Universal Health Services, King of Prussia, Pa., reported higher profits for 2009, but warned of headwinds that will weigh on 2010 profits.
Universal saw rise in profits, revenue in '09
Universal reported net income of $60.9 million in the fourth quarter, up 31% from the year-ago period. Revenue increased 4.3%, to $1.29 billion. For 2009, net income increased 30.6%, to $260.4 million. 2009 revenue was $5.2 billion, up 3.6%. Comparing the fourth quarters of 2009 and 2008 on a same-facility basis, acute-care admissions increased 1.8% and behavioral-health admissions increased 4.2%.
Steve Filton, Universal's senior vice president and chief financial officer, said the company combined the licenses of its hospitals in Edinburg and McAllen, Texas, a few years ago to boost its Texas Medicaid reimbursements, but now those rates have been adjusted, as expected. Also in McAllen, the loss of obstetric cases to a physician-owned competitor led to a drop in the company's Texas Medicaid disproportionate-share payments, Filton said.
2010's net income also will be hit by a lack of projects for the company's construction management subsidiary, UHS Building Solutions. Combined, these two factors will produce a $28 million drag on profits in 2010, with the Texas Medicaid changes accounting for two-thirds of the shortfall, Filton said.
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