Universal Health Services at Goldman Sachs Conference: Post-COVID Strategies

On Monday, 09 June 2025, Universal Health Services (NYSE:UHS) shared its strategic plans at the Goldman Sachs 46th Annual Global Healthcare Conference. The discussion, led by CFO Steve Hilton, highlighted UHS’s transition into a post-COVID operational landscape, balancing growth opportunities with challenges such as labor costs and regulatory changes.

Key Takeaways

• UHS is experiencing mid-single-digit revenue growth, driven by both price and volume increases.
• Efforts are underway to stabilize labor costs and improve operational efficiency.
• The company is expanding its hospital network, adding approximately 300 beds in both 2024 and 2025.
• Behavioral health business aims to return to historical volume growth levels.
• Regulatory changes, including potential impacts from DPP and ACA subsidies, are being closely monitored.

Financial Results

Acute Care:

• Revenue growth is projected at 5-7%, with a midpoint of 6%.
• Adjusted admission growth is targeted at 2.5-3.5%, with similar pricing growth.
• Acute care margins are expected to return to pre-pandemic levels of 16-16.5% within 18-24 months.
• West Henderson and D.C. hospitals are expected to be modestly EBITDA positive this year.

Behavioral Health:

• Volume growth target is set at 2.5-3%.
• Historical revenue growth remains in the mid-single digits.
• EBITDA margins are currently at the upper end of the historical range, 22-23%.
• Strong pricing continues to support the business.

Operational Updates

Acute Care:

• Length of stay is currently 6-7% above baseline, with ongoing efforts to reduce it.
• New hospitals are set to add approximately 300 beds in 2024 and another 300 in 2025.
• Contractual pricing for acute care is seeing increases in the 4-5% range.

Behavioral Health:

• The company is addressing staffing constraints to enhance bed utilization and patient volume.
• 140 beds have been added in 2024, resuming growth paused during the pandemic.
• There is an increased focus on outpatient services to capture a larger market share.

Future Outlook

• UHS anticipates acute care margins to return to pre-COVID levels within 18-24 months.
• In behavioral health, pricing is expected to moderate as volumes recover.
• New hospitals are projected to achieve divisional average performance within 18-24 months.
• The company plans to continue expanding its hospital network, with bed additions contributing to growth.
• Long-term revenue growth is expected to stabilize in the 6-8% range, balancing pricing and volume.

Q&A Highlights

• There is potential to further reduce the length of stay, enhancing efficiency and profitability.
• UHS is optimistic about the terms of DPP in current legislative discussions.
• The company has resumed bed additions after a pandemic-related pause.
• The potential loss of enhanced ACA subsidies could have a $95 million impact.

In conclusion, Universal Health Services outlines a robust strategy for sustainable growth and margin expansion, focusing on efficiency and strategic investments. For more details, please refer to the full transcript below.

Full transcript - Goldman Sachs 46th Annual Global Healthcare Conference:

Jamie: Alright. Good morning, everyone. I’m Jamie first this is the first session of the day. So I we’re required to make disclosures in public compensation either 1% or more ownership. We’re prepared to repeat the loud disclosures for press however these are available to our in our most recent reports, we

Jamie: would find a on our firm portal. Alright. So with that out of the way, we’re we’re kicking off today with UHS, and we have Steve Hilton, CFO. Thank you.

Steve Hilton, CFO, UHS: My pleasure. Thank you. Yeah. We’ve talked a lot about the idea that 2,024 seemed like a transition year post COVID into a sort of a post COVID year, and 2025 certainly feels like maybe the first full post COVID year. And and it feels like our acute care metrics are mirroring the traditional metrics that we, you know, tended to experience pre COVID.

So, you know, mid single digit revenue growth, call that five, six, seven percent, talk about, let’s say, 6% at the midpoint, but pretty evenly between price and volume. So two and a half, three, three and a half percent. Adjusted admission growth, two and a half, three, three and a half percent pricing growth. And that’s kinda what we’ve been running, and feels to us like that’s a sustainable level of acute care performance. I’ll say that I think we’ve talked about in the last few quarters, I think as have more public acute care hospital peers, somewhat softer procedural or surgical volumes.

I think that tends to be more a comparison issue than anything else in the sense that as we emerge from the pandemic, we definitely, I think, as an industry, experience this sort of collective catch up in procedures that had been postponed and deferred during the pandemic. So when we compare first couple of quarters of this year to last year, that’s a that’s a difficult comparison because that element of catch up. But I think other than just slightly softer procedural surgical volumes, I think we’re at this historically sustainable level of both volume pricing in acute care segment.

Jamie: I’ll I’ll come back to some of the specifics, but, you know, high level momentum you saw in the first quarter. Anything you can say about

Jamie: where you’re in?

Steve Hilton, CFO, UHS: Well, I think that the momentum that you’re alluding to is this idea that now that we’ve returned to kind of to sort of this more normalized revenue growth metric or or trajectory. We’ve also been able to, I think, focus on and execute on our expense structure in a way that was more difficult during the pandemic. There were a lot of pressures during the pandemic, especially on wages and labor. So, you know, there was an extremely elevated use of temporary labor, temporary and traveling nurses, and others. That’s been reduced fairly dramatically.

Wage inflation itself has I say decelerated. I really I think I really mean accelerated at a slower rate because there just isn’t quite as much competition for nurses especially as there was during the pandemic. Still a pretty tight labor market, but again, if you look at our expenses, well controlled. Supplies expense has been extremely well controlled. We really have not had any measurable impacts from the tariffs back and forth.

So yes, so it’s been, I think, a very favorable environment because we’ve got relatively steady, sustainable revenue growth, well controlled expenses. And as a consequence, we’ve had now several years of increasing EBITDA, increasing margins, margin expansion, and we continue on this track to get our acute care margins back to pre pandemic levels.

Jamie: And on the kind of you framed this 5% to 7% half volume. On the volume side, if you were to further break it down in terms of medical versus surgical, you mentioned some of the comp issues on the surgical side of the business. But looking forward, should those two components be fairly equally balanced? I’ve been surprised at the medical strength on a relative basis. How should we think about those two kind of broad categories going forward?

Steve Hilton, CFO, UHS: I think, again, historically, those two categories, that is medical admissions, medical activity and surgical admissions or surgical activity, have tended to move largely in tandem. So if adjusted admissions were up 3% in a quarter, generally surgical procedures would be up 2% to 4%, something pretty tightly correlated. And yes, I think that’s the expectation. Once we sort of get past this comparison issue, that if adjusted admissions are growing by that 2.5%, three %, three point five % metric, that surgical procedures will be growing within a point or so one way or the other of that. Okay.

Jamie: Wanted to touch on length of stay. It was around four point six days pre COVID, went to the mid fives during COVID. It’s come down some, but it’s still six percent or 7% above kind of that that baseline. This has obvious dynamics around reimbursement. You’re paid per patient, but your costs are per patient day.

So I want to get a sense from you if there’s further room to moderate length of stay or if this is more structural given the patient mix. Any perspective on length of stay?

Steve Hilton, CFO, UHS: Yes. We think there is an opportunity to further reduce length of stay, and that’s an opportunity, as I think your question suggests, to increase the efficiency, the profitability, the margins of the business because as you suggest, most of the patients for whom we’re being reimbursed are being reimbursed on a per discharge basis. So there’s a flat amount that we’re being paid for the term of their admission. And if they are discharged earlier, appropriately, obviously, if the medical facts support that, then the sooner they’re discharged, the the more profitable, we’ll be. And to your point, you know, obviously, length of stay rose considerably during the pandemic when we had all these acutely ill COVID patients.

Has come down obviously significantly as the number of those patients has declined dramatically. But it’s still higher than it’s been. And I think the main reason for that is the continued challenges that we face on patients who are being discharged into some other milieu. So not all patients who are discharged from an acute care hospital are discharged home. Somewhere between or around a third of them are discharged into some other setting.

It could be home health. It could be subacute or rehab, etcetera. And we find often that placing those patients in those types of settings can be challenging. And patients stay a day or two or three days longer just because we don’t have a place that can accept them. And I think that’s largely because of generally labor shortages that were particularly exacerbated or exaggerated during the pandemic where there was such a need for nurses in an acute care setting that nurses were leaving subacute settings, whether that was, again, home health, nursing homes, in our case, behavioral hospitals, and working in acute care settings.

Again, I think that dynamic has improved, but we still find that some of these subacute facilities struggle to fill all their vacancies and that sometimes limits their ability to take patients. So yes, I think at the end of the day, there is an opportunity on length of stay. But in large part, the hurdle there or the headwind is largely out of our control, I believe.

Jamie: I guess just sticking on this point for a minute, are there particular end markets that are most challenging or improving at differential rates between home health or rehab? Just and I guess you mentioned it’s out of your control large part, but are there any initiatives you have or partnerships to that you can affect to move the needle here?

Steve Hilton, CFO, UHS: Yes. So as I think our experience has been, and I think this continues to be true about labor vacancies, they vary by geography. They don’t always remain the same. So the answer, I think, is yes. I mean we’ll find those challenges discharging to subacute more challenging in some markets for a period of time and then it gets better, etcetera.

So I wouldn’t call out a particular market that’s a chronic issue. And you’re right, and I probably made too strong a statement when I said this is beyond our control. I was obviously alluding to the fact that this supplydemand issue of labor I think is kind of a macro issue. But there are things that we try and do. Obviously, we try and create relationships, particularly where we have a significant amount of market share in our markets with subacute providers.

In some cases, we’ll have arrangements where we will actually pay subacute providers to essentially reserve or set aside a certain number of beds for us, that sort of thing, to make sure that there’s availability for our patients. So there are some things we can do. Again, I was just trying to make the point that the broad labor supplydemand dynamic is somewhat out of our control, obviously.

Jamie: Okay. Great. I wanted to focus on some of the new hospitals. You’re in this period of decent sized build out across a couple of hospitals. So in rough numbers, you’ll add about 300 beds this year between West Henderson and D.

C. And then another 300 beds next year with Palm Beach Gardens and the California Hospital. Each of those two cohorts in isolation would add 4% to 5% to your bed count. So how should we think about layering on admissions or adjusted admissions? First, they’ll be total not same facility and then as they reach twelve months affecting same facility.

How should we think about that layering of growth?

Steve Hilton, CFO, UHS: I mean historically, we generally have the view that it takes a new hospital somewhere between eighteen and twenty four months to ramp up to, I’ll sort of call it, divisional average performance both from an admissions perspective and margin, etcetera. We know, those of you who follow the company, that when we open hospitals in Las Vegas, they tend to ramp up more quickly. We disclosed in the first quarter that the hospital that opened in West Henderson, a suburb of Las Vegas, in its first full quarter, which was the first quarter, was already EBITDA positive, which is really unusual for a new hospital, particularly one well, just for it is unusual for a new hospital. But Vegas, I think, is an exception. Hospital in D.

C. And I think the others will ramp up a little more slowly. I think the other thing to consider is each one of the hospitals that you mentioned, Vegas, D. C, Palm Beach Gardens here in Florida, are all opening in markets where we have at least an existing, in Las Vegas, a number of existing hospitals. So there’s some amount of cannibalization.

But I think if you think about modeling, etcetera, you would think about trying to ramp those hospitals based on their bed size up to sort of divisional average margins, divisional average admissions in kind of an eighteen- to twenty four month period. And I would tend to do it ratably. If want to get specific and ramp the Vegas hospital up faster, you can do that. But like we’ve talked about this year, on a combined basis, we believe that the West Henderson and D. C.

Hospital will be together modestly EBITDA positive.

Jamie: Okay. I’ll come back to that point in a sec. Just on this 5% to 7% trajectory that you roughly framed, is the new bed growth on the acute care side supportive of that or additive to that?

Steve Hilton, CFO, UHS: No. I mean, when I give those sort of metrics about the five to 7% growth, really, they’re meant to be same store metrics.

Jamie: Okay. And on the EBITDA comments, bear with me a little math here. But I think in 2024, average EBITDA per band was like $180,000 across the network. If we apply that to West Henderson in D. C, that’d be like $50,000,000 kind of at run rate.

You said you’d be modestly EBITDA positive this year. Is $50,000,000 ish, is that roughly the trajectory you should think about for ’twenty six as both these hospitals kind of reach maturity?

Steve Hilton, CFO, UHS: Yeah. I I mean, I’d like to caveat a little bit. Sometimes, you know, I’m I prefer to have the numbers in front of me when I’m answering a question like that. But I I think, you know, on the surface, that sounds about right. Yes.

Again, ramped up over that eighteen to twenty four month period. Okay.

Jamie: Fair enough. Shifting to just acute care pricing, where are we in the cycle? Obviously, we went through a period of a little bit better contracting, not fully reflecting the inflationary environment, but some of it. Where are we and what’s sort of your visibility in terms of the outlook for the next one to two years?

Steve Hilton, CFO, UHS: Yes. So I always answer this question or I answer this question a bit of a caveat in the sense that I think that contractual pricing in my mind continues to look, I’m going to call it, or solid. And I know that’s a value term in and of itself. But yes, I think we’re seeing commercial contractual pricing, meaning our new contracts, our annual increases in our new contracts are in that 4% to 5% range, which I think is generally where we would expect.

Jamie: What I think

Steve Hilton, CFO, UHS: people don’t focus on as much or maybe it’s a little because it’s a little more difficult to focus is, I think where we find our revenue per unit, per adjusted admission, per adjusted day, however you want to look at it, impacted more than the contractual pricing is through what I’ll broadly describe as payer behavior, what payers are doing in terms of denials and nonpayment and delays, etcetera. And to be fair, I don’t think that behavior has changed dramatically in the last year. I think it changed some coming out of the pandemic as payers became more aggressive after having been less aggressive during the pandemic, but not so much. But because there’s been so much happening in the managed care space, there’s been a lot of speculation. And I think you probably know this, Jamie, both ways, sort of some speculation that payers would be less aggressive because of some of the focus on their behavior, etcetera, and some speculate that they’d be more aggressive because their profits and their MLRs were under some pressure, etcetera.

So like I said, I mean, to date, we haven’t seen a great deal of change in that behavior and nothing that I would point out as affecting our growth in pricing in any sort of significant way. But something we watch very carefully, something we’re very focused on and spend a great deal of time and resources on.

Jamie: Okay. And just on acute care margins, you’ve talked a lot about getting back to this 16%, sixteen point five % margin for that business. Profitability really started to ramp in the first quarter of last year and very much continued into the first quarter of this year. Given the balance of inflation, patient mix, reimbursement and some of the factors we’ve talked about today, DPP, what’s your level of confidence in getting back to that level? And any thoughts on timing?

Steve Hilton, CFO, UHS: Yes. I mean, again, as you point out, we’ve made a lot of progress in the last, let’s call it, one point years or so. And that momentum seems to be sustainable for the reasons that I talked about, that Even relatively, I’ll call it, modest, top line growth in that 567% range is generating continued margin expansion in an environment where we’re in a better position to control costs that looks like it’s going to continue. Of all the things that you mentioned, labor is better controlled. We ultimately like to think that in the end, there won’t be a huge impact from tariffs on our supply costs.

So presuming that you mentioned DPP, we’ll probably return to that when we talk about policy later. But assuming that those numbers remain relatively stable, yes, I think there’s a general sense that we can get closer to, if not back to pre COVID margins on the acute side, in the next eighteen to twenty four months.

Jamie: Okay. Great. Let’s move on to the behavioral business. Starting with volumes, you’ve obviously had a lot of questions on this just given the volume trajectory, which has been a little bit slower than I think you and us externally had imagined. You’ve been pretty kind of same level of conviction that you can get back to this 2% to 3% volume trajectory?

What underpins that confidence?

Steve Hilton, CFO, UHS: I think that our sort of confidence, as you describe it, in our ability to get back to sort of 2.5%, three % volume growth, which historically has been a relatively sort of modest volume growth level in the behavioral business, is really based on kind of two broad perspectives of the market. One is, I’ll call it internal or micro, which is our own experience, the amount of incoming inquiries we have from patients, from referral sources about patient need and placing patients, etcetera. And we have found in the last couple of years is that we haven’t always been able to meet all those needs for a variety of reasons, probably most notably staffing constraints where we had available beds or available capacity but didn’t necessarily have the appropriate number of nurses or the appropriate number of therapists or the appropriate number of mental health technicians or aides to treat those patients and therefore had to defer certain admissions or deflect certain admissions. We believe that over time, that dynamic has gotten better. If you look at last year, twenty twenty four’s dynamic, patient day growth was getting better throughout the year until very late in the year.

So that’s one perspective. And the other is just the outside perspective that to the degree that there are industry wide metrics available on diagnoses and incidents of mental illness and the need for mental health treatment, all those metrics seem to be growing and really across the board, meaning across diagnoses, across ages, across payers. And so again, the general sense that we have is the onus is on us to solve the issues that have been preventing us from taking all those patients, mostly labor scarcity, sometimes the physical availability of beds, sometimes the acuity of the patients that are being asked to be treated. All those things are things that we should be able to deal with over time. I think you said I was very emphatic about being able to get to the 2.5%, three % growth patient day growth this year, maybe too emphatic.

What I did also add, however, was if we didn’t get to that volume growth, I thought we’d still get to our targeted revenue growth in, again, the mid single digits by virtue of the strong pricing that we’ve continued to experience.

Jamie: You’ve made some comments recently just about the strong pricing in the market and that attracting more competition. How does that factor into the your ability to get back to that trajectory?

Steve Hilton, CFO, UHS: Yes. That’s a part of it. I mean the reality is because I think there is a healthy demand environment in behavioral, because I think there is a healthy pricing environment both in terms of contractual pricing with payers and some of the more recent Medicaid supplemental programs that some states have implemented. We’ve seen an increase in competition and new entrants into the market. Particularly, I think we’ve made the point, I think, our last couple of earnings calls on the outpatient side of the business.

We historically have had, I think, a fairly significant skew and focus on inpatient care. I don’t to be perfectly candid, I don’t know that we’ve gotten our, I’ll call it, fair share, again, sort of a value judgment word, but our fair share of that incremental outpatient business of which I think there’s a significant amount. I think we’re correcting that both in terms of tightening up our own policies and procedures to make sure that the patients that are in our facilities and are being discharged into outpatient programs are being discharged into our own outpatient programs where clinically appropriate and also, though, capturing what we call the step in outpatient business in this industry. And these are patients who are entering behavioral system not on the inpatient side of things but on the outpatient side. They may never need inpatient care, although some of them probably will.

And that, which is really more of a freestanding facility freestanding outpatient facility business, is a business that we have not played in, in a very significant way historically and I think are increasing our footprint there pretty rapidly.

Jamie: And you mentioned labor being one of the bottlenecks in this. Like, look back the last two years, salary, wage and benefits in the behavioral business are up like 14 versus emissions down four. I realize that’s like picking a very specific time period and you don’t have numbers in front of you. But just roughly speaking, how much of that is added unit cost per nurse or whatever versus increased headcount that can allow you to absorb more capacity?

Steve Hilton, CFO, UHS: Yeah, think it’s a combination. Obviously, and I alluded to this a little earlier, one of the dynamics that I think almost all subacute providers experienced during the pandemic, behavioral home health, skilled nursing, nursing homes, you know, experience was they were losing nurses in particular, but potentially other clinicians and employees to the acute care setting where they were able to make significant premiums on their pay. I think that nurses in the acute care setting have always historically made more than nurses in a subacute setting. But that difference and that gap widened considerably during the pandemic. I think what you saw coming out of the pandemic is that subacute providers writ large, including us as behavioral providers, we’re readjusting our salary structures to be more competitive in that regard.

So I think that’s a piece of what you’re seeing. And then some of it is also, as you point out, we’re staffing up. And that takes some time. And so for a period of time, what we’re what you’re going to see, I think, reflected in our financial statements is a lot of cost of new hires, which essentially is nonproductive cost. You were talking about salaries and then admissions or revenue.

And so in the beginning when we hire new nurses and new techs, etcetera, there’s a period of time, depending on their experience in particular, where we’re training them and orienting them. And again, in some cases, if they’re newly new graduates or really have no experience in the behavioral industry, you know, we could be training them for months at a time. And so, you know, you make this investment in salaries and wages that then is not being reflected in, you know, revenues and profits for a period of time. Ultimately, we think it’s the right investment. And particularly, if we can control our turnover rates and reduce turnover, that’s another way of sort of increasing the effectiveness of that investment.

But yes, I think that’s also some of what you’re seeing in the data that you’re citing to me.

Jamie: I think that dynamic tied to this next question as well. But you’ve added 140 beds in the behavioral business in 2024. You go back a few years, that was like 300, four hundred. I guess, what do you need to see in the labor markets and otherwise to get back to a more aggressive cadence of new bed growth and behavior?

Steve Hilton, CFO, UHS: Yes. So it’s an absolutely valid observation that we slowed, our bed additions, again, during the pandemic, the argument being if we couldn’t staff the beds that we already had, what was the point of building new beds? And to your point, I think now that we’ve emerged from the worst of those labor shortages, and this really is a market by market, determination, but we’ve resumed, a lot of that bed addition, bed building that had been paused during the pandemic. Now, again, there’s time frames associated with that, permitting, the actual construction time, ramping up, getting those new beds staffed, etcetera. So it takes some time.

But to your point, I think over the next several years, you’ll see the number of bed additions and new hospitals. We also have some new hospitals coming on. We just opened a new hospital in Michigan and have a few more on the board over the next few years. So you’ll see both Bet additions to existing hospitals and de novo facilities, more of those coming on in the next few years.

Jamie: Okay. And then pricing has obviously been very strong this business. I think three of the last four years with 6% or better than more of the mix of that five to 7% algorithm in this business has been pricing. Is there a point we reach a new equilibrium? How sustainable is this kind of trajectory in the near?

And as you think about the next couple of years, again, do we reach a new equilibrium that’s a little lower than you’ve been seeing lately?

Steve Hilton, CFO, UHS: So we’ve argued, I think, for the last several years that there is this sort of interplay between pricing and volumes. And to some degree, the reason that we’ve been able to achieve, I’ll call it outsized or certainly larger than historical pricing levels, is the very lack of capacity that I’ve been talking about on the volume side of things. So that’s been a headwind for us on the volume side. But the flip side is as payers struggle to sometimes and in some markets find adequate access and capacity for their subscribers and their patients willing to pay a higher rate to be in network and essentially to be assured access to facilities in the market and to beds in the market and outpatient capacity, whatever it may be. And so yes, know again, I think what we’ve seen over the last several years is this lower than historical volume growth and higher than historical pricing.

And I think what we’ve argued is that, using your term, that there would be, over the next few years, more of an equilibrium, that pricing would start to moderate as volumes came up. And the truth of the matter is, as I think you commented in an earlier sort of question or commentary was, it’s been a slower process than we originally imagined. Volumes have been slower to recover back to historical levels than we might have imagined and expected and I think even guided to. But at the same time, I think pricing has remained stronger. And again, our long term view, I’ll call it intermediate and long term view, is that pricing will moderate some, volumes will come up.

I think at the end of the day, in combination, we’re still going to be tracking that sort of mid single digit same store revenue growth that I talked about earlier in that kind of 6%, seven eight % range.

Jamie: Is there a way to sort of measure that on a micro basis just in terms of number of payers you’re able to give in network contracts to and kind of guarantee that supply and the number who are on the outside that would like more supply and just better gauge where we are from a supply demand balance perspective?

Steve Hilton, CFO, UHS: Yes. I mean the answer, of course, is yes. I mean we could say these are the number of contract I don’t know this off the top my head, by the way, but these are the number of contracts that we’ve renegotiated in the last several years at a 4% or 5% plus annual increase greater than we might normally have, etcetera. And then I think the question I get asked, which I think is kind of where you’re going with your question is, well, how much more runway What inning in this game are we in?

And that’s hard to say. As I said, I mean, I think the reason the pricing has been more sustainable and has endured more is because the volumes have been challenging, not just for us, I think, but for the industry in general, and capacity is somewhat limited, etcetera. So I think it’s a little bit hard to say, again, how far along in this process we are. But again, I’m going to say our intermediate and long term view is that the equilibrium that you kind of talked about in your question is something that will occur over the next several years.

Jamie: And then maybe just closing out behavioral. EBITDA margins have been in kind of the upper end of their historical range the last couple of years. Putting these factors together that we’ve discussed today, I mean how are you thinking about where margins go from here? Is that 22%, twenty three % type of level sustainable? Do you expect margin improvement?

And any color there?

Steve Hilton, CFO, UHS: Yes. I mean I think that the historical model for the behavioral business and by the way, think it’s very similar to the acute business as we talked about is, if you can achieve that mid to upper single digit revenue growth in behavioral, we’ve been talking 6%, seven eight %, let’s call it 7% at the midpoint, which would be 4%, four point five % price to 2.5% patient day growth or adjusted patient day growth, then it’s unlikely that your expenses will be growing faster than that. And for the vast sort of history of the business, they have not now. Again, the pandemic was an exception when all of a sudden salaries were growing much faster and we were having to pay for temporary traveling nurses and sign on bonuses and all sorts of recruitment incentives, etcetera. But all those things have largely either completely disappeared or moderated significantly.

And so the notion is, yes, as long as we can grow the revenue side of the business in that 6%, seven eight % range, that, yes, there’s still room for margin expansion. Now to be fair, some of that margin expansion over the last several years, particularly in behavioral, has come from these Medicaid supplemental payments. We may touch on that in the last minute or so. Those programs likely not to continue to grow in the future. As an industry, I think the hope is that they’ll be at least sustained in something close to current levels.

But that plays a part in this as well.

Jamie: Okay. Well, glad we were able to focus on fundamentals today, but in the last minute or so, any updates on DPP? I think your latest is the existing programs would be protected. You’re waiting on some approvals in Tennessee and DC. Just any updates there.

Steve Hilton, CFO, UHS: Not really. I mean, the the you know, obviously, the the reconciliation bill is now with the senate. I think there’s a lot of lobbying being collectively done by the hospital industry in general, the behavioral industry, the acute industry in terms of sort of firming up the language and trying to ensure that existing programs and programs that have been submitted and awaiting approval are included in the grandfathering provisions that the grandfathering provisions, say, you know, they’re basically grandfathering existing terms. They’re very specific to what those terms are, the tax rates, average commercial rates, all those sort of things. As you know, there’s a lot of sort of back and forth with the Senate.

They may not have the exact same goals as the House. We’re not sure, you know, how that will play out. But I think the industry is hopeful that, you know, the terms and the language in the House bill, at a minimum, are sort of the floor of, you know, what would be included either a Senate bill or a reconciled bill ultimately. Okay.

Jamie: I’m going squeeze one last one in here. You previously gave a 50,000,000 to $100,000,000 number for enhanced ACA subsidies if that went away for next year. Given some of the moving parts there? Is that still the right way to think about it?

Steve Hilton, CFO, UHS: Yes. And I would say we were at the lower end range. To be fair, that was a guesstimate because there are a lot of sort of assumptions and variables that go into that. But yes, we were in that sort of $95,000,000 estimate range.

Jamie: Okay. Great. Thanks, Steve. Thank you. We’ll end there.

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