As more patients flood King of Prussia, Pa.-based Universal Health Services’ acute care hospitals, fewer are heading to the operating room.
Same-facility surgeries decreased 0.7% compared with the third quarter last year, Steve Filton, CFO of UHS, said during the system’s Oct. 28 third-quarter earnings call.
Excluding one-time items, UHS’ third-quarter adjusted EBITDA fell short of its internal expectations, Mr. Filton said. This mainly reflected slower-than-expected ramp-ups at its new hospitals and softer-than-expected surgical trends.
“Inpatient and outpatient surgical cases declined at similar levels in the quarter,” Mr. Filton said. “Inpatient medical admissions significantly outpaced surgical admissions, which negatively skewed pricing trends in the quarter.”
During the third quarter, same-facility adjusted admissions increased by 4.9% and emergency department visits rose 4.6%.
“The trend towards a slightly weaker surgical mix is an acceleration of existing trends that we have seen for some time,” Mr. Filton said. “That is the continued shift of procedures, both in and outpatient procedures, out of the hospital, in and outpatient services, and into alternative settings, whether they are ASCs or physician offices. We really see this in particular in certain service lines.”
Mr. Filton pointed to an accelerated shift in gastroenterology procedures moving into alternative settings outside the hospital, along with a number of orthopedic procedures. As more GI procedures move out of the hospital, he said UHS has struggled to get gastroenterologists to cover its emergency rooms. In some facilities, GI-related emergency visits are now being diverted elsewhere due to lack of coverage.
The shift toward medical rather than surgical admissions reduced growth in same-facility acute care revenue per adjusted admission by about 100 basis points, Mr. Filton said. That metric fell 1.7% in the quarter. Mr. Filton said revenue per adjusted admission was slightly positive after excluding the net headwind from out-of-period Medicaid supplemental benefits and the shift of exchange patients to uninsured status.
Mr. Filton said cardiology, neurology and urology service lines were strong, continuing a trend from recent quarters.
“We didn’t make a conscious decision to increase volumes but decrease procedural volumes,” Marc Miller, president and CEO of UHS, said during the call. “Most of our medical volumes honestly come through the emergency room. So those are patients who come to us. Procedural volumes tend to be more elective. We have done a lot of things to continue to build on procedural volumes, including investments in technology and things like robotics and things like OR capacity, et cetera.”
Mr. Miller said these investments have paid off in the system’s strongest service lines.
UHS reported an operating income of $454 million (9.6% margin) in the third quarter of 2026, down from $522 million (11.6% margin) during the same period last year. The system’s net income was $309 million. Its total revenue was $4.7 billion and total expenses were $4.3 billion.
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