Competition, bad debt cool Universal's profits

Universal Health Services, King of Prussia, Pa., said profits for 2004 are likely to be lower than the company expected because stepped-up competition from a physician-owned hospital is hurting Universal's hospital in McAllen, Texas. Universal also said that two hospitals new to its portfolio -- Lakewood Ranch Hospital, Bradenton, Fla., and Methodist Hospital, New Orleans, which the company acquired this year from HCA -- are hurting its financial performance. The losses at Methodist are in part a result of treating more uninsured patients, Universal said. For the fourth quarter, Universal expects volumes to be flat with 2003's fourth quarter. The company first noted trouble with volumes in March, when it warned that first-quarter profits were going to be lower than expected. Universal also reported a 2% decline in admissions at acute-care hospitals owned for more than 12 months in the third quarter. Universal owned or operated 27 acute-care and 44 behavioral health hospitals as of Sept. 30. -- by Vince Galloro