Universal Health Services (UHS) Goldman Sachs 45th Annual Global Healthcare Conference summary

Acute care market trends

• Acute care volumes have been strong in Q2, slightly above expectations, with March softness attributed to calendar dynamics.

• Elevated utilization is mainly driven by the Medicare population, particularly in medical admissions rather than surgical.

• There is caution about the sustainability of current volume growth, with expectations for moderation over time.

Strategic planning and capital allocation

• Capital deployment is focused on diversifying across the care continuum, not just on acute care admission growth.

• Expansion of freestanding emergency departments has relieved pressure on hospital ERs and improved patient access.

• The shift from inpatient to outpatient care has been ongoing for over a decade, with outpatient surgical growth outpacing inpatient.

Revenue and reimbursement dynamics

• Revenue per adjusted admission remains strong, supported by Medicaid supplemental payments and commercial pricing.

• Supplemental Medicaid programs are expected to remain stable or grow, as providers depend on them for financial survival.

• Commercial contract renewals since mid-2022 have achieved higher price increases, with limited payer pushback on pricing.

• Payer denials and patient status changes increased post-pandemic but have stabilized; no significant impact from the Two-Midnight Rule yet.