Wednesday, October 31, 2012

Voters' Voices: Three Reagan Democrats Talk Medicare

Voters' Voices: Three Reagan Democrats Talk Medicare

Of those voting this year, count in the so-called Reagan Democrats -- that group of once loyal left-leaners who crossed party lines in 1980 and helped the former California governor relocate to the White House.

Some of those Reagan Democrats were in their late 30s or early 40s then. Today, they’re older and on Medicare, a program that the GOP wants to alter dramatically. Do they fear for Medicare? Or do they still hold true to the Gipper’s smaller government ethos, even if it might mean big changes to the program for seniors and the disabled?

KHN tracked down three Reagan Democrats, who have each landed in a different place on this question: Cheryl McNamara, John Crowe and Penny Lockhart.

Cheryl McNamara was 35 years old in 1980 and a registered Democrat. Asked what she remembers most about that period, she says the one thing that jumps to mind is inflation: "I could see it was just killing my father, for example, who worked for a much smaller company and who couldn’t afford to raise their prices to match inflation, and so he couldn’t afford to give the raises to people to match inflation so the value of my father’s income was eroding."

McNamara, now 67, lives in Willowbrook, Illinois and thinks she'll vote for Mitt Romney. She remembers thinking Reagan could put the brakes on inflation and stop the government from meddling with prices.

It’s a message Jon Crowe, an undecided voter who is now 72 and living in Wardensville, West Virginia, remembers too.

"My main lean with Reagan was basically budgetary," Crowe says. "I found much more compatibility with Reagan's philosophy than I did with the Democratic philosophy."

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But for both McNamara and Crowe, there were other ideas that were starting to take root then. McNamara says her belief that the country had enough money to do right by all of its citizens was starting to falter.

"As I grew older and reality set in, I realized that there isn’t enough money in the world to spend it any which way you wanted to," McNamara says.

Crowe found himself at odds with both parties to a degree: "At the time, my thinking about it was that the Democrats always wanted to get elected to give you something, and the Republicans wanted to get elected to reduce taxes. And I thought they were both wrong.  I didn’t like a lot of the welfare policies. Although I thought people needed help, I thought Reagan had better ideas on that."

If McNamara and Crowe helped Reagan win the White House, there were other so-called Reagan Democrats, like Penny Lockhart, who crossed over for his re-election in 1984 when she was 39 years old, "a largish active woman, very busy. Let’s see, my daughter was 5 years old and I had just gone to work part-time as bookkeeper," she recalls.

Lockhart lives in the same modest home she lived in then, in the self-proclaimed garlic capital of the world, Gilroy, California.

Penny Lockhart came from a family of Democrats when she voted for Ronald Reagan in 1984 (Photo by Sarah Varney/KHN).

"My parents were both very active in Democratic politics," Lockhart says, "so when I voted for Ronald Reagan it was a great shock to my family and actually my mother made me promise that I would not re-register as a Republican until she was dead."

Lockhart’s mother was a junior college teacher and her father managed a meat company. Lockhart starting doing accounting work for local farmers and welders whose businesses were in distress.

"At that point I realized how hard it is to be a self-employed person and how important it is to give other people’s jobs," she says.

Lockhart, McNamara and Crowe don’t remember much about President Reagan and Medicare. The years they would need the program were, after all, still decades away. Reagan had warned in a 1961 recording for the American Medical Association that Medicare would usher in an age of totalitarianism: "And pretty soon your son won’t decide when he’s in school, where he will go or what he will do for a living. He will wait for the government to tell him where he will go to work and what he will do," he warned, ominously.

But by the time he became President, those fears seem to have subsided. Indeed, according to the Ronald Reagan Presidential Library, Reagan oversaw the expansion of Medicare to protect the elderly and disabled against what he called "catastrophic" health costs.

Lockhart is now 67 and on Medicare. It seems unlikely to Lockhart - who plans to vote for Obama - that Reagan would find much in common with the Romney-Ryan plan for premium support. That plan would give future Medicare beneficiaries a fixed amount of money to buy coverage from private health plans or traditional Medicare.

"I do not believe that if Mr. Reagan were around today that he would be on the same page as Mr. Ryan," says Lockheart. "I think he would want changes to be made so that things could continue as they were. I think of him as a really warm-hearted person and I find it hard to believe that he would want everything privatized."

For her part, Cheryl McNamara says she can get behind the Romney-Ryan Medicare plan. She says the Republican proposal is similar to the Medicare Advantage plans that exist today that give private insurers a set fee to care for patients.

"I think it would be fine," says McNamara. "There has to be a limit to how much the government paysfor this program, because price keeps going up, you have to spread that cost around."

John Crowe believes that the cost of Medicare needs to be addressed. He hasn’t decided who he is going to vote for, but he doesn’t trust the "free market" to look out for seniors’ best interests.

"If you go to a voucher system, these insurance agents are gonna say, 'Whoa, we don’t need this guy who has a pre-existing condition' so they take the people with good health. So if they’re not stopped from that, the people who need the most are getting the least because they can’t afford the policy," says Crowe.

On the day he was interviewed, Crowe's wife had received an operation, paid for by Medicare. With her safely at home, he sounded almost wistful about the man he helped elect many years ago: "Reagan, he recognized the problem with government, the problem with Congress or bureaucracy. But he also felt there was a role that government should play and had to play and he was very proud of government."

Crowe says Reagan’s standard bearer is nowhere nearby.


Source: feeds.kaiserhealthnews.org

Cooley Dickinson Hospital, Leader in Patient Safety, Becomes First in New England to Implement Electronic Hand Hygiene Monitoring

Cooley Dickinson Hospital, Leader in Patient Safety, Becomes First in New England to Implement Electronic Hand Hygiene Monitoring

CHARLOTTE, N.C., Oct. 31, 2012 /PRNewswire/ -- DebMed®, creator of the world's first electronic hand hygiene compliance monitoring system based on the World Health Organization's (WHO's) Five Moments for Hand Hygiene, today announced that Cooley Dickinson Hospital has become the first in the New England region to implement the DebMed® GMS™ electronic hand hygiene monitoring system.  Located in Northampton, Mass., the 140-bed community hospital is a recognized leader in patient safety, and will further support its goal of eliminating hospital-acquired infections (HAIs) with the DebMed system implementation.

Hospital-acquired infections (HAIs) are the fourth leading cause of death in the U.S., and according to the Centers for Disease Control and Prevention, are responsible for 99,000 deaths per year and result in $35.7 to $45 billion annually in healthcare costs. The DebMed GMS helps to increase hand hygiene compliance, which can directly lead to a reduction in HAIs and associated healthcare costs, through its unique ability to provide real-time feedback on hand hygiene behavior.

"The adoption of the DebMed GMS is important to further support the hospital's mission to create the safest possible environment for our patients," said Linda Riley, MEd, RN, CIC, Manager, Infection Prevention, Cooley Dickinson Hospital. "With our sights set on eliminating hospital-acquired infections, electronic monitoring of hand hygiene is the next step in our journey toward zero infections. DebMed is a trusted industry leader with the advanced technology that will help us to deliver the best results for our patients."

A recipient of the prestigious Healthgrades' top five-percent patient safety award for four years in a row (2009 – 2012), Cooley Dickinson has been a recognized leader in patient safety and the use of innovative technologies. With ultraviolet light room disinfection (Xenex), they were able to achieve considerable milestones in 2011, such as a 54 percent reduction is Clostridium difficile infections, a 58 percent reduction in MRSA infections/colonization, and a 65 percent reduction in VRE infections. The implementation of the DebMed GMS further supports Cooley Dickinson's forward thinking and quest for continued patient safety improvements, such as its goal to reduce the number of HAIs to zero, by improving infection prevention practices based on the data from electronic monitoring of hand hygiene using the WHO's guidelines.  The WHO's Five Moments for Hand Hygiene is a higher clinical standard than the more commonly based practice of staff cleaning hands only before and after patient care.

In addition to following the WHO guidelines, other benefits of the DebMed GMS are that is automated, highly accurate and provides group monitoring, which encourages higher compliance by monitoring the group instead of individuals. Group monitoring is recognized by infection preventionists as being more effective than other monitoring systems that track individuals' actions and can be seen by staff as punitive or as an invasion of privacy. The DebMed GMS also provides supporting tools, such as staff meeting facilitation guides and visual reminders, to help enable positive behavior change, ultimately creating a safer environment for the patient.

"We are honored to have Cooley Dickinson, a leading hospital for innovative, patient safety initiatives, champion the DebMed GMS," said Heather McLarney, Vice President of Marketing, DebMed. "Early adopters of patient safety technology, such as Cooley Dickinson, set the high standard for other healthcare facilities to adapt to the growing safety expectations of patients. We are looking forward to helping them achieve improved outcomes and meet their goal of zero HAIs."

About DebMed®
DebMed is the healthcare program of the Deb Group. The DebMed program offers innovative hand hygiene products, electronic monitoring technology, and improvement tools to support hand hygiene compliance.  The DebMed® GMS™ (Group Monitoring System) is the world's first group monitoring system to report hand hygiene compliance rates in real-time based on the World Health Organization's (WHO) "Five Moments for Hand Hygiene" and to date has recorded more than 16 million hand hygiene events.  The electronic monitoring system is being utilized in a four year, multi-site research project being conducted by the Columbia University School of Nursing and funded by a $1.2 million grant from the Agency for Healthcare Research and Quality (AHRQ). It is the first study aimed at reducing healthcare-associated infections in pediatric long-term care facilities by improving staff compliance with hand hygiene guidelines. Deb is the first hand hygiene company in the world to provide actionable information along with its hand hygiene products to help drive best practices and improved outcomes for patients worldwide.

For more information on the study or DebMed, visit www.debmed.com.

About Deb Group
Possessing international scale and strong local market presence, Deb Group provides innovative skin care programs for all types of workplace and public environments, spanning industrial, commercial, healthcare and food sectors.  Headquartered in the United Kingdom with US operations based in Charlotte, NC, Deb Group is comprised of 21 companies operating in 16 countries.  For more information, visit www.debgroup.com.

About Cooley Dickinson Hospital
Cooley Dickinson, a full-service community hospital, is ranked in the top 5 percent of all U.S. hospitals in patient safety by HealthGrades®, the country's leading independent health care ratings organization. It is the only hospital in the Springfield area to achieve the HealthGrades Patient Safety Excellence Award™ for four consecutive years, 2009- 2012. Cooley Dickinson's staff of 1,650 professionals and more than 300 affiliated physicians comprise a network of emergency, surgical, clinical, rehabilitative, hospice and home care expertise that treats 40,000 emergency patients per year, delivers 800 babies, and collaborates with Massachusetts General Hospital to deliver comprehensive cancer care. Cooley Dickinson's vision is to make the Upper Pioneer Valley the nation's model healthy community, able to provide local access to the most advanced clinical treatments in a caring and neighborly setting. Learn more at www.cooley-dickinson.org.

For media inquiries, contact: Holly Jespersen, 203-504-8230 x132, hjespersen@knbpr.com

SOURCE DebMed(R)

RELATED LINKS
http://www.debmed.com


Source: www.prnewswire.com

Tuesday, October 30, 2012

Universal Health Services, Inc. Reports Financial Results For Three And Nine Months Ended September 30, 2012 And Revises 2012 Full Year Guidance

Universal Health Services, Inc. Reports Financial Results For Three And Nine Months Ended September 30, 2012 And Revises 2012 Full Year Guidance

KING OF PRUSSIA, Pa., Oct. 30, 2012 /PRNewswire/ --

Consolidated Results of Operations, As Reported – Three and nine-month periods ended September 30, 2012 and 2011:
Universal Health Services, Inc. (NYSE:
UHS) announced today that its reported net income attributable to UHS was $71.8 million, or $.73 per diluted share, during the third quarter of 2012 as compared to $85.1 million, or $.86 per diluted share, during the comparable quarter of 2011.  Net revenues increased 1% to $1.68 billion during the third quarter of 2012 as compared to $1.66 billion during the third quarter of 2011. 

Reported net income attributable to UHS was $308.0 million, or $3.15 per diluted share, during the first nine months of 2012 as compared to $302.9 million, or $3.06 per diluted share, during the comparable period of 2011.  Net revenues increased 2% to $5.20 billion during the first nine months of 2012 as compared to $5.10 billion during the comparable period of 2011. 

Consolidated Results of Operations, As Adjusted – Three and nine-month periods ended September 30, 2012 and 2011:
For the three-month period ended September 30, 2012, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule"), was $88.6 million, or $.91 per diluted share. There were no such adjustments required to our reported net income attributable to UHS for the third quarter of 2011.    

As reflected on the Supplemental Schedule, included in our reported results during the third quarter of 2012, was an aggregate net unfavorable after-tax impact of $16.8 million, or $.18 per diluted share, consisting of: (i) an after-tax charge of $18.1 million ($29.2 million pre-tax), or $.19 per diluted share, resulting from the write-off of deferred financing costs related to the portion of our Term Loan B credit facility that was extinguished during the third quarter of 2012, and; (ii) a favorable after-tax impact of approximately $1.3 million, or $.01 per diluted share, related to the incentive income and expenses recorded in connection with the implementation of electronic health records ("EHR") applications at our acute care hospitals (as discussed below in Accounting for HITECH Act incentive income and EHR expenses). 

For the nine-month period ended September 30, 2012, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $308.4 million, or $3.15 per diluted share. There were no such adjustments required to our reported net income attributable to UHS for the first nine months of 2011.    

As reflected on the Supplemental Schedule, included in our reported results during the first nine months of 2012 was a net aggregate favorable after-tax impact of approximately $400,000 consisting of the following:

  • an unfavorable after-tax charge of approximately $3.6 million recorded in connection with the implementation of EHR applications as discussed below in Accounting for HITECH Act incentive income and EHR expenses;
  • a favorable after-tax impact of $18.8 million resulting from an aggregate cash payment of approximately $36 million received by us in connection an agreement entered into with the United States Department of Health and Human Services, the Secretary of Health and Human Services, and the Centers for Medicare and Medicaid Services (referred to collectively as "HHS").  After reductions for estimated related expenses and the portion attributable to third-party non-controlling ownership interests, this agreement, which was part of an industry-wide settlement with HHS related to litigation that was pending for several years contending that acute care hospitals in the U.S. were underpaid from the Medicare inpatient prospective payment system during a number of prior years, favorably impacted our pre-tax consolidated financial results by $30.2 million during the first quarter of 2012;
  • a favorable after-tax impact of $4.3 million recorded during the first quarter of 2012 representing the 2011 portion of the net Medicaid supplemental reimbursements earned pursuant to the Oklahoma Supplemental Hospital Offset Payment Program ("SHOPP");
  • an aggregate unfavorable after-tax impact of $5.1 million recorded during the first quarter of 2012 resulting from: (i) the revised Supplemental Security Income ratios utilized for calculating Medicare disproportionate share hospital reimbursements for federal fiscal years 2006 through 2009 ($2.4 million unfavorable after-tax impact), and; (ii) the write-off of receivables related to revenues recorded during 2011 at two of our acute care hospitals located in Florida resulting from reductions in certain county reimbursements due to reductions in federal matching Inter-Governmental Transfer funds ($2.7 million unfavorable after-tax impact);
  • a net favorable after-tax impact of $3.4 million consisting primarily of the 2011 portion of net Medicaid supplemental revenues recorded during the second quarter of 2012, and;
  • an unfavorable after-tax charge of $18.1 million resulting from the above-mentioned write-off of deferred financing costs related to the portion of our Term Loan B credit facility that was extinguished during the third quarter of 2012.

Acute Care Services – Three and nine-month periods ended September 30, 2012 and 2011:
During the third quarter of 2012, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) decreased 1.7% and adjusted patient days decreased 1.0%, as compared to the third quarter of 2011. Net revenues at these facilities decreased 0.4% during the third quarter of 2012 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 1.3% while net revenue per adjusted patient day increased 0.6% during the third quarter of 2012 as compared to the comparable quarter of the prior year. On a same facility basis, the operating margin at our acute care hospitals decreased to 13.4% during the third quarter of 2012 as compared to 14.8% during the third quarter of 2011. We define operating margin as net revenues less salaries, wages and benefits, other operating expenses and supplies expense (excluding the impact of the items mentioned above and excluding the EHR impact, as indicated on the Supplemental Schedule).

During the first nine months of 2012, at our acute care hospitals on a same facility basis, adjusted admissions decreased 0.3% and adjusted patient days increased 0.3%, as compared to the comparable nine-month period of 2011. Net revenues at these facilities decreased 0.5% during the first nine months of 2012 as compared to the comparable period of 2011.  At these facilities, net revenue per adjusted admission decreased 0.2% while net revenue per adjusted patient day decreased 0.7% during the first nine months of 2012, as compared to the comparable period of 2011. On a same facility basis, the operating margin at our acute care hospitals decreased to 16.2% during the first nine months of 2012, as compared to 17.8% during the comparable nine-month period of 2011.

We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $259 million and $246 million during the three-month periods ended September 30, 2012 and 2011, respectively, and $840 million and $708 million during the nine-month periods ended September 30, 2012 and 2011, respectively.

Behavioral Health Care Services – Three and nine-month periods ended September 30, 2012 and 2011:
During the third quarter of 2012, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 2.6% while adjusted patient days increased 0.7%, as compared to the third quarter of 2011. Net revenues at these facilities increased 3.4% during the third quarter of 2012, as compared to the comparable quarter in 2011. At these facilities, net revenue per adjusted admission increased 0.7% while net revenue per adjusted patient day increased 2.6% during the third quarter of 2012 over the comparable quarter in 2011. The operating margin at our behavioral health care facilities owned during both periods increased to 27.8% during the third quarter of 2012, as compared to 26.5% during the third quarter of 2011. 

During the first nine months of 2012, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 5.0% while adjusted patient days increased 1.2%, as compared to the comparable period of 2011. Net revenues at these facilities increased 4.2% during the first nine months of 2012, as compared to the comparable period of 2011. At these facilities, net revenue per adjusted admission decreased 0.7% while net revenue per adjusted patient day increased 2.9% during the first nine months of 2012 over the comparable period of 2011. The operating margin at our behavioral health care facilities owned during both periods increased to 27.8% during the first nine months of 2012, as compared to 26.7% during the comparable period of 2011. 

Accounting for HITECH Act incentive income and EHR expenses:
The health information technology provisions of the American Recovery and Reinvestment Act (referred to as the "HITECH Act") established criteria related to the "meaningful use" of electronic health records ("EHR") for acute care hospitals and established requirements for the Medicare and Medicaid EHR payment incentive programs.    

During 2011, we began implementing EHR applications at certain of our acute care hospitals and will continue to do so, on a hospital-by-hospital basis, until completion which is scheduled to occur by the end of June, 2013. As of September 30, 2012, EHR applications have been implemented at eleven of our acute care hospitals, the majority of which occurred during the second and third quarters of 2012.  Our acute care hospitals will be eligible for Medicare and Medicaid EHR incentive payments upon implementation of the EHR application, assuming they meet the "meaningful use" criteria.  Eight hospitals met the "meaningful use" criteria during the first nine months of 2012 and one additional hospital may qualify by the end of 2012.

As reflected on the Supplemental Schedule, our consolidated results of operations for the three-month period ended September 30, 2012 includes the favorable after-tax impact of approximately $1.3 million, or $.01 per diluted share, recorded in connection with the implementation of EHR applications. This favorable impact, which on a pre-tax basis amounted to $2.2 million, net of $1.1 million attributable to third-party, non-controlling ownership interests, consists of $10.6 million of EHR incentive income offset by $2.8 million of salaries, wages, benefits and other operating expenses and $4.5 million of depreciation and amortization expense.  The EHR incentive income recorded during the third quarter of 2012 consists of state Medicaid EHR incentive payments attributable to seven acute care hospitals that met the "meaningful use" criteria during the quarter. 

As reflected on the Supplemental Schedule, our consolidated results of operations for the nine-month period ended September 30, 2012 includes an after-tax charge of approximately $3.6 million, or $.04 per diluted share, recorded in connection with the implementation of EHR applications. This charge, which on a pre-tax basis amounted to $5.9 million, net of $800,000 attributable to third-party, non-controlling ownership interests, consists of $12.5 million of EHR incentive income offset by $11.1 million of salaries, wages, benefits and other operating expenses and $8.1 million of depreciation and amortization expense. 

Revised 2012 Full Year Guidance:
The operating trends and financial results experienced by our behavioral health facilities met our expectations during the first nine months of 2012.  However, against the backdrop of a continued sluggish economic recovery, the operating trends and financial results experienced by our acute care hospitals were below our expectations for the third quarter of 2012 and those trends are expected to continue during the fourth quarter of this year.  Based upon our consolidated financial results experienced during the first nine months of 2012, and most notably the results experienced by our acute care hospitals during the third quarter of 2012, our revised estimated range of adjusted net income attributable to UHS, for the year ended December 31, 2012 is $4.00 to $4.10 per diluted share. This revised guidance, which excludes the favorable EHR impact mentioned above and the impact of the other items reflected on the Supplemental Schedule for the nine months ended September 30, 2012, represents a decrease of approximately 6% from the previously provided range of $4.25 to $4.35 per diluted share.    

This guidance range also excludes the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits and other material amounts that may be reflected in our financial statements that relate to prior periods. It is also subject to certain conditions including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures.

The operating pressures that we continue to experience in many of our acute care markets has increased the volatility of the financial results of our acute care hospitals making estimation of future results more challenging.  However, we continue to actively and aggressively respond to these challenges through strategic initiatives and operational enhancements such as physician recruitment and integration and implementation of expense controls and other operating efficiencies.             

Conference call information:
We will hold a conference call for investors and analysts at 9:00 a.m. Eastern Time on October 31, 2012. The dial-in number is 1-877-648-7971. 

A live broadcast of the conference call will be available on our website at www.uhsinc.com.  A replay of the call will follow shortly after conclusion of the live call and will be available for one full year.

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:
Universal Health Services, Inc. ("UHS") is one of the nation's largest hospital companies, operating acute care and behavioral health hospitals and ambulatory centers nationwide and in Puerto Rico and the U.S. Virgin Islands.  It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE: UHT).  For additional information on the Company, visit our web site: http://www.uhsinc.com.

This press release contains forward-looking statements based on current management expectations.  Numerous factors, including those disclosed herein, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2011 and in Item 2-Forward-Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended June 30, 2012), may cause the results to differ materially from those anticipated in the forward-looking statements.  Many of the factors that will determine our future results are beyond our capability to control or predict.  These statements are subject to risks and uncertainties and therefore actual results may differ materially.  Readers should not place undue reliance on such forward-looking statements which reflect management's view only as of the date hereof.  We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

During the first quarter of 2012, we adopted the Financial Accounting Standards Board's Accounting Standards Update No. 2011-07, "Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities," which required health care entities to change the presentation in their statement of operations by reclassifying the provision for bad debts associated with patient service revenue from an operating expense to a deduction from patient service revenue (net of contractual allowances and discounts). As a result, the provision for doubtful accounts for our acute care and behavioral health care facilities is reflected as a deduction for net revenues in the accompanying consolidated statements of income for the three and nine-month periods ended September 30, 2012 and 2011. The adoption of this standard had no impact on our financial position or results of operations.

As mentioned above, our acute care hospitals may qualify for EHR incentive payments upon implementation of an EHR application assuming they meet the "meaningful use" criteria. However, there can be no assurance that we (our acute care hospitals) will ultimately qualify for these incentive payments and, should we qualify, we are unable to quantify the amount of incentive payments we may receive since the amounts are dependent upon various factors including the implementation timing at each hospital. Should we qualify for incentive payments, there may be timing differences in the recognition of the incentive income and expenses recorded in connection with the implementation of the EHR application which may cause material period-to-period changes in our future results of operations. Hospitals that do not qualify as a meaningful user of EHR by 2015 are subject to a reduced market basket update to the inpatient prospective payment system standardized amount in 2015 and each subsequent fiscal year. Although we believe that our acute care hospitals will be in compliance with the EHR standards by 2015, there can be no assurance that all of our facilities will be in compliance and therefore not subject to the penalty provision of the HITECH Act.

We believe that operating income, operating margin, adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share and earnings before interest, taxes, depreciation and amortization ("EBITDA"), which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect in each year of items that are nonrecurring or non-operational in nature including items such as, but not limited to, costs related to extinguishment of debt, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods.  To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2011 and Report on Form 10-Q for the quarterly period ended June 30, 2012. Since the items included or excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be alternatives to net income as a measure of our operating performance or profitability.  Since these measures, as presented, are not determined in accordance with GAAP and are thus susceptible to varying calculations, they may not be comparable to other similarly titled measures of other companies.  Investors are encouraged to use GAAP measures when evaluating our financial performance.         

(more)

Universal Health Services, Inc.

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)










Three months


Nine months


ended September 30,


ended September 30,


2012


2011


2012


2011









Net revenues before provision for doubtful accounts

$1,869,263


$1,814,686


$5,718,676


$5,553,268

  Less: Provision for doubtful accounts

188,910


152,011


522,203


456,042

Net revenues

1,680,353


1,662,675


5,196,473


5,097,226









Operating charges:








   Salaries, wages and benefits

838,075


828,606


2,565,052


2,492,570

   Other operating expenses

362,687


343,873


1,059,048


1,030,492

   Supplies expense

191,747


198,794


594,924


603,657

   EHR incentive income

(10,551)


-


(12,506)


-

   Depreciation and amortization

77,032


73,170


221,807


213,828

   Lease and rental expense

23,481


22,704


70,906


68,501

   Costs related to extinguishment of debt

29,170


-


29,170


-


1,511,641


1,467,147


4,528,401


4,409,048









Income from operations

168,712


195,528


668,072


688,178









Interest expense, net

45,207


48,452


137,805


154,677









Income before income taxes

123,505


147,076


530,267


533,501









Provision for income taxes

42,132


52,234


188,880


192,638









Net income

81,373


94,842


341,387


340,863









Less:  Income attributable to








noncontrolling interests

9,556


9,788


33,402


37,967









Net income attributable to UHS

$71,817


$85,054


$307,985


$302,896

















































Basic earnings per share attributable to UHS (a)

$0.74


$0.87


$3.18


$3.10









Diluted earnings per share attributable to UHS (a)

$0.73


$0.86


$3.15


$3.06

 

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)










Three months


Nine months


ended September 30,


ended September 30,


2012


2011


2012


2011









(a) Earnings per share calculation:
















Basic and diluted:








Net income attributable to UHS

$71,817


$85,054


$307,985


$302,896

Less: Net income attributable to unvested restricted share grants

(85)


(165)


(379)


(440)

Net income attributable to UHS - basic and diluted

$71,732


$84,889


$307,606


$302,456









Weighted average number of common shares - basic

96,817


97,397


96,701


97,447









Basic earnings per share attributable to UHS:

$0.74


$0.87


$3.18


$3.10









Weighted average number of common shares

96,817


97,397


96,701


97,447

Add: Other share equivalents

794


1,201


1,010


1,461

Weighted average number of common shares and equiv. - diluted

97,611


98,598


97,711


98,908









Diluted earnings per share attributable to UHS:

$0.73


$0.86


$3.15


$3.06

 

Universal Health Services, Inc.

Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule")

For the three months ended September 30, 2012 and 2011

(in thousands, except per share amounts)

(unaudited)

























Calculation of "EBITDA"










Three months ended


Three months ended


September 30, 2012


September 30, 2011

















Net revenues before provision for doubtful accounts

$1,869,263




$1,814,686



  Less: Provision for doubtful accounts

188,910




152,011



Net revenues

1,680,353


100.0%


1,662,675


100.0%









Operating charges:








   Salaries, wages and benefits

838,075


49.9%


828,606


49.8%

   Other operating expenses

362,687


21.6%


343,873


20.7%

   Supplies expense

191,747


11.4%


198,794


12.0%

   EHR incentive income

(10,551)


-0.6%


-


0.0%


1,381,958


82.2%


1,371,273


82.5%









Operating income/margin ("EBITDAR")

298,395


17.8%


291,402


17.5%









   Lease and rental expense

23,481




22,704



   Income attributable to noncontrolling interests

9,556




9,788











Earnings before, depreciation and amortization, interest expense, and income taxes ("EBITDA")

265,358


15.8%


258,910


15.6%









   Depreciation and amortization

77,032




73,170



   Costs related to extinguishment of debt

29,170




-



   Interest expense, net

45,207




48,452











Income before income taxes 

113,949




137,288











Provision for income taxes

42,132




52,234



Net income attributable to UHS

$71,817




$85,054



















Calculation of Adjusted Net Income Attributable to UHS










Three months ended


Three months ended


September 30, 2012


September 30, 2011




Per




Per


Amount


Diluted Share


Amount


Diluted Share

Calculation of Adjusted Net Income Attributable to UHS - including and excluding EHR impact:








Net income attributable to UHS

$71,817


$0.73


$85,054


$0.86

Plus/minus adjustments:








  Costs related to extinguishment of debt, net of income taxes

18,126


0.19





Adjusted net income attributable to UHS - including Electronic Health Records ("EHR") impact

$89,943


$0.92


$85,054


$0.86









Plus/minus impact of EHR implementation: 








EHR-related incentive income, pre-tax

(10,551)







EHR-related salaries, wages and benefits, pre-tax

2,779







EHR-related other operating costs, pre-tax

(82)







EHR-related depreciation & amortization, pre-tax

4,575







EHR-related minority interest in earnings of consolidated entities, pre-tax

1,122







Income tax provision on EHR-related items 

817







After-tax impact of EHR-related items

(1,340)


(0.01)


-


-

Adjusted net income attributable to UHS

$88,603


$0.91


$85,054


$0.86

 

Universal Health Services, Inc.

Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule")

For the nine months ended September 30, 2012 and 2011

(in thousands, except per share amounts)

(unaudited)

























Calculation of "EBITDA"










Nine months ended


Nine months ended


September 30, 2012


September 30, 2011

















Net revenues before provision for doubtful accounts

$5,718,676




$5,553,268



  Less: Provision for doubtful accounts

522,203




456,042



Net revenues

5,196,473


100.0%


5,097,226


100.0%









Operating charges:








   Salaries, wages and benefits

2,565,052


49.4%


2,492,570


48.9%

   Other operating expenses

1,059,048


20.4%


1,030,492


20.2%

   Supplies expense

594,924


11.4%


603,657


11.8%

   EHR incentive income

(12,506)


-0.2%


-


0.0%


4,206,518


80.9%


4,126,719


81.0%









Operating income/margin ("EBITDAR")

989,955


19.1%


970,507


19.0%









   Lease and rental expense

70,906




68,501



   Income attributable to noncontrolling interests

33,402




37,967











Earnings before, depreciation and amortization, interest expense, and income taxes ("EBITDA")

885,647


17.0%


864,039


17.0%









   Depreciation and amortization

221,807




213,828



   Costs related to extinguishment of debt

29,170




-



   Interest expense, net

137,805




154,677











Income before income taxes 

496,865




495,534











Provision for income taxes

188,880




192,638



Net income attributable to UHS

$307,985




$302,896



















Calculation of Adjusted Net Income Attributable to UHS










Nine months ended


Nine months ended


September 30, 2012


September 30, 2011




Per




Per


Amount


Diluted Share


Amount


Diluted Share

Calculation of Adjusted Net Income Attributable to UHS - including and excluding EHR impact:








Net income attributable to UHS

$307,985


$3.15


$302,896


$3.06

Plus/minus adjustments:








  Medicare Rural Floor settlement, net of income taxes

(18,753)







  Oklahoma SHOPP Medicaid reimbursements related to prior years, net of income taxes

(4,329)







  Impact of revised SSI ratios and write-off Florida county receivables, net of income taxes

5,149







  Net Medicaid reimbursements related to prior years, net of income taxes

(3,417)







  Costs related to extinguishment of debt, net of income taxes

18,126







Subtotal after-tax adjustments to net income attributable to UHS

(3,224)


(0.03)


-


-

Adjusted net income attributable to UHS - including Electronic Health Records ("EHR") impact

$304,761


$3.12


$302,896


$3.06









Plus/minus impact of EHR implementation: 








EHR-related incentive income, pre-tax

(12,506)







EHR-related salaries, wages and benefits, pre-tax

10,722







EHR-related other operating costs, pre-tax

314







EHR-related depreciation & amortization, pre-tax

8,102







EHR-related minority interest in earnings of consolidated entities, pre-tax

(775)







Income tax provision on EHR-related items 

(2,217)







After-tax impact of EHR-related items

3,640


0.03


-


-

Adjusted net income attributable to UHS

$308,401


$3.15


$302,896


$3.06

 

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)










Three months


Nine months


ended September 30,


ended September 30,


2012


2011


2012


2011









Net income

$81,373


$94,842


$341,387


$340,863

Other comprehensive income (loss):








   Unrealized derivative gains (loss) on cash flow hedges

(45)


(21,360)


1,782


(39,636)

   Amortization of terminated hedge

(84)


(84)


(252)


(252)

Other comprehensive (loss) income before tax

(129)


(21,444)


1,530


(39,888)

Income tax (benefit) expense related to items of other comprehensive income (loss)

(47)


(8,214)


585


(15,270)

Total other comprehensive (loss) income, net of tax

(82)


(13,230)


945


(24,618)









Comprehensive income

81,291


81,612


342,332


316,245

Less: Comprehensive income attributable to noncontrolling interests

9,556


9,788


33,402


37,967

Comprehensive income attributable to UHS

$71,735


$71,824


$308,930


$278,278

 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)











September 30,



December 31,




2012



2011

Assets







Current assets:







    Cash and cash equivalents


$

25,652


$

41,229

    Accounts receivable, net



1,042,535



969,802

    Supplies



97,013



96,775

    Deferred income taxes



123,131



108,324

    Other current assets



93,022



99,859

    Assets of facilities held for sale



107,071



48,916

          Total current assets



1,488,424



1,364,905








Property and equipment



5,240,909



5,106,160

Less: accumulated depreciation



(1,924,833)



(1,818,180)




3,316,076



3,287,980








Other assets:







    Goodwill



2,594,740



2,627,602

    Deferred charges



87,092



111,780

    Other



294,734



272,978



$

7,781,066


$

7,665,245








Liabilities and Stockholders' Equity







Current liabilities:







    Current maturities of long-term debt


$

2,499


$

2,479

    Accounts payable and accrued liabilities



810,963



832,125

    Federal and state taxes



6,774



-

    Liabilities of facilities held for sale



18,112



2,329

          Total current liabilities



838,348



836,933








Other noncurrent liabilities



408,535



401,908

Long-term debt



3,440,962



3,651,428

Deferred income taxes



195,692



209,592








Redeemable noncontrolling interest



234,056



218,266








UHS common stockholders' equity



2,608,782



2,296,352

Noncontrolling interest



54,691



50,766

          Total equity



2,663,473



2,347,118










$

7,781,066


$

7,665,245

 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


Nine months


ended September 30,


2012


2011





Cash Flows from Operating Activities:




  Net income

$341,387


$340,863

  Adjustments to reconcile net income to net 




   cash provided by operating activities:




   Depreciation & amortization

227,641


220,208

   (Gain) loss on sale of assets

(945)


164

   Stock-based compensation expense

16,189


13,434

    Costs related to extinguishment of debt

29,170


-

  Changes in assets & liabilities, net of effects from




   acquisitions and dispositions:




    Accounts receivable

(86,821)


(103,700)

    Accrued interest

11,901


13,143

    Accrued and deferred income taxes 

(260)


102,949

    Other working capital accounts 

(42,916)


(74,342)

    Other assets and deferred charges

25,959


20,215

    Other 

5,833


4,146

    Accrued insurance expense, net of commercial premiums paid

66,752


71,186

    Payments made in settlement of self-insurance claims

(58,884)


(45,764)

          Net cash provided by operating activities

535,006


562,502





Cash Flows from Investing Activities:




   Property and equipment additions, net of disposals

(282,191)


(195,404)

   Proceeds received from sale of assets and businesses

56,194


23,682

   Acquisition of property and businesses

(25,092)


(8,599)

   Costs incurred for purchase and implementation of electronic health records application

(41,854)


(27,874)

   Return of deposit on terminated purchase agreement

6,500


-

          Net cash used in investing activities

(286,443)


(208,195)





Cash Flows from Financing Activities:




   Reduction of long-term debt

(1,127,829)


(267,539)

   Additional borrowings

906,000


36,000

   Financing costs

(8,257)


(23,559)

   Repurchase of common shares

(9,676)


(44,532)

   Dividends paid

(14,519)


(14,638)

   Issuance of common stock

3,828


3,596

   Profit distributions to noncontrolling interests

(13,687)


(33,962)

          Net cash used in financing activities

(264,140)


(344,634)





(Decrease) increase in cash and cash equivalents

(15,577)


9,673

Cash and cash equivalents, beginning of period

41,229


29,474

Cash and cash equivalents, end of period

$25,652


$39,147





Supplemental Disclosures of Cash Flow Information:




  Interest paid

$104,560


$120,712





  Income taxes paid, net of refunds

$187,899


$89,268

 



       Universal Health Services, Inc.





  Supplemental Statistical Information






                   (un-audited)






























 % Change 


 % Change 








Quarter Ended


9 months ended



Same Facility:





9/30/2012


9/30/2012













Acute Care Hospitals










Revenues





-0.4%


-0.5%



Adjusted Admissions





-1.7%


-0.3%



Adjusted Patient Days





-1.0%


0.3%



Revenue Per Adjusted Admission





1.3%


-0.2%



Revenue Per Adjusted Patient Day





0.6%


-0.7%























Behavioral Health Hospitals




















Revenues





3.4%


4.2%



Adjusted Admissions





2.6%


5.0%



Adjusted Patient Days





0.7%


1.2%



Revenue Per Adjusted Admission





0.7%


-0.7%



Revenue Per Adjusted Patient Day





2.6%


2.9%











































UHS Consolidated



Third Quarter Ended


Nine months Ended




9/30/2012


9/30/2011


9/30/2012


9/30/2011











Revenues



$1,680,353


$1,662,675


$5,196,473


$5,097,226

EBITDA   (1)



265,358


258,910


885,647


864,039

EBITDA Margin (1)



15.8%


15.6%


17.0%


17.0%











Cash Flow From Operations



162,144


206,726


535,006


562,502

Days Sales Outstanding



57


51


55


50

Capital Expenditures  



99,840


79,164


282,191


195,404











Debt 







3,443,461


3,687,741

Shareholders Equity







2,608,782


2,221,382

Debt / Total Capitalization







56.9%


62.4%

Debt / EBITDA  (2)







2.96


3.42

Debt / Cash From Operations  (2)







4.99


5.55





















Acute Care EBITDAR Margin  (3) 



13.4%


14.8%


16.2%


17.8%

Behavioral Health EBITDAR Margin  (3) 


27.8%


26.5%


27.8%


26.7%





















(1)  Net of Minority Interest 










(2)  Latest 4 quarters










(3)  Before Corporate overhead allocation and minority interest. Before Adjustments shown on the Supplemental Schedule 

 


UNIVERSAL HEALTH SERVICES, INC.


SELECTED HOSPITAL STATISTICS


FOR THE THREE MONTHS ENDED


SEPTEMBER 30, 2012 AND 2011






















AS REPORTED:
































ACUTE (1)


BEHAVIORAL HEALTH




09/30/12

09/30/11

%  change


09/30/12

09/30/11

%  change












Hospitals owned and leased


25

25

0.0%


175

178

-1.7%


Average licensed beds


5,704

5,739

-0.6%


19,177

19,372

-1.0%


Patient days


273,361

279,322

-2.1%


1,289,975

1,291,753

-0.1%


Average daily census


2,971.3

3,036.1

-2.1%


14,021.5

14,040.8

-0.1%


Occupancy-licensed beds


52.1%

52.9%

-1.5%


73.1%

72.5%

0.9%


Admissions


61,521

63,305

-2.8%


91,520

89,951

1.7%


Length of stay


4.4

4.4

0.7%


14.1

14.4

-1.8%












Inpatient revenue


$3,013,482

$2,827,617

6.6%


$1,410,170

$1,368,405

3.1%


Outpatient revenue


1,517,261

1,384,084

9.6%


151,788

146,836

3.4%


Total patient revenue


4,530,743

4,211,701

7.6%


1,561,958

1,515,241

3.1%


Other revenue


25,006

19,884

25.8%


36,303

35,581

2.0%


Gross hospital revenue


4,555,749

4,231,585

7.7%


1,598,261

1,550,822

3.1%












Total deductions


3,560,780

3,265,466

9.0%


734,266

707,287

3.8%












Net hospital revenue before 










  provision for doubtful accounts

$994,969

$966,119

3.0%


$863,995

$843,535

2.4%












Provision for doubtful accounts

$166,570

$134,344

24.0%


$22,326

$17,710

26.1%












Net hospital revenue 


828,399

831,775

-0.4%


841,669

825,825

1.9%






















SAME FACILITY:






















ACUTE  (1)


BEHAVIORAL HEALTH (2)(3)




09/30/12

09/30/11

%  change


09/30/12

09/30/11

%  change












Hospitals owned and leased


24

24

0.0%


171

171

0.0%


Average licensed beds


5,545

5,580

-0.6%


19,010

18,960

0.3%


Patient days


265,043

270,314

-2.0%


1,278,478

1,266,518

0.9%


Average daily census


2,880.9

2,938.2

-2.0%


13,896.5

13,766.5

0.9%


Occupancy-licensed beds


52.0%

52.7%

-1.3%


73.1%

72.6%

0.7%


Admissions


59,643

61,229

-2.6%


90,415

87,895

2.9%


Length of stay


4.4

4.4

0.7%


14.1

14.4

-1.9%































(1)

Auburn is excluded in both current and prior years. Hospital count previously reflected number of licenses


we have revised to reflect number of hospitals.
















(2)

King George School, Marion, Pennsylvania Clinical School, and San Juan Capestrano  



are excluded in both current and prior years.
















(3)

Brook Glen Behavioral Hospital, Jefferson Train, Manatee Palms Group Homes and the Peaks 



are excluded in both current and prior years 

























































UNIVERSAL HEALTH SERVICES, INC.


SELECTED HOSPITAL STATISTICS


FOR THE NINE MONTHS ENDED


SEPTEMBER 30, 2012 AND 2011






















AS REPORTED:
































ACUTE (1)


BEHAVIORAL HEALTH




09/30/12

09/30/11

%  change


09/30/12

09/30/11

%  change












Hospitals owned and leased


25

25

0.0%


175

178



Average licensed beds


5,703

5,713

-0.2%


19,152

19,390

-1.2%


Patient days


852,588

872,943

-2.3%


3,905,070

3,913,151

-0.2%


Average daily census


3,111.6

3,197.6

-2.7%


14,252.1

14,333.9

-0.6%


Occupancy-licensed beds


54.6%

56.0%

-2.5%


74.4%

73.9%

0.7%


Admissions


189,886

195,818

-3.0%


279,231

270,042

3.4%


Length of stay


4.5

4.5

0.7%


14.0

14.5

-3.5%












Inpatient revenue


$9,326,344

$8,934,701

4.4%


$4,242,528

$4,154,117

2.1%


Outpatient revenue


4,606,680

4,068,566

13.2%


474,623

453,652

4.6%


Total patient revenue


13,933,024

13,003,267

7.2%


4,717,151

4,607,769

2.4%


Other revenue


68,827

55,620

23.7%


109,273

105,102

4.0%


Gross hospital revenue


14,001,851

13,058,887

7.2%


4,826,424

4,712,871

2.4%












Total deductions


10,947,246

10,073,372

8.7%


2,188,024

2,162,038

1.2%












Net hospital revenue before 










  provision for doubtful accounts

$3,054,605

$2,985,515

2.3%


$2,638,400

$2,550,833

3.4%












Provision for doubtful accounts

$456,078

$398,445

14.5%


$66,144

$57,497

15.0%












Net hospital revenue 


2,598,527

2,587,070

0.4%


2,572,256

2,493,336

3.2%






















SAME FACILITY:
































ACUTE (1)


BEHAVIORAL HEALTH (2)(3)




09/30/12

09/30/11

%  change


09/30/12

09/30/11

%  change












Hospitals owned and leased


24

24

0.0%


171

171

0.0%


Average licensed beds


5,544

5,554

-0.2%


18,977

18,901

0.4%


Patient days


825,781

845,672

-2.4%


3,871,182

3,826,941

1.2%


Average daily census


3,013.8

3,097.7

-2.7%


14,128.4

14,018.1

0.8%


Occupancy-licensed beds


54.4%

55.8%

-2.5%


74.5%

74.2%

0.4%


Admissions


184,021

189,456

-2.9%


276,105

263,293

4.9%


Length of stay


4.5

4.5

0.5%


14.0

14.5

-3.5%































(1)

Auburn is excluded in both current and prior years. Hospital count previously reflected number of licenses


we have revised to reflect number of hospitals.
















(2)

King George School, Marion, Pennsylvania Clinical School, and San Juan Capestrano  



are excluded in both current and prior years.
















(3)

Brook Glen Behavioral Hospital, Jefferson Train, Manatee Palms Group Homes and the Peaks 



are excluded in both current and prior years 






 

SOURCE Universal Health Services, Inc.

RELATED LINKS
http://www.uhsinc.com


Source: www.prnewswire.com