Universal Health Services reported profit of $209 million for the first quarter of the year after major highs in patient service revenue due to the pandemic.
The $209 million in net operating income is a major increase from the $142 million it generated in the first quarter of 2020. However, UHS did have to repay $695 million it got in advanced Medicare payments last year.
UHS saw net revenues generated from its acute care services increase 11.7% during the first quarter of 2021.
Adjusted admissions at UHS’ acute care hospitals decreased by 12.1% and adjusted patient days by 0.7% compared to the first quarter of 2020.
However, the net revenue per adjusted admission increased 26.3% “while net revenue per adjusted patient day increased 11.8% during the first quarter of 2021 as compared to the first quarter of 2020,” UHS said in its earnings release.
The higher net revenue from admissions is the latest indicator of higher acuity patients helping offset patient volume shortfalls stemming from the pandemic.
"We have seen during the pandemic our entire pricing well above historical levels and the main driver has been higher acuity to our COVID-19 patients and lesser degree of non-COVID-patients," said Chief Financial Officer Steve Felton during an investor call Tuesday.
There are some other reasons for the high bump in acute care revenue, including that some IT services like billing and collection activities were delayed.
"We anticipated we would recover some of that as we recovered billing and collection," Felton said. "I think we benefitted to the tune of $10 to $15 million."
The system also got $15 to $20 million from the federal government as a reimbursement for treating uninsured COVID-19 patients.
Overall, UHS generated $3 billion in net revenues in the first quarter of 2021, up 6.5% compared to the $2.8 billion it brought in during the first quarter of 2020.
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Major for-profit hospital chains Tenet and HCA Healthcare also posted strong profits in the first quarter on the back of higher patient acuity.
UHS did say that it has treated more COVID-19 patients than some of its peers, whose proportion of cases are in the high single digits of 8 to 10%, while UHS' percentage is in the low to mid-teens, Felton said.
But while UHS’ acute care services have rebounded, adjusted admissions at behavioral health care facilities declined by nearly 5% compared to the first quarter of 2020.
“The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change,” UHS said in its earnings report. “We are not able to fully quantify the impact that these factors will have on our future financial results.”
UHS did report that its net cash generated from operating activities was $72 million compared to the $502 million it posted in the first quarter of 2020.
A major reason for the decline was the repayment of $695 million in repayments of Medicare accelerated and advance payments the system received last year when the pandemic was first hitting hospitals.
But UHS’ liquidity remains strong, posting nearly $1 billion of borrowing capacity since the end of March.