- Universal Health Services said the COVID-19 pandemic has had a "material unfavorable effect" on its first quarter results, forcing the King of Prussia, Pennsylvania-based health system to rescind its earnings forecast for the full year.
- Operating income fell 30% to $237 million in the first quarter compared to the same quarter last year. Expenses grew by 5%, outpacing revenue growth, which increased by a slim 0.9%.
- Adjusted admissions at its acute care facilities on a same-facility basis decreased 4% during the first quarter compared to the same period last year. At its behavioral health facilities, adjusted admissions on a same-facility basis decreased 2%.
The fallout from COVID-19 continues to batter hospitals as they've been forced to halt a substantial portion of their most lucrative services.
UHS said patient volumes declined 29% during the second half of March at its acute care hospitals. The negative trend has continued into April, the system said Monday in its first quarter earnings release.
"The decline in volumes and the shift in business in the last two weeks of March occurred so suddenly that we didn't really have time to implement significant cost cutting measures until the end of March and beginning of April," CFO Steve Filton told investors Tuesday morning on an earnings call.
As a result of the financial strain, UHS said it has implemented numerous measures to mitigate the fallout, including a "reduced spend rate" and reduced magnitude for previously planned capital projects by a quarter to a third of original projections.
The company will also suspend its stock repurchase program and payment of quarterly dividends.
As the virus lashes hospital operations, Congress and federal regulators are attempting to offset the financial effects by providing grants and loans.
A sum $175 billion in funding is earmarked for providers in two pieces of legislation, the Coronavirus Aid, Relief, and Economic Security Act passed in March and the Paycheck Protection Program and Health Care Enhancement Act passed Friday.
UHS officials said the system has so far received $195 million in CARES funding and $375 million in accelerated Medicare payments. It expects to receive about $375 million more in accelerated payments.
Other providers have revealed the extent of the funding they have received. Mayo Clinic said Friday it had received $150 million in CARES funding plus an additional $900 million in advance Medicare payments.
Filton said the system is largely ready to begin resuming elective procedures, and some facilities in Texas have already started doing so. That ability will depend on adequate and timely testing as well as securing enough personal protective equipment — but the system has made progress on all those fronts and expects most markets to resume scheduled procedures in the first half of next month.
The company does expect patients will want to reschedule the care — especially since the procedures put off would not have been seen as deferrable outside of the level of crisis caused by the pandemic.
UHS CEO Alan Miller said the system was on its way to a successful year but "just got interrupted" by the outbreak. "I expect, given time, we'll pick right back up," he said.
This story has been updated with details from an investor call.