Universal Health Services suspended dividends and stock buybacks as it reels from the financial fallout of the COVID-19 pandemic. Officials said they also sliced capital expenditures.
The King of Prussia, Pennsylvania-based health system reported $142 million profit in the first quarter, or $1.64 per diluted share. That's down 40% from the $234.2 million, or $2.57 per diluted share, it earned in the same quarter a year prior. Its revenue of $2.83 billion was up about 1%.
The drop in income came as the health system saw its business in the acute care segment—much like other health systems around the country—plummet in the latter half of March as emergency room visits dipped and elective and scheduled procedures were canceled.
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Its adjusted admissions decreased 4%, and adjusted patient days dropped by 0.2% as compared to the first quarter of 2019. At these facilities, net revenue per adjusted admission increased 3.7% while net revenue per adjusted patient day decreased 0.3% during the first quarter of 2020 compared to the first quarter of 2019.
UHS saw similar drops in its behavioral health business.
UHS received $195 million in grants from the $100 billion allocated for hospitals under the CARES Act. The health system also received $375 million in accelerated Medicare payments. UHS has more than 90,000 employees and, through its subsidiaries, operates 26 acute care hospitals, 331 behavioral health facilities, 42 outpatient facilities and ambulatory care centers in 37 U.S. states, Washington, D.C., Puerto Rico and the U.K.
Officials said they have just begun to get restarted with elective procedures in some regions of the country but may have to wait several more weeks in other major markets.
"In some of our hospitals in Texas and in some of our ambulatory facilities we’ve actually started to see the resumption of elective and scheduled procedures," said Steve Filton, UHS' chief financial officer. "I think in most of our other states of consequence, Florida, California, Nevada, the general expectation is the states will lift their bans sometime in the first half of May."
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UHS is working with its physicians to be ready to jump back in as soon as the bans are lifted, but Filton said the speed of the return is beyond the health system's control.
"In a lot of cases I think it’ll be dependent on how patients themselves feel. We’re certainly doing everything we can from a procedural perspective to make sure that patients feel like the hospital is a safe place to come, they’ll be protected and tested before they’re treated so we can make sure people are not being unnecessarily exposed to the virus," Filton said. "The hope is things begin to improve in late April and early May. But again, the trajectory and how quickly that occurs is very difficult to say at this point."
In light of the financial uncertainty and lack of clarity over when shelter-in-place directives will be lifted, the health system followed other major health systems in withdrawing its 2020 guidance.