Universal Health Services sees profits drop 50% in second quarter

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Acute and behavioral hospital operator Universal Health Services posted higher revenue in the second quarter but much lower profit, with profits down by half from its quarterly performance in the second quarter of 2021, according to published financial documents. by the company this week.

UHS attributed the drop in revenue to continued workforce pressures — particularly the nationwide shortage of nurses and clinical staff — as well as a drop in admissions from a year ago. Revenue increased 3.9% to $3.3 billion for the quarter, but net income was only $164.1 million, net income landed at $3.23 million and the company recorded $3.09 billion in operating expenses.

In contrast, UHS net income was over $325 million in the second quarter of 2021, while overall expenses were lower, at $2.8 billion.

Revenues from acute care services increased 3.3% from a year ago, but revenues from behavioral health services increased by less than 1%.

WHAT IS THE IMPACT

One of the main factors affecting revenue was admissions to its acute care facilities, which were not as high as expected. There has been a drop in the number of COVID-19 patients, but no corresponding increase in non-COVID-19 admissions.

Although this decrease in patient numbers has relieved some of the pressures caused by staffing shortages and the resulting escalation in costs, the recovery has occurred at a slower pace than originally expected, the system wrote in the announcement of the results.

The labor shortage, according to the system, “puts a strain on our resources and staff, which has forced us to use more expensive temporary labor and pay premiums above standard pay. for essential workers.

UHS added that at some facilities, particularly its behavioral health sites, “we were unable to fill all vacancies and as a result, we had to limit the number of patients.”

The system expects these staffing shortages, along with the ongoing pandemic, to continue to negatively impact its operations for the remainder of the year, although it said incremental improvements are expected. .

In the first six months of the year, UHS, which has more than 400 acute care hospitals, behavioral health facilities and outpatient centers in the United States, Puerto Rico and the United Kingdom, recorded total net income of approximately $318 million on $6.62 billion in revenue. That’s below the net profit of more than $534 million the company posted in the first half of last year.

THE GREAT TREND

The shortage of nurses and other clinical staff has been an ongoing problem for years in American hospitals and healthcare systems, and the situation has been exacerbated by several factors, including the pandemic and the lack of interns in the university system to make up for the shortfall. .

This was highlighted recently in a survey published by Wolters Kluwer Health and UKG, in which 92% of respondents predicted that they would fall short of their budgeted nursing workforce over the next 18 months. And 58% of health leaders said they did not expect to bring in additional staff or new roles due to financial constraints.

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