Universal Health Services (UHS), headquartered in King of Prussia, Pa., is focusing on its behavioral health business to drive revenue growth, the company reported in its earnings call this week.
The behavioral health unit had the highest net revenue gains year over year, increasing by 9.7%, reaching $1.49 billion in Q1 2023, compared to $1.37 billion in the same period in 2022. In comparison, net revenues from acute care hospital services on a same-facility basis increased 3.5% to $1.89 billion in Q1 2023, from $1.82 billion in Q1 2022. The company’s fiscal year runs from Jan. 1 to Dec. 31.
UHS is one of the largest behavioral health providers in the country, with 331 inpatient behavioral health facilities across 39 states and the United Kingdom. Its size helps the company negotiate more favorable terms with payers in contract negotiations, UHS President and CEO Marc Miller said.
“The leverage is shifting a little bit and we’re trying to work with [payers] to show them how it is more conducive for them to pay us a little bit more, but have their patients serviced in a much better way than to try and continue to nickel and dime, and ultimately, that’s not going to satisfy their needs,” Miller said.
These discussions about higher pay rates have become more common in the last six to 12 months as the demand for behavioral health services grows, Miller said.
The company’s behavioral care centers have turned patients away due to a lack of beds or available staff, despite efforts to meet staffing needs, UHS EVP and CFO Steve Filton said. By 2026, 25.2% of people living in the US may require behavioral health services, according to a March report from healthcare analytics company Trilliant Health.
“Broadly in the behavioral space, there’s not a lot of excess capacity around the country, and payers…are going to, I think, find themselves having to be reasonable if they really want to make sure that there is a place for their subscribers to be adequately treated,” Filton said.
These ongoing discussions with payers will lead to “more positive results,” Miller said.
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