Dive Brief:

• Universal Health Services says it’s still on track to meet 2026 growth targets for earnings and admissions, even though a weak respiratory season and winter storms dampened the for-profit hospital operator’s volumes in the first quarter.
• Volumes were down 200 basis points in UHS’ acute care unit and between 40 to 50 basis points in its behavioral health division because of the seasonal factors, executives said on a Tuesday earnings call.
• UHS executives said the company still believes it can grow full-year adjusted admissions by 2% to 3% compared to 2025, but acknowledged the majority of this growth may happen in the second half of 2026.

Dive Insight:

UHS’ peers have also called out a poorer-than-expected respiratory and flu season during the first quarter, saying the seasonal volumes depressed earnings compared to prior years. Executives at HCA Healthcare this week said that its respiratory-related admissions fell 42% year over year in the first quarter due to lower viral activity.

Impacts of the declining volumes were concentrated in UHS’ acute care division, which saw flat same-facility adjusted admissions compared to the prior-year quarter. But its behavioral segment — a priority for UHS — was impacted too, as its hospitals funneled fewer patients to its behavioral facilities.

Executives cautioned that volume declines were confined mostly to January and March, and that admissions began moderating in March.

“March was, for want of a better word, a cleaner month, meaning no real flu impact and no significant weather impact,” UHS CFO Steve Filton said on the call.

Despite the admissions declines, UHS reaffirmed its 2026 guidance. The hospital operator expects to grow adjusted admissions by 2% to 3% and also hit its long-term goal of 2% to 3% growth in adjusted patient days in its behavioral segment.

The company also expects to take in revenue of $18.4 billion to $18.8 billion for the full year.

Executives said they’ve begun to see benefits from investments made in staffing its behavioral division, a historic bottleneck for growth. Demand for services is “strong,” according to Filton, and UHS is focused on capturing that demand in outpatient settings. The hospital operator hopes to capture demand even more through its $835 million acquisition of telehealth provider Talkspace, which UHS announced last month.

“I think we're doing more — a better job, and a more focused job on capturing that demand,” Filton said. “We think that's an upward climbing trajectory.”

UHS lost about $15 million in the quarter due to the expiration of more generous subsidies in Affordable Care Act plans, out of the $75 million in total it expects to lose this year.

UHS has less exposure than some of its other for-profit peers to ACA enrollees, due to the smaller size of its acute care footprint and bifurcated volumes split with its behavioral health division.

ACA admissions declined about 5% year over year, but executives anticipate the actual amount is higher due to grace-period provisions that keep beneficiaries enrolled in plans for the first three months of the year even if they don’t pay premiums.

Accounting for that, executives anticipate that ACA volumes may have declined between 10% to 12%.

Filton said UHS also saw a slight increase in uninsured admissions and a small decline in Medicaid utilization but “no other big changes” related to ACA enrollment. Policy experts anticipated that the expiration of ACA subsidies could increase the uninsurance rate by as much as 5 million people this year.

UHS reported $4.5 billion in revenue during the first quarter, an almost 10% increase year over year. Net income also increased 10% to nearly $349 million in the quarter.