Universal Health Services sees profits plunge 50% in Q2
One of the main factors influencing revenue was admissions at its acute care facilities, which were not as high as anticipated.
Photo: Xavier Lorenzo/Getty Images
Acute and behavioral hospital operator Universal Health Services saw higher revenue in the second quarter but a much lower profit, with profits dipping by half compared to its quarterly performance in Q2 2021, according to financial documents released by the company this week.
UHS attributed the decrease in revenue to ongoing labor pressures – specifically the nationwide shortage of nurses and clinical staff – as well as to a dip in admissions compared to a year ago. Revenues rose 3.9% to clock in at $3.3 billion for the quarter, yet net income was just $164.1 million, net revenue landed at $3.23 million and the company logged $3.09 billion in operating expenses.
By contrast, UHS' net income was more than $325 million in Q2 2021, while overall expenses were lower, at $2.8 billion.
Acute care service revenues were up 3.3% from a year ago, but revenues from behavioral health services increased less than 1%.
WHAT'S THE IMPACT
One of the main factors influencing revenue was admissions at its acute care facilities, which were not as high as anticipated. There was a decline in COVID-19 patients but no corresponding increase in non-COVID-19-related admissions.
While these decreased patient volumes have relieved some of the pressures caused by staffing shortages and related cost escalations, recovery has been occurring at a slower pace than was originally expected, the system wrote in the earnings release.
The labor scarcity, the system said, "is putting a strain on our resources and staff, which has required us to utilize higher‑cost temporary labor and pay premiums above standard compensation for essential workers."
UHS added that at some facilities, especially its behavioral health locations, "we have been unable to fill all vacant positions and, consequently, have been required to limit patient volumes."
The system expects these staffing shortages, as well as the ongoing pandemic, to continue to negatively impact its operations for the remainder of the year, although it said incremental improvements are expected.
During the first six months of the year, UHS, which has over 400 acute care hospitals, behavioral health facilities and ambulatory centers across the U.S., Puerto Rico and the U.K., logged a total net income of about $318 million on $6.62 billion in revenues. That's below the net income of more than $534 million the company posted during the first half of last year.
THE LARGER TREND
The shortage of nurses and other clinical staff has been an ongoing issue for years among U.S. hospitals and health systems, and the situation has been exacerbated by several factors, including the pandemic and a lack of trainees in the academic system to make up for the shortfall.
That was highlighted recently in a survey issued by Wolters Kluwer Health and UKG, in which 92% of respondents predicted they would be short of their budgeted nurse headcount over the next 18 months. And 58% of health leaders said they don't expect to bring in additional staff or new roles due to financial constraints.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
