Universal Health Services, King of Prussia, Pa., reported sharply higher profits than analysts expected for the first quarter, mostly thanks to strong control of labor and supply costs and moderate uncompensated-care costs.
UHS reported profits of $67.5 million, up 9.5% compared with profits of $61.7 million in the year-ago quarter. Revenue increased 2.7% to $1.31 billion. The company recorded earnings per share of $1.37, compared with the average of $1.14 for analysts. Overall, volume was flat in its 21 acute-care hospitals and up 0.5% in its 82 behavioral-health facilities.
Steve Filton, senior vice president and chief financial officer, said on a conference call to discuss the results that the weak job market has allowed the company to moderate the salaries and the wage increases that it offers to recruit and retain staff members. On the supply side, the companys switch of group purchasing organizations in April 2008 from Broadlane to HealthTrust Purchasing Group has driven its supply costs down, Filton said.
Total uncompensated care, including bad debt, charity write-offs and discounts to uninsured patients, rose to $158 million, only 2.6% above the level in the year-ago quarter. UHS, Filton noted, experienced its best figures on uncompensated care in the first quarter of both 2007 and 2008.