UHS Shifts Focus to Outpatient Care Amid Volume Challenges
With a 10% year-over-year increase in same-facility acute care EBITDA and a 5.7% rise in same-facility acute care net revenues, UHS outlined adaptive measures, including AI integration, and repurchased 1.9M shares for $332M year-to-date, demonstrating its commitment to navigating the challenges and capitalizing on growth opportunities in the healthcare sector.
Universal Health Services (UHS) reported softer-than-expected volumes for the second consecutive quarter, with adjusted admissions rising just 0.4% in the behavioral health segment, prompting a shift in focus to outpatient projects.
The company attributed the decline in volumes to payers' growing preference for outpatient care, which has not favored UHS' inpatient-heavy portfolio. As a result, UHS plans to build 10-15 freestanding behavioral health facilities per year, aiming to capture more volumes by opening behavioral centers and referring more inpatient cases to its outpatient providers.
Despite challenges, UHS raised the midpoint of its 2025 guidance due to the approval of a Medicaid state supplemental payment program in Tennessee and the opening of West Henderson Hospital in Las Vegas. However, problems receiving Medicaid certification and start-up issues at its newly opened Cedar Hill Regional Medical Center in Washington, D.C. tempered the guidance increase.
UHS' acute care unit also underperformed, with adjusted admissions rising just 2% and surgical volumes slightly down year-over-year. Executives blamed lower volumes on staffing challenges and the slower-than-expected opening at Cedar Hills. The company remains confident in its ability to adapt to potential changes, including the impact of the recently passed "Big Beautiful Bill", which is expected to cost between $300 to $400 million by 2032.
UHS' stock surged 5.08% on July 29, 2025, with a 34.28% spike in trading volume, following Q2 2025 earnings that beat expectations. The company's focus on operational efficiency and expansion in high-growth behavioral health outpatient care positions it to mitigate headwinds and sustain earnings momentum.