest in of we're uninsured again, population, [Phonetic] to rate, unique a certainly And acute due and rates think of I'd but generally probably our bill, us, phenomena issue payer. certainly Medicaid other growing at and slower address a point out, portion slightly not the amongst the a only commercial mix kind every tried the payer and have the years. commercial

Ralph Giacobbe

about I you've quarter, year-to-date. big helpful. but revenue And in components observation the had for notice, and then outsized stat care number know the talked particularly acute that's admission Okay, periods sort of stays, you've of volume some within volatility around the the and dynamic of past can't help and sort pricing the around with stats. a of

flush of Just noise want to the driving perhaps optics stat out, any call makes to that anything play out here overall kind the observation at or up Thanks. that of revenue? there or is still the else

Steve Filton

don't admission with to issue I I is this -- mean at observation our ongoing I our issue certainly commercial operators, we as this we payers. an think point, so. talk say, really Yes, of versus will when

So again, addressing. it's an ongoing issue that constantly we're

of a seeing We from proper and amount to to optics of external classification payers. the think I it's appropriately resources I think, and of paid the have But growth don't back and influencing etcetera. we that your admission sure really question, our internal devoted don't we're forth. significant get significant changes, making both patients,

Operator

the Please Bank. line Your Pito Deutsche next question comes Chickering ahead. of from go with

Pito Chickering

Good morning, guys.

no is it? share X.X for deals, is way to? of M&A repo can and or us are on there So leverage, is But is running guys guys if are that repurchase -- of just large it up if sort of turns there priority that you understand is minimum X so your no company. between if deals Following that ratio there thinking the think a right about the leverage we you questions. a guide doing the I

Steve Filton

again, look, or not at to call frankly point. Yes, we're Pito going specific today any on to leverage ratio commit a the

the leverage it going become a tried amount like It I a tremendous we operated leaves is, acknowledge in maintain long ratio levels we of think of at probably of right our higher which the certainly a and today, of it's to flexibility but low, signal to investments think capital a couple to at of current deals company so itself investors. which not is ways for But and future, bought year inefficient. back of period, happy be of an us the in that flexibility, long may to I mid-XXXX the sort ago. sort we're shares shareholders, company. would We're other relatively we more to or return many we of flexibility may us to of the back But members We to maybe not sense period, may do be press time, we or that probably contemplating that to sort in release, in a the than so. sort of or the that. at and statement forward, if of obvious the three even opportunities time XX% leaves respond outstanding today's But be, think for the also continue opportunity two be we've made move over so it. right the leverage for I we the today, presents but do management, yesterday's as and we're frankly so to that active

Pito Chickering

guess, going running you ask leverage you deals there sort Okay. of to from by just couldn't leverage with the I in five different that last multiples? just I this complete turns are that way, a two are if higher guys guys seen you've any at your mean repo, of that years,

Steve Filton

Yes, answer, Pito, of commentary. maybe basic and to -- specifics we've going I your things deals look, size not what to their looked of get the fair because it's it's I think about look, M&A it's we're one at and that But into and difficult contemplated and etcetera. question, was, mean, our

We We deplorers over acknowledge think We that years and to flexibility, view like think as way. and many they have arose, has to I be to a we last we and lot capital, that to ourselves or us of employers that, that respond judicious financial the flexibility, that. continue allowed given our capital structure. opportunities of

Pito Chickering

quick volatile the key And the see follow-up obviously then last trends months. last six one over here. be We very

in As making the that plan of things normalized admissions XQ, staffing going at back third year, staffing changes any quarter, the do you half assume on you or you cadence look of from during perspective? the to a to

Steve Filton

either question. an sort more hires, better for more great honestly, a that whether challenge etcetera. that operators time it's whether temporary over or have an by decide registry increase or necessitates it's goes And hospital up, kind nurses, a it's of It's increase temporary [Indecipherable] to they their as permanent of volume a is nurses, everyday served

sort that making volume something judgment Look, think on several fair market, years, our longer new UHS' maybe I say what's frankly happening last not and it's ahead much the terribly of of our that's in in acute etcetera. honestly, strength for industry-leading care and think that So each over generally care market, even periods that than peers. volumes to we're that, quite have been I acute depending is

us, That although that as our be that growth, persist. norm So extended again, average volume is an the would of see of sort think for above you X% extraordinary of -- think time. again, sure period an we I'm to level likely volume I about as more of volume not to mentioned as growth of know, sort do earlier, growth I over

Operator

of ahead. comes Steven line go Valiquette from Your Please Barclays. the next with question

Steven Valiquette

I and and Steve in guess for there morning, I congrats strong the results. year, good [ph] just on and Thanks, And been Alan, us, this you washed has around some the flow ebb UHS and just continued in Thanks? healthcare thoughts just actually push updated overall. point greater of view. this pricing transparency for and I'm topic around have if hospital any from curious, pricing guess, the

Steve Filton

complicated Healthcare is and may know easy population it's I'm and say, what not significant on relatively not as the think cost, or that of of who focus transparency gallbladder trying One exactly is I two have procedures. that portion self-paid a surgery, individual Look, things. insurance to patient. percentage to insurance affects to having patient, negotiate has look a it's to the does a the sometimes a transparency for want percentage I that Honestly, for tends is particular an small the I be of going difficult exercise always a -- just Steve individual small rate. think to

is our It's lower -- the payers this that market. be the that the not us, the it’s to of from legal, well, end market, the much of that than etcetera. says, broad private us. a payer legislators, that us that But got really rates that we traction be the there use sort the want you of private ought that to between comes rates the at a example if concept surprise. we've at public pricing seems focus who I and sure. sort to if the in are get we at I number will now and to and in least outlines which insurers a smaller are day, the out you I whether payer, I'm dynamic, other this the to hospitals, believe proved that player there, lowest that idea becomes that me payer not rates easy that's accept to complete surprise in The To landscape is that and transparency much accept same the payer a not the of the some know accept one rates surprise knowledge be to from it is and market, a paid also a not of

government And case. decides I not one just to do that it no and be to to the able be do are to the going is going prices they're to all it's going don't us think going unless around. set We to just that, force

something I great business will think transparency we deal. everyday as practices don't a So view that change our by

Operator

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

Peter Costa

unrelated. Thanks couple of quarter. the I on had somewhat questions and congratulations a

where and we and improve in Denison us, period, much those in quarter a related can difference there well. as perhaps, there's period, maybe it within at one of looking a it sounds little of terms like improvement, particularly are of appreciate over to six month acute I for that McAllen view if a in but the wondering care first The markets? your further of scale improvements second of is the business. you then I'm how sort bit two to those And

Steve Filton

I to I that's mean Peter. think do, difficult Yes,

that think the the very the to power Obviously, year unchanged, our of to guidance. this think Look, sort that from in the on. projects, we I the and internal -- into we of a aggressive because Texoma you projects, more would individual therefore you it to And whole get think, confidence sort of several to was be about The and our or guidance the capital Street, to I was really as a day, suggested expect that's quite and potential as this explicitly we is guidance have. said and thought the that of room remains there year that, to of like the year, that, own that, was frankly a disconnect some And guidance, was know is Temecula QX, and terribly this year they suggests Henderson when Street our model. or of is never earnings continue ramp for full for I ago, we we balance the balance simply just I than not broadly the we sort were making say, something just emergency that the I it cited effect mid-sized between end our not cumulative on of imagined, what what earlier I our of dramatic level was point it project idea likely focus these felt detail. suggests, suggesting have what etcetera, don't making was people to like at of I the just went a down was conversation, and model ramp point a in think, saw our I these helping impact hospital talk we the it or not get productive tend years I lot granular

Peter Costa

or for in of out that's helpful. the staff management to behavioral wondering if there is referral side, seen Okay, facility through Acadia Debbie either away? migration And change you've more gone went I'm since you've any clinical sources the on level and second management question

Steve Filton

we with a will that handful personnel somebody the with, and got level that top that that of over. talked like staff I quite Debbie No, somebody I think a surprise slot, deep has But pleased round we're bench just that about think when terribly comfortable of and think sort moves. I fill very tenured that We've at remains out here. it we're look, very long moved and that's when have of that really approach. feel and we've hardworking and don't our a acknowledged tenure significant

wouldn't the seen I the themselves of encourage sort issue referral tend in surprised as independently, the not no and -- XYZ those employees whatsoever. we've corporate behavior say frankly of payer clinicians entity, whatever impact sources of and I'm again, I market, far that. think sort other as operate very that And those of markets or As we would than of hospital to broader rather

So of at we've that level the none really detail seen operating

Peter Costa

And where do leadership are then and position, process just from the you we're of you a in lastly getting point this that somebody? think at closer to end finding

Steve Filton

starting we been sometime date, has and feel think we've the about few undertook it within it capable that But seat. process not to behavioral that set in eight, when mean, we I'm time get person exact we're an right Yes, process, time, it, that, the last and that, very have a particularly to I of we would position. nine sitting to going been close we towards I few end think of feel acute generally the or we're has filled in comparable I decades, long on since XX like that, original estimate that. a an range should a but the position month, month over times based the

Operator

of with Your ahead. line comes Mayo go the next from Whit question UBS. Please

Whit Mayo

question. follow-up to last wanted on that Just

maybe changes Just like as a Are anything doing initiatives Just and expect local talking and that you're what like what leadership. going terms to differently that any from any of going the it new we strategically see investments? terms field level wondering should about year now, in to Thanks. there actually the we strategy in at kind be division, in behavioral of changed has in business? now forward? initiatives Is of to relates

Steve Filton

talked been fact behavioral it the trying time before the mentioned about that number that times segment. in -- this we've a think I has Look I position to we use a since of are changed we long Whit, at top

past, of reset. think, would I kind very overhaul so use to had sort etcetera, new the the your to that, a at see the least now, opportunity than we I opportunity year a think that we business, I complete so frame to where we're potential I dynamics some And like And strategic in more think I think allow would we and that the will think of from like a about us with or a productively point, a guess different in initiatives and of may we about of reevaluate those as and in be hire broader we the experience, healthcare, talking maybe management to have telemedicine, that engage person the how use more, behavioral those think the new with I business. hoping to conversations. in we the population telemedicine interacts slice technologies question, of as probably, things successful the you the behavioral space, But the business

Whit Mayo

Okay.

on So to stay go second Pito's back question around staffing. wanted a I tuned maybe there. just for we'll

this conversations more are I that wherever you costs, could staffing at and are physician and care what under if we most you professional comments around ask hospitals aren't any comment subsidies, if do how pressure at the the unemployment staffing helpful? of maybe how around acute stress more really and Obviously, be you in think seeing are, wonder fees. address more some labor Now on contract point, X% and investors, we're seeing companies so level to struggle least question my see would at specifically seeing you're

Steve Filton

-- look our finding are efforts I to we to basically we definitely nurses things or comments is clinical portion challenging, a for, is are have one don't I personnel. think challenged, are nurses this of doctors. broadly about I of retention, the your where you -- you number personnel, qualified recruitment think of issue operators' X% universe. local and how who on focused who we're sufficient again, competitors, of of but unemployment, a or Whit, when whether not are Look, clinical always more those Look for when of significant and in segment, again, I talk that's mean, very -- at that's qualified personnel we whether XX% think sort in Sure. frankly are fair, the business our either outperform those have challenged. We outperform just clinical competing doctors,

recruitment we and so, retention policies work allow And at hard very to that. us do that

we and are is etcetera, two to focus big lot a don't of it the a pressures feeling two think just a we in pressure, impacts not or think maybe XXXX those seeing of I that, might least about have businesses statements, expect as a the were saw willingness and have know But that about themselves our later our it's a in absolutely degree, think challenge. is, creative, being talked helps I think flexibility, in at largely I or years what Frankly, it much But we realistic lot of anniversaried that were It's as sooner because financial markets it. stabilized. the if ago. many have they as our or a cost years company, XXXX three And as peers. because reasons I three you and I cost to why of than that's more sort we're now be us pressure endeavor. more our two the reflected appear to one look, in we of

Whit Mayo

company professional comment you around staffing question on Can subsidies, the physician color helpful? any the and fees be maybe would

Steve Filton

operating can mean suppressed of that pressure. throughout whatever our really subsidies think physician or look, enormously like on than But tick other don't some or it's examples few or seen might several I I anything that, think I have fees a providers other moving have where for a and in three increased our portfolio, little said years, really overall, I the four is some I I that of or bit expenses anecdotally, contract could think our in be. we've last needle that. -- from that people line But about of over margins think pressure keeping and I I -- off asked tick-up terms don't it

Operator

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

Gary Taylor

Hi, good morning.

quick Just a few questions.

other costs the, complying costs have $XX as the so couple sign? or It annually associated point your might you to had CIA you're any anticipate Steve, million to thoughts. would But dollars companies going with from that mentioned of measurable were ongoing to about with so seems with investigation to a Do First, the million get go like that. you DoJ closes. that or this away want

Steve Filton

Yes.

specific we've have be. a fund the that legal to little might frame should been than tried of the be to costs the So mean kind I think bit of whatever clearer help incremental this, I that maybe could we've and be. difficult so should I I those a relief fees at I again what minimum, or think costs clear, should us government, it guess nothing from would for to seen be But

Gary Taylor

be call if in in explicitly. to was of the response Frank's terms But it may then something supplemental missed extra we acute asked of didn't I payments this I anything out quarter just Q? And your in EBITDA was the catch there tail-end just Right. that or he to question, there, might supplemental the see payments,

Steve Filton

think don't I anything material.

Gary Taylor

my the to into the just to Healthcare Any thoughts and what a implications interesting acquiring about just How that? thinking Nevada much And if Vegas that's one listening, I get he's you for care still Intermountain you Okay. precursor that? of Do about last this them be was more one, would maybe would market? Alan, Partners hospital think wanting are

Steve Filton

process good created here, discussed United think I that. the we had would we've this would answer a I'll mean advantage same able for Look, them. of routinely the think concerns [Indiscernible] be have competitive keep mind. I that and I I to news, that Yes, so unfolded, as think this we're business, real

think much have a have no been a would payer, that from the in sell have sold So them who of doesn't ideally, favorable of plans the provider of business as who they next the the when you is that -- take development. has to sort kind sort in of present that well some maybe in it's to the that question, of that to really would over has the in a provider, time, would I think some will -- to be real small liked execute FTC of have either entrenched the Look, have or think and sort number to sort a market fact plans time, been Intermountain a that alluded a market. will But view the is obstacles market, required obviously, we we best thing. presence your presence But probably perspective. perfect of a to will guess, amongst I signal develop will I business, business this our to as some that overcome, in providers. for sold market, I

dynamics a at But it's sort Las one sleep markets. Vegas. we're that in one all So our the losing of face be in new will This not competitive we over. moment of

it on to prepared be fair, respond to and are it. to we're we Although focused

Operator

is line line Your James. from open. John next question of comes with the John, Raymond Ransom your

John Ransom

an I within to payers readmissions for of -- but are in have payers and heard Hi, that certain managed the This outcomes imply we that behavioral, is some are penalties, type, good morning. starting mean term, to care material don't a layer short [indiscernible] question timeframe. in it's the starting sort example

And to seeing my quality/outcomes question think number is, number bar there or to lagged going of type raising this? anywhere then so you you if if, and just way see But we're certainly lifetime, that, are in our this meaningful one. in any to curious behavioral, if by is anything is has Thanks. a do acute more. see decade two, And of the which data a in this

Steve Filton

accurate, of segment, quality med-surg UHS lines reverse on been Yes. and Yes, and behavioral well. cutting I'll reporting is I John. sophistication acute The has comment as But think care reporting your the go in in other mean outcomes maturity sort maybe certainly, order, the edge. lags. service certainly I of segment and the

directly outcomes more quality worked example, an and develop reporting. standardized joint as have with the commission We to

area in space. with in med-surg probably we I do where think just anybody we behind industry than this is. are several years you, that more about I else But agree the

bit of As that. payers far little -- seen are environment we've as in sort in minds, you incongruous, in penalties, I find some readmission length of were dynamic our at stay we to a patients those also payers don't back I on specific of it and own aggressively think of the where because and least thought payers the know, that having suggest we an come penalty, cases, readmitted, would arbitrarily discharged. have they that. then insisting shorter struggle then for prematurely with bear of should patients, be earlier in discharges when sort We to

So any we've of not seen sort that way. or material in measurable

John Ransom

is for benchmarking medical electronic measured quality? at reporting, point? qualitative this it being what just records and yet there is some What the anything do you have in measured is even is So being that's behavioral, just

Steve Filton

restraints, too share one think mean way, address be probably outcomes, being and non-clinical to I detail. But frequency of the person it's like restraints probably things I of look, the to not happy the it. more I'm by a Yes, use offline measurements person to and as measured. that are of actually complicated best

Operator

from question Gentlemen, is Steve, the line open. line your [ph] Goldman final Steve your of Sachs. comes with

Unidentified Analyst

Steve. tracking on line morning, guidance. question. just clarify the guess taking first to in wanted I Good commentary for before, DSH Thanks the said you with the

to for I think is be DSH 'XX. guidance payments down Medicaid -- well, million year-on-year be down supplemental in to $XX

I to that sort of just what thinking, so know And in there? the the anything maybe and still is is to to latest want cadence understand, tracking you're that

Steve Filton

little don't first I think the the had. I quarter changed Q disclosed Yes, great. not first I or that our deal from a in as a bit decline we great in the is than it's But think quarter, what quarter, second as less mean, trajectory the

Unidentified Analyst

then And on one Got behavioral just the as well. maybe it, okay. side

total. sorry, or higher than were So facility earnings -- higher same non-comp noticing than

So lost in million just thinking what's I about like bucket. the the non-comp have facilities sort in about of seem quarter. $X that to am

there like I in just think the fall XX but way hospitals, it Danshell looks reported. you XX, is will guys there. It's

remind in another of So in and maybe sort can Panama there, then else quarter? Danshell is be City what may you how did the us one. But

Steve Filton

Yes.

is So much. tracking Danshell pretty

I that them, acquired EBITDA and obviously. about tracking I think think something quarterly, stream, $XX when had are annual million we a they they close to

terms Florida that anything I CON I that eliminated -- otherwise, we think in their and we assets million number. material had know -- can't think or $X else of non-same-store CON behavioral terribly the quarter. of a has I so I a our had and the think of in number that write-off non-same-store for

Unidentified Analyst

on Got us it. of UK Perfect. growing your your potentially is the side? And and behavioral business that business just give can thoughts UK, doing, picture you bigger how maybe level maybe on and Danshell the thinking interest

Steve Filton

by to UK. But of times, so mean, increase I are the I look, growing done we we the intent. number the We've sort of sort developments. was Danshell beds a our I in Alpha. a few small added opportunities. acquisition. of is looking that footprint UK not to other in it's We've novo And of for I Yes, We've few million one-off, size Danshell our that's de think way either of we the company smaller like a UK. that that, multiple are not reflective a and the $XXX think like envision than those acquisitions looking facilities done It think development again called -- a

Unidentified Analyst

a Got it. right, That's helpful. lot All thanks

Operator

concludes our I'll turn the the question-and-answer call session. presenters back for to remarks. This closing over

Steve Filton

forward for again look to quarter. time just We and everybody Okay. next speaking everyone their with thank

Operator

conference Thank you. your participation. today's Thank concludes call. This for you

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