Universal Health Services, King of Prussia, Pa., reported higher profits for 2009, but warned of headwinds that will weigh on 2010 profits. 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. Revenue in 2009 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 Medicaid disproportionate-share payments in Texas, 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.
Late News: UHS sees profits rise in '09, but expects tougher 2010
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