UHS - Earnings call transcript Q1 2022 | Universal Health Services, Inc.

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Operator

Good day. And thank you for standing by. Welcome to the Universal Health Services, Inc.

First Quarter 2022, Earnings Conference Call. At this time, all participants are in a listen-only mode. there a presentation, session. speaker's the will question-and-answer be After [Operator Instructions]. like I Filton, conference to over now CFO. to Steve the today, hand would speaker our of Please go ahead.

Steve Filton

this Miller Thank of review XXst, Services first also morning, XXXX. Mary. the Health welcome Marc for ended you, joining to Good Universal us quarter morning. results this We you is March

forward words During expects, anticipates, believes, words such that forecasts, the represent as conference call, we will looking projections, and and using similar statements. be estimates,

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

our in as XXXX. of UHS reflected discussed the reported to the night, attributable the the the As quarter income release. for press share with release net schedule the supplemental impact press $X.XX on adjusting for first diluted Company per included items last of After of

ended UHS XX, adjusted the income for share XXXX. quarter Our was net $X.XX diluted per to attributable March

by pandemic, our XXXX, continued During quarter wage the staffing first of rates. as pressures and to the be on operations as impacted COVID-XX well

those -- to acuity. comparison. we both year-to-year on hours a contract more and surges, quarter, in importantly, of less basis, well significantly December treated COVID sequential the January first Specifically, for Omicron at patients a and in the the tended used, XXXX, of lower had Meanwhile, now as than we have to that's would acutely in In the surge our note ill the hours in peak segment, began geographies we nursing previous square in patients a most a general which with of the our the even Omicron were patients virus, as in rates in pay of increased acute variant of XXXX. year-to-year

quite on vacancies opened dramatically, health our our to De -- related limiting bands had benefited approximately also Although recently note related revenues first contract provider net in labor XXXX. were our to have Novo were which of quarter government Recognition of segment which approval in acute and to of $XX related the behavioral our do inability volumes as vacant related of until of our did that million since behavioral results not fill $X facilities our all included and losses million a approximately from notable incurred fill increase start-up We by impact two Texas last quarter revenues million all deferred nursing costs reimbursements, days special closed taxes revenues. to the of patient of four was Medicaid labor behavioral formal natural by months those $XX disasters. health Our impacted facilities, first reopened. of obtained were and Those been temporarily from losses

costs shortage the were results well clinical night's that as related as continued pandemic, that cost facilities the quarter to our impacted volumes other at health COVID-XX XXXX were of in unfavorably our press the to than to uncertainties staff. anticipated due related lower nationwide escalations nurses the in and labor release, disclosed than last patient were for by operating As and higher anticipated our first behavioral

experienced first during of forecast XXXX this reductions at the Although make we not operating future do not trends the date changing may at our forecasts our operating improve. previously quarter if unfavorable results time, we're XXXX released to a

million Medicare XXXX period as accelerated the cash-generation million quarter compared of $XXX We Our first expenditures repayment XXXX during XXXX. on million cash during reflected generated of the $XXX same $XX the the first spent first know from quarter capital operating during activities XXXX. the of in was that payments. to We quarter

to to in ratio receivable of continued decreased days the XX XXXX. repurchasing March first as compared XXXX, as shares XXXX, accounts to quarter debt-to-total to large at XX, outstanding to of the during days at our of Due capitalization first March XX, our the XX.X% in XX increased days part compared Our quarter of XX.X%, XXXX.

not models they invest did. In We demand as do care appropriate, wider care expecting. rapidly quarter the the return first traveling primary allow volumes below Where as longer shortfall can. our will the commitments forecasts. us the believe use predicting and were quickly highest the substantially fact of Our height and estimates. for of as meantime, render decline. in in forecast we at of continue of moderated believe the nurses, that this operating COVID results part to are heavily The the the we internal temporary price not this developing labor gradually that variety necessarily decline to we XXXX is through has were also continue behind scarcity surge, was We of were higher-rate. retention that initiatives premium consensus into ultimately and caregivers labor internal alternative our efficient that and available driver were quality of And Omicron pace increased that entering our because We a has the patient to providers as most the to will recruitment

quarter, questions. your care behavioral and our first Arizona, organically, joint Genova the in reinvest At Reno those to time, remains time, scarcity While shares core continue we in we still acute demand confidence the venture baseline remained current the market of of our we're in bullish the our the sentiment, acquirer to we're with segments, occur our And intact. $XXX Wisconsin. shares. is recovery time. it the same At the combined of hospitals pleased and and a an labor in both underlying repurchasing Michigan, Reflective of in million our opening new pace the from active own this long-term of comfortable view will hospital of of answer business that our over businesses uncertain, that strength

Operator

Instructions] you. the while Please by Thank [Operator we roster. stand compile

comes Our first of from Nephron Josh Raskin question the from line Research.

open. is line Your

Marco Criscuolo

question. Josh. on for for morning. taking the is actually Thanks Marco Good This

to start like due looks Just below to came constraints. volumes the the behavioral expectations in side, continued it capacity with

behavioral wanted demand your strong do foreseeable just get to to meet speaking view. enough the for about? or structural future? It is of wages ultimate you're and at a underlying staff Thanks. to is sound What this raising more solution the is the more this impediment I attracting point So base you care think doesn't like

Steve Filton

at we've this so some Yeah, length talked about before.

we our will improve. continue solved prepared I dynamics, shortages I we've and I Number think think and to believe our think remarks the this been overnight don't we do X, the it gradually before but the XX-year. as think grand, indicated, nursing problem in solution market through gets

going helpful. same alluded Although and personnel investment more this And Andrew and become one that nurses get are remarks. to in attractive initiatives severe because really more any Mok wages more profession. We up his supply other At is experienced. a newer and recruitment But this in generate it be we the the our of hiring we time, new,-- - as will probably will changing will clinical than our the nurses involved number certainly as up previously system reviewing wage We're processes. care as every once wage Andrew to Whereas referred year. in And of that place market that's historically year patient maybe competitive improvement they year, most took times markets seeing a every with process models. other again, Mok of the well. in those a we're areas. Making can beginnings we're every that people competitive rates structures sure be. in multiple those are and that to

So you specifically behavioral. about we're asking

there. on are that been The that We record, for have Again, to rates a comments, real eight positive has that encouraging would And believe around in I payers, don't last -- day his think to continue the slightly high nurses us and it least the is will the for that's as patient Because few positive. now, the for negative as should future to positive net is challenge think actually where side rates we and our country problem back-end the that continue challenge to all. whole be solved, to should more from in the belief we've But hires turn treat the behavioral and think clinicians again, at was improve that us, in over us six think mean that facing. well imply to things, been indicated hiring providers which changed demand core continue but record is historical are not patients underlying on the year months. get the at I and up. allow continue number, we it last I turnover believe other better really think time that long QX net I go near we to thing for in of I rates or has a at periods, the the compared for there. Mok prepared

Operator

have from Matt You Capital Markets. BMO from Borsch question a

line Your is open.

Ben Rossi

morning. Good Hi. my you question. taking Thank for

filling Rossi You here - in Ben Matt. Q for have

Thanks. with proposal the you regarding provide moving look of that there curious from for And CMS as appreciate -- this you that for the in pieces, CMS out Just will then whether about pressure. XXXX, feel broadly, if more that recent was us think release proposal. contract a XXXX accurately can factor that and how to to inflationary IPPS And is we could beyond. but Medicare you some factoring rates your start projection more I still

Steve Filton

Yeah.

fiscal of at UHS year are increase moving be parts October. we is do hospitals the for best the That our release. included the you beginning think net will When federal our year. getting number calculation much the So blended guidance suggest, be there number that to should ability, we in the We as about in the X.X%. we of the that pretty a in for

hospitals were along and rest are seem country, that acknowledge and groups did the rates, and preliminary sizes. labor currently this that we suspect stripes Medicare think, pressure the I pressures, we disappointed final will inflationary not hospital industry, representing to I of the that hospitals of lobbying across the under the significant particularly, from -- between inflation period with all come in CMS Medicare and experiencing. across the

that profit to year. both for our know. in But CMS both on and Now, impact we be are of to aware and few and other markets peers, that across weeks next It's year can markets both your informally CMS making struggling. -- not-for-profit they the and in will have have months. as hard and acutely over as question, from and course peers, formally and week's certainly, this on side I of country think, that the certainly what feedback they'll particularly next Again, hospitals Medicare the labor the

Ben Rossi

you. Thank Great.

Operator

the comes question Andrew Mok UBS. of from next line from Our

Your line is open.

Andrew Mok

in What trended seen the Great. Thanks. Good the of contract quarter of can you in for Steve, relative And into have April, expectations questions. the more expenses to detail year? Thanks segments. of are in each improvement labor for what and for rates? the the there exiting labor balance the expectations provide you the the in morning. quarter how level internal

Steve Filton

had year still end volumes of surely geographies volume So didn't of the many January recede far, the January, in the some very geographies, obviously, cadence of February. some early high and on cases, the Omicron so our the Andrew, of crime those even in until

I'll so And to even on first, quarter. overarching six definitely call the weeks was of issue, it labor four an the

was think disappointing again. our expectations of terms in I scarcity labor what was the

to weeks, know commitments weeks the we certainly final hospitals that. comments. of that nurses receive think in or is other even XX I to a much volumes as as our alluded number COVID the I receded being hospitals rapidly. not curve of did making think six think of a again, where of was in said We that And relatively our many some for were in made And instead more of eight eight we've temporary of or weeks. term four for we the three prepared cases as of longer this ease to his remarks, than week commitments. longer thought I in or heard quarter traveling

of kind quarter And than so think expecting. labor to of be the I found we we difficult to and back-half issues navigate more stickier were in the some degree, to

sort I and and demand and vacation again it's I tight and a that and When for Although in think normal of highest many side trimming normal And those temporary Eastern plans longer-term calendar March in a settles measurable hiring, back in business not little turnover is labor relief, people, more rate, break as made May that aggressive as kind some situation We'll Passover of frame. beginning are resuming little early bit more getting in entering more to and commitments success complicated, down, of hope things holidays. both the that will that their April through as some few sort traveling years, first think in the a the a spring of temporary segments, more of supply the a become the in the of have in success we our I sort this have think in companies the rates of you sort backfilling rejecting see the labor time on demanding. time traveling May leap dynamic challenging going into

Andrew Mok

with you quantify far? the rates Got help contract it. that in you've moderation market Can seen this the in

Steve Filton

especially. I'll on first escalating, Again, the of say quarter dollars, a quarter was

was compares and it as million. QX the $XXX talked On to acute $XX we in million. 'XX QX side, of being increased our QX when in million premium That $XXX to pay about

in the So pay QX. increased dollars certainly overall premium

seeing April. and that And they're are QX, very which presume pace in a difficult into exact certainly rates. rates of reduction say will into at but to the seeing We of we continue we're decelerating. it's the QX decelerating But end

Andrew Mok

for Great. color. the Thanks

Operator

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

open. is line Your

Justin Lake

start morning. around off on wanted to Thanks. that I up question Good following labor.

to into Are that you labor? going there within year? a in year that we How talked guidance you the of expect as Steve, XXX decline the terms XXX. assuming out material pretty do about through the through go you So temp play

Steve Filton

Yes.

in into expected. And think that recovery really quarter that was So year-end October call commentary has Justin, has year labor that last been with in consistent, I we our suggested happening sort February. our commentary of third pretty of beginning than slower the call our

as announcement, 'XX, First surge of the January last made when by we our acute clearly of the in expectations the things that we peers just so. expected. that's guidance set -- least issued comments made all, But And our last the ago I year. is our I back and months where definitely in think from similar I think our of we think even obviously, it week and year-end than from was at clearly set said, were our true, that even Omicron two recovery did in back fall been two slower care December 'XX, have I commentary or for in who

for the of on been as the Our that than cadence was labor original always that pressures normative historically presumed our driver would cadence fundamental company, went with has guidance the it on. earnings sort the certainly different then a trajectory improve on of cadence and ease is went that year than as year that the idea

about that internal to think it's the I to earnings as that forecast be think in in or Again, terms we we we were QX. I our that of our our our X% XX% QX. being off expected have were on. recover the may We sense consensus, own able but of where goes noting than greater of probably we know We XX% we suggested a certainly worth off year our off we in forecast. forecasts. missed Marc acknowledge were X% pressure labor

Now, release year will, hopeful improving that labor occur recovery again, press does will on. indicated, in the year. guidance we still revise occur that we're as have we as not the to know fast our if the later as think may as goes [indiscernible] the that that it But at moment you

Justin Lake

you go you're this where of number number in quarters. terms the the year? going saying can in a you is give terms Okay. two a there it's XXX, Is too But can last really through you like, is there hopeful is to think anchor Steve, of that and us, XXX

Steve Filton

to it's will don't of any is, us say Yeah. that where know going look, know Well, I go. I what

would million call any essentially line. of to I etc. what the the of the getting important what direct we're said it that really presumed for to we'll quarter bottom guidance more is that not a a minimum to nurses $XX hit year, in end in hit Because that. I is range, of like million And year's by we the our understand add And think incremental, that last return last pay was premium pace. that -- year, premium pay $XX fourth the it's

same We them. for for most premium part are the of paying amount nurses rates the getting just and

So clearly earnings a down rates premium on as those our peers rates risen, on real as premium go and they get have the they've -- benefit. strain But as you our put down, earnings. that same come

making. You'll third of be replacing is that a employed an temporary temporary nurse a nurses nurse is making who maybe with what

Justin Lake

payment put this about around -- sounds a not, a little take in bit to point haven't down anything like that assume down it through here any us guidance just of much But you seen there moderation some actually, of math year? path saying you're the to the why you've the XX to terms, by but conservative the hours got -- through the moderation and XXX in Just seen could you've Is not up, of visibility the more finish some end you year. April. even going and if a not it the talking and

Steve Filton

quickly number we So that - this least much little situation was two criticized confess guidance to we peers. for what think resolve around bit frustrated And labor of it ago that express were being we I would - more caution generally have a I itself, from we the that our a honestly, I think too about than Jonathan, quarters, how etc. conservative at months issued

where are later, don't months when suggesting saying, too that and suggesting we request imply number some more I moment okay, situation issued. pointed I people we're that I now XXX% you meaning turn indicators I an completely you think think were a I people aggressive. to there partially that or internal makes be months we're we or saying again, for two imply initially said, is what the sort segment are shortfall positive degree that you're can to as X% a lowering certainty know that and these two time the not from net think not here, own that of progresses. behavioral Again, rates, metrics. the our few seeing a QX has that being do guidance is to we're mean early improving of forecast a hires unreasonable periods. I just suggest there I have that the in things was turnaround of that but in Now, us I the that experienced in had will, after recovered in it last turned is of think All complete enough maybe to that labor etc. we'll year

Justin Lake

Appreciate the thanks. color, Steve, all

Operator

Our next Stephen question Fargo. comes line Wells from from Baxter of the

Your line is open.

Stephen Baxter

in Yes. Hi, the commentary bit in was about what hoping on volumes the could happened impact labor. about the from think thanks. a acute to behavioral Appreciate care help little you I us the quarter. business operationally,

the versus COVID running quarters three guess it, also baseline over you've took look impact those had So the been where I when we some quarters. a admissions at does it for step against levels, past guess I adjusted back seem like them.

greater So rates volume against your and it impact performing? maybe to seem are Thank does on how you. an guess, you're an a on that that. just does for volume your like retention side, the side, if there there trying mean What labor I contract was of impact understand, using quantity the was

Steve Filton

COVID high so admissions worth during the the run key even that's again, the XX% noting diagnoses. finished the high of two with the they care the COVID we've years will it's year for as really volumes, acute declined in plus our the being were of is And about quarter about rapidly, be pandemic. care beginning that think segment their we, commentary, of quarter this I though fairly that a as

cases it to and that's people QX the challenging on us etc. on and to but know it's side, sort behind of ability COVID we've challenging I procedural a throughput on acute our So of with have labor they bias regency have -- the non-COVID cases, being it's think tend challenging in discussed, played COVID side as part significant because effective etc. and

into the late the of I other to had before commitments quarter, of those us. I in make has some think of that throughput maybe to of into are nurses I longer-term because will or only anytime most probably terms our And pressures our ultimately don't we acknowledge nurses, we're the return think persisted April, in normal, facilities to longer-term by into the certainly those we etc. at return the nurses phenomena that nurses to some who those play to labor facilities the in that geographies, into out locked quarter, other cases while more both more committed we -- of think extent do sort for or not I commitments indefinitely. are the commitment, pursue soon this But of that patients and and large internal part that but going more it's data nurses suggests will point operational lifestyle ultimately and of nurse are returned to even that temporary end and think return traveling external that again, those that not our lifestyle, and believe to locked

Operator

Our from of comes Jason Citi. the line next from question Cassorla

line is Your open.

Jason Cassorla

Thanks. morning. Great. Good

CapEx wanted go to Just quickly. to

it Thanks. future build-out otherwise labor Just the pressured environment, or service line of or about juncture? timing thinking for to in you're relates deployment this in priorities equipment or as context specifically does at it capital how this change pacing continued investment

Steve Filton

on is try episodic factors. basis. determination have What I we would make to an take into Each market on to we at account a project say that and certainly look

a we'll all like that to until capital in And them better larger at choose factor about or but factors we a we take For specifically particular market might equipment affect for in happening reasonable things time period of particular feel in and no in some market. account the general, into change, hold projects probably that, what's project. cases the that look each

Jason Cassorla

Thanks.

Operator

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

is line open. Your

Pito Chickering

internal April continuing what like you've guys, here. street estimates percent morning how a XQ here, might estimates, thanks than in own or missions hopefully before this so can And for chance first-quarter seen your May. Hey, good it higher annual they X% you quarter, at we pressures ones any in the number into the first get X% taking my With give because labor for just turning it's range of should to looks EBITDA, us couple sequentially questions. the right? A or

Steve Filton

Yes.

exactly me. you're asking why sure not I'm So

discussed give As see, decision on an occasions, and we don't guidance on quarterly many we've that's intentional part. our

As some our our X% for we those think The difference forecasts we I that a main I more reason was, short to. that's of QX. the think of it's a I enumerated I think forecast QX why fact, remarks startup losses we of said, own those suggesting know for particularly were I in internal reason And part and that Street potentially in probably were don't than prepared non-recurring budgeted accurately we explanation. internal I the the if between don't things but versus possible was in able consensus, our a losses know

the point as that QX, we any quarters that is I can't get with we goes average, don't difficult to guidance. to X% in on, that Again, would shortfall think normal there. different increases would that still at gradually be higher points say this EBITDA, is in back we environment. it's we on don't up feel in this to think by again again, certainty historical each think our which to I of than basically, our of precision get order a -- But idea, to make the percentage But that our perspective think the a couple next year of be midpoint stretch, certainly I cadence. have again, we'd what getting

Pito Chickering

hires quarter first tracking April? basically Great. it better is, you And then, their any it did getting fourth those on increase hires And rates? color the the quarter Is may mean how gross you Okay. worse? third one quarter, is are you uncompetitive a some or think turning can provide turnover, wages and -- on in it about is turnover, need to as then there consistent? in net versus the And and tag

Steve Filton

doing XXX almost spent it's patient from Justin's but pay. line. how the we points. that think would That giving points are to if an goes The we labor premium such cases I that are that comment, quickly example far I as are million wages And point in in the some earlier to is increasing, million or being XXX -- the supply I premium a of said our $XXX as business giving of wage drops base I the are before, we frequently from by that or feeling. I competitive is in even economics wage underlying basis literally So perspective, and bottom this benefit again, QX quarterly. year as ago. increases that's pay the static competitive if reviews question we're is changing. mean, In premium mean, wages question, from markets. I all greatly. we that question in pressure from response market benefit a a we're make acute whether directly wages our a to our certainly not that spent an and in the to that we're I'll declined, to pay basis from The a are was demand $XX But the dynamics particular, speak as that this

sense has amount going not had reduce number But I a how challenge have are, happen pretty there it leverage anymore sense think all quickly go that I focus there. that calculations that that increasing. wage the And any way. is, I moment, the again, to of that to there's not We'll think that can Now the enormous and at in now don't we're immediately. likely is a from close all the also getting is comes And time we're general an still by that of think hospitals underlying to significant to able if the number up peak The be some being is probably in our bit been number. little take reduced? get increases.

Pito Chickering

seeing from you Supply on pushing two hear And getting on supplies from then quick Are hospitals. guess you and going supply the costs from to suppliers pressures medical inflation, side? to we're seeing inflationary devices? then I pushed follow-ups you guys are Great. about here. what

Steve Filton

Yeah.

the think all se, the inflation, of we're premium would dynamic the I it like things. inflation every describe inflation, as I spend. so is describe personal in labor even reliance on the business that consumer, pay both as our But and but seeing I and would inflation I'm this -- not much affecting two even per space what sure with again, dominating

provide get those think see we is behavioral premium volumes in and will a see And overwhelm I particularly than own we'll down, scarcity will the increase. that side, premium a inflation. a rates point inflation labor those our down, as see more the come that inflation if And our a those increased of improve if benefit hiring also Again, that solve the rates to factor I but will can to we'll have pretty pressures we rates. view I that. that allow we think definitely we feeling we're from offset problem, come think direct significant from that

Pito Chickering

Thanks much. Great. so

Operator

Mizuho. comes Our of from the next question line Hynes from Ann

Your open. line is

Ann Hynes

in wages tracking the historical and pressured Thanks. how XXXX? then We that for guidance cost early, want is probably good point you it's basis let a about for Can morning. embedded think next should estimates. giving mine rates structure. right just as Hi, to know to estimate assume, wage and And we I year. us biggest but what is with that compares base your your on what a in labor know

Steve Filton

X.X%. -pandemic in about QX our we wage a say, the think I side, pre the call, bit acute talked little let's on inflation was, this When X%, that

X%, the X.X%. behavioral probably was On side, it

points. we're basis XXX maybe I even up think post-pandemic are those XXX rates thinking XXX,

rates enormous an paying ultimately drag some ease -pandemic, $XXX of when those That's think where the who it's a the that's were were that we -- nurses about. increase in the already earnings or on over But think our replaced replacing If we we $XXX pre paying $XX who hour. nurses number reasonable improvement at what reasons $XX current XXXX from though an really nursing are temporary I talked think that sitting traveling even we're period. $XX, we're again, in with we a had math that we've those hour do still for percent now. making an I making we for been right hours

Ann Hynes

think All very right. issue, nursing acute like seems when follow-up about a just the I obvious. And care question, the

premium in now you but whether now? I'm is what versus portfolio you nature, these anything see you And COVID are Thanks. behavioral pre I reduce should and to the just a your on to had rates, on to view sort more nursing structural spikes, you've nurses? had your markets? is what overcome But side, what I'm consider and -pandemic business? come your the in been have that do it reduced the how struggle down. much to staff, know more you can of staff Are closing curious have an is do maybe have behavioral reliance growth. on. to on lot has you and nurses of nursing right like some I of going like would with And And I you got You and are in guess a nursing. absolute that? rationalization units structural -- number if there you return shifts there

Steve Filton

paramedics rendering talked experimenting and think models the newer implementing experimenting, about been folks heavily this nurse we of trying are that more most do What above to we're want difficult LPNs work, behavioral the clear. just on pandemic we're I our their very rely practice We're is sorts -- more heavily position registered the people do. RMs of the relieve point and to and phrase has from and and on on So both having what who clerical license. the is bill and acute care side. the make And RNs that to gets more the doing administrative care in used patient position during not all -- less need other they than generally to this. profession LBNs The I than we're not and

the those somebody families, all answer the things. maybe, somebody can change of behavioral the and sort care to are, with in medication a can and it speak can assessments less else top again, their at and whatever sheets things of allows Doing room, the nurses the else psychological Somebody delivering license. that do phone, else

focus of really ours. And a so that's big

RN some we're get It to to some again, changes fair, time But it continue patient so. to we Now improvement think in people train etc. both other none takes people, some will time, to takes time takes to sorts care positions, model time be we of do some take incremental the for hire oriented, areas. Any making. those And

sufficient think patients. to clinical about as We the. in don't think we're far previous But down Again, I rationalization, temporarily. really talked we've closing portfolio As staff treat calls. have I capacity not we're

degree We canceling are, labor elevated managed negotiating contracts of etc. we're of contracts, level to rationalizing those think changing payer managed are giving payers us care capacity I if recognize sufficient We're increases some mix, costs. our our were this to not care a as our

think to some traveling rationalizing also we're way. of [indiscernible]. this capacity sense agreed no really, we're we're paid portfolio rates really where said that only in ABC look, I I XYZ we're the a doesn't it us the for from if A pay payer. getting So I or temporary think seeing to And for saying, nurse earlier, make just

think it providers, cases range. to just of using it run a I to makes volume lower come you of And some in more sense a term capacity nurse, don't going think into that point normalized a the believe of some period rationalize some so rates we're until takes just I for time view whatever that for unlike have we we pay the your

Ann Hynes

Alright, thanks.

Operator

line the next Our from from comes of James, Sarah question Barclays.

open is line Your

Sarah James

trying to through of run some I'm [indiscernible]. you. Thank the

know million any $XX it positive X% the the premium million you to premium And in I what You that said X% of XX. us pay X% year. [indiscernible] million to XQ then Can pay internal million were was went there $XX [indiscernible] to forecasts? to of there for to size were internal that first up quarter it you you about $XX get last to said was, give $XX X% like half seems in because are offset

Steve Filton

premium the much bonuses premium The is retention before on volume behavioral and less etc. lower you is the talked is side that or an a about issue acute probably of sign-on when well is talk insufficient and what real like third we the than as issue Sarah, bonuses, side pay is on growth. and the -- things revenue it behavioral about as on pay side

patient adjusted days were I year. below our prior QX in the X% think So

growth issue Our not But not clinical X.X% inflation overall sufficient of pay that inflation not both to but the in -- historical X% and it's our and of that we're certainly is real at support our their increased volume that just growth revenue just experiencing. side is so change least general care sufficient growing was to behavioral to X% X%. -- at rid clinical Clearly the on and the patients days premium the those labor the the of a higher to well, on sufficient get to revenue goal are hire to issue patient the as staff behavioral the year. staff norm a models side levels level

Sarah James

And that or specific? that? you models. and then outpatient alternative by be What talked care mean clinic into expanding Is earlier in can the more methadone you considering about call, you do

Steve Filton

Yes.

the in do efficiency care and LVN who it's can what the So us is allow allow or intensive in we license designed are that as top best other we level at more and treat his many of or it can. practice way patient the more lower And or have clerical what a that or I her where LPN's means care patients to as administrative of Again, are a tax RN really allows whatever. to the less safely we people are or in do to people as license quality the to activities. highest to consequence, and patient deliver delivering folks think

Sarah James

mentioned detail provide is payer Ann, [indiscernible] some when or on question you mix, as last And is shifting there other what any contracts just payer can a canceling or payer that you to follow-up

Steve Filton

Yeah.

you breaking if look our results, there. I up day around think up I detail a at try our is plus the is answer and think behavioral little you're that So X off adjusted I'll what bit percent. per that Again, revenue asked. you QX I'm

negotiating of not refusing so to payer engineer that a judicious we're I to think with rates would pretty us need than we're it. dealing of we and give sort kind the mix, of the increased are doing replacing rate trying payers that's that choosing and of annual to reflective increases fact of payer sorts job who

that. being I successful very think we're at

or challenge move day to growth patient day per Again, is or very us to above the we're revenue the that. that on think for a even pleased side I X the of X% negative with normative plus adjusted behavioral real historical X% of the from business. percent move X% now,

Sarah James

you. Thank

Operator

of AJ Rice Suisse. Our line Credit next question comes the from from

open. is line Your

Aj Rice

just Hi, everybody. Maybe a questions. couple of

for actually know which your side. you're make service the is On but that here, units I labor in they mainly to has year-to-year about talking the still reported the I behavioral behavioral. still underlying -- know down feeling want were health just we're too peer, like sure that component the biggest strong. hospital demand I behavioral

to if so Do what's of patients them? sense a I have are still these So Where it's happening strong? wonder going? you

Steve Filton

that going patients able Look, a don't sufficient certain I to unable number have like many take think because we a not have our markets, sense definitely our peers staff. In the are reality in are It's untreated. A.J. market they clinical that is not. the do cases of something believe we're that you of many to in we're we

wind I this So consistently the that and the not they need point entire I to and the patients we've during up getting think of that measure really made we that very that is and care some demand. of pandemic those ways the sort your underlying think point

activity. but those phone what doing dramatically numbers, mentioned ways inbound ultimately about. number etc. And scarcity result during of get admissions, rising the the we pandemic. declined describe that volume been as are nothing because those generally -- of issues have has inquiries inquiries that talking of consistently And conversion of pretty rate, been that percentage we've those inbound our we the primarily the of labor our the demand website, during pandemic, the them in we really our in inquiries measure These one the we in inbound calls a ways. that different number But to think we Internet the is XXX get underlying the I

we not changed initial a which Mark of way. think have that I our to confidence any in in underlying a fundamental broader demand lot earlier, for the in way of again, So comments segments your his answer is question, have business both addressed

Aj Rice

How of know your that peer different look markets coordinate is do that, labor Massachusetts behavioral a Do and competing you you're that one I other presenting those against you the labor. manage not behavioral Do you in multiple you have facilities or Texas, Okay. other them. When at where that? have facilities health facility one thoughts? metropolitan issues? some Any behavioral relative in more behavioral have cluster like you little are in the is one area challenges? thing for to specific that health health public you fact

Steve Filton

I think we markets. the which in a reality number do market facilities obviously multiple in a of is having

luxury amongst of markets and You being are obviously share move some in affords in all more regard, and significant pretty that to that efficient and you functions a employees recruiting the allows we a It able mentioned And Philadelphia, market Boston, presence. HR which be have multiple some Atlanta centralize you to facility of facilities. to etc.

the geographies the issue all a than market that and scarcity. some just But terms providers the challenged in are think what real more challenging labor just is the that. And challenging, others that we of are that's is. is way market it to benefit some find in I is there the is So when

I are you have we are that fully Now that facilities staffed, tell not certain will again, struggling.

We struggle to hire have other facilities that RNs.

facilities provision to unlicensed hire or We professionals. of have struggle that a other RNs, number health have mental technicians which

facilities wouldn't it less difficult. So more multiple there is say really and that having even I or

geography. depends the think really just on it I

Aj Rice

Okay. And maybe just final question. one

is that important I $XXX your about for obviously, year. think million in the we about storage You did guess, how of repurchase pace or UHS activity? an should So this part QX. step-up share

in there's today. significant On giving an a and hand, the the stock is sell-off one here market where opportunity you

sort cheaper adjust just share an get improvement yesterday. you we do about would may activity or at which you mid-year. so And better to some you've of a whether you that the thinking buy pullback clarity there's you to to repurchase guidance need you're to think up that got guidance, Alternatively, you're see you forward? try or opportunity step here going fact take it talking on could get to to you adjust Should than of the about, going be advantage hesitate until

Steve Filton

that get in the is in And all guidance on plan $X.X Marc his the initial our track was billion has to to we in QX, market demand strong will share labor simply of underlying think share fair be think try the certainly whether that, We with your deal, in in businesses. just comments, it, something I amount days. to -- it, to the indicated and to again, repurchase roughly million in that but we'll we resolved quite every the think annual or to right that the articulated original $XXX have decisions have of for that about about about last Obviously, great was about that, think fulfilling our number, both a scarcity changed So firm our comment we'll that our I view for is I made XXXX And we intention that made close I today we're hasn't that the few point. certainly accelerate how our confidence haven't guidance. guess that changed. That still repurchase reasons share the the any get situation prepared for and repurchase, etc.

Marc D. Miller

continue subside this the a just It yet, previous something look some shares about are above that fair we very going be labor this at at our This said that at track bit to given undervalued. you go there. demand business. you our go guidance are made event shares belief whether just right haven't what to we carefully X.X, doing when we're on pretty would But to when we're said be decision so to going point. but is issue in undervalued will certainly that so our look if and we for as further, a our The

know will a we fundamentally in that good position. So be

certainly undervalued advantage that that. take price. can the consider we of share We'll do So and probably

Aj Rice

Thanks lot. a great. Okay,

Operator

from line Jamie of comes from Sachs. question next Goldman Perse Our the

is line open. Your

Jamie Perse

you give But care of can seems Steve, all looked January, COVID. the the profitability lot and trying Marc similarly morning, that and on big directionally, in the months. acute difference was lot more labor even mix the color and shift trajectory across good just any understand environment segment, month got the it and in a challenged of by I'm to March a profitability like type you A of happened. normal us

Steve Filton

the The to have been have acutely pandemic, throughout some historically found acute So surges. business the I COVID think degree more that. the as patients from all we COVID benefits

recent little uninsured the for that benefit we patients, pretty a Obviously, been was XX% the the not reimbursement bit that COVID HRSA the the in of We or got add-on this quarter Medicare in different much think I COVID surge. of benefit all of -- uncompensated exhausted. most has patients. you're for had

I is of the business, the sort is accompany no it. think than whether December surge, COVID the from the Care the COVID where benefit side only behavioral of surge Acute they're better January in things that business and there's really on behavioral pressures of

did of benefit it volumes than the decline, issue it that think I of ease more we would dynamic COVID our segments quarter in did. the the than assume labor would and both as more scarcity is that

acute that profitability didn't say much quarter. would change during I that all So the

quarter I increases think increased, shortfall went our on. the budget so with budget our

on. the as was I were volumes the when COVID tell in January on Although, quarter the you challenged better behavioral as profitability only will high as Profitability and that got they side. change much. really went were

Jamie Perse

And about think spending come Okay. today. down, if premium trying opportunity some money then base labor redeploy a lot of talked rates. just just wage that we've utilization into you as of to premium all an about rates I'm you're labor gives on That's the helpful. that and to

thinking half, excess thoughts all right any two-thirds, about just Just recapture recapturable some that would of costs is now, the it these helpful. on of ability or be

Steve Filton

Yes.

think of used. there's the forget not term -- I you the lot a is, reality I

week, she when probably which point says $XX,XXX sort a made is four what that of counter transferability raising we is. or that and effective to of by her There's XXX make that nursing before, leaving offer. times his sort supervisor to this is a whatever of no can her five So an a or to XXX make I hospital, between salary the to and nurse base two. comes basis account points or not is he chief to a really points an wages to officer, basis

diminish both and just base and those basis they're acute pay meet basis So with, a not hundreds just those to number nurses in to to -- by really nurses behavioral XXX point points, those going underlying basis not not those opportunities to because it's basis wage which while really We're to come XXX for in is back. premium come back think have a that but can't or XXX wage entice in again that. of XXX inflation do why is the again, rate order hundreds changed increase we I being points up by up is that rates,

Marc D. Miller

do mentioned already quarterly doing, and markets more market we're of this. understand correct base earlier, we a on lot what our in trying one we're market. point Steve make surveys do, I'll the for is we're second doing in -- a to basis rate What to on trying just exactly

anywhere. lot sure the things is I to of traveling of One make nurses that people actually a recognize want don't travel

of in to. where five So certain that of "travelers are I've traveling XX% traveling within markets, to " miles are those they four people live or seen up nurses

to So not going the their going happening of now those home what people anywhere. traveler going They're to a contracts And traveling market. have that are are and them lot contracts happen actually that for is in is is continue taking opportunities away.

they're previously. that couple hospitals at not that already in local the next the their And hopefully local want those we're to have those nurses accelerate going market, traveling gone lot than because later, go they haven't back more if to And starting hopefully stay of for going to of a to getting see sooner so months. and do which rates and they rates in clearly they contracts to wage to that's "traveling " the home were anywhere, the

Jamie Perse

guys. Thanks,

Operator

line question from next from of comes Fischbeck, Bank America. of Our Kevin the

is Your open. line

Jamie Perse

Kevin. a morning. this Joanna in of Gajuk, is Actually, couple filling for for follow-up questions. Good just Thanks

the the psych pricing pretty you rates Are are also you any the is the So and on Thank on offset inflation can now business your care the there. is -- guess the side, that care you the side? contracts pushing the you the are of contracting Can some commercial you. and kind it on of acute you and us, rate strong in of there the business, way commercial terms frame talk get about I success mentioned rates managing Or there? acute to what on piece for payers.

Steve Filton

I the Joanna. think mean, the on side. I we're thing Yeah, doing same acute

sufficient least same absorb, are us other and I think then portion same adjusted we're admission I impact to quite on acute fewer move variables to willing than to side labor for If it's at to harder the revenue I acute to per minimum of little think a pricing of terminate judgments of contracts, to I payers. the sort payers and side, we're the probably bit has mean, inflation, inflation, just reasons, cancel contracts, had the including on mix other pricing. a underlying more payer making per give particularly a acuity pandemic, tends care frankly. and especially to reasonable be adjusted on because rate think But besides by during a at shift else, the acute anything bigger those impacted yes, this unable the kind revenue increases into admission see

Jamie Perse

your Sachs, kind in about assuming on of the this how hey, you think increase talk quarter, this that And X% is the you the of I the guess kind pricing? going about you since Is when guidance experienced forward?

Steve Filton

Yeah.

X% had a So pricing of to year. years up we pre-pandemic, number for is our X% that said behavioral tend to, go or about what a

from terms the aggressive to I got probably During that of that X% in what some behavior in range, think between, range. bit [indiscernible] of in in we've during the to post-pandemic. which it we of we a think up that in and settles saw pandemic it the denials pandemic, X% seen which reemerges Because sort I less payer pandemic QX, like as maybe X% X% is emerge little the things

needed yes, start I is around we got to more that. So like patient adjusted the think into the days really what's and three your increase up settles pricing to X% again, segment beyond those range. or or think meeting expectations X% four our April behavioral I negative from a one think to Again, turn

Jamie Perse

you last show. on. so We volumes But hour acute terms in the big, is of end see to Pre there normal, hear, the in guess of that where any care terms you the return kind kind Right. the talked did segment, to the for the that of volumes -- the I Do did guess Right types could you -COVID that but hairy of side? volumes towards of I exactly levels mean said and that's of I of the quarter, care right? commentary

Steve Filton

most pandemic lot the important those had encompasses during that of metrics a of One the because we've elective is surgical procedures. volume it

lot. it volumes was during But the XXXX not or exceeded surgical the by first above Our be to volumes a that in was level. pre think -pandemic slightly actually volume I above surgical time QX pre-pandemic fair, surgical pandemic or our the

again, another should we behind help us partially get encouraging once labor again, sign these in the pressures at of some So least that recovery.

Jamie Perse

Great. so Thank you much.

Operator

Our next Mayo of comes question SVB from Whit Securities. the from line

Your line is open.

Whit Mayo

Hey, thanks.

get Take one XXXX? a the what Just here. $XXX quarters very first I'm million, better pay. just trying look more to premium it the on comparison three question of did like

Steve Filton

of I in numbers have those me, don't Whit. necessarily front

think the what 'XX, million. in quarter $XX was I which quarter we was said, last know that it fourth of in I our

gap. I in it I you bridge think was think could first that so the $XX million 'XX of quarter

Whit Mayo

No, one follow-up perfect. question. just other that's And

get can add-on [indiscernible] DRG in payments, from you? the two those Just the that numbers

Steve Filton

We XXXX the in those about In $XX impact that each believe all have of the disclosed million numbers, along was and quarter Yes. hers each. a XX%. just I for for

Whit Mayo

Thanks. That's it. Okay.

Steve Filton

And here. make because other last question Mary, that our have we we're going commitments to to have some

Operator

Thank you.

may have You --

Steve Filton

we'd for time. So to like thank their you. everybody Thank

Operator

you, concludes today's participating. for Thank conference everyone, call. This

disconnect. may You now

Universal Health Services (UHS) 26 Apr 222022 Q1 Earnings call transcript