Universal Health Services (UHS) 26 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Steve Filton	executive
Marc Miller	executive
Jason Cassorla	analyst
Benjamin Hendrix	analyst
Andrew Mok	analyst
Joshua Raskin	analyst
Benjamin Mayo	analyst
Albert Rice	analyst
Jamie Perse	analyst
Scott Fidel	analyst
Justin Lake	analyst
Kevin Fischbeck	analyst
Stephen Baxter	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the Second Quarter 2023 Universal Health Services Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Steve Filton, CFO. Please go ahead.

Steve Filton

morning. good and you, Thank Marc Miller morning. us also joining this is Universal this results June We to of XX, Health ended welcome you quarter review Services second for XXXX. the

XXXX, expects, using the Statements forecasts, March represent and our and for our the forward-looking and a in such During section we'll recommend and and Form be Risk the I ended reading call, as words Factors conference projections December believes, XX-Q XX-K Forward careful ended anticipates, statements. that on estimates similar Factors XX, words Form year quarter of XXXX. Risk XX,

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

discussed for income second for As company the release UHS the the of of night, reported attributable After on press XXXX. the impact $X.XX UHS our quarter for net reflected XXXX. of June adjusting included item in per attributable release, diluted press XX, our last the to the diluted share supplemental as to net was $X.XX income share ended per schedule, with the quarter adjusted

procedures, skewed was Our to demand X.X%. though services quarter second the the year. increasing for growth the adjusted acute still admissions volume a was strong very in with X.X% acuity Even growth their lower over experienced overall hospitals revenue prior somewhat robust

second is X% the that includes hourly pay that the quarters. premium It's our which The from continued approximately the the amount While average reason overall in from outpatient. about XXXX. shift second has solid, XX% inpatient in pay, worth amount there increase continuing premium premium further. robust to were acute several X% increasing was pay of than to the from volumes surgical $XX noting in quarter, decline Meanwhile, quarter volumes was lower previous a the prior million XX% was year not of quarter rate, the declined reflecting major

the second compared of On a increased XXXX XX% at the hospitals to our comparable quarter. same-facility care prior during quarter EBITDA basis, year as acute

the During a quarter, in revenues was acuity our treatment our acute same-facility to our at comparable behavioral our patient adjusted behavioral similar been in versus period. the day level centers driven up increased the at for drive increase by health revenue revenue beyond X.X% the same The second prior relatively per in lower year -- hospitals already acute compared primarily quarter, hospitals behavioral of levels per residential our growth year increased greater growth has the revenue With day. hospitals periods. the the in day XX% which the EBITDA robust first to first for a of quarter by tended X.X%, care facility we've several posting patient half

$XXX we spent own of of approximately approximately million shares. X.X million XXXX, repurchased during $XXX first cash during the period $XXX million from same operating first compared company's X Our XXXX, acquired outstanding have the activities the Since generated our the as of million XX% on total XXXX of half to a $XXX shares million. of In and cost capital XXXX. in we months expenditures was at

borrowing to XX, $XXX had pursuant billion As available our of June of XXXX, facility. aggregate credit we million revolving $X.X capacity

the departments In be completed inpatient been expected to capacity. more and Beach of Alan and to XX both opened X Regional expected Cedar our next approved as Center development. the additional continues in Henderson which hospitals care We consisting are care segment, Gardens, open acute are Center Hill months develop in in in as beds we Medical stages which B. fall; the construction Hospital next currently D.C., Florida; freestanding Vegas, ambulatory novo to open to in of de XXXX. have X additional Palm Washington, our XXX-bed is acute Also, which and are operational Las XXX-bed care Medical Nevada, on have X West and emergency and various expected of continue over the XXX which Miller well

Health In Madera, in Michigan, to and Hospital our XXX-bed behavioral on California, XX-bed joint which broke year. we a is next Health health segment, ground Behavioral the we with Behavioral River and Southridge opened recently later Hospital Michigan, Trinity in completed the West open venture expected Vista

I and will some Miller, over to President for comments. now turn Marc the call CEO, closing

Marc Miller

pleased world. our Steve. both their business generally quarter We were our as post-pandemic of transition into segments second Thanks, continued results with a

volume quarter have hospitals to second As the and continued volumes trajectory, first COVID to XX-basis-point more QX gradually hope sustain the have our a we in last The had year-over-year towards is we the patterns margin low began extended X have the comparison resemble next their recovery improvement we the experienced acute is step the pandemic. anticipated, to acute begun comparison for recovery, periods. a we margin pandemic since for year's care of several quarters and before apples-to-apples

pressure first year, rate to upward EPS trends a which Based $X.XX physician at a to segment, but from guidance tended about on we in pre-pandemic, In revenues running acute favorable our increasing to share of the X% of our generally on a the half the in of is expense run highlighted XXXX. end are the $X.XX XXXX the share. of operating closer we lower X.X%

still range XXXX worth end that Nevada state-directed is a believe have new of quarter disclosed, hospitals. recognition our a of Nevada from XXXX revenues our believe have $XX of and reduced now in million. change program. of fourth our approximately It to we to noting previously a state had also for program recognition has with XXXX favorable which we previously be assumed be will Nevada funding impact supplemental guidance the disclosed at appears informed materially program, our the decision our guidance originally dramatically a we has upper this fourth million track reduction revenue for potentially on not $X Medicaid quarter only time. this As we on The the This implementation

answer this We are at time. pleased to questions

Operator

Citi. Cassorla first Our Instructions] [Operator from question comes Jason from

Jason Cassorla

base think in acute still the guess, strong you of or a for be know and new I half overcome next through to those color the the off the back first And which difficult how you create that wanted of of it's in result I a year. you're you do obviously, volumes. around but think half creates about grow trajectory just do the it Just kind set would you but a this of of helpful. 'XX? kind to volumes of from Or feeling half, for early, care year? commentary that wondering any have comps ask of work first I about

Steve Filton

pandemic, quarter we've Again, what reporting payers is that in the was in last an -- half of what time, this and both Medicare the the we're first I I probably anticipated volumes, skewed defer or was and that amount X year towards is Sure. think some during both, think of to deferral acuity most for have been certainly volumes, in uptick surgical during I the think, part mean is what seen postpone that pandemic. lower of and particularly postponement I some in providers procedures. population think of particularly and providers procedures. have there the And elective and and experiencing payers I prone

that current very really postponed the of except almost physicians precisely difficult is was individual quite frankly, demand sort for everybody, during us, or for I volume much for to an and determine It's deferred and exhaustion pandemic. providers of of try think, like how

I acute Those comment adjusted historically to that made numbers. think in unprecedented really the have that X% close XX% QX. is we in admission simply are we had QX, growth care in

an of indications sort growth anyone months, I strong for the that occurs have moderate also been I to in future again, for acute project. Marc's and Whether But quarters, kind volumes, a think expecting, July top of somewhat to couple to think, that QX, -- rise I see. expectation for low line to model. way. time, enhanced year it's of the that the the volumes. our terms first early of So acuity next is last extended in care were comments but comparison and in volumes pretty long for of level COVID we'll to that X apples-to-apples with sort in think last we been difficult mid-single-digit the in that remains Obviously, of whether and return we had We're in of run has

guidance some -- at idea there moderate, which that about volumes, they this think So our is which non-COVID back the sense what of the sure volumes definitively pretty we're did is by least I but again, about during half overall pace suffer feeling suffer caution in not But at care generally acute good pandemic. care did that of volumes some will. informed exactly the also year acute

Jason Cassorla

Got it.

maybe now beyond? pressure greater And expense. and perhaps subsidy on where fair? that's other of Okay. helpful. an And for Any like be that guess, curious the even maybe at thoughts to tipping level guidance. up physician is than of a as acute or you of one, of guy just I coming set follow-up if levels a help just a that kind and strategies at 'XX offset point good sounds originally anticipated in create on It care to point spending is in-sourcing would consider need sort greater that

Steve Filton

Yes.

$XX providing a There much have we expense. February XXXX that. certainly that in especially many increase a of running million back is to by challenging physician do $XX and came anesthesiology stress. a degree, and our We providers. been this of rate in issue increase subsidy room who be in contract million facing about these we when have the would These talked sort a of are our pressure. like at them probably when of providers financial about -- twice reality our XXXX expense. are to year service is coverage to So contract physician about is talking it been guidance that think of this guidance -- anticipating significant bankruptcies number in The provide gave area pretty of that I high-profile emergency some transitory

either this at these there's of dollars subsidies expenditure interim we or in ourselves, or I at of and And But this of in sort and this day, the think to hopefully, source transition. to alluded greater kind to make pay physicians the providers providers of or of and money where to new replace onetime, But kind existing to hire there's question our substitute country, we're providers period, see your having end the there's X in this XXXX, increases decline. X an dollar have a the And providers those extended point number of a of view anesthesiology increase in disruption of country. and over settles ER period current hopefully time. sort will off of of to of number out, minimum will actually we're in going rate not level when like that this

Operator

Hendrix Ben RBC from Capital Markets. comes question Next from

Benjamin Hendrix

that behavioral was saw I we versus could the wondering answer on the much same softness pretty the if quarter. you this question quarter in first

I had at out some specific called maybe think facilities. some headwinds you

Just of fix to wanted an in kind the and Is forward? going we see looks expect like what easy back how can that half? that

Steve Filton

go back Yes. to Well, the Marc point I'll made that earlier.

comparison with a a XXXX The volume we a because were first very XXXX. high quarter quarter bit anomalous low in in comparing COVID kind COVID of of QX was volume

comparison volume more growth was So looked EBITDA particularly side, behavioral little we anticipated. all the volumes, a in very that very a and little revenue, frankly, growth QX was favorable normalized, softer on than favorable QX.

delved of I the our and were residential we're dived than our but volumes, somewhat expectations, this those lower actually or expectations with line in think that kind centers behavioral remarks, comment volumes I -- prepared acute our numbers. the treatment as made in into we in

year, It were seem be referral back resolved any issues to of pervasive handful sources in a having or sort really industry-wide in the or sort half that we be on issues, were and that specific but like regulatory will facilities of corrected they dynamic. the largely believe of company-wide didn't of seems focused

that our think would able some the hire about as the for is pandemic be point business that I behavioral as trajectory, COVID view volumes time more So during to think made the we we eased, we've people.

to be more As efficiencies, volume, more patient we greater hire to would EBITDA days, greater able more able generate people, growth. we'd be

the made is of up which, the look remarks, I EBITDA the months XX%. point year, you in prepared think again, first if my at I X

the at I the trajectory look is in you I reflective to but of X experience bit last we've the think more our long-term over slowdown EBITDA power the think of think we is I up -- substantially. we're of looking QX, behavioral the X X much think that's business. if a at earnings quarters. quarters, And how had A last

Operator

question We Andrew from have UBS. from Mok a

Andrew Mok

Same-store But inpatient admissions up about the were surgeries up so. or were inpatient I in about X% quarter. X% only think

growth medical think I those procedures, very nonsurgical elaborate or on the some but side? procedures imply seeing nature acuity the stats you're inpatient lower mentioned would on the growth. You strong you Can of

Steve Filton

Yes.

up affects in growth view up surgical said I outcome procedures towards this QX the is, mind, And solid recapture skewed But outpatient growth acuity. remarks about we're X%, procedures degree, I inpatient is overall of If so was care a that and surgical more outpatient what -- to result. we an volume some intuitive was sort in again, of only X% in my pretty over acute prepared that a procedures. obviously X%. as which up terms QX, So my in outpatient deferred growth think of postponed were seeing were what

surgical But emergency nature. care the And that health think high volumes were needs terms sense procedures muted more acuity. deferred makes deferred those were attended more but people pandemic, to. both you're and somewhat It had by the that very lower things acuity of that's medical. the those if seeing dynamic procedures, in more and I during postponed the discretionary Almost again, definition, of elective, were were

Andrew Mok

And How it. just on growth Got quarter? Hospital same-store the tracking the hospital Reno Can a you against quantify that admissions help quick that, had is contribution the expectations. in follow-up.

Steve Filton

those a the Hospital Reno numbers was have have $XX Reno -- front $XX our of in about guidance the or exact that Hospital. for was don't million say me, in but I at XXXX Yes. million said admission what turnaround included I'll we

think I -- we little and that anticipated I back-end that's a loaded, right. would think we're think tracking I that, be

million a large quarter. way our or improvement for have probably a sense that's the Reno one improvement that year, But QX. the the think $X I about of million enough and in $X not the think My impact tracking or for I in had other on generally we're to level we full Hospital had admissions significant is is expectation.

Operator

Raskin Nephron Our Research. next comes from question from Joshua

Joshua Raskin

margins. behavioral Just the the health first question, getting back to

Steve, to they I clinicians and just different are past, now you're capacity. MD If think maybe feeling there your and that And the versus weren't of think sort suggested, this, in coming just able nurses so, roles. where performing you you've you find Are enough from? just I'm hire these curious slowed I that volumes. that different alluded to categories, clinicians? how is are to

Steve Filton

pandemic to for would say the early opportunities to I'm argument in Yes. think prior to then. et to acute in these return hospitals were going we've XXXX. what start and say, we volumes in high-level itself described, And particularly especially been I for colleagues pretty point sort they then I I And nurses, as all it ICUs, described have we back of seeing that we'll because pretty think, consistently nurses months, the to early having and and the many was have I premium ERs to should started the mean, at seeing that or along call think for XXXX, COVID cetera. units The care think tight -- or COVID to was, like home making and country going throughout particularly was pay those would decline back overall their think that close spring XX said pay I'm by and providers very would extraordinary we pandemic, XX so employment, late is unemployment tightness, I the or last to have declined, opportunities . The of that most increases pandemic employment, the we're providers provider the what really these that's employment great XXXX, clinical the I would a rate nursing the -- of we that. the labor tight. pandemic full market. made nurses lose working behavioral I It's subacute least pretty employment. base spring exacerbates our And

what Now in base to for wage rates get folks order an is those we're seeing back. in us increase

before, in salary, the year increase improvement, we've that running see think lesser quarters, what higher QX generate wage is as hourly But than in to it rate in is et And was a QX people, I we're prior I more and able end and over think in and average increases. the is make of day, demonstrated, point of I is, So last especially this hire to more the of EBITDA margin X overall which a trying degree, the able growth, you like over certainly at year cetera. to this more that X.X%, pandemic. the our and or volumes consequence, the some behavioral to salary we're again, X%, was inflation as

quarter. have I we behavioral the a But directly-it's lead as and patients ratable some and there's to continue single hire have here -- trajectory view that and they a be that's timing in inefficiency. going hire think But a not trained we to not of over new to again, more level long-term to every that that people, causes time, of increase element we're oriented and It's in to some growth able and to going business. admit more be people

Joshua Raskin

on just think Got that lower you. just increase a people seeking more mental Do translates United of the then services. and you. more been acuity? maybe one that Got of more Or a to acuity in on spoke the health care? And that's is inpatient inpatient level more about incidence you large side more utilization, steady that's

Steve Filton

a sort a being reading I for outpatient from competitors. was increase think skewed Yes. there's is market talked My procedures. that United recollection behavioral, And specifically they more competitive more outpatient of to lot obviously, transcript the about that highly

for appropriate getting much assessments, broader to care our intensive are many view and business, and care et long partial hospitalization of more cetera, term, the all more over inpatient includes is continuum across care sorts the outpatient think a of tends good that and which is diagnoses. I our getting who have people

So referred think, outpatient benefit more getting to specifically, call, necessarily assessment. from their I United we the I level that and that have the that in we think people to road, while second likely experience in more -- care we're growth a didn't quarter of view and that ultimately same down first appropriate behavioral

Operator

next Our from Whit Partners. Mayo Leerink from comes question

Benjamin Mayo

Medicaid that and how Any pieces potential comments potentially some that are way XXXX? Nevada there's guys you about the thinking moving Steve, program supplemental of know contribution the and in appreciate happen. approvals to size the I still on I need to changes.

Steve Filton

Yes.

we waiting specific guidance methodology more state based to the hospitals. on But Nevada think this issue But materially benefit of But going this could and for lot in remarks, to the their commented have intermediate is we're end et broad say specific be year. favorable think about clarity of program pool, more with the surrounding there'll certainly, our Marc to near the So the going anxiously state that think of sort forthcoming, going to is of we more I'm by a waiting the cetera, we're as the I the how be on to resume in expectation is which could our prepared the and et for specifics how size work, calculations cetera. understanding his term. a work our methodology

Benjamin Mayo

Yes.

line making. can't is you're questions thinking But many hospitals I imagine that's guys EMR the remind helpful. just Cerner Okay. impact, how time gotten new. investments any and review all the this We've about No, converting? that us of of are income your that's Oracle facilities, maybe around initiative? some just None CapEx statement, of you

Steve Filton

Sure.

as is really new this Cerner. We not news. committed with behavioral implementation So EMR a to originally you necessarily said,

not of to after of couple We'll implemented handful But Oracle Cerner's mean, this do a to in years, press a acquisition which back implement facilities and Going clear, round by wanted We've XXXX. new. XXXX. another of facilities be I in already it's release, fine. is Oracle,

of the number you doesn't press read release, refer If facilities. it to the

XXX making the announcement I to that in combine at facilities. sort that we story here one said fact implement this behavioral of up the least news we've the think the that of outlets with and the U.S. when were we committed facilities media got XXX picked fact were they

that. your not that have appropriate may alludes we et for not to, to of we an As facilities have scale, certainly this residential yet smaller question investment committed be cetera.

I will an mean, I EMR. -- So years I around think, the less that we implementation acute EMR on significantly on behavioral number EMR, $XXX think ago spend care the on $XXX the million, than of of million did think care acute we I a point

on think behavioral X- we'll they'll over, think, I period. substantially less be out I and spend a spread or X-year

individual to the that investment impact think significant a don't have is I impact. the of So going

The garner are that had is that piece implementation. efficiencies we from gain the operating we'll an other and there expectation

investment a So chunk offset with efficiencies. be should significant of that operating

Operator

Suisse. We Credit from question from have a A.J. Rice

Albert Rice

year the reset rate where commercial a side. ongoing track is midyear. know increases out back we of side? their I that can got But Medicare, know on side update settle the rates year year and the or rates last the on gotten into Medicaid know -- discussions about you've behavioral on easier. you've good next in some so any I commercial states thinking also the of I for half behavioral lot

Steve Filton

A.J., mean, pretty day sort have X% They increases pre-pandemic. a the comments our think of behavioral behavioral historically, year, generally -- or consistently division in per I rate X% pretty Yes. has increased revenue on been and definitely consistent. I

those in rise to we've able the there to talked and is leverage reason saw X%. X% generally closer especially. labor numbers to -- During capacity think the we we industry think main of this call constraints been discussed we've that fact to on is already something much then pandemic, that the as for capacity that, we've I about because And the

admitting patients payers And to our from can inadequate we us contracts pay and insurance paid. either the them going more who think to whose selective will environment be we treat being fairness we number those a increases an lowest demanding what we in and view we've more, limited that patients, of and canceling where be simply treat about or of we're only again, can been we

that admit more I were X% patients, to quarter, mix leverage versus in X% as also patients, but and think, a X%. rate to we we're of acute been increases bit only is before. a not that that, to the diminishes able the running is function again What had We to a of more although that that day per our of as little moderates we're X% revenue we the X% said increase to I maybe over ability little have mentioned getting think residential

But I think We're -- the future. for remain that like generally, strategy there's remains in pricing termination we've many do strong. a runway this a so price or notice environment our great foreseeable in feel markets behavioral to We terminated of aggressive issued the and payers. aggressively pursuing great pretty to many

Albert Rice

Southern got any much Okay. I Obviously, portfolios of stepping the and this good volume performance know But you the a had the in California Texas, in and Was facility overall quarter? there dispersion? Southwest major difference and back, the in Vegas geographic you D.C. growth. those there. markets you've about new acute and trajectory side in I Vegas talked know maybe in concentrated

Steve Filton

facilities of and like have or I other geographies. So the rate our most year I a public Texas last so commented rapid notably several HCA in and their -- that think our most than Tenet, recovering peers, in Florida think more been in of at or have

emerged more in states on around I states have rapidly. pandemic from think those the the as have more pandemic, those emerged economies the

peers. of relative than a and a for and of California in the bit year Texas has footprint in that got honestly, sort less our Nevada and or been us. over last a negative Again, more comparison because so think of Florida we've I

geographies what et But seeing up now the in we're pick I pace, starting to is is those cetera. recovery think

particularly that I we of news quarter. quarter. I growth can't and specifically the encouraging, for of it market, It be of improved specific the care piece line the in top to think had, But got single significant obviously, in the EBITDA really will don't sort I one performance think, element and in our in results to us. good Nevada XX% was. acute be that's I our performance was always the was say us to And a particular, again, Nevada in think for improvement that's broad-based. pretty the have

Operator

Goldman from question Sachs. have We a from Jamie Perse

Jamie Perse

just within a to I back expenses go the other second. wanted operating for acute to

from there of some the sort spoke understand You $XXX Are costs in the out more of about on realized Just to the cost I'm space. new Or trying this and you right at how near going item? point? to color the model here, baseline? term vendors that specific if just the you that's if in onetime some where line million for disruption can quarter? take bankruptcies any we're

Steve Filton

disruption. But I are a increases current got one that of we I the function We've think Look, Jamie, made dramatic to tracking also that believe But we guidance. point the physician our those I providers make in months, point things. the this that first tried X significant that the in a these in increase twice Yes. really are who us expenses telling rate subsidy XXXX we they're earlier, anticipated two anticipated. or

there's out they can't we're whether are folks we're again, to provide a think sort I And these the transition that They've of largely contract costs at or cost, to they bankruptcy, services One is contracted higher to nature. that declared in can't the hiring having replace in. them And continue. just else generally continue somebody contracting that and for. we're onetime

to going continue to experience for or so. we're quarter think these I the But next

I think, answer. this not has I'm -- we these think, view off by be sure who a cetera. healthy and local financially, and by expense. by ER to or providers leveling But employed this have that time the these of a to hospitals and XXXX of general providers, physicians a get -- a anesthesiology there's out I either regional employed et But we they'll see will us are either settled more and more lot be by we're going however, single

to it last quarter that's significantly should the the able that we're We the year, going that a higher off QX, the than know that again, boost when expense. to acute future. in increased was in to positive fact we've like of levels in is physician XX% feel our And view power. don't provide despite that this of next year's earnings I got predict think this is burden model how EBITDA mind, my care you I exactly

Jamie Perse

talked hospitals Okay. on and profile And a other strong always about you margin have surgery.

Just this us color your point, given surgeries? that seem margins the you any be in profit surgical can give contribution on surgical space on or from tailwinds the in business to to think at about average profit how

Steve Filton

care I tend think, XX above margins to to to the you something length surgical think depending basis to higher want specific on that. difference it I'm basis teens, find that. if cetera. about surgical of than acute the there's call tend I I X et XX%, demographics But the procedure, points to if points be been Yes. in XX our like patient margins you going upper But think however the medical -- a the X of margins. historically, mean, base, stay, medical long-term be measurably below have margins margins and of that to lot probably Obviously,

Operator

Our will from come Stephens. Fidel next Scott question from

Scott Fidel

an come of around detailed with commentary, in-network of for really it plans also did sort out around A health behavioral parity was the interested expect that couple know And intensive thoughts your yesterday, out, focused recent out I in proposal don't sort of -- outpatient to benefit too but updated -- policy on the the on came or health side, behavioral. I just proposal Medicare. just came around for first proposals just administration initial on CMS Biden the developments would the be get that so and then mental enforcing with

So on there. you proposals, potential thoughts any just initial and risks on those interested opportunities if have both

Steve Filton

Yes.

the parity more one, So which tackle the one, Scott, know recent first. I'll is I

they health I think morning, were those. As new you and the chance this have appreciate they that which a rules did mean, announced yesterday had administration your issue I acknowledgment pointed to not out, mental Biden to we that on review parity, I going

the mental the positive the at originally broad or the more there And regulations part as industry think I is the take it a to has is parity for should liked. chance originally has and fact years on never I think, context XX would there specific have but legislation we the passed fulsome the the do And here current away amount think think be I least mental that health was, positive. to the need almost positively I been frustrated the I been reading health I as read enforcement viewed needs having of think, industry administration adherence that that government always regulations, of the -- be focused an ago. But a very specific parity enforcement, think better that positive legislation seems had impact, it the on one the industry. without

believe think any have dodge been effort aggressively tried the laws payers I that this there and is and the sort we those argue on that part legislation would more of the enforce And to to plans of administration intent that we of welcome. parity have

be to are think was just before I developments The sort comments -- the regulations, encourage United's more terms that I behavioral going people about in I'll general utilization commercial access generally care intensive of comments same make get making or in repeat for of outpatient allow comments to or outpatient positive new any us. commercial people that or to

lot behavioral think or very low high intensive a of to of diagnosis think care have But this outpatient offerings. inpatients, and and from than acute care people more given very the that outpatients acute had we continuum complete I more access that, are assessment. I who We

I generally think us. news good for that's

positive. we as of I So say, view these both would developments a

precise I administrative the business any in behavioral the think, to way. legislative and sort to for and federal those quantify the benefit of general consistent either of difficult with, we think, at level, favorability them state of view sort both I

Scott Fidel

follow-up. just quick Got it. And then one

sort on tease Medicare But driven quarter, you I it's whether seeing. interested of heavily Anyway, in be guess inpatient? and normalization the I'm to pickup a as we've outpatient. the by in seem been you Obviously, second that of we on that outpatient of know of volumes side that's sort out the saw how sort inpatient well. Medicare felt skewed between Just the volume can skew just sort

Steve Filton

mean, X% so said, in Yes. as we I the admissions we adjusted saw, by increased quarter. almost

is, outpatient activity. admission But lower it bit skewed Again, towards the of was pure just feel also procedures. is driven seeing a obviously, Some I growth you're strong. pretty certainly that like what by the acuity is

not the so per in X% on I by acute And saw the revenue tremendous side by again, adjusted we or quarter. amount. increased mean, overall admission a

to range. would normally, we X% think the more in I number to that X% expect be

are it's more they being I postponed -- think So the those outpatient elective outpatient low that little skewing it's numbers. and now to think, clearly of I kind an more whether but not or in the But greater -- during towards issue an so more of and end. realized is it issue, in procedures of pandemic were it's of bit deferred were on and that skew there's inpatient I much a mean,

Operator

comes question with next Research. from Our Lake Wolfe Justin

Justin Lake

seeing about Medicare pricing. what wanted given First I you you question, from about early little talking the of medical any stuff cetera, managed kind are redeterminations, care payers of asked seeing you're higher are when payers management bit denial, the or Advantage got know utilization. to et payers. higher? are be their claims, already costs that are a I about signs into Medicaid increased heading might ask do But will Steve, typical

Steve Filton

Yes.

supplemental that or So can we're think, comments one I I of not from redetermination we think again, raising mean, far. not guidance, on seeing, on commented payment. Marc big commented that is, two Medicaid he the a Justin. measurable rationale a think for the do our end least we that's I identify made, things of so impact two it. at the you piece -- Nevada do I upper

both Medicaid in yet have may I impact year view we from But the there of be businesses of yet a have redeterminations an not the we back that also in think the half seen. that

we're very focus. to So paying and close attention a that's that,

reporting say be way an length classification taken, lot observation, that in we're the we've limit yet. their own and that payers more is have aggressive we part the other But increase that on see of utilization, to a medical expectation going comment in is well I your behavior with their laws an also think more just that measurable to side. on say change may a it side versus whatever that or can't I acute challenge definitively to the we on stay inpatient seen can behavioral

sometimes quarter play for it. to I a takes think very But very tell I will sort for that prepared or that focused on X and of you we're information it out.

sorts I the the to more think so contract, of upfront change contracts all way that that that issues go billing in process. are provide defined, we're ways, information appeal these we in the and but through in think are trying also we I our in

suggesting So sensitive something you to all care those things are I is a become aggressive significant are procedures, are focus and their But of prepared utilization we're that to payers review very likely managed in more for. think ours.

Justin Lake

expand of can on plans, kind uncertain you to be employer a of going I are kicked your around Maybe even pay bunch commentary of of know, a lot a out. the up plays end but that. redeterminations. health that appreciate are Medicaid, on people I private acute on of on how right, a one line this on us is lot But especially the better, lot or side. side, them could off behavioral and exchanges which the thinking

broad-based? not that? Is to the how and Do given think your unfortunately you remove from of think you it pick other what a do concern folks you, to Or do lot that your be market that's that, So you about specific roles drives vis-a-vis? going think exposure? that just just And geographic is are your coverage? up

Steve Filton

Yes.

sort sufficient cetera, analysts with way the of a So alluded have say, on products, studies. are they the the will there at that off impact CMS I all potential better concur, when sell-side the redeterminations of going I I'm the done, people positive requalify exchange that be we folks generally this largely framed Urban then redetermined to number to pretty think Medicaid one. but And and products question number who can of Institute, that think, providers sort analysts ultimately, impact as broad commercial way like a to the question both, of et your and your of conclude of commercial roles exhaustive will who looked net that they be the number passionate a you paying

whether or how I short go nature and process through of skepticism and the sort or timing off, is that caution drain requalify as on really quickly get think, again, in don't I concern we for be measure is redetermined sort products, And term et short-term a a or they people more time commercial related our to or think can could cetera. enough had this. there we've of just bump

to have on a The I been think somewhat out run, whole, is think we probably based from news ahead. I've long in seen, good But come that we redetermination data there if at not the least perspective the my date, while off, are is redeterminations them chunk whatever administrative of people of be. redetermined of may paperwork sort date, of is reasons. up up their lot lot it address more not Their not good for a those a

like able it feels on back so to quickly. will be people And the roles Medicaid those get

in maybe point like significant going long feels be thought. might we negative it short-term the have net some long we not to be So as the run is think our to for the this maybe really think impact is don't But is as a term, providers. over I of going view again, uncertainty

Operator

America. of question next with from Kevin Fischbeck comes Bank Our

Kevin Fischbeck

a I to two the perspective, world? might to path about there things world. Is guys transition it a of that time? just to you look the Do thinking is are to look that assume margin segments how over comments about that company's or be want XXXX, -- lower that XXXX, that back both like is? go that to, like businesses post-pandemic I guess, think what how margins you starting believe Marc's about right whatever getting higher And do and timing to to normalization from reason you in

Steve Filton

Yes.

I each for Kevin, think little the bit segments. a is the answer, different of

as and call today, in well. on previous I think but degree the I we to this touched some -- certainly calls in think

to to exhaust been is think our to And pandemic, behavioral I more ultimately, able there. not able return more people, out hire of go is view on of margins, should as that's we XXXX. XXXX to back or behavioral margins XXXX peak to the behavioral impacted we'd to create probably side, sort labor really but the by that and And not demand be return able negatively on only unmet are view the goes the margins scarcity. to particularly our we think but be again, that were create or diminished during I we'll argument the

that us gradual trajectory to quarter just that's I top or line obviously when that. it clear, and I next relatively of allow that say that, robust happens relatively I be X. expenses is I fixed immediate. semi-fixed don't think an to mean, Now sort I the and in think think do of this growth don't But

patients, -- to think from business the a I et COVID pandemic the benefit itself some a side, special more from cetera. certainly of we acute from the was acute the the care patients, acuity a mix that COVID bit There on the related of it's to story. little bit received reimbursement

get more COVID I'm acute business Because I a replace so, lot to And that, got those to patient-related margins. the challenging going for and it's to benefit. pre-pandemic they've little to back of bit a think say,

Now clearly, gets But they've volume question this this sustainable quarters. again, pretty been acute few of of back to think, similar. doing again, higher that And last to, -- I be. how level care a is over the pretty much going

which acute the pre-pandemic feel side, as XXX, points we're we Marc XX like prepared got were, many quarters step, to hope where more comments remarks XXX where certainly we sustain for back there get We in think his of to that that I a points margins. margins we QX. in pre-pandemic close our or as basis back get Marc's below on to -- view basis first

Kevin Fischbeck

Yes.

historically, you you some to guess, it's per say kind do is going normal? markets back growing like to trend The the that. understand been So What at me. cautious to fix to concerned bit that you below get levels unchanged? you were. sense, get that's trend and me though, long-term it degree demand really you wouldn't it one I that concept and back the I why the volume well makes population bolus when percent labor a got line? couple you that demographics So Aren't that behavioral just than get as year, rather makes constraint a in both to in QX number to demand, XXXX to you've finally sounds a cases, line. where growth, new this is your of pent-up the little a drivers above fundamental the long-term when volumes of still it's of you unclear but

Steve Filton

from or any can up acute the again, on given that And -- think, way, I path I'm I'm simply think acute get we've the -- back there Yes. recovery acute to hope we side. -- on were acute some not just therefore, quicker, really the our that business. The on steeper robust pandemic I is the the quite behavioral benefits clearly the the And the the complicated little behavioral to suggesting care recovery pandemic margins. only and and they care side. is from is pre-pandemic recovery that because for margins consequences a in had think I side frankly, not sort behavioral on negative side more more pandemic don't it of than were

think get to do cetera. improvement, on it driven side. volumes that level a don't may extended of for acute we are top behavioral think over that would some in et have kind margin growth future. to revenue Look, But little we able it's range I can't on look the bit I I or argue been if and will reason produce again, growth, some of extraordinary foreseeable by think that what I And EBITDA there's recovery side. longer time think you're the pretty it earnings at care us with the trajectory than mid-single-digit will generally being model I any of X% growth X% line probably sustain level period you take there acute rapid think the what an business But look, moderate seeing is some. of we

Kevin Fischbeck

Okay. All right.

there assume volume probably be X% that but a but to are year volumes [ to ] from just a normalized make decide from of year's shouldn't you that because there's could we not bolus. some think sort next it, headwind Or should up, -- a base, you're next year assume volume growth? is become this unsustainable to It's sure saying perspective? I comp got just this I all good headwind growth, So a more we here saying

Steve Filton

I'm revenue growth. to Again, level. don't but obviously, level sustain that point, at high hard a to of at growth, -- XXXX had revenue things. that Yes. historically XX% not know be I we know, this I but that's Kevin, guidance again, Again, don't in this Two able quarter. we'll giving

I revenue bit. think a the level probably of moderates growth little

makeup increased think, or more and I EBITDA in somewhat to revenue in changes growth somewhat I margin a still moderates we're acuity I But XX% revenue expansion. of pricing. model think growth likely that think that which if the volume, again, X% less to X%, to see that's

Operator

Fargo. question We have from Wells Stephen Baxter a with

Stephen Baxter

how on question. experience you in Obviously, expand A margins pre-COVID a in Usually an second see the I as on expectations? to increased SWB quarter. do of if of could and the to what earlier the revenue think sequentially margins something wanted closer quarter with you different bit your internally we did balance year? more quarter. the this margins sequentially. those OpEx And percent a typical little Wondering you increases? a other compare should seasonality in up see had drove And behavioral to follow-up the

Steve Filton

just operator, question. have the last be I'm our to And Yes. is going to make this to going point,

fill responding saw We or by a had unfavorable increased the $X inefficient. a mean, short more than an vacant people quarter. positions think I So it the a couple these is we be In salaries run, point And generally, think positive generally, million. assets ability somewhat and We had were rate, loss of about to that a was in few which development. in is was affecting I the expected U.K. we million hire little can question. items on in just disposal this a our had a dollars. to an making the I exchange in earlier bit we us of But non-recurring I quarter.

in of training. We and people have orientation lot a

A quarters to I'm less little the why a care, that short the suggesting and lot last people been And the again, being -- in emerging used able long think we're COVID, historically. by hire pandemic experienced to of in and to last that then from these of I are of impacted trained in the the that's but particularly being inefficiency people just so people. much months the not run, on year and X where or really not behavioral somewhat X of the to creates quarter, we've the less on hiring months focus were X second bit run, first

to going the think to I And that but still we're the think broadly, come top line, we growth. -- the fundamentally efficiencies with I line continue generally think belief. top our also show that there generate grow And the that's that results

we're And So think your have for I that's way I to business. point think at the question. operator, Thanks in at looking we're the going this to stop time.

Operator

I'd Okay. Steve closing it turn to Filton any like to remarks. for back

Steve Filton

time their third speaking for again to quarter. everybody after morning, thank to this we our everybody just with look and forward Yes,

Operator

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

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