Universal Health Services (UHS) 25 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

Steve Filton	executive
Marc Miller	executive
Ann Hynes	analyst
Stephen Baxter	analyst
Benjamin Hendrix	analyst
Albert Rice	analyst
Justin Lake	analyst
Jason Cassorla	analyst
Sarah James	analyst
Andrew Mok	analyst
Pito Chickering	analyst
Hua Ha	analyst
Kevin Fischbeck	analyst
Benjamin Mayo	analyst
Joshua Raskin	analyst
Ryan Langston	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the Q2 2024 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, Executive Vice President and CFO. Please go ahead.

Steve Filton

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

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

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

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

demand experienced X.X%. Meanwhile, year-over-year adjusted expenses were for hospitals of was controlled. quarter solid a flattening growth still surgical services a acute out. second moderation growth admissions in the Our and their X.X% the with increasing Overall, revenue well

[ second XX% was quarter. the Specifically, decline year in prior $XX ] the the reflecting amount premium of XX% from quarter million, a to pay

year of payments incremental second quarter the to as same if increase increased care EBITDA during On the quarter. in the the hospitals impact was the compared facility exclude XX% our acute supplemental XXXX And you basis, Medicaid Nevada. a comparable prior at of XX%

health the supplemental adjusting revenue quarter, in second day. X.X% by revenues facility comparable driven facility same not adjusted year XXXX a second behavioral our to in hospitals per EBITDA guidance, payments for increased after for health included increase our Medicaid increased as in same behavioral same period. facility XX%, hospitals the by patient primarily revenues and During the by original our quarter in compared X.X% XX% prior Even increased

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

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

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

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

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

Marc Miller

with business continued improvements. segments our quarter to both our make Thanks, operational second Steve. as We're pleased results

the resemble moderated acute care somewhat have going for periods. margin further the last increase to to we prior quarter sustain pandemic. more in second acute operating recovery, towards extended hospitals next to volumes As a several to in experienced care for year's income are we hope be comparison patterns is anticipated, we and The step gradually a

physician our is which significant In has revenues. at XXXX, in stabilized X.X% expense acute segment, a approximately of headwind

by half Based diluted favorable trends share previously. $XX.XX of in the operating XXXX on the generally are EPS per the midpoint per our $XX.XX diluted from increasing share first year, we of the to guidance XX%

not are are New our supplemental not and in in D.C., programs developed approved included Washington, revised being Tennessee yet guidance. which fully

in aggregate thereby release, to program, our Board our -- Directors increase the a billion authorization announced $X.XXX earnings billion. as yesterday's repurchase Lastly, current purchase increasing $X repurchase stock of has to authorized

We're answer this at time. questions happy to

Operator

[Operator question, Mizuho Securities. comes which Hynes from Instructions] of moment One Ann for our first

Ann Hynes

be just care. And maybe side new programs. in want Like that are program be on inning both just on a figure question supplemental trying what I'm that D.C., it focus for acute care the like payments. out in new would acute I my forward, to to you the and might great. going the you behavioral behavioral sounds mentioned so

Steve Filton

Yes.

think And new while that expansion of D.C. not or of really mentioned contemplating we from had that And a CMS programs discuss them program formal I and so we think is states fall may tend either both perspective, programs I to until within are state. understand the CMS the sort there our before category. into Washington we that approvals existing Tennessee from individual sort some of pending to of submission and programs,

year. be program this next been XXXX, July believe told would business. primarily Medicaid be would retroactive a acute October is suggest, and either programs, we the that most programs likely behavioral the would state although have likely Tennessee that business. where this or approved We you and which the be programs XXXX district is to have to geography of D.C. are to to exclusively would state Both in early that be retroactive. Both of later year a retroactive As we year. have of is D.C. we beneficial from the expectation the acute Tennessee be business, both Washington, supplemental behavioral

these additional disclose. call programs or are or programs none CMS again, the states And we other they would certainly and considered. are of all guaranteed incremental are new programs where of two, on least being aware and at expansion them, we Those depend are things approval. of I'll But

Ann Hynes

I you one just you what potential you provided be? for follow-up. -- provide And know benefit D.C. the have that would Great. but Tennessee, can you think

Steve Filton

Yes.

annually. XX-Q, in disclosed and potential $XX $XX in we've be prior benefit that $XX potential potential million D.C. the in million probably range benefit the $XX to million would benefit annually. our So is between Washington, our we think in XX-Q of Tennessee the The million

Operator

coming Stephen Wells of from Baxter And Fargo. our be next question will

Stephen Baxter

hoping on the volume elaborate bit little could you performance was a I in behavioral quarter.

the quarter. I maybe a the last think earnings just second you had call, improve bit expectations in little to going

end wondering growth about just drivers back about in talk of the you're behavioral if the the quarter. So how year. the performance of could also demand some And thinking you of in then

Steve Filton

Yes.

dynamics I think behavioral that same. have volumes remained the surrounding pretty the much

description. You patient are basis X% correct adjusted think, We your same-store on were about I -- a behavioral in up, days in QX.

not. slightly equal We expect to than it did maybe in QX. We be and better

and filling I find some been familiar to lot issues time, progress our around I still on a labor we've in We talking for about we've country. think, very vacancies the are think while of and very made, capacity what the ability sometimes difficult patients. labor technicians sometimes to mental and our place sometimes that geographies to or are can certain specific positions, nurses, health sometimes therapists markets limit nonprofessionals admit and counselors,

time impact discussed think get which our more Arkansas, we've disenrolled or exchange particularly make and and Medicaid business behavioral some had difficult the often program, disenrollments, requirements, the Texas quarters, have that Medicaid and them either in get if it's on the them the I they Louisiana, high have in an of Southern into a few meeting commercial fact their deductibles, Medicaid they people last hospitals. states, a commercial to gotten as have exchange reenrolled taken co-pays in into financial Mississippi, from program,

have of would. And in behavioral slower at somewhat originally facilities are struggled handful they doing that pace specific with than XXXX. so they've imagined improved, a very issues a believe finally, but we all I we

terms patient target full think going believe day growing XXXX, we view and should at growth. of growth believe end be rate I that think guidance embedded that we sustainable in that in growth that But is forward. achievable rate I of ultimately, we original our we not we of still the that, by that a XXXX probably an target, year X% as

Operator

And our of next Ben Hendrix from will be question Markets. coming RBC Capital

Benjamin Hendrix

trending you trends seeing towards any elaborate Just pre-COVID in see and with how Any a wanted surgeries specific could there and in demand acute little and your moderation levels. call to that mix out categories flattening payer implications you're specifically develop? the can you if on bit

Steve Filton

number and in X.X% X% X% in second comment in quarter Yes. that X.X%, growth I year, the I'd care acute admission adjusted last in comparable the one the is of growth was quarter that, was range. year mean of about that so make the second to surgical last

So were very both difficult comparisons. those

I comparison. difficult growth had adjusted growth, that to the flat. very relatively view think we Surgical admission was a relatively expectations, a our X.X% given close

some don't for increased least that the where during some volumes, I for pre-pandemic growth those of at as both margin so that know sort could absolutely and preparing talking, I levels of I revenue volume and think that's we expectation care and that remain been periods. surgical of the return for overall I quarter of cost and on certainly, that that. and that, been expectation a you growth, for EBITDA we patterns. more sort saw the think, acute think We've to the generate And management we several expansion But an right about trajectory time preparing admissions lot of was today. are pre-pandemic would that to we've return

Operator

of from our question UBS. will be A.J. And next coming Rice

Albert Rice

then and Maybe I first a just have follow-up. question,

on then that question then the the and raise quarter, had guidance. -- year First supplemental maybe quarter. after first some there didn't was updated the second some there's weren't know the I full in also guidance outperformance you original you've in payments And outperformance the the and guidance.

just how you to parse any capturing in is you Can is second adjustment trends? half this updated much guidance? your for And expectations sort out adjustment an year-to-date supplemental then information? have How just of made much payment

Steve Filton

Yes.

by a supplemental first indicated knew the guidance increase the half which A.J., took the anything approach we the in we include substantial payments to revised or of So high-level in We in guidance of did was continue year. the that Washington, not, that as Any revised his for half amount second the include would present beat, half. perspective, programs the obviously was to for from guidance the the and Tennessee back be comments, D.C. to and Marc

for guidance included from, particularly perspective, I the part, second which cost think, of are sustainable. certainly generally that most revenue retained our some just we improvements original a for then believe management of a we've the volume we made, the And and half year. the But

Albert Rice

There's how what some Rule forth. -- those seeing a you're of quarter seeing been maybe it Two impact areas? this lot Rule Two know both behavioral comments of affect about I had Can you're and there you on about sides. and discussion so but Okay. redeterminations thoughts Any make what Midnight Medicaid Midnight maybe the updated on some impact redeterminations, wouldn't business, the in two just

Steve Filton

or know any that from as Midnight goes, as don't mean acknowledge comments But of I the and denials in unable but our like et on part validate any daily -- Two think, peers far what of it's some impact real Rule. cetera. a I changes I I our be Yes. before, benefit really We basis that we've and dramatic bit any that been personnel Midnight said. the parse metrics this the otherwise, identify may changes, this unable Nor just or anecdotally, the some with have from do see Two two-midnight real have different change precisely our change. patient change they've our to than little on issue Rule hear commented payers. we of getting we're seen behavior we've on we're out Again, suggested to significant status deal from a of amount peers who of

of exchange about commercial think Medicaid not resulted on in exchange end adjusted had as PAT peers, compared probably admissions. an have increase. redeterminations, overall Pre think the acute side, an Again, our we the percentage in to I gone commercial patients. -- X%. of some a We've I the increase patients of was our big as

our climbed that or that of some think has I climbed to X% about number to suggested know has I currently. X% peers have X%. number

high. that haven't We gotten

to get population I we're been those in I'm -- And say, side, think have X, response. an population. or large exchange in to behavioral plans the being exhaust copays think Medicaid that earlier On have. particularly last, going the in this program. some by to And program, slow in reenroll alluded sometimes do a they to if affected commercial for commercial Medicaid either the seen on the in to redeterminations, X it's We I weakness adolescent exchange definitely those to that a deductibles get a I to it's on process adolescents and quarters.

redeterminations on probably slight Medicaid the think has the bigger had the impact exchanges behavioral I to So on a a business, commercial been shift net to side negative positive. acute probably

Operator

next And will Justin Wolfe question our coming Lake Research. be from of

Justin Lake

first, DPP started about you the the the year. bucket, this of in million expected guidance year kind to Steve, on $XXX get of that just at I you terms XX-K think in isolating that

the XX-Q. to You updated it $XXX ones the with million with

is what that that now number year. curious you Just to this expect right get

got for Then question. first my Marc. in that do just let's I've So one

Steve Filton

Yes.

which that release, the [ although X picture a we disclosure, included on $XXX XX from no Washington the days. in file we'll I Q think cetera. step ] there'll in a our et including So or a week up or that we're million, we significant the But more XX-K, there'll in still have that But so. obviously, be working be numbers our in press precise

Justin Lake

round Do much -- you I share goes $XXX there? you those have number could you it does add to go if in think than Like Or million? us? with a Okay. numbers two higher it do

Steve Filton

million. think low to I go Yes, will into the it mid-$XXXs

Justin Lake

Okay.

is So [indiscernible]? these that fair started to $XXX it That from your raise is it if guidance to million maybe reasonable of the to we you maybe rest raise If about year coming give of payments? $XXX say low at guidance look take, to around million, mid-$XXXs half that think goes the million. or a at supplemental way

Steve Filton

that's think I fair.

Justin Lake

there's Marc, then, to What Curious do sit with business to back best the which improvement the way And you -- the potential way hospital of at trajectory go your a put still get down a And if in operators? you pre-COVID think a line the time terms a reasonable target Okay. talked margins. in plan probably of kind do about when is you or to you the levels. to have you it. hospital is

the Maybe to there? you when of a you steps to that. expect terms take In expect share you get get of could to couple

Marc Miller

especially on to every Yes. how a you not in market improve. little where of to with think a the last And I'm that of XX but have expenses. soon, with done, the we're right just continue we lot a I really going mean we In and plans, period we obviously. going to if lot a continue volume we is operators give or trajectory, months. that little getting a still have time there's go. a be But on better handle have to fairly bit the the only a need addressing but I get we'll to ways issues, incrementally discussions We've to pleased now. number different, been very work

Operator

Jason question And Citi. our will Cassorla next be coming of from

Jason Cassorla

Q quarter, would give kind acuity in volume dollars the slightly Great. on only anything simply volume X.X% maybe kind of can of trends of be that quarter? to know payment ask for return? I of to the maybe this Or mix just of you the payer supplemental and within but or the around made Maybe up normalizing Is lower in and continue function payment mix supplemental year-over-year. acuity kind a a you surgical year, the so, on pricing comments dynamic outside acute that programs just up just helpful.

Steve Filton

Yes.

less we quarter growth to something high growth, Jason. We things, et revenue XX% pretty of comparison. high last variety close a I cetera. quarter, years a it's comparing rather, surgical surgical think were had Again, think and to difficult I

postponed some been think some have I exhaustion during down postponing of procedures some the deferred of seeing we're settling those deferred and that pandemic.

us X%, of of and the volume. And the progress either I expectation to we should payments, close growth that historically, EBITDA levels business think evenly we'll that or something margin to I revenue a the we to even trajectory in exclusive both we've is and sort segment. expansion until management margin get again, the growth think in completely same-store of that that pretty between allow as supplemental I as made, price our cost split have to Marc with back X%, on continued side, acute get alluded pre-pandemic have and

Jason Cassorla

Okay. And Great. then just follow-up. maybe a

on kind the With the terms increase I aiming lawsuit billion quarter, million this the how about little increase that Illinois should the program share repo accelerated for repurchase think expectation going year? of $X to repo dynamics? know program, spend $XXX is dynamics repo repo the activity the with share in a on. million, to there the we still share in the you $XXX But around with share of you're Or bit in maybe

Steve Filton

Yes.

I point. your on largely So is suggestion think

that announcement needed spend free that Our the and in million still would that. to suggested that frankly, reinforce share or which And the still track of accomplish original We And point I on release obviously, that guidance $XXX bulk reauthorization our to including our we we're the this think think of quarter's would cash just main was believe repurchase. flow, intent. be we million I is to be idea. on able $XXX

Operator

Sarah Our Fitzgerald. coming of James next will question be Cantor from

Sarah James

your that you adjusted guidance talk about little And little decelerate? you or flat hoping stay drivers admissions for are bit growth a half assumption? bit the the levels the that first could could you what for half. about Are a was baked I embedded talk second into assuming

Steve Filton

Yes.

So back year not in of our original guidance. volume are terribly half our than different the think, I the assumptions,

just how the range, exiting kind X% side, quarter. acute in X% of of it's in growth adjusted the the I we're second sort think to the On admission continuing

get be get the a end to or for practically, the be for believe I level to side, on growth the to tall growth the that and that do a by sustainable the year. think full patient of year a still foreseeable we'll that behavioral day X% will after will that we level of it But that. order X% sustain that future that, think I can we

Sarah James

how Got as updates to it. X% do have practices And side, are on And that getting you you hiring behavioral driven? do on mostly any capacity the think going? about you're

Steve Filton

we mean slowly it's I of things the a been little Yes. ticked expected. combination I think off, a than I things. that have think progressing I more

accelerate. We pockets more think will troublesome. been to believe I that particularly in have somewhat that we'll we hiring in believe success have continue

that continue I I disenrollment, help of get reenrolled to in do down of these in the or Medicaid on impact and bit copays last commercial we or back will quarters, drag, think it's our exchange slower been have people either that and but get is happening the products a facilities just I X rate handful plan, all the which have weighed allow will than deductibles. that and the progress I the better more had And Medicaid anticipated. X%, to more we which the volume think, of think as a than originally original X residential in believe get our us was a progressing again, been expect somewhat little at slowly will and which the

Operator

Andrew question next Mok be our coming will And Barclays. from of

Andrew Mok

on up wanted follow payment Just programs. Medicaid to supplemental the

category the higher perspective? attractiveness us can programs Is and into how to in patients Medicaid this you from lean average that a second, where commercial you of that would relative payer rates? these line a give relative change does And the First, reimbursement service a referral stand sense class?

Steve Filton

Yes.

this made increases that Medicaid So of been care payments these my -- the that least think have substantial around acute mostly point even cost. And most think reimbursement particularly for I there one though company I our at country is acute below side, the rates, cases, rates. remains Medicare Medicaid in And supplemental our the this part. still peers in and quite frankly, well commercial below true on well most below

just up Medicaid an during also particularly point pressures that pressures important made the because last are broadly, it the accelerated reimbursement make I'll one we've really pandemic, the exacerbated pandemic. were inadequate cost for reinforce that of increases inflation during and pressures, I the these the but So several again years, intended wage it's think, to, particular that the before, the

the cases, of approach payments I the think Medicare side, states, do, some between reimbursement the in at supplemental sort of behavioral in least in Medicare some Medicaid probably and some cases, on commercial.

-- in it resources and I that approach approach on it encourages in I was tend that. sort used to our produce in us does you those are, markets. and think, those think change our think leaning those Medicaid patients. does into And the those I focus we facilities, inform I referral phrase community and those states we And it, to sources of think

Medicaid side, vast I think business of majority on the our emergency to comes room. our the acute

out, being the increase side, get where it proactive to that to a these not we're makes rate. there's we So programs that just level whole and more I we we're yes, states business lot take more that attractive. behavioral that actions a for of get, the adequate reimbursed that on Medicaid reimbursement those But the we seek think in a business do

upraise are that more work sources into trying business and We referral with it. get to of using to leaning

Operator

And will be from of Deutsche our Bank. next Pito Chickering coming question

Pito Chickering

So well comes of to the stay length as in help better contract due labor talk on the half those EBITDA back reductions down about does year how also, is stay to hiring turnover as and growth? is length today where as of think labor. of how the you about staffing, can side, where And acute your

Steve Filton

Yes.

indicated high the and the that the But time. long still turnover we business. But and as to very and fair, think those has in view almost sort a as of my as high. where industry I as has nationally the inefficient pre-pandemic Obviously, premium that turnover kind that's to we care is at acute to probably ability height and which for Part that necessarily height indicates rates So of more as acute it's view of And ideal, we're while which down and our lower success work of the not we Pito, of be positions. them. had the still comments, nature I care XXs prepared mid-XXs, turnover, far very and XXs pay, these obviously, continue in just permanent low from into we X/X low reduced hospital -- pandemic by filling hiring the rate in in the is been period. its were reduce and to

think you reduction just reduction I -- it on in or labor the I inflation in payments, acute recruitment in a also in open et acceleration the in see dynamic just of in our our our vacancies. incentive and filling incentive supply rate the payments, of in deceleration greater think the business, a demand our out wage indicate, success cetera, all part settling

the income think length of lowered reducing we've length stay. I of think see you the cost management do and cost of And incrementally. cost again, so then can reflected height from that's admission. And our degree patients stay in initiatives that We're able them our reduce the our the per As to the whether on sort dynamic, again, stay because to we lower made our partly reduction more very are far dramatically subacute our that pandemic of or the efficient of in are stay, to to and but discharge on of and per facility continue or I that's that treat we to a treat to some discharge discharge the as the fully basis, them majority being length setting, payments per our successful really vast even home appropriate statement. length cost

Pito Chickering

]. recently, your the press [ impact Senate some Okay. negative that Committee to including you There's seeing Are all? been referrals at ResCare Finance on

Steve Filton

report. really Honestly, no have from virtually seen Yes. the we hearing Pito, impact and Senate

population. what expect referral well. greatest admirable have their And our hospitals, think patients the would we perhaps be that And kind very care But satisfied seen and business referral from from They satisfaction a believe in with job. is a of I sources recognized that sources. do think, highly patient are think understand satisfied generally the I I lesson overall this and facilities. results the is this suggest think would I They difficult outcomes think I patient that understand referral is to the impact we sources these understand that. the very very

no, our impact no on impact referral volumes, seen really no So oversight. additional regulatory not necessarily sources, we've incremental any from

So with pleased we're that.

Operator

question comes from Baird. our of Ha And next Michael

Hua Ha

the said tails volumes us more how of behavioral, constraints? Medicaid powerful. to volume I headwind labor-related still redetermination Is say on So break yet roughly was you redeterminations of wondering help if be maybe it of And comps rebound, help versus volume a could creates then behavioral naturally related? into it slowly remains fair discuss the I source that against behavioral And redetermination half that to pricing bounce out off is XX-XX, supplemental this pricing could strength, year you the easier half backdrop? if positive much the impact you second that should back ex back it X.X% in think the volumes. And of payments. would

could dynamics pricing, what's happening is [ ] some of parse the would that be in there, if test just So you it helpful.

Steve Filton

shortfall. higher And not bit redeterminations, which elaborated or day its the little behavioral Yes. are, I from at the a QX where be growth XX would quarter And an continuation parse the be, issues just versus staffing, would with than patient the we therefore, we I residential precision again, around It's of maybe that X% the basis point make of that. XX, handful volumes on between XX, shortfall facilities. Medicaid that points. great our where mean, it's would the the in to the thought X.X% enormous I like

do. to that's difficult So

will we the the -- we residential the better these your year and get believe impact year as allow reach facilities do get from the of redeterminations get of half and believe other target. do the back question I to issues, in redeterminations that think broadly, the X% suggests, half or as us the better staffing in back

Operator

America. coming of question Fischbeck Our next will Bank from of be Kevin

Kevin Fischbeck

Okay.

I on that improvement. site comment a the guess two volume questions. Just follow about there

by redeterminations? And and really not then I adding end back staff First you're form to have is is of generally the demand about dynamic mean be shape second, about It the to yet. would one growing the Or consistently support is kind X%. be that way, pace you currently that sign, pace. when that? this of or that to any think of like Are quite to at impacted? get there labor guess, adding at any year, then capacity that just being staff in is, you I maybe and there sounds outside Medicaid to X% you're going that population

understand that should So kind to what add to doing year-end type that now you getting just and sustainably trying you're of of between be capacity?

Steve Filton

Yes, Kevin.

sort from that think the have should sources illness opioid increase. treatment diagnoses, a in and demand different to macro is and a of measure of levels, across I illness we So historically behavioral reason need the of variety there's to behavioral a and including volumes of virtually increase confident behavioral incidence that of that many I lot of think a believe and others. ways. We -- been demand of and it we measure again, the in continues believe that we board, normative treatment more strong, couple sort And basis, underlying that for we whole of is part could for the

into and we satisfy issue this that to have what really are. so labor sort to do plays we the that dynamic? Yes, an do of of we becomes -- demand can And

say for continue to incremental but a thought, to our continue XX would slower XX had Again, months. little have the I hires. than have hires that. and and add net we it's we been We net -- we last positive between

creates recently inefficiency. for is. question turnover. areas we think, I Behavioral a Pito, be of about what focus care lot And probably I more earlier, think had care that twice acute acute to is a tends of turnover the one major of

I leaving. think So And this a issue. they're of lot hiring even again, just UHS is though a people, not we're

satisfy I be we'll can turnover be of we we've recent the focused able that which demand to stay to career are our issue. But we'd that really very some a much in I the development incentive in and to unable mentorship think way like educational we that to believe reduce things programs people, it's I want that can do on rate, turnover That so will organization with do to industry-wide an really reduce practical to been And that think one satisfy the when do to that with facility. as which and as an objective. to which is they outstanding behavioral we periods. have opportunities opportunities hire we want rate, includes and stay

Kevin Fischbeck

right. adding an you Great. there to there is the really physical the that capacity, constraint? bed labor capacity that's All actual be need it's too, dynamic Is just Or beds? enough

Steve Filton

Yes.

it's I [ So of think ]. sort catch 'XX a

adding new beds dramatically if because view think the can't have. point well, beds were we pace staff we had already a during what's I at we that we the the beds which of we adding reduced pandemic that, the

pandemic. cetera, think more each and running et path of vacancies, a as vacancies at facility, before we in willing and be individual resume but I see a to make and increase phase, the think this as the kind of more that those able ramp fill of to calculation progress an to we going again, to and individual those additions were being market fill bed sort we pace to our we're I more is ability

Operator

And our Partners. from will Mayo question of coming be Leerink Whit next

Benjamin Mayo

square one challenges is have question. just to filling moderated. interesting I'm trying per your really Steve, fourth in is dynamic this What's consecutive has where comments on the labor the And day more quarter this SWB against I positions. patient

not a but And all. acute or the RTC you're I line slower said but than something. there's salary You opposite maybe thought versus intuitively, at of something maybe of pressuring make optical it's do I bit I thought have the mix with this? hiring would guess would little happen, the How sense you

Steve Filton

think industries sub-acute and industries, where care nursing rate, narrowed. able was of other included, think significant were people think has and like skilled I compensation to that nursing mean, those it settings that there's were always acute and rates leaving And existing work a for home behavioral, but the think, than make subacute care care gap since I industries but the it you compensation gap I always do pandemic subacute I dramatically lots to in obviously that to their been, saw pandemic. facilities a I premium they homes included what higher widened were salaries. And health. during during and sure, acute they Yes. leaving

-- trying question I'm so and sense answer in your to really -- that's of. And the

was when make et $X moderation didn't you're not our as leaving -- think Raising So by going us in issue. wages acute an I suggesting, matter setting. it to patient pressure is that day. in for you're the salaries why, to her nurse I per really have which why on salary to us is It an be during pandemic and she rates actually hour, impact, a any seeing an our Xx told care don't was got you dramatic salary think told nurse behavioral and behavioral a which saw cetera,

sense. most we that's with Look, although do this that be solving But just supplemental markets compensation we're we'll believe problem think did not of I'm this on going that to pandemic, some that payments, creating payments, a particularly is makes is cetera, during we'll I way a it focus career focus. higher and rewarding behavioral for -- valued, is these certainly, the and we working certainly where it of payments it's is answer, again, to how necessary. But money going we premium the through et that Because in still think think we be is and it. we real problem an setting and make incentive our at opportunities some invest if higher think where I it the markets, in I do think more in that them pursue in could solves money of But is suggest throwing And people cases, availability that. Medicaid they're our a feel we et cetera. not place paying necessarily automatically

Benjamin Mayo

follow-up, it? I about for my how think you time. and business health do some performing haven't Or plan you talk a how expectations Okay. business UHS? as at core differently versus think And that's in the all that Wondering heard you about of guys

Steve Filton

the mean I plans health time time. about and to talked we've

participate. like alignment only we plan in think, we care Advantage options think and as currently, And that particularly breakeven with in physicians, way some are even narrow dynamic networks expensive acute patients. And do it's less like similar we markets really well. certainly an plants hospitals. than focused operates or this Medicare further is although any other greater which health is other physician in and largely Medicare hospitals for still a investment options, have It's create acute care create plan we those us to that the level I which us a employment way provider-sponsored for though in sort at our to on things operate the it plan a ultimately, of return health

and And that operate to a plan I with us, think, and so we'll to patients It continues certain markets, of in yes, health do narrower that. provide a again, it the funnel network continues to aim. continue

Operator

Our will Joshua of Raskin be from Nephron question Research. coming last

Joshua Raskin

peers? one the you contracting? patients? are that's of what is you is than coming Just could Is comment you relative more, your based? those do on think why across exchange-based insurance. that segments. coming lower that revenue margins exchange Or individual other patients X% percentage with strategy segments. X% to and then network do think those And geographic from curious of I be the And I'll Steve. patients guess, But heard I of if both

Steve Filton

that, know second far Josh. question, don't to answer really I as As the the

as and right close be probably think have of percentage me, say, reimbursement. reimbursement Medicare admissions I my to the guesstimate this be be I but tends in exchange between little midpoint our what of commercial, first I Medicare somewhere is X% of Medicare, goes, pretty would midpoint would revenue probably that between of data because sort commercial would would one and to commercial I far As don't because a think of front closer the the something about be would to

Joshua Raskin

then? Medicare somewhere commercial to similar think, you margins, between and And Okay.

Steve Filton

Yes. yes. sorry, but Yes. I'm

Operator

Langston Ryan question and an get Langston, did Cowen. Ryan of that's We from TD additional

Ryan Langston

on Just or in coming and to dynamics it acute quick I guess, faster long other real you online, that, those facilities any us do new behavioral, get the markets And takes or just that can the changes geographies have maybe breakeven? slower? those are remind to to facilities in the how both, generally any

Steve Filton

In what breakeven think then the the that in to markets would year I consider to generally, like to in little will range. of XX-month say, the we're in this be is range ramp and the to Yes. very would X- averages, facility to time Vegas year. the frame be XXXX XX-month be opening Las compressed. Again, Las XX- impact I in there's to Vegas, that I because the probably facility tends late divisional probably

impact this an D.C. earnings early don't West going of Washington, on impact give the I when So it's facility much we'll year. Henderson guidance next year. think And precise get feedback 'XX of we the more both on have to and our

Operator

I Steve conference And I'm questions. like to to turn would Filton showing no for now further closing the back remarks.

Steve Filton

for with Thank everybody like this and speaking We you. would next again just time to thank forward morning their look everybody quarter. to

Operator

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

You disconnect. may now

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