| Metric | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Net Revenue per Adjusted Admission Change (%)** | -3.8% **[0000950170-23-004690_uhs-ex99_1.htm:3]** | -7.5% **[0000950170-23-014576_uhs-ex99_1.htm:0]** **[0000950170-23-018827_uhs-20230331.htm:50]** | 1.3% **[0000950170-23-034571_uhs-ex99_1.htm:1]** | 0.4% **[0000950170-23-055374_uhs-ex99_1.htm:2]** | 3.7% **[0000950170-24-021193_uhs-ex99_1.htm:2]** **[0000950170-24-021193_uhs-ex99_1.htm:1]** | 4.6% **[0000950170-24-055683_uhs-20240331.htm:45]** | 3.5% **[0000950170-24-094006_uhs-20240630.htm:48]** | 7.0% **[0000950170-24-124103_uhs-20240930.htm:57]** |
| **Net Revenue per Adjusted Patient Day Change (%)** | -0.2% **[0000950170-23-004690_uhs-ex99_1.htm:3]** | -1.5% **[0000950170-23-014576_uhs-ex99_1.htm:0]** | 2.0% **[0000950170-23-034571_uhs-ex99_1.htm:1]** | 3.3% **[0000950170-23-055374_uhs-ex99_1.htm:7]** | 5.0% **[0000950170-24-021193_uhs-ex99_1.htm:10]** **[0000950170-24-021193_uhs-ex99_1.htm:2]** | 5.8% **[0000950170-24-047947_uhs-ex99_1.htm:0]** | 5.3% **[0000950170-24-086313_uhs-ex99_1.htm:9]** | 6.5% **[0000950170-24-117220_uhs-ex99_1.htm:2]** |
| **Inpatient Admissions (Acute Care)** | 81,314 **[0000950170-23-004690_uhs-ex99_1.htm:18]** | N/A | 79,100 **[0000950170-23-034571_uhs-ex99_1.htm:14]** | 80,074 **[0000950170-23-055374_uhs-ex99_1.htm:14]** | 82,918 **[0000950170-24-021193_uhs-ex99_1.htm:17]** | 83,581 **[0000950170-24-055683_uhs-20240331.htm:43]** | 81,858 **[0000950170-24-094006_uhs-20240630.htm:46]** | 81,731 **[0000950170-24-117220_uhs-ex99_1.htm:15]** |
| **Adjusted Admissions Change (Acute Care %)** | 5.5% **[0000950170-23-004690_uhs-ex99_1.htm:3]** | 10.5% **[0000950170-23-014576_uhs-ex99_1.htm:0]** | 7.7% **[0000950170-23-034571_uhs-ex99_1.htm:1]** | 6.8% **[0000950170-23-055374_uhs-ex99_1.htm:7]** | 5.6% **[0000950170-24-021193_uhs-ex99_1.htm:1]** **[0000950170-24-021193_uhs-ex99_1.htm:2]** | 4.5% **[0000950170-24-047947_uhs-ex99_1.htm:0]** **[0000950170-24-047947_uhs-ex99_1.htm:5]** | 3.4% **[0000950170-24-086313_uhs-ex99_1.htm:9]** **[0000950170-24-086313_uhs-ex99_1.htm:1]** | 1.5% **[0000950170-24-117220_uhs-ex99_1.htm:8]** **[0000950170-24-124103_uhs-20240930.htm:66]** **[0000950170-24-117220_uhs-ex99_1.htm:1]** |
| **Patient Days (Acute Care)** | 401,363 **[0000950170-23-004690_uhs-ex99_1.htm:18]** | 392,589 **[0000950170-23-014576_uhs-ex99_1.htm:12]** | 384,373 **[0000950170-23-034571_uhs-ex99_1.htm:14]** | 384,348 **[0000950170-23-055374_uhs-ex99_1.htm:14]** | 403,117 **[0000950170-24-021681_uhs-ex99_1.htm:0]** | 415,327 **[0000950170-24-047947_uhs-ex99_1.htm:12]** **[0000950170-24-055683_uhs-20240331.htm:43]** | 390,433 **[0000950170-24-094006_uhs-20240630.htm:46]** | 393,521 **[0000950170-24-124103_uhs-20240930.htm:55]** |
| **Adjusted Patient Days Change (Acute Care %)** | 1.6% **[0000950170-23-004690_uhs-ex99_1.htm:3]** | 3.7% **[0000950170-23-014576_uhs-ex99_1.htm:0]** | 6.9% **[0000950170-23-034571_uhs-ex99_1.htm:7]** | 3.8% **[0000950170-23-055374_uhs-ex99_1.htm:7]** | 4.3% **[0000950170-24-021193_uhs-ex99_1.htm:10]** | 3.4% **[0000950170-24-047947_uhs-ex99_1.htm:0]** | 1.6% **[0000950170-24-086313_uhs-ex99_1.htm:9]** | 2.0% **[0000950170-24-117220_uhs-ex99_1.htm:8]** |
| **Average Length of Inpatient Stay (Days)** | 4.9 **[0000950170-23-004690_uhs-ex99_1.htm:18]** | 5.1 **[0000950170-23-014576_uhs-ex99_1.htm:12]** | 4.9 **[0000950170-23-034571_uhs-ex99_1.htm:14]** | 4.8 **[0000950170-23-061147_uhs-20230930.htm:55]** **[0000950170-23-061147_uhs-20230930.htm:48]** | N/A | 5.0 **[0000950170-24-047947_uhs-ex99_1.htm:12]** | 4.8 **[0000950170-24-086313_uhs-ex99_1.htm:16]** | 4.8 **[0000950170-24-117220_uhs-ex99_1.htm:15]** |
| **Occupancy Rate (Acute Care %)** | 64.0% **[0000950170-23-004690_uhs-ex99_1.htm:18]** | 67.8% **[0000950170-23-014576_uhs-ex99_1.htm:12]** | 66% **[0000950170-23-034571_uhs-ex99_1.htm:14]** | 64.3% **[0000950170-23-055374_uhs-ex99_1.htm:14]** | 67.4% **[0000950170-24-021193_uhs-ex99_1.htm:17]** | 70.4% **[0000950170-24-055683_uhs-20240331.htm:43]** | 68.3% **[0000950170-24-094006_uhs-20240630.htm:46]** | 66.0% **[0000950170-24-117220_uhs-ex99_1.htm:15]** |

9185c56171500fcd8c5c54fafe8a33a863672959d2f3534e645a682d31104fed

30be0ad4f9ebbd1162118266bce48be9dfd00bf075652e7d008f2afaf6d4627d

**Net Revenue per Adjusted Admission Change (%)**

**Net Revenue per Adjusted Patient Day Change (%)**

**Inpatient Admissions (Acute Care)**

**Adjusted Admissions Change (Acute Care %)**

**Patient Days (Acute Care)**

**Adjusted Patient Days Change (Acute Care %)**

**Average Length of Inpatient Stay (Days)**

**Occupancy Rate (Acute Care %)**

08992b7676c27fef6a10584a0dc2454c2389a659d6fc90f454aadd18635a6ab6

Universal Health Services, Inc. (UHS) is a healthcare company that owns and operates a network of acute care hospitals, outpatient facilities, and behavioral health care facilities across the United States, the United Kingdom, and Puerto Rico **[0000950170-24-124103_uhs-20240930.htm:42]**. The company provides a wide range of medical services, including general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services, and behavioral health services **[0000950170-24-021175_uhs-20231231.htm:174]** **[0000950170-24-124103_uhs-20240930.htm:42]**. UHS's revenue is primarily derived from its acute care and behavioral health care segments, with additional support services such as capital resources and management services provided to its facilities **[0000950170-24-021175_uhs-20231231.htm:78]** **[0000950170-24-021175_uhs-20231231.htm:3]**.

1. **Acute Care Services** - Operates acute care hospitals and outpatient facilities offering services such as general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, and pharmacy services.
2. **Behavioral Health Services** - Manages behavioral health care facilities providing comprehensive mental health services, with significant operations in the United States and the United Kingdom.
3. **Support Services** - Provides capital resources and management services, including central purchasing, information services, finance and control systems, facilities planning, physician recruitment services, administrative personnel management, marketing, and public relations to its facilities.

733aef145f9eb11903e81cd2b3130fb545779a082677b8fad45af93fe2cd4ae8

f18dcb62791a868722276cc72462739e4094697b73353c1a42421dbf74f2c97e

1. Given your previous statements about cost management efforts in preparation for moderating volumes  **[UHS_3403992_23]** , could you elaborate on how your strategies have evolved in response to the faster-than-expected moderation in acute care volumes, and how confident are you in achieving EBITDA and margin expansion under these circumstances?  **[UHS_3403992_23]** 

2. With the aggressive behavior from managed care payers, including increased patient denials and status downgrades  **[UHS_3403992_2]** , how is this impacting your revenue cycle management, and what specific actions are you taking to mitigate these pressures, particularly related to the Two-Midnight rule?  **[UHS_3403992_2]** 

3. In light of higher liability reserves and issues at certain psychiatric facilities  **[UHS_3403992_25]** , are you considering a shift in your strategic direction or operational focus within the behavioral health segment, and how do you plan to address the risks associated with these challenges?  **[UHS_3403992_25]** 

4. Considering the potential capacity constraints in your acute and behavioral hospitals, with occupancy in behavioral facilities running at higher levels despite overall occupancy in the low 70s  **[UHS_3403992_11]** **[UHS_3403992_10]** , how are you balancing capital expenditures between building new beds and optimizing existing capacity to drive admission growth?  **[UHS_3403992_11]** **[UHS_3403992_10]** 

5. As you continue with significant capital expenditures and share repurchases  **[UHS_3403992_1]** **[UHS_3403992_10]** , could you provide clarity on your capital allocation strategy going forward, including your appetite for M&A opportunities versus returning capital to shareholders, especially in the context of expanding services like outpatient care and telehealth in behavioral health?  **[UHS_3403992_1]** **[UHS_3403992_25]** **[UHS_3403992_10]** **[UHS_3403992_22]** 

8e4182051bd31f08e7a3d9f137af322b994c08a9cac4d7198ada057eb8b22737

176cc2238c3ce1f2dd6089af06abb063b0560798cc36c679f14762df92a684e5

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from / Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

d052b414ba5bf1096cf9a37014068f69c3f4d941c39d5c9973f532c4fcea41c7

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Behavioral Health Segment**: Expected same-store revenue growth in the mid- to upper single digits (6% to 8%), with pricing contributing 4% to 5% and volume contributing 3% to 3.5%  **[UHS_3403992_13]** .
  2. **Acute Care Segment**: Expected same-store revenue growth in the 6% to 7% range, split evenly between price and volume  **[UHS_3403992_5]** .
  3. **Medicaid Supplemental Programs**: Potential incremental benefits from new or expanded Medicaid supplemental programs in Tennessee, Washington D.C., and Nevada  **[UHS_3403992_1]** .
  4. **Corporate Expenses**: Nonrecurring corporate expenses in Q3 2024, including a $5 million loss on debt extinguishment and $5 million in lawsuit settlements  **[UHS_3403992_6]** .
  5. **New Facilities**: Two new facilities expected to open in 2025, with no significant drag on EBITDA anticipated  **[UHS_3403992_4]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Earnings Per Share (EPS)**: Increased midpoint of 2024 EPS guidance by 17% to $15.80 per diluted share  **[UHS_3394442_1]** .
  2. **Adjusted Admissions Growth**: Acute care segment expected growth in the 3% to 4% range for the second half of the year  **[UHS_3394442_14]** .
  3. **Behavioral Health Patient Day Growth**: Aiming for 3% patient day growth by the end of 2024  **[UHS_3394442_14]** **[UHS_3394442_4]** .
  4. **Supplemental Payments**: Potential benefit in Tennessee estimated between $42 million and $56 million annually and in Washington, D.C., between $80 million and $90 million annually  **[UHS_3394442_3]** .
  5. **Revenue Growth**: Same-store revenue growth trajectory of 5% to 6%, split evenly between price and volume, in the acute business  **[UHS_3394442_12]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Behavioral Health Segment**: Expected patient day volumes to gradually improve, aiming for around 3% growth  **[UHS_3380906_1]** **[UHS_3380906_4]** .
  2. **Acute Care Volumes**: Anticipated moderation but robust compared to historical levels  **[UHS_3380906_1]** .
  3. **Medicaid Supplemental Payments**: Potential upside to initial forecasts  **[UHS_3380906_15]** .
  4. **Margins**: Expected recovery of margins that deteriorated during the pandemic  **[UHS_3380906_9]** .
  5. **Premium Pay**: Goal of reducing premium pay to around $50 million per quarter  **[UHS_3380906_13]** .
  6. **Capital Expenditures**: Continued investment in acute and behavioral segments  **[UHS_3380906_14]** .
  7. **Guidance Revision**: Possible revision if trends continue positively in Q2  **[UHS_3380906_15]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Revenue Growth**: Expected in the acute care segment to be around 5% to 6%, split evenly between price and volume  **[UHS_3375584_4]** .
  2. **Volume and Pricing**: Anticipated moderation in volumes with increased acuity and pricing  **[UHS_3375584_3]** .
  3. **Physician Expenses**: Expected to grow by the overall inflation rate  **[UHS_3375584_3]** .
  4. **Labor Costs**: Continued improvement in premium pay labor trends  **[UHS_3375584_3]** .
  5. **Supplemental Revenues**: Additional $140 million of Nevada supplemental revenues  **[UHS_3375584_3]** .
  6. **Behavioral Health**: Forecasts same-store adjusted patient day growth to exceed 2.1%  **[UHS_3375584_3]** .
  7. **Margins**: Cautious about margin expansion due to past volatility  **[UHS_3375584_20]** .
  8. **Medicaid Supplemental Payments**: Importance acknowledged with potential capping by CMS  **[UHS_3375584_7]** .

ea6aadc2e789e379fc51852dcd649d177d251c3b63cde9db790584e0bb7c27c4

Acute Care Hospital

Behavioral Health

Other

Total Revenue

74f7fd11de05fc714a10bb5140dd59228e1a73ab0fe265e169ccfc71e0b062c7

55976bec9ce5ac1cf05a9bb7664619af64d4517e93496edc9a68096518f3fc1f

| Name               | Position                                           | Start Date         | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|--------------------|----------------------------------------------------|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Marc D. Miller     | Chief Executive Officer and President              | January 1, 2021    | Marc D. Miller has been serving as the **Chief Executive Officer and President** of UHS since **January 1, 2021**. He has been a Director since **2006** and served as President starting in **May 2009**. He has held various positions within the Acute Care Division since **2000**. He is the son of Alan B. Miller, the Executive Chairman of UHS  **[0000950170-24-021175_uhs-20231231.htm:28]** **[0001193125-24-086555_d631163ddef14a.htm:49]** **[0001193125-24-086555_d631163ddef14a.htm:20]** . |
| Alan B. Miller     | Executive Chairman of the Board                    | January 1, 2021    | Alan B. Miller has been a Director of UHS since its inception in **1978**. He served as the Chief Executive Officer from 1978 until he stepped down on **January 1, 2021**, at which point he became Executive Chairman. He was previously the President, Chairman, and CEO of American Medicorp, Inc.  **[0000950170-24-021175_uhs-20231231.htm:28]** **[0001193125-24-086555_d631163ddef14a.htm:49]** **[0001193125-24-086555_d631163ddef14a.htm:99]** **[0001193125-23-093052_d445017ddef14a.htm:18]** .                             |
| Steve G. Filton    | Executive Vice President, Chief Financial Officer, and Secretary | 2003 (CFO), 1999 (Secretary) | Steve G. Filton has been the **Executive Vice President, Chief Financial Officer, and Secretary** at UHS. He became CFO in **2003** and Secretary in **1999**. He was elected Executive Vice President in **2017** and has been with UHS since **1985** in various roles  **[0000950170-24-021175_uhs-20231231.htm:28]** **[0001193125-24-086555_d631163ddef14a.htm:49]** .                                                                 |
| Matthew J. Peterson| Executive Vice President, President of Behavioral Health Division | September 2019     | Matthew J. Peterson joined UHS in **September 2019** as Executive Vice President and President of the Behavioral Health Division. He previously worked at UnitedHealth Group for 11 years and serves in the Air National Guard, U.S. Air Force, recently promoted to Brigadier General  **[0000950170-24-021175_uhs-20231231.htm:28]** **[0001193125-24-086555_d631163ddef14a.htm:49]** **[0001193125-23-093052_d445017ddef14a.htm:30]** .                                           |
| Edward H. Sim      | Executive Vice President, President of Acute Care Division | December 5, 2022   | Edward H. Sim began his role as **Executive Vice President and President of the Acute Care Division** at UHS on **December 5, 2022**. Before joining UHS, he was the Chief Operating Officer at Centura Health and held senior leadership roles at Baptist Health for 11 years  **[0000950170-24-021175_uhs-20231231.htm:28]** **[0001193125-24-086555_d631163ddef14a.htm:49]** **[0001193125-23-093052_d445017ddef14a.htm:30]** .                                                   |

1047b092e0c772cf9b8b3d4275b50e20fde1fc9713299da14da1de4492ad8c00

| Program Details          | Program 1          |
|--------------------------|--------------------|
| Approval Date            | **July 2024**  **[0000950170-24-124103_uhs-20240930.htm:120]**   |
| End Date/Duration        | **No expiration**  **[0000950170-24-124103_uhs-20240930.htm:120]**  |
| Total additional amount  | **$1.0 billion**  **[0000950170-24-124103_uhs-20240930.htm:120]**  |
| Remaining authorization amount | **$1,073.981 million**  **[0000950170-24-124103_uhs-20240930.htm:120]**  |
| Details                  | **No expiration date**  **[0000950170-24-124103_uhs-20240930.htm:120]**  |

ee08abc0b825f242a4a8685efa335db251b137e13352cf2311fd5b7fbd056949

UK Revenue

Acute Care

- UK Revenue

d5b8db846df103a9fe41b6756274d08ae88ce885605c1080c5460130c940c36e

**Annual guidance for FY 2024:**
- **Behavioral Health volume**: 3%–3.5%  **[UHS_3403992_13]** (raised from 3%  **[UHS_3394442_14]** **[UHS_3394442_4]** )  
- **Behavioral Health same-store revenue growth**: 6%–8%  **[UHS_3403992_13]** (no prior guidance)  
- **Acute Care same-store revenue growth**: 6%–7%  **[UHS_3403992_5]** (raised from 5%–6%  **[UHS_3394442_12]** )  
- **Acute Care volume**: 3%–3.5%  **[UHS_3403992_5]** (lowered from 3%–4%  **[UHS_3394442_14]** )  
- **Medicaid Supplemental Programs**: Potential incremental benefits from new or expanded Medicaid supplemental programs in Tennessee, Washington D.C., and Nevada  **[UHS_3403992_1]** (no prior guidance)  
- **Corporate Expenses**: Nonrecurring corporate expenses in Q3 2024, including a $5 million loss on debt extinguishment and $5 million in lawsuit settlements  **[UHS_3403992_6]** (no prior guidance)  
- **New Facilities**: Two new facilities expected to open in 2025, with no significant drag on EBITDA anticipated  **[UHS_3403992_4]** (no prior guidance)  

5834082322426e99b1eb777586649de980e5dc799649a75e061a4796bedbc762

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 2007       | Present  | Current auditor   |  **[0000950170-24-021175_uhs-20231231.htm:167]**  |

f447d002d0ab01319e0b65d97c132769762c8d1da58773398f9cc7907ed51d6f

ae965223540603a5be1530bc40f9d0e9fc82aa92d4d89b10f07b71ca5efd103e

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $3.963B (+11% YoY)  **[0000950170-23-061147_uhs-20230930.htm:31]** **[0000950170-24-124103_uhs-20240930.htm:33]**   
- Acute Care Hospital Revenue: $2.246B (+11% YoY)  **[0000950170-23-061147_uhs-20230930.htm:31]** **[0000950170-24-124103_uhs-20240930.htm:33]**   
- Behavioral Health Revenue: $1.715B (+11% YoY)  **[0000950170-23-061147_uhs-20230930.htm:31]** **[0000950170-24-124103_uhs-20240930.htm:33]**   
- UK Revenue: $230M (+13% YoY)  **[0000950170-23-061147_uhs-20230930.htm:31]** **[0000950170-24-124103_uhs-20240930.htm:38]**   
- Operating Income (EBIT): $384M (+35% YoY)  **[0000950170-23-061147_uhs-20230930.htm:45]** **[0000950170-24-124103_uhs-20240930.htm:2]**   
- Net Income: $259M (+52% YoY)  **[0000950170-23-061147_uhs-20230930.htm:45]** **[0000950170-24-124103_uhs-20240930.htm:2]**   
- Diluted EPS: $3.80 (**+59% YoY**)  **[0000950170-23-061147_uhs-20230930.htm:2]** **[0000950170-24-124103_uhs-20240930.htm:2]**   

5444cb53858336c859d43cd42d3f8717355b659e39fb2736533509e47d7913d9

| Year | Amount Due (in millions) | Debt Type                     | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|------------------------------------|------------------------|------------------------------------------------------------------------------------|
| 2025     | $738                         | Other Debt                        | N/A                    | 15.7% = (738 / 4700) * 100 **[0000950170-24-124103_uhs-20240930.htm:19]**                                                |
| 2026     | $700                         | 1.65% Senior Secured Notes        | 1.65                   | 14.9% = (700 / 4700) * 100 **[0000950170-24-124103_uhs-ex22_1.htm:0]** **[0000950170-24-124103_uhs-20240930.htm:17]**                                        |
| 2027     | $70                          | Other Debt                        | N/A                    | 1.5% = (70 / 4700) * 100 **[0000950170-24-124103_uhs-20240930.htm:19]**                                                  |
| 2029     | $1,300                       | Other Debt                        | N/A                    | 27.7% = (1300 / 4700) * 100 **[0000950170-24-124103_uhs-20240930.htm:19]**                                               |
| 2029     | $500                         | 4.625% Senior Secured Notes       | 4.625                  | 10.6% = (500 / 4700) * 100 **[0000950170-24-124103_uhs-ex22_1.htm:0]** **[0000950170-24-124103_uhs-20240930.htm:17]**                                        |
| 2030     | $800                         | 2.65% Senior Secured Notes        | 2.65                   | 17.0% = (800 / 4700) * 100 **[0000950170-24-124103_uhs-ex22_1.htm:0]** **[0000950170-24-124103_uhs-20240930.htm:17]**                                        |
| 2032     | $500                         | 2.65% Senior Secured Notes        | 2.65                   | 10.6% = (500 / 4700) * 100 **[0000950170-24-124103_uhs-ex22_1.htm:0]** **[0000950170-24-124103_uhs-20240930.htm:17]**                                        |
| 2034     | $500                         | 5.050% Senior Secured Notes       | 5.050                  | 10.6% = (500 / 4700) * 100 **[0000950170-24-124103_uhs-ex22_1.htm:0]** **[0000950170-24-124103_uhs-20240930.htm:17]**                                        |
| Beyond 2034 | $2,400                    | Other Debt                        | N/A                    | 51.1% = (2400 / 4700) * 100 **[0000950170-24-124103_uhs-20240930.htm:19]**                                               |

087c54c14aac37b97593bcabf18b395b2a6148533adfb6a2c4cad8cf32b5e116

8e89f9a04f988c1741094686997eba5f620780174666afdc7a5bd8693ed10d08

1. **Illinois Litigation Impact**  
   **Q:** How does the Illinois verdict affect your business strategy?  
   **A:** The unprecedented jury verdict in Illinois is under appeal, and we believe there is significant uncertainty around its ultimate outcome.  **[UHS_3380906_4]** **[UHS_3380906_8]**  At this time, it is not impacting our approach to the business or capital allocation plans.  **[UHS_3380906_8]**  We are focused on challenging and resolving the case through the legal system.  **[UHS_3380906_8]** 

2. **Margin Recovery Outlook**  
   **Q:** What's the outlook for margin improvement in both segments?  
   **A:** We expect margins to recover as we return to normal growth levels.  **[UHS_3380906_9]**  Opportunities include strong revenue performance, better expense control, manageable wage inflation, and reduced physician expense growth.  **[UHS_3380906_9]**  Supplemental Medicaid payments also contribute significantly to margin recovery without adding incremental expenses.  **[UHS_3380906_9]** 

3. **Medicaid Supplemental Payments**  
   **Q:** How do Medicaid supplemental payments impact your results?  
   **A:** Increased Medicaid supplemental payments benefit providers with higher Medicaid utilization like us.  **[UHS_3380906_2]** **[UHS_3380906_6]** **[UHS_3380906_10]**  This quarter, we received **$10 million to $15 million** of out-of-period behavioral dollars.  **[UHS_3380906_2]**  We anticipate more states will implement or expand programs, boosting supplemental payments throughout the year.  **[UHS_3380906_6]**  Regulatory changes are generally favorable, allowing states flexibility until **2028** to adjust programs.  **[UHS_3380906_11]**  

4. **Guidance and Potential Revision**  
   **Q:** Will strong Q1 performance lead to guidance revision?  
   **A:** Although we exceeded internal and consensus expectations in Q1, we don't typically revise guidance after the first quarter.  **[UHS_3380906_14]**  If positive trends in acute volumes and behavioral pricing continue into Q2, a guidance revision is possible.  **[UHS_3380906_14]** 

5. **Labor Cost Trends**  
   **Q:** What are the trends in labor costs and premium pay?  
   **A:** Premium pay decreased by approximately **$20 million** from the same quarter last year  **[UHS_3380906_7]** , but remains elevated due to robust acute care volumes.  **[UHS_3380906_13]**  Wage inflation is decelerating, and we've made productivity adjustments.  **[UHS_3380906_7]**  Reducing premium pay further will be challenging unless volumes moderate.  **[UHS_3380906_13]** 

6. **Behavioral Volume Growth**  
   **Q:** What's driving confidence in behavioral volume growth?  
   **A:** We expect behavioral patient day growth to improve to about **3%** this year.  **[UHS_3380906_4]**  Underlying demand is strong, evident from inbound inquiries.  **[UHS_3380906_4]**  Staffing improvements and stabilization of Medicaid disenrollments bolster our confidence in incremental volume growth throughout the year.  **[UHS_3380906_4]** 

7. **Capital Allocation and CapEx Plans**  
   **Q:** Any changes to capital deployment or CapEx plans?  
   **A:** No significant changes at this time.  **[UHS_3380906_8]**  We continue investing in acute care areas like emergency services and high-acuity surgical services, as well as outpatient facilities.  **[UHS_3380906_13]**  In behavioral health, we're expanding inpatient capacity and investing in outpatient developments and telemedicine.  **[UHS_3380906_13]** 

8. **Regulatory Changes Effect**  
   **Q:** How do recent Medicaid rules affect supplemental programs?  
   **A:** The new Medicaid rule doesn't cap supplemental programs but focuses on hold harmless agreements.  **[UHS_3380906_11]**  About **one-third** of our supplemental payments are under agreements CMS objects to.  **[UHS_3380906_11]**  States have until **2028** to adjust, and we believe there's flexibility to maintain these payments.  **[UHS_3380906_11]** 

9. **New Hospital Opening**  
   **Q:** What is the impact of opening West Henderson Hospital?  
   **A:** West Henderson is scheduled to open in late **November or December**.  **[UHS_3380906_12]**  Initial financial impact will be minimal, with some preopening costs and early operating losses offset by improvements at our existing hospital.  **[UHS_3380906_12]**  We expect significant population growth to drive a successful opening, similar to Henderson Hospital **five years ago**.  **[UHS_3380906_12]** 

10. **Competitive Landscape**  
    **Q:** Are supplemental payments affecting competitive dynamics?  
    **A:** We haven't observed significant changes in competitor behavior due to increased supplemental payments.  **[UHS_3380906_10]**  While these payments benefit providers with high Medicaid utilization like us, they haven't notably altered strategic actions in our markets.  **[UHS_3380906_10]** 

cf17cbbf3ef192d2110f9ce2c79abf363b1723be1cd38ec41197f5dd4305268e

1. **2024 Guidance and Margins**  
   **Q:** Why is 2024 EBITDA growth lower than expected?  
   **A:** Steve Filton explained that after facing elevated costs in recent years, they're cautious about expanding margins. Excluding the **$150 million** increase from Nevada supplemental payments, EBITDA growth appears modest. However, these payments are essential to offset higher expenses. They anticipate mid-single-digit growth but remain prudent due to unpredictable costs like physician subsidies.  **[UHS_3375584_6]** 

2. **Medicaid Supplemental Payments Impact**  
   **Q:** Will increased Medicaid payments continue or stabilize?  
   **A:** Steve noted that Medicaid supplemental payments have grown significantly, reaching **$809 million** or **41%** of EBITDA in 2024, up from **$225 million** in 2019. These payments are crucial for sustaining operations amid inadequate Medicaid reimbursement and rising costs. While CMS may cap growth rates, they're unlikely to reduce payments, and other states might adopt similar programs.  **[UHS_3375584_7]** 

3. **Volume Growth Expectations**  
   **Q:** Should acute volumes grow faster to return to trend?  
   **A:** Despite adjusted admissions growing over **6%** in 2023, volumes are expected to moderate in 2024. Steve believes the high growth rates are unsustainable long-term. They project a return to historical mid-single-digit growth, accounting for potential moderation in lower acuity volumes.  **[UHS_3375584_12]** **[UHS_3375584_13]** 

4. **Labor Costs and Wage Growth**  
   **Q:** How is wage growth impacting volumes and margins?  
   **A:** Wage growth has moderated to around **4–5%**. While raising wages might fill remaining positions, it risks elevating pay across all staff. They've reduced premium pay from **$153 million** in early 2022 to **$67 million** in Q4, aiming for further reductions towards **$50 million** per quarter, potentially saving **$30–40 million** annually.  **[UHS_3375584_11]** **[UHS_3375584_16]** 

5. **Capital Deployment Strategy**  
   **Q:** How are you prioritizing capital between segments?  
   **A:** Capital is allocated based on the highest returns, regardless of segment. While behavioral health offers higher margins, opportunities in acute care, especially in strong markets like Las Vegas where they've invested hundreds of millions, remain attractive. There's also an increasing focus on outpatient opportunities in both segments.  **[UHS_3375584_8]** **[UHS_3375584_9]** 

6. **Behavioral Pricing Sustainability**  
   **Q:** Can strong behavioral pricing continue in 2024?  
   **A:** Strong pricing in behavioral health has been driven by higher acuity and successful rate negotiations. However, as these impacts are annualized, they expect pricing and acuity to decline slightly in 2024, with increased volumes offsetting the impact.  **[UHS_3375584_19]** 

7. **Physician Expenses and Contracts**  
   **Q:** What's the outlook for physician fee expenses?  
   **A:** Hospital-based physician contracts have been renegotiated due to industry changes. The increased costs are now largely reflected in financials, and they don't anticipate significant increases in 2024. Nonetheless, they remain cautious due to potential volatility in this area.  **[UHS_3375584_10]** 

8. **Technology Investments and Efficiency**  
   **Q:** How are technology investments improving operations?  
   **A:** Investments include implementing electronic medical records in behavioral facilities and utilizing patient-tracking devices to enhance efficiency in patient rounding, improving overall operational effectiveness.  **[UHS_3375584_22]** **[UHS_3375584_24]** 

7b2f6e0c73cbf1543b0b3f1558f0a65b1698b22ada61f20595e6389486ceade3

- **UHS is experiencing a moderation in acute care demand, with adjusted admissions increasing only 3.4% year-over-year and surgical growth flattening out.**  **[UHS_3394442_5]**
- **A significant portion of UHS's earnings guidance raise is dependent on supplemental Medicaid payments, which may not be sustainable or guaranteed, potentially making earnings less predictable.**  **[UHS_3394442_10]** **[UHS_3394442_6]** **[UHS_3394442_3]**
- **UHS is facing challenges in achieving projected growth in the behavioral health segment, with patient day growth expected to be lower than anticipated, and progress slower than expected.**  **[UHS_3394442_15]** **[UHS_3394442_14]**

b299e92d065d8093116076be38d619c56059002db27cfb9c0e4c7799c27aa1e0

1. **2025 Tailwinds and Medicaid Payments**  
   **Q:** What are the major headwinds and tailwinds for 2025?  
   **A:** Steve Filton expects continued margin recovery in 2025 and highlighted significant potential tailwinds from Medicaid supplemental programs in **Tennessee**, the **District of Columbia**, and **Nevada**.  **[UHS_3403992_4]**  UHS will open two new facilities: one in West Henderson, Las Vegas, and another in the District of Columbia, but neither is expected to significantly impact EBITDA.  **[UHS_3403992_4]**  He also mentioned potential new or expanded programs in **California** and **Florida** that could be effective next year.  **[UHS_3403992_4]** 

2. **Outlook for Acute Care Growth**  
   **Q:** What's the outlook for acute care volume growth?  
   **A:** Filton anticipates acute care growth returning to pre-COVID levels, with same-store revenue growth in the **6% to 7%** range, split evenly between price and volume.  **[UHS_3403992_5]**  Year-to-date metrics show adjusted admissions up **3%** and revenue per adjusted admission up **5%**.  **[UHS_3403992_5]**  He doesn't expect incremental benefits from the Two-Midnight rule change and hasn't seen evidence of structural changes leading to elevated volume growth.  **[UHS_3403992_5]** 

3. **Physician Expenses and Labor Costs**  
   **Q:** How are physician expenses and labor costs trending?  
   **A:** Pressures on physician expenses were driven by billing changes like the **No Surprises Act** rather than physician scarcity.  **[UHS_3403992_3]**  Physician recruitment has remained stable over the last several years.  **[UHS_3403992_3]**  Labor trends have stabilized in both business segments, with premium pay decreasing and salaries as a percentage of revenues coming down, contributing to margin recovery.  **[UHS_3403992_9]** 

4. **Behavioral Health Volumes and Pricing**  
   **Q:** What are the trends in behavioral health volumes and pricing for 2025?  
   **A:** UHS expects to exit the fourth quarter with **3%** patient day growth in behavioral health.  **[UHS_3403992_13]**  For 2025, they anticipate same-store revenue growth in the **6% to 8%** range, with pricing growth of **4% to 5%** and volume growth of **3% to 3.5%**.  **[UHS_3403992_13]**  While behavioral pricing has been strong, it may moderate but should remain within the **4% to 5%** range.  **[UHS_3403992_13]** 

5. **Managed Care Payer Behavior**  
   **Q:** Have you seen changes in managed care payer behavior like denials or downgrades?  
   **A:** Since late 2022, there's been more aggressive behavior from managed care payers regarding denials and patient status changes.  **[UHS_3403992_2]**  However, there was no dramatic change in the current quarter.  **[UHS_3403992_2]**  On the Two-Midnight rule, UHS has been focused on appropriate coding and hasn't seen significant changes from recent CMS clarifications.  **[UHS_3403992_2]** 

6. **Higher Corporate Expenses**  
   **Q:** Why were corporate expenses higher this quarter?  
   **A:** The higher corporate expenses were due to a **$5 million** loss on debt extinguishment from refinancing and another **$5 million** in settlements of miscellaneous smaller lawsuits.  **[UHS_3403992_6]**  These **$10 million** expenses are characterized as nonrecurring.  **[UHS_3403992_6]** 

a5cf179bc16416c7d428e112daf318fb972e2c65f0db3e27019e0a86be4be359

- **UHS is strategically investing in high-return opportunities**, including expanding outpatient services in both acute and behavioral segments, expected to enhance growth and profitability.  **[UHS_3375584_8]**
- **Improved operational efficiencies**, particularly in labor costs, with contract labor expenses expected to decrease by **$30 million to $40 million** in 2024, are anticipated to positively impact margins.  **[UHS_3375584_17]**
- **The company is securing favorable commercial rate increases** in the **mid-single digits (5%-6%)**, which should support revenue and margin growth in the acute segment.  **[UHS_3375584_24]**

90861b353e9f416aed87f2059b50003323999f7ac6c7894c93feee6a21a6c6a2

- **UHS is improving margins through enhanced cost management**, with decreasing salaries as a percentage of revenues contributing to margin recovery in the acute care segment.  **[UHS_3403992_23]**
- **Strategic expansion of the care continuum**, including investments in ambulatory surgery centers, freestanding imaging, and freestanding emergency departments, along with strong **physician alignment** initiatives, positions UHS for future growth.  **[UHS_3403992_17]**
- **Significant investments in technology within the behavioral health segment**, such as implementing Electronic Medical Records (EMRs) in **25-30 facilities by early next year**, are leading to operational efficiencies and higher quality of care.  **[UHS_3403992_22]**

d960f9e2bbe3810d396250a0a13479812dba6412c92aa3ae357da3230cad4bed

- **Uncertainty around margin expansion due to high inflation and unexpected cost increases, particularly _physician expenses_, which in prior years have **doubled initial projections**, indicating potential continued volatility in costs that may impact margins.**  **[UHS_3375584_21]** **[UHS_3375584_20]** **[UHS_3375584_10]**
- **Increased competition from major providers like **HCA** investing heavily in key markets such as Las Vegas may pressure UHS's market share and margins, as competitors expand their capital deployment in these lucrative markets.**  **[UHS_3375584_9]** **[UHS_3375584_8]**
- **In the Behavioral Health segment, **pricing and acuity are expected to decline in 2024**, with management noting that previous strong pricing gains may not be sustainable; **occupancy rates remain below pre-pandemic levels by 200 to 300 basis points**, potentially impacting revenue growth and margins.**  **[UHS_3375584_14]** **[UHS_3375584_19]**

a96c6b1f62151837dc2c055a3519a65bcd71ee0cb450be6d187c484785b19e92

- **Strong acute care volumes exceeded expectations, leading to higher operating margins in both business segments in Q1 2024 compared to Q1 2023.**  **[UHS_3380906_15]** **[UHS_3380906_9]**
- **Expenses are better controlled due to decreasing premium pay—down by **$20 million** compared to last year—and decelerating wage inflation, enhancing profitability.**  **[UHS_3380906_7]**
- **Significant increase in Medicaid supplemental payments, with potential for further upside, expected to improve margins beyond original guidance.**  **[UHS_3380906_15]** **[UHS_3380906_14]** **[UHS_3380906_9]** **[UHS_3380906_8]**

8274a92491b53d40066cf2be04b898c0483b21974a6421d4debe59e8533a5f8b

- **Significant legal risks:** UHS is facing an **unprecedented jury award** in a malpractice case in Illinois, which could have **financial implications despite insurance coverage**.  **[UHS_3380906_4]** **[UHS_3380906_8]**
- **Muted Behavioral Health growth:** Behavioral Health **patient day growth** was only **2.0%** in Q1 2024, below the company's target of **3% growth**, indicating potential challenges in this segment.  **[UHS_3380906_16]** **[UHS_3380906_15]** **[UHS_3380906_4]**
- **Elevated staffing costs:** **Premium pay** remained high at **$68 million** in Q1 2024, exceeding their goal of **$50 million per quarter**, suggesting ongoing **staffing cost pressures** that may impact margins.  **[UHS_3380906_13]** **[UHS_3380906_9]**

684a09543168d8478c18c98637de4afd77dd3b618fcab8bb35fc2f1d9e28d301

1. **Updated Guidance and Supplemental Payments**  
   **Q:** How has updated guidance accounted for supplemental payments and second half expectations?  
   **A:** Steve Filton explained that the revised guidance includes the first half's outperformance and ongoing supplemental payment programs but excludes any potential benefits from Tennessee or Washington D.C. ( **[UHS_3394442_6]** ,  **[UHS_3394442_8]** ). He stated that about **half of the guidance raise** is due to supplemental payments, increasing expected Medicaid supplemental payments from about **$810 million** to the **low to mid-$900 million** range for the year ( **[UHS_3394442_8]** ,  **[UHS_3394442_10]** ).

2. **Medicaid Supplemental Payments Impact**  
   **Q:** What is the expected financial impact of new Medicaid supplemental programs in Tennessee and Washington D.C.?  
   **A:** The potential annual benefit from the Tennessee program is estimated between **$42 million and $56 million**, and from Washington D.C., between **$80 million and $90 million** ( **[UHS_3394442_3]** ). These programs are pending CMS approval and could be retroactive, with Tennessee possibly retroactive to **July 2024** and D.C. to **October 2024** ( **[UHS_3394442_2]** ).

3. **Behavioral Volume Performance**  
   **Q:** How have behavioral volumes performed and what's the outlook?  
   **A:** Behavioral patient days increased by **1.4%** in Q2, below expectations. Challenges include labor vacancies, Medicaid disenrollments affecting adolescent volumes, and specific facility issues. Steve Filton expressed confidence in reaching the **3% patient day growth** target by year-end, believing underlying demand remains strong ( **[UHS_3394442_4]** ,  **[UHS_3394442_16]** ,  **[UHS_3394442_17]** ).

4. **Margins and Cost Management**  
   **Q:** What steps are being taken to improve margins and return to pre-COVID levels?  
   **A:** Marc Miller highlighted plans to incrementally improve margins by addressing volume issues and better expense management. Progress has been made over the past **12 months**, and continuing this trajectory is expected to achieve desired margins in the near future ( **[UHS_3394442_11]** ).

5. **Acute Pricing and Payer Mix**  
   **Q:** What's affecting acute care pricing and payer mix?  
   **A:** Adjusted admission growth was **3.4%** in Q2, with surgical volumes flattening due to difficult comparisons to last year. Steve Filton noted a return to pre-pandemic patterns and expects same-store revenue growth of **5% to 6%**, evenly split between price and volume, excluding supplemental payments ( **[UHS_3394442_12]** ).

6. **Impact of Medicaid Redeterminations**  
   **Q:** How are Medicaid redeterminations affecting the business?  
   **A:** Medicaid redeterminations have led to increased commercial exchange patients on the acute side, rising from **4% to 5%** of adjusted admissions, slightly benefiting revenue. In behavioral facilities, particularly in Southern states, disenrollments have negatively impacted volumes, especially among adolescents, due to delays in reenrollment and higher copays and deductibles ( **[UHS_3394442_7]** ,  **[UHS_3394442_15]** ).

7. **Labor Dynamics and Staffing**  
   **Q:** How are labor challenges being addressed to meet volume demands?  
   **A:** Turnover rates have improved to the **low to mid-20%** in acute care, returning to pre-pandemic levels ( **[UHS_3394442_17]** ). Efforts focus on reducing turnover through mentorship programs and career development to retain staff. Net hires have been positive for **18 to 24 months**, aiming to meet the **3%** volume growth target in behavioral facilities by year-end ( **[UHS_3394442_20]** ,  **[UHS_3394442_22]** ).

8. **Two-Midnight Rule Impact**  
   **Q:** Is the Two-Midnight Rule change affecting the business?  
   **A:** Steve Filton stated they have been unable to identify any significant impact from the Two-Midnight Rule change on metrics like denials or patient status changes, differing from some peers' observations ( **[UHS_3394442_7]** ).

9. **Share Repurchase Program**  
   **Q:** What is the plan for the share repurchase program?  
   **A:** The company intends to spend around **$500 million to $600 million** of free cash flow on share repurchases this year, with the recent authorization supporting this plan ( **[UHS_3394442_13]** ).

10. **Health Plan Business Performance**  
    **Q:** How is the health plan business performing, and is it core to UHS?  
    **A:** The health plan operates at breakeven but provides narrow networks and aligns with Medicare physicians, funneling patients to UHS facilities. It remains a strategic part of UHS's operations in acute care markets ( **[UHS_3394442_23]** ).

836e568852886155f8f5f0bd857466afc3b1f4ae9aeadd879458f52d4fab8ca1

- **Slower than expected recovery in behavioral health volumes**: UHS has acknowledged that the recovery in behavioral health patient volumes has taken longer than anticipated due to staffing challenges, issues at specific residential facilities, and the impact of Medicaid disenrollments. This suggests ongoing operational difficulties within this segment.  **[UHS_3403992_14]**
- **Anticipation of moderating behavioral health pricing**: The company expects that behavioral health pricing, which has been a significant driver of revenue growth, will moderate from historically high levels. This potential slowdown in pricing growth could impact future revenues in the behavioral segment.  **[UHS_3403992_7]**
- **Normalization of acute care volume growth limiting future prospects**: UHS does not foresee elevated acute care volume growth, as volumes have begun to resemble pre-pandemic patterns. This normalization could limit growth prospects in the acute care segment moving forward.  **[UHS_3403992_5]**

2437d0a951f1fdf3f5c8053065b883f3f5f37b473c0e70e534257f59fdef910b

- **Successful cost management and labor efficiency improvements are leading to margin expansion and EBITDA growth**. Premium pay has been reduced by almost two-thirds from its peak during the pandemic, and acute care turnover is down to pre-pandemic levels in the low to mid-20% range.  **[UHS_3394442_17]**  This reflects greater success in hiring permanent positions and reducing costs per discharge through decreased length of stay.  **[UHS_3394442_17]**
- **Strong underlying demand in the behavioral health segment**, with plans to increase capacity and reduce staff turnover to meet this demand. UHS expects to achieve **3% patient day growth by the end of the year**, supported by positive net hires over the last 18 to 24 months and initiatives to reduce turnover rates.  **[UHS_3394442_14]** **[UHS_3394442_20]**  Reduction in turnover will help satisfy the outstanding behavioral demand, including treatment for opioid illness and other diagnoses.  **[UHS_3394442_20]**
- **Expectation to return to pre-pandemic margin levels and continue EBITDA growth**, supported by sustainable cost improvements and volume growth. The company has **increased its guidance**, reflecting substantial first-half outperformance and ongoing cost management improvements.  **[UHS_3394442_12]** **[UHS_3394442_6]** **[UHS_3394442_11]**  UHS anticipates same-store revenue growth of **5% to 6%**, split evenly between price and volume, in its acute care segment.  **[UHS_3394442_12]**

804e658277a85313e43fa82c4a5ee089b8729181bb00337af15a13f8b1953f65

Universal Health Services Inc (UHS)

Financials