Universal Health Services is upping its 2023 guidance range after posting a strong first half of the year.
The for-profit health system said Tuesday it is revising its adjusted earnings per share outlook for the year to a range of $9.85 to $10.50, compared with $9.50 to $10.50. The system did not adjust the upper end of that range due to a reduction in funding for a Nevada Medicaid program, resulting in about $22 million less in projected supplemental revenue from facilities in the state, CEO Marc Miller said on an earnings call Wednesday.
Net revenue is projected to land at $14.13 billion to $14.33 billion, up from the previous projection of $14.04 billion to $14.31 billion.
The King of Prussia, Pennsylvania-based organization reported second-quarter net income of $171.31 million, or $2.42 per diluted share, compared with net income of $164.06 million, or $2.20 per share, in the year-ago period. Quarterly revenue was up 6.8% to $3.55 billion.
Second-quarter expenses were up 5.8% to $3.27 billion, including a 4.7% increase for salaries and wages and a 7.1% jump for supplies.
Expenses for physician subsidies, particularly in emergency care and anesthesiology, are still putting pressure on the system, Chief Financial Officer Steve Filton said on the earnings call. He attributed some of the increased expenses to financial stress at contract companies providing these services, forcing Universal Health Services to pay more to cover the roles. He said he expects the additional spending to be a short-term issue.
The system, which operates 27 hospitals, 331 inpatient behavioral health facilities and 42 outpatient sites, noted some improvement in patient volumes. Same-facility acute admissions in the quarter grew 7% year over year, driven in part by the returning demand for deferred procedures. Volume growth has been skewed toward lower-acuity procedures, Filton said.
Admissions for behavioral health sites rose 3%.
Universal Health Services is adding facilities to accommodate increased volume. It is on track to open three acute-care hospitals in Nevada, Florida and Washington, D.C., within the next couple of years. The system recently opened its River Vista Behavioral Health hospital in Madera, California, and broke ground in June on Southridge Behavioral Hospital in Byron Center, Michigan, as part of a joint venture with Trinity Health Michigan.
Universal Health Services will open three freestanding emergency departments in the next six months, with another nine in development across its footprint, Filton said.