Regardless of elevating steerage for 2021, UHS nonetheless has considerations about COVID's pressure on labor markets

Common Well being Providers has adopted within the wake of different outperforming for-profit well being methods in the course of the second quarter of 2021, reporting $325 million in income and a 17.1% year-over-year improve in web revenues as sufferers returned to its hospitals and behavioral well being companies.

However whereas the robust efficiency allowed UHS to extend its forecast for the rest of 2021—it now predicts web revenues for the 12 months will fall between $12.12 billion and $12.36 billion—executives warned buyers that continued acceleration of current COVID-19 case traits may take a chunk out of its sunny forecast.

“Through the previous 4 to 6 weeks, lots of our hospitals have skilled important surges within the variety of COVID sufferers and it isn’t evident that this surge has but reached its peak,” Steve Filton, govt vice chairman and chief monetary officer, mentioned throughout an investor name. “Given the unsure impression of this most up-to-date surge on non-COVID volumes and on labor shortages, we based mostly our steerage for the second half of the 12 months totally on our authentic inner forecast.”

At UHS hospitals, COVID-19 instances have ranged from comprising roughly 20% of sufferers in the course of the winter peak to single-digit percentages because the pandemic cooled within the spring, executives mentioned.

Right now, the corporate is seeing about 11% or 12% of its sufferers receiving take care of COVID-19, which they mentioned was about on par with summer season 2020’s second wave. The surging illness is having an impression on each the corporate’s acute care and behavioral well being companies inside hard-hit geographies, most notably Florida, Texas, Missouri and Nevada.

Nonetheless, this time across the executives mentioned they’re not too anxious about points like shortages in private protecting tools or a significant decline in elective surgical procedures. Quite, the “single greatest difficulty” is the pressure COVID-19 provides to an already tight labor market via nurse and clinician burnout, quarantined workers, recruitment competitors inside the behavioral well being market and different associated penalties, executives mentioned.

“In Could, June, July, we have been setting inner information for the way many individuals we have been hiring in any respect ranges because of some very targeted exercise on our half to extend our recruitment exercise,” Filton mentioned. “We’re additionally focusing an important deal on growing retention charges for these folks we do rent, however once more, [we] categorical some degree of warning and concern with the rise in COVID volumes within the final month or so, solely as a result of each different time we’ve seen a rise in COVID sufferers it does create exacerbated stress on these labor points.”

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King of Prussia, Pennsylvania-based UHS owns and operates 26 hospitals and employs roughly 89,000 folks. It reported $11.6 billion in 2020 revenues, which was up 1.6% from the earlier 12 months’s $11.4 billion regardless of the pandemic.

For the second quarter of 2021 ended on June 30, UHS’ $325 million web earnings represented a 29% improve from the $251.9 million reported in the course of the second quarter of 2020.

Yr-over-year web revenues grew from $2.7 billion to $3.2 billion for the three-month interval of every 12 months and from $5.6 billion to $6.2 billion for the primary halves.

UHS additionally famous that it has returned all $189 million that it acquired this 12 months again to the federal government utilizing its money reserves.

“Subsequently, our outcomes of operations for the three- and six-month durations ended June 30, 2021 embrace no impression from the receipt of these funds,” it wrote within the earnings announcement.

Amongst UHS’ acute care hospitals, revenues, adjusted admissions and adjusted affected person days for the quarter have been up 18.5%, 26.4% and 21.6%, respectively, in comparison with the prior 12 months’s quarter.

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UHS behavioral well being hospitals’ revenues and volumes have been additionally larger, albeit to a lesser diploma. Right here, income jumped 13.7% year-over-year whereas adjusted admissions and adjusted affected person days rose 14.1% and seven.4%. 

“For many of the second quarter we skilled the continued decline within the variety of COVID-19 sufferers being handled in our hospitals and a corresponding restoration within the variety of non-COVID sufferers,” Filton mentioned. “Consequently, most of our key quantity metrics, together with acute and behavioral affected person days, emergency room visits and surgical instances, grew to ranges approaching people who we have been monitoring earlier than the pandemic started. This strong restoration in volumes exceeded the tempo of our authentic forecast and drove the favorable working outcomes even within the face of continuous labor pressures in each of our enterprise segments.”

Internet income for each of those service teams included $218 million of acknowledged authorities stimulus funding from the CARES Act and different packages, the system famous. About $157 million of this web income was attributable to UHS’ acute care companies, whereas about $61 million went to its behavioral healthcare companies.

The for-profit’s board introduced alongside the earnings that it has approved a $1 billion improve to its inventory repurchase program, bumping it up from $2.7 billion to $3.7 billion since 2014.

Filton mentioned that the corporate is at all times looking out for favorable enlargement alternatives, however that promising merger and acquisition targets thus far have been few and much between. Quite, he mentioned that the corporate has been hard-pressed to seek out exterior alternatives which might be extra compelling than the favorable charges at which it may possibly repurchase its inventory.  

UHS is presently sitting on $199 million in money and money equivalents and $996 million of combination obtainable borrowing capability.

The system famous that it has added simply $119 million to its money readily available because of its working actions, down from $1.45 billion in the course of the 12 months prior. The system attributed nearly all of that decline, about $695 million, to Medicare accelerated funds made in the course of the first quarter.

UHS’ outcomes from the quarter sustain the rising income and volumes pattern reported final week by HCA and Tenet Healthcare. The previous outlined an almost 20% year-over-year improve in admissions and a $1.4 billion revenue for the quarter, whereas the latter touted a 13.7% achieve in hospital admissions and a 36% improve in web earnings to $120 million.