UHS Raises Revenue Guidance for 2025 Amid Strong Acute Care Performance

Universal Health Services (UHS), a major for-profit healthcare operator, has increased its financial forecast for 2025 following a robust third-quarter performance. The company's strategic moves in acute care and recent regulatory developments have contributed to its positive outlook, despite ongoing challenges in its behavioral health division.

Q3 Financial Results and Updated Guidance

UHS reported a significant 13.4% year-over-year increase in third-quarter revenues, reaching $4.5 billion. Net income for the quarter surged by 44% to $373 million compared to the same period last year. In light of these strong results, UHS has revised its annual revenue guidance upward to between $17.3 billion and $17.4 billion, an increase from the previous forecast of $17.1 billion to $17.3 billion.

The company attributed its revenue growth partly to a $90 million boost from Washington D.C.'s recently approved Medicaid supplemental payment program. Additionally, UHS experienced growth in acute care volumes, which continues to outpace its behavioral health portfolio.

Acute Care Division Performance and Expansion

The acute care division of UHS demonstrated strong performance in the third quarter, with same-facility adjusted admissions increasing by 2% year-over-year. This growth was partially offset by ongoing losses at the new Cedar Hill Regional Medical Center in Washington, D.C., which recorded a $25 million loss during the quarter.

However, UHS President and CEO Marc Miller announced that Cedar Hill received its anticipated Medicare certification in September, following a survey by the Joint Commission. This certification allows the facility to receive government funds, and UHS expects to "break even or better" on the facility by year-end.

Looking ahead, UHS plans to open its next acute hospital, the Alan B. Miller Medical Center in Palm Beach Gardens, Florida, in the spring of 2026. This expansion will add to UHS's current portfolio of 29 inpatient acute hospitals.

Behavioral Health Challenges and Strategic Initiatives

While the acute care division thrives, UHS continues to face challenges in its behavioral health business. Same-facility adjusted admissions in behavioral services rose by only 0.5% year-over-year in the third quarter. The company's initial target of growing adjusted patient days by 2% to 3% in 2025 has been pushed back, with CFO Steve Filton now describing it as a "reasonable target for next year."

To address these challenges, UHS is implementing several strategic initiatives:

1. Portfolio realignment: UHS is working to better align its behavioral health portfolio with the growing demand for outpatient care. The company currently operates 345 inpatient facilities and 100 outpatient access points.

2. New outpatient clinics: UHS is opening 10 clinics this year that will have no inpatient hospital branding, aiming to capture "step-in" patients who prefer to enter behavioral healthcare through outpatient settings.

3. Workforce management: The company continues to focus on filling vacancies and reducing turnover in its behavioral health division, though progress has been slower than expected.