Universal Health Services (UHS) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 26, 2023 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning and thank you for standing by. Welcome to the First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Steve Filton, Executive Vice President and Chief Financial Officer. Please go ahead.

Steve Filton

Thank you, and good morning. Marc Miller is joining us this morning. We welcome you to this review of Universal Health Services results for the first Quarter ended March 31, 2023.

During the conference call, we’ll be using words such as believes, expects, anticipates, estimates and similar words that represent forecasts, projections and forward-looking statements. For anyone not familiar with the risks and uncertainties inherent in these forward-looking statements, I recommend a careful reading of the section on risk factors and forward-looking statements and risk factors in our Form 10-K for the year ended December 31, 2022.

We’d like to highlight just a couple of developments and business trends before opening the call up to questions. As discussed in our press release last night, the company reported net income attributable to UHS per diluted share of $2.28 for the first quarter of 2023. After adjusting for the impact of the items reflected on the supplemental schedule, as included with the press release, our adjusted net income attributable to UHS per diluted share was $2.34 for the quarter ended March 31st, 2023.

During the first quarter, our behavioral health hospitals produced strong results. The decline in COVID activity allowed our behavioral hospitals to continue to reduce their labor vacancies, resulting in a reduction of the capped bed capacity and a 4.7% year-over-year increase in adjusted patient days. Combined with a healthy 5% increase in net revenue per adjusted patient day, overall revenues grew by almost 10% over the prior year quarter. And with that level of revenue growth, same-store behavioral EBITDA margins increased from 20% to almost 23%.

Our acute hospitals experienced strong demand for their services with adjusted admissions increasing 10.5% year-over-year. For a variety of reasons, revenue growth was more muted at 3.5%. As a percentage of total admissions, COVID diagnosed patients made up 14% of our admissions in the first quarter of 2022, but only 4% of admissions in the first quarter of 2023. This decline in COVID patients resulted in reduced revenues due to the lower acuity and less of the incremental government reimbursement associated with COVID patients.