Staff shortages across Universal Health Services' behavioral health hospitals are the "single biggest headwind" the company faces to returning to pre-pandemic volumes, its finance chief said Tuesday.
The King of Prussia, Pa.-based acute-care and behavioral health provider simply can't pay enough to get sufficient personnel into some of its hospitals, Chief Financial Officer Steve Filton said on the company's first-quarter earnings call.
"It's certainly the single biggest focus of our operators as we turn our attention to what we need to do to both recruit and retain the proper amount of nurses," he said.
Filton said the shortage is primarily among clinical workers but also includes nonclinical personnel in some cases. The trend is happening even as the total cost of labor isn't rising significantly, he said. UHS performs compensation surveys to ensure its wages are competitive, Filton said.
Mental health staffing shortages are a growing national problem. The behavioral health provider shortage stood at approximately 4 million in 2019, according to a report from the Substance Abuse and Mental Health Services Administration.
The number of people who require treatment for mental health and substance use disorders is rising steadily. In 2018, 57.8 million Americans had mental health and/or substance use disorders. That number increased to 61.2 million in 2019, SAMHSA found.
"The ability of Americans to access appropriate treatment and community recovery resources is critical to improving the overall health of our citizens and reducing the impact of mental health and substance use disorders on individuals, families and communities," SAMHSA's report said.
Despite its staffing challenges, UHS had a strong first quarter, with profit up 47% year-over-year to $209 million, even without including any federal stimulus funding. The company announced Monday it's in the process of returning to the federal government all $188 million in Provider Relief Fund grants it received during the quarter ended March 31.
Filton explained on Tuesday's call that while UHS continues to experience residual effects of the COVID-19 pandemic, the net impact on lost revenue and incremental expenses was not nearly as severe as in 2020.
UHS held onto more than $400 million in federal grants in 2020. The company has also repaid early the $695 million in accelerated Medicare payments it received in 2020.
The volume of COVID patients across UHS' hospitals peaked in the first half of January and leveled off as the first quarter went on.
"Clearly we exited the quarter in March a lot more profitably than we entered in January," Filton said, "and that's continued into April."
COVID patients are less profitable than those who come in for surgeries and other procedures, Filton noted. They tend to be sicker and more expensive to treat compared with other patients, he said.
UHS consistently saw a higher percentage of COVID patients than its peers. In the past few quarters, percentages of patients with COVID were in the low to mid teens on the company's acute-care side, versus 8% to 10% of hospitalized patients across other operators, Filton said.
"That's a pretty significant difference," he said.
Like its peers, UHS will benefit from Congress' decision to postpone Medicare payment cuts to hospitals. Holding off on the 2% sequestration until the end of the year provides a benefit of up to $11 million per quarter, Filton said. HCA Healthcare, another for-profit hospital chain, estimated the benefit at up to $50 million per quarter.