UHS - Earnings call transcript Q4 2019 | Universal Health Services, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter and Full-Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions]

to Filton, conference CFO. like speaker to now Steve today, would hand over the your I Please ahead, go sir.

Steve Filton

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

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

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

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

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

release, last the on income UHS reflected As quarter our during reported the made of attributable earnings supplemental no net to fourth included with significant adjustments to XXXX. night’s there schedule were

or as After UHS schedule, or the to per attributable adjusted income share of XX, XX-month the ended $X.XX compared share, during $X.XX to million, diluted as $XXX.X supplemental indicated per net $XXX.X diluted period adjusting XXXX, full-year XXXX. the on increased December million, the

as certain adjusted sale. held attributable diluted a of UHS investment an to per marketable of our income in from during quarter net or reported for classified gain unrealized for market pre-tax is increase and of of resulting securities share and fourth Included XXXX in $XX.X shares available our share, the $X.XX the million,

$X.X marketable for gain ended per a pre-tax these results recorded with included in a XXXX, December securities. financial XX, or year share, diluted $X.XX unrealized connection the million, Our

in for a an net $XX.X impairment, year reduced connection attributable unfavorable provision resulting favorable assets the our impact taxes, from ASU adoption impact the developing on asset million related and UHS Network of of after-tax supplemental DOJ as million, XX, recorded which Reserve excluded the $XX.X $XX.X and to reflected income XXXX, carrying December XXXX-XX. increase adjusted unfavorable the value income Recovery an ended For of an the of our impact Foundations million, intangible a after-tax and with asset of from after-tax certain real in property tradename schedule,

facility in net basis On revenues fourth Acute the same Division, during a increased Care our quarter of X.X% XXXX.

adjusted same-store in the a plan, adjusted Excluding health revenues from of compared increased quarter XXXX. X.X% our increase as admissions fourth in The primarily a X.X% admission. and X.X% to revenues resulted increase per increased revenue

basis, behavioral our On the as XXXX. than Behavioral compared year, to in Health of a health XXXX. during fourth same X.X% of days adjusted fourth while fourth of increased X.X% X.X%, increased Division the patient for Adjusted facility during the quarter a facilities increased our admissions quarter owned net revenues quarter more to XXXX,

of XXXX was proceeds quarter Included of million Revenue adjusted pre-tax comparable Division’s during patient approximately the during quarter. over X.X% $X Behavioral prior year operating day the fourth insurance results Health of interruption business fourth in repaired recorded per XXXX our rose quarter of during damages been and of property has Florida. Hurricane which sustained facility, in Michael, losses with connection in fourth facilities substantial our incurred sustained located at the one This quarter reopened. with in and damage connection XXXX,

XXXX, full-year as billion billion of expenditures activities $XXX the during to cash on $XXX spent XXXX, to XXXX. compared the XXXX. during compared of full-year from generated million during million was $X.XXX Our as during operating capital $X.XXX We

XXXX. compared XX, At XXXX, to declined total XX debt as XX.X%, XX, XXXX, Our year to to days accounts days capitalization receivable the days XXXX. to during of December our outstanding declined during XX XX, as December December to ratio XX.X% compared at ended

completed XXXX, XXX acute opened beds and During approximately our new behavioral in we hospitals. existing and

number are emergency to construction, four in to also and to more two acquired more XXXX. total bring FEDs our expected in XXXX We under departments open XX. new which There FEDs of developed freestanding are three

grow three seven new with open the behavioral XXXX; We in to already health opportunities or XX joint to also construction which venture our under XXXX expected over continue and portfolio, operational; pipeline. are and announced, facilities in

million of renovation, $XXX XXXX, million to we new capital hospitals, expenditures equipment, projects expect capital construction expenditures, During at spend on to new approximately facilities. to includes which existing $XXX and

cost or share we approximately million, during program the our share share. of stock quarter X.XX repurchase purchased of a fourth with conjunction $XXX XXXX, $XXX per In approximately our at million of

shares ended use $XXX prudent We XXXX capital, continue XX-month or share. financial believe and repurchased XXXX, our have of shareholders share we repurchases. cost aggregate we to the at December approximately During a is $XXX results purchase our of per assumes return approximately million XX, million an million, to to approximately our Consequently, forecast X.X in value $XXX of plan operating XXXX. share

our XXXX results for year ended XX, release included press operating night’s Last forecast December XXXX. the

before estimated $X.XXX range $X.XXX of earnings billion. interest to adjusted Our of is controlling taxes, net amortization depreciation and billion interest,

UHS diluted adjusted Our of to ended December adjusted the December XX% UHS XXXX ended guidance an represents share. of schedule. $XX.XX over supplemental XX, the calculated attributable X% share the net estimated range the adjusted per year net is range $X.XX to approximately XX, EPS XXXX on for $XX income diluted increase Its income for as attributable to of per year to

increase net to billion X.X% our are to to representing be $XX.XX approximately our an over $XX.XX XXXX XXXX, net revenue. billion, revenues estimated of X.X% During

to are time. pleased We answer this questions at

Operator

the Valiquette first Your Thank Steve you. of line [Operator from Barclays. with Instructions] comes question

Andrew Mok

is Mok on morning. Good Steve. for Andrew Thanks. This

revenue underlying the volume on midpoint, the provide any segments? growth in you EBITDA the X% highlight? closer that guidance. X.X%. At to the meaningful guide you there in The Can is outlook and the is for first change would between Is color guide behavioral embedded up some on question XXXX XXXX almost components

Steve Filton

the mid guidance, EBITDA are guidance than EBITDA the in growth sort items, we terribly results. range. as sort in And as, to with a XXXX, that obviously, XXXX some cetera, Acute think, not in growth to are to behavioral the that is to well that I et and X% that range Division, our upper Andrew, And quite of of then underlie the frankly, XXXX adjustments revenue side, I on commensurate that XXXX reimbursement make X% in single-digit think and those growth X% that in revenue the the X% XXXX rather. expect the live elements on we different non-recurring growth based range under

Andrew Mok

helpful. That’s Thanks.

On environment? volumes volume call labor challenges Is you of position commitments would volume Can there speak the volume XQ. anything high to lower? labor the in managing from exceptionally both the temporary you quarter, choppy driving in that expenses, in your acute type volume number decelerated and this out

Steve Filton

preparing And as you we in I what at as moderate had think, that move we’ve acute The some volume volumes I ourselves been next notion Sure. did of for that the XXXX. some of fourth describe think industry-leading should more question. And care decelerate levels. not on our would for saw would only really – our and the our investors and quarter And now. to point, well historically of I acute we’ve to historically normative sort then QX, but in growth results extraordinary years several

I specific pretty explosive at last times any few now sort the We’ve talked is market over about full capacity number the only growth to point the the that in extraordinarily That around operating hospital Vegas. or hospital years Henderson of fast is of Henderson. at The and would Las Hospital clock. ramp-up much

we overall saw growth just muted of the there on a overall basis, an in has of quarter. bit. slowed. And Care has Acute that growth normative So I little down Division the think, step a Otherwise, the kind

As pressures, far as think, again, I the new there. labor nothing

the don’t it’s not labor business a development, a surprising segments. We robust of country. and a given I low pressure the continue not think it’s development. both to rates see unemployment extremely new our in And in

replace the themselves challenges our divisions fill physicians, recorded differently temporary have of reflected over operating or we as It time or continues locums, pay with where both other contract expense, the physician our on seemingly two expense our The benefit and Acute Division. cetera. of premium labor, and vacancies some in to the salary press et we in or hours of sort

we labor a to Again, on. cap nothing or but an resolved it new the our vacancies challenge patients. much in away those in a either our continues focused to on operators because – beds the side, challenged, very we’re of be behavioral turn that instances, lot having And of are

Andrew Mok

Great. I appreciate the color.

Steve Filton

Next question? Thank you.

Operator

of comes next Your BMO Matthew Capital Markets. from Borsch question the with line

Matthew Borsch

near-term it’s talk just little be to I a little was given the bit weight for and quarter, anything say you season unimportant a don’t coronavirus? to need could it’s utilization if to obviously say then flu the about a bit calendar finally, backdrop you. maybe calendar want to you there’s And tell first outlook you and a a maybe of bit hoping you is little strange to the Thank there’s then can or on the plotting.

Steve Filton

Sure, Matt.

I unexpected, and somewhat seasonal cases, than the XXXX traditional a in year to in some quarter-to-quarter I particularly think, business which a of different think in fair acute experienced amount, That we volatility. was patterns. was, difficult explain of sort

results the to Now, I that division not be think into at think, we don’t But expectations. absent played the progression, of and terribly expectation guidance than go year contrary give quarterly cadence out would XXXX, the and of of the don’t the annual to traditional. is differently and quarters I sort full-year, overall more even though intend for the we our as of the the epic, information our any the end

we stronger then had Last a in acute first much a quarter very solid and second. year,

a I frankly, don’t And, think that’s of But bit hard it’s part expect a quarterly ratable. we predict. reason, the guidance. this cadence more give year, we’d to quite

give As certainly impossible at else, quarter, that but coronavirus, in think, would know speculative. It’s far what to the any the commentary everybody would first I we’re point the impact I like as this be be purely specifically prepared. would

impossible are coronavirus more they can but be. hospitals think prepared I best Our becomes virtually – as the the to predict impact. financial widespread, If as

Matthew Borsch

on versus a procedures you lots that having cancellation be are of Do get is lot of in forth? speculative, general, think lots a you on this elective effect could because actually being where – patients retarding spread you in sorry, I let but of disruption, travel a as which there certain so are volumes hospitalized. follow-up scenario Do disruption necessarily just realized a and quick that afraid and that, of people me that, is

Steve Filton

I mean, speculative would part. it again, would repeat, on Matt, my I be that

Matthew Borsch

Okay.

Steve Filton

very fall on generally, et SARS, is cetera. I ailments elective we’ve sort only thing think, can think, have was. the either back whatever I been by have a our that experienced busy we we it found season, that of before or ailment not really procedures And impacted busy seasons flu respiratory respiratory or

this is again, extraordinary. Now,

are I off all think, bets the table…

Matthew Borsch

Sure.

Steve Filton

experience. not historic that …but been has the

Matthew Borsch

Okay. right. All you. Thank

Operator

Wolfe from Lake Your next Justin Research. comes the question from line of

Eugene Kim

is This on morning. Justin. Good Eugene for

a Just Thank And costs if a the improvement question. in volumes as appears follow-up about remain more XXXX, staffing normal? moderate the despite in quarter? Andrew’s costs also, How should temp high we volume. you. remain QX, meaningful behavioral pricing It these to earlier on comment the you can think in

Steve Filton

Sure.

of business, that, why in staffing of more So so to of the alluded for drag long is time. it terms been think I as before, strong I’ve period a the temp think than acute volumes, such was has the been I it of quarter reasons as even our I in one in fourth a

longer-term our hospitals physicians. and staffing, both nurses been making commitments have that for hospital temporary for and think operators I for our

in sometimes as a day little lower difficult for in quarter, it a days volumes. just of but little And those quickly advance, fourth not as sort like bit we’d to the of advance. or adjust a volume when more to for So months softened couple a weeks consequence the as a and of that, was in

control you’ll in nurses on case us you’ll that salary line, many I better be line, believe in believe mostly expenses, the I labor if which able persist not XXXX, into see and but I on of of lower the I’m that that those. over respond. volumes And get to recorded they see certain get the cases think doctors will, do that other those case our and expense we’ll operating

has the pricing a QX been by obviously, pricing I helped division, as our far the from the payers, terribly over control cetera. denials bit proceed my in really insurance behavioral the But also in that challenging element on our I think that little mentioned – it’s remarks. think As reflective improvement, think, and the for payer a better business, of not recovery behavioral et mix I is but I

net I some improvement those So, fronts incremental quarter. the the think on help revenue stronger in

Operator

of Your Fishbeck the question of next from America. comes Kevin with line Bank

Kevin Fishbeck

in stay seen thinking were you what years. length behavioral kind the of guess, like see we’ve versus looks of up, to pressures about, some that Wanted the last thanks. it the firming side Great, of few been has I

what get was outlet to for thinking that and that your how wanted about next So driving year? into you’re

a point just last on relatively that And being then maybe follow-up about pricing solid.

for would highlight are to growth be below Thanks. looking don’t you besides there insurance QX, so know You recovery? that there’s anything if year’s next I in the

Steve Filton

Yes.

So We identified the Medicaid I of after division comments managing more Medicaid of has think, in certainly stay. are decline. times a length where many stay, couple consistent reason the patients, length that patients as fairly shift the of Medicaid managed of a Length traditional payers primarily of flat to stay behavioral decline in for XXXX manage your about Kevin, aggressive years been almost are pretty from in accurate.

move a for still that reason a of chunk slowing saw Medicaid Medicaid in timing. I programs. think was, we that the there’s traditional expectation just that difficult to programs some occur believe us the stabilization will states managed the will for main we some patients We of to that XXXX point. from shift. have reason ultimately that, an – predict in But It’s at

that particularly behavioral of we pricing, on it per the line revenue of talked how XXXX the more relates think think ran perspective And was our from in revenue admission fourth XXXX of of something I our guidance volume what XXXX we or In quarter performance, guidance, full-year to the from pricing I growth pricing. – X% a basis more the X% and for basing performance really to based and full-year our were that when in X% on like about X% guidance. with sort terms a is that’s behavioral, was the X% I which

Kevin Fishbeck

Thanks Okay.

Operator

question of Credit Suisse. next comes line Your from A.J. the Rice with

A.J. Rice

been everybody. on drives to side. in stabilizing the stay a know that to length focus, go got at on behavioral of question, obviously the Maybe Thanks. behavioral has and coming the volumes But and just President new back I last of just on division you But of Hi, home you’ve sort – any and doesn’t really in just of Can focus trend an like could us initiatives It of is? really of XXXX some in looking at forecast some update that initiatives. different those your any is at the point. impact? when where change have on look this overall

Steve Filton

Yes.

managed the people the terms in is, I that is different as of bunch of Optum. I so Behavioral sort President, wrapped as our what approach A.J. United comes new in would you’re Peterson or what Matt a away of a last there’s Matt know, taking I asking background, think questions spending think, in up strong brief impact most I So decade mean, from and say, possible, care with as

arrangements of utilization, other to consequence, In provider. there in I the care structure is of a to help perspective are primary opportunities a we a and their And think beneficial create payer some when the but whereby are words, and he, beneficiary utilization, has that that that us way. for payer a the there both control the real partner with our as managed are create mutually payers that

underway. So But that a think ones mutually should those conversations, for time They’re think, I not collaborative immediately. a both. I can yield sort of with will more over are and be beneficial be relationship of win-win payers kind that, again that necessarily affected

Force and rigor process managed a Matt in the Air as on I as got lifelong in is experience, brings world, He’s based both his in table career the discipline that the think reserves. a military. a thing the well to other around the care

of talked how rigor sense, I that terribly intake the a we of issues that lot processes we’ve evaluate will denial bringing helpful. new I And think, cetera. think that things management, some, he’s before, to discipline I of before. about issues, again, identified is we had Matt process like and et things But And patients, and don’t different necessarily in level certainly or those that haven’t be ultimately, think

to translates guidance. the of how that terms In

for time ago, was will. we the position for behavioral predict would us to took I inflect years when it think couple firmly or that turn, that business it believed the we some of have when a would difficult it

We believe continue that. to

front we’re get to idea not predict happen. we’ll in when to alter We – to I continue last that the at that support think underlying increase at our some out going certainly believe to and admission time. in two we’re year and we’ve committed been guidance or our and that’s try projections same-store the demand going But will the over an growth it does, that When our point.

A.J. Rice

Okay. Maybe then. recontract a just follow-up Vegas. Las on one gone your in it’s market lot of and acute the on in biggest There’s focus

what there quarter? contract a you the with It first out have view that guidance opens might the – be Can assumed you bit so little that has volume. in biggest then up, out expected flesh that? had that year-to-year you pricing. of you as And far offset what the with in better is in You have on played a payer impact of sort terms maybe

Steve Filton

made effective has So back the of in we’re in of are a network over United assumption this in about January out out in that Sierra, and Vegas talking decade, They guidance? Well, for with commercial XXXX. X the of network. contract that, Las first which we’ve has been beginning HCA way the all, is played

occurred have done our this of is new is of a with signed we now we’ve effective which X also nature that, The our that have Sierra, contract to contract year. had rates with which and such January opportunity an Sierra, renegotiate once we

pricing But hospitals. patients to some that, the to Vegas is go Our we believe a already hospitals are that be scheduled X Las both our a Sierra the impact will have come there increases we negative in as longer-term, volume, year-and-a-half of and historically so. over the get January decline expectation will other now course that’s offset HCA effective, of will that increased next be that largely obviously that or by over there

not billboards naive. very understand of As status, we at that A.J., and which on real in in early far has the it, is of certainly a the of the And but we not XXXX in perspective, they’re are shift commercials patients contract change there’s a good outset from the their very as obviously, promote our new thing, network been relatively surprisingly, signs the the effort to market. HCA and slow,

think over will I a the accelerate. shift time time, we largely patients assume period year, we the in assume and result of over will So of again, extended an that, – But, over push. that be

A.J. Rice

Great. Thanks.

Operator

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

Pito Chickering

Thanks taking my Good morning, guys. for questions.

On that guidance Henderson. mentioned couple XXXX, quarter from it’s for due the years. consistent the a past there’s over in of the acute in relatively slowing headwinds some you impact But the fourth to

of I does revenue Henderson build Vegas doing new hospitals, to So guess, what’s in kind how you the And XXXX expand growth? market your what point? are affect plan Vegas to – much to at this for towers,

Steve Filton

Sure.

noted think on as basis out of earlier their XX, I single the slowdown that of the of the So, driver the the a again, think in probably XX I evenly I made volumes. spread point that’s commentary throughout volume about impact got rest the But the certainly when It’s components portfolio. not pretty I Henderson remaining slowdown.

a XXXX at new Vegas had that and occasions in the facilities, of which et problem virtually of Vegas expansions, towers, we’ve beds, cetera. six major ER problem The is commented to expansion Las addressing. I new we on projects at facilities have capacity number think, surgical of one any all have We’ve, expansions, been running our good

that, that is capacity that’s whole be developed, open. sometime We’ve Henderson, a brand-new before will project underway, specifically, it got and but tower new is at that being

Pito Chickering

I your XXXX? sort And acute on versus so And that versus you temp much. of how from costs we can labor? it. labor physicians? nurses XXXX of break by that. Okay. margins, Maybe missed pressure what should Got come out that SMB that the And then percent beating in Thanks

Steve Filton

hours sure information, strive for, X% I mean, to be our all this. sort of will, Pito. nursing is will I So would say I’m sort of I something pay. premium have if precise not that think of we what you I around

your think probably is hours nursing to somewhat I But premium you pay, overstaffed. efficiency. kind would probably that maximum argue have if of that’s you X% of of you’re sort X% close

last in et been the several we’ve think digits, kind I single the more cetera. the mid running years, shortages, given over labor of

From permanent perspective, It’s physician is costs. have et specialty in a services, to much target cetera. to physician both have temporary more general contract think, our not I efficient physicians really and any

both the in So exactly But faced. division probably know physicians I has clearly, challenge acute that nursing labor, what numbers and in biggest the are. don’t operating single the is the contract

add about are that comments in back want I one thing just in Nevada enhance is, other open on presence on, statewide Vegas and in it just will that one should to a XXXX. Las significantly. expansion have new we And major go and to we really And my obviously, add our hospital Reno, building

expansions have So the in I Nevada very the we think much as that’s related that to part well. of southern

Pito Chickering

Great. much. Thanks so

Operator

next the James of line Piper Your with comes Sandler. Sarah from question

Sarah James

JV Thank talks broadly, expanding discussions with then And Hermann? more just Thank you. that your us Memorial I behavioral you. going on are on could how was JVs? hoping Baylor on update you any

Steve Filton

Sarah. Sure,

So, under as are number we noted development. of I my projects have that comments, a in

will in late scheduled in One open of least at That’s with them a is to that XXXX. Texas. Temple, open Baylor or facility

XXXX the pipeline. we’ve obviously that that far or in projects on going not other Those et of in XX in XXXX. any think, conversations, then as specifically. those to opening projects way We, again, cetera, of open are remarks, another I got, will As comment up any either negotiations, to my and the I pipeline, eight commented completed as our under are I’m in

are large a those we’re are really I who they to not-for-profit until Obviously, of It joint of it going hospitals any reflects very acute the interest not on pipeline. part care But interested in think, on a first these number comment geographically real reflects discussions of active executed. ventures.

Sarah James

that forward? you that percent negotiating Can a Thank there Okay. any quarter you. how pricing about And acute are efforts and think revenue. for this talk trending supply cost of about on as down going you came

Steve Filton

answer, and Yes. that that, our – manage it’s the the effective first focus the most is time, to a but of main pricing that’s I operators. find of there’s I are There assure costs I I mean, is our highlight so the initiatives quality all standpoint above from the would supply effort think specifically, you, to none can ongoing. all, suppliers

down And part think reason supply for revenues I down costs, because is the just of I labor particularly is the up, down, denials costs surgical is think pressure, care supply the – coming because I which because the some. out, controlled revenue think and strong the are appear in to relation uncompensated are. mix of they costs to be on is better our greater there other I think some

So I what’s happening. that’s think

Sarah James

Thank you.

Operator

comes question next Your Raskin Research. with line the Instructions] of Nephron Josh [Operator from

Josh Raskin

morning. Any and of sort CapEx. maybe centers. care or active anything else as more other thanks. on just surgery facilities investment to know the development a see the any issue CapEx? you outpatient guys you $XXX part into on have Hi, Good into, that been ED of and question way pretty that’s that tying all urgent side. types, I – going of Steve, whether But more freestanding million

Steve Filton

mean, I full Josh, sort of it’s Yes. really, continuum. the I think

And care the presence primary we physician think many of to front-end, which FEDs, up idea you be great which as providers care I have the across think, and as my on few, we urgent acute need have includes, continuum. full an have to successful a provider that comments, so a are in offices, et a highlighted the which I really of, committed acute that we I we several, cetera. described, care centers, the care have kind

the And of and got in outpatient then, extensive the both hospital. think I we’ve the on facilities, obviously out in hospital, back-end, then,

own as long-term ASCs markets then the And health We like back-end, – et well. and our home We rehab, things cetera. on and do have in care

a approach So our to services. And able a one could presence sort those capacities partnering in be we think, greater our talk describe we full markets. markets, either buying and to those And or you, we a things. along of different narrative take But we about reflects are would or any the single building to these that of I continuum. much of all

our that that reflected along we And our markets. are arrangements, that in some But reflected in of joint CapEx in presence some in is obviously fashion, form venture continuum well, some its of et building as all or of cetera.

Josh Raskin

that in And Is contract Vegas quick HCA market I change. assuming totality Vegas right the terms into Did XXXX in of clarification you’re just it minuses? from perspective. a a it’s of a and like Gotcha. on it sound non-event as the read guidance the with kind pluses

Josh Raskin

Well, of the impact. bottom I non-event would in say, terms line

relatively a I would But we change was is think, as to or see what our expect but be unchanged. what some, Vegas you expect think, revenue – per would cosmetically, our admissions admission in to up. our of EBITDA down result go to the I go this in Sierra network

Josh Raskin

Perfect. Thanks.

Operator

Baird. with from question comes the line Matthew of Your Gillmor next

Matthew Gillmor

Hey, What I a mix think, on the perspective or to pricing. did I wanted bit Steve, the an mentioned helped? you better that acuity key that a more and was you this quarter from surgical ask thanks question. for perspective? specifically see payer mix the

Steve Filton

Yes.

we really experienced have is things relationship inverse year that think acute the side pricing. between volumes of sort and on an inverse the of one rule I all and So

So earlier a extremely little to ER in skewed our year in were mix medical, suggest were was burden bit was that high the more because ER that cetera. when the volumes particularly of bit et high, our that little a volumes, and, higher particular, uncompensated medical-surgical generally volumes

stronger care think, lower bit, down or uncompensated we extremely a pricing And revenue helped the quarter, they’ve whereas as of a better volumes opposite lower I that saw quarter, saw We saw the a burden. fourth a the the volumes little little In that little drive surgical to than phenomena. We came slightly to bit been. per in admission were mix. medical

Matthew Gillmor

I Got volume could it’s impact. respect I any issue, it. to operations? other impact if seeing follow-up you’re hard your curious was And really know masks predict to you coronavirus. that with supply one surgical on then for any especially

Steve Filton

anything had been that and and I this to I it mean, I think UHS. specifically has Yes. reported, broadly think do with don’t

this in difficult virus. to – I little think done the to it’s who have on issues the of the been have bit that been a get are suspected testing phases early process, patients

being think, testing the only the originally, done CDC. was by I

Now, there are little more has places, but bit at I cumbersome. a think far least testing been so

country more is think will then that, like supply. effective up short been become a are and And for things has gears it the widely masks presumption I that gloves this, My process. in reported as

you suspect well country imagine, I everything we of make to as most the supply sure that hospitals doing as in adequate an We’re are similar as things, can those might we an have But doing things. pipeline. adequate

I to be seen, that’s we every be but certainly making So, effort can. we are to prepared as as something, think,

Matthew Gillmor

it. Thank you. Got

Operator

Instructions] Morgan. of Gary JP comes next from with line question [Operator Your Taylor the

Gary Taylor

Steve. Hey, question. two-part good A morning,

The I of the I end heard first question. tail Sarah’s apologize. one, just

just count facilities or projects if behavioral have position on that next like I’m me sort you us an the ownership just do about you’ve But So us of here. eight the XX% that adds And seven projects, what, that? refresh help UHS can over typical think overlapping a couple you you bed is that got total you the stop JV have – years? on ballpark underway, or of think

Steve Filton

Yes.

the are range. me, the a that of And in front them that then Gary. of are have all XXX-bed couple think, certainly mean, are probably I terms XX-XX are precise data There to generally, I don’t structure, XX-XX. these So to in size. closer a hospitals little of of new I in most But in XXX range

negotiated would XX% would I not into facility. into the highly XX-XX would we But in that each it we think is share normative. than basically deal or a separately, had management enter the probably a be control is venture of less but think which I and model joint enter We the unlikely

Gary Taylor

follow-up contemplating And there the Congress material the that on one those Gotcha. if Even acute of all my year sort all to that XX to Medicaid do projection, XX on supplemental just another anything then be on side? behavioral payments. supplemental I is and your respect EBITDA would of with impacting you’re headwind at the dish, payments next anything doesn’t think,

Steve Filton

Yes.

that presume cuts our ACA defer $XX May the has in will in about that through Congress million them Congress a not May, headwind XXXX. those after the So we and dish that’s guidance, deferred

supplemental to care both provider referring et – our that cetera. reimbursement otherwise We frankly, you’re dish includes And payments what divisions. taxes, get it divisions. is cross uncompensated our and that in does that think I broader in both and

Gary Taylor

Okay.

Steve Filton

We’re specific or I expecting million have of front two that’s million split And I divisions. but between decline the a $XX the don’t think year. next $XX actually in breakout me,

Gary Taylor

you. helpful. Okay, Thank

Operator

[Operator of Instructions] UBS. question line with the from Whit Your comes Mayo next

Whit Mayo

fee-for-service patients substance there’s morning. Steve, use seeing for disorders. provide a waivers of that are behavioral Good thanks. pursuing number XXXX with adult states Hey, we’re to treatment

options. I since fall looked think states state probably have see XX to plan last

wondering, any Presumably, do for you market Just have thoughts opens who really knows. this? some this you, but on up

insight? you have if any curious Just

Steve Filton

Yes. to I IMD But overall being lifted would more I the that it’s really are industry exactly think a we have an sort obviously, exclusion not And hard I was when of analogous. something comment. mean, And, say predict. immediate it’s thought making impact. we

more shifting see of relatively felt industry from care like freestanding to the setting. quickly the that would those we just Medicaid patients setting freestanding think adult acute I

something saw, anxious all we XXXX hospitals from you to waiver. what think, the But not part with sort I acute I that, might exclusion IMD think, were expect similar necessarily that those patients. from is of the the

as see as consequence, quick. and shift JV a actual more not of patients, being more conversations But those I the much we much active And think, robust.

see so more how wait XXXX waivers And terms would what potentially really in resolved, patients. I or and the of result these is

Whit Mayo

as this chance trying there consequence there I’m any that see result guess, this? headwind? of I a a negative develop to Is any you as is think, could

Steve Filton

haven’t We yet. it seen

little it’s So think, early too tell. to I a

Whit Mayo

Yes.

comment professional haven’t looked any in XX-K as but XXXX. fees, malpractice comments any And building contract could you on your I if your on And just management around at pressure you think experience yet, Thanks. about maybe XXXX? Okay. subsidies

Steve Filton

Yes.

So our last over changed much stable. experience several malpractice It’s pretty been really not has years. the

of service we’re and cetera, think costs, those et I think things I far a our say As of regular would well pay in like for other contract some either services, position the doctors to vendor where those thing. of I same vacancies hospitals, in some costs our of having as bigger pretty remained stable. been as et much terms cetera. ER arrangements or has for kind for fees, as us contract specialties, pay have having to on contract we’re the Again, locums fairly vacancies pressure But

Whit Mayo

Thanks. Perfect.

Operator

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

Anton Hie

I Hi reopened. the Frank. on been just for there. – you Can back. had how heard trending that? insurance there, believe recovery an on us recovery I Hie It’s City is Anton that’s refresh I of kind know we not sure but I’m update actual Panama on

Steve Filton

Yes.

to, think is So in normal level. of facility Emerald ramped of Coast, name I City reopened, in believe sort and has has up September back I the pre-hurricane pretty Panama the which

tail $XX XXXX, the So the the XXXX. in in $X a neighborhood think million million for wind maybe behavioral a to provide facility I for in recovery division operating bit of should of that

Anton Hie

Okay. drag give on the treatment, that? you can on then addiction And an the update us

Steve Filton

we’re making seen don’t some addiction significant improvement to mean, in standalone one, and think of there initiatives treatment real remains incremental results progress, improve I a trying No, business, incremental. some that I change. where there’s but the but we’ve it’s any number

Anton Hie

you. Thank

Operator

next [Operator Your line Citi. comes with Giacobbe of Instructions] the from question Ralph

Ralph Giacobbe

Thanks. morning. Good

staff. backdrop. Is want quickly. in of around market, sort of And What starting really rate to or there understand non-clinical your obviously, pressures strong contract Just staffing pressure volume temp are to bit back that wage to running? labor both what’s Steve? labor a of and growth more sort little been, about context competitiveness hear go What’s nursing? there for the Certainly underlying in the incremental the we

that? in frame in help any So

Steve Filton

pressure division, X.X% inflation higher ago, behavioral probably Look, annual in little least think to few to in to on picked years the that X.X% And gone wage a we at I last on so or businesses, has serve But increases our division behavioral probably to wage lower X.X% up today’s has the the I the think come on X.X% a the environment. little several that to the acute pressure side. that certainly acute from but inability to in and on in in the think, X.X% years. a the two hourly I we’ve over X% pay, itself, premium again, really not wage like much still biggest patients all the

Ralph Giacobbe

then enough. Okay, fair just… And

Steve Filton

ahead, Go Ralph.

Ralph Giacobbe

mix. follow-up. commercial if of missed I acuity I and apologize this. give …yes, Medicare of little just us sense better payer the I can you there? sort Medicaid, noted just trends know Thanks. more and just I And one I increase volume versus was a maybe you CMI hoping a versus quick think of the

Steve Filton

Yes.

manifested think acuity really mean, that I volumes. So in I surgical itself the

were a But uncompensated is the in inpatient or increases years. have several down front X% probably volumes don’t that know QX. the ticked care of the me. think, I in one surgical in which had I of I of in the patients exact quarter, better percentage X% somewhat last as number up the we’ve And numbers uncompensated

Ralph Giacobbe

payer then mix? And

Steve Filton

that similar. I mean, was most mean, uncompensated me of I remain I think Yes. percentages to the our other care. payer

Ralph Giacobbe

Okay. Thank you.

Operator

There questions. are no further

Steve Filton

Okay, we end thank their months at forward time quarter. first with to of for talking a in again the and everybody of everybody look couple the

Operator

for participating. you, concludes This today’s and gentlemen. Thank you call. Thank ladies conference

disconnect. You now may

Universal Health Services (UHS) 27 Feb 202019 Q4 Earnings call transcript