UHS quarterly earnings slide

Michelle Swafford

Friday, April 23, 2004 | 10:37 a.m.

Universal Health Services, which owns four Las Vegas Valley hospitals, Thursday reported a first-quarter profit of $46.2 million, or 74 cents a share, down from $52.8 million, or 84 cents, in the year-ago quarter.

The King of Prussia, Pa.-based acute care and behavioral health hospital operator reported revenue rose to $1.04 billion from $886 million.

The company attributed the quarterly loss to fewer patients, increased bad debt from unpaid patient bills and market competition in some cities.

"Bad debt is an issue that's likely to exist through the rest of this year," Universal's Chief Financial Officer Steve Filton said.

Filton said the financial situation could improve once the economy is stronger and fewer patients are uninsured.

Hospital giant HCA Inc. reported Thursday that its profit dropped 26 percent, primarily because of an increase in unpaid patients bills.

Filton said the Las Vegas market, which operates as Valley Health System, is not an area where unpaid patient bills are hurting the company. Competition with hospital giant HCA Inc., however, is increasing. HCA operates three Las Vegas hospitals, including Southern Hills Hospital, which opened March 1 in the southwest valley, just a few miles from Valley Health's Spring Valley Hospital.

Filton told investors in March that the competition in Las Vegas was a "temporary market disruption" and that population growth will absorb the new bed capacity.

Universal also owns Desert Springs, Summerlin, and Valley hospitals in Las Vegas, which were "cannibalized" when sister hospital Spring Valley opened Oct. 2, Filton said.

The company has announced plans to build a fifth hospital, Centennial Hills, on a $15 million parcel at the intersection of I-215 and U.S. 95 in northwest Las Vegas, but no details or timeline have been released. Universal owned land in North Las Vegas but will sell it later this year because the Centennial Hills parcel was purchased, Filton said.

Universal will soon own an 82-bed behavioral health center in Las Vegas. The company signed a letter of intent to purchase four centers from Keystone Education and Youth Services, which is also selling centers in Bowling Green, Ky.; Benton, Ark.; and Savannah, Ga. Universal is expected to pay $100 million this month for those four units plus a behavioral health hospital and ancillary services in Stonington, Conn.

At the end of the first quarter, Universal Health owned 28 hospitals, up from 24 in the year-ago quarter. Patient admissions on a same-facility basis, which excludes units built in the past year, dropped 1 percent to 66,891 patients from 67,505.

Locally, Universal doesn't report patient admissions numbers, but the company's market share increased through the end of 2003, Valley Health spokesman Michael Tymczyn said.

Patient admissions could further increase with the additional beds and services in the works at Universal's Las Vegas hospitals.

Summerlin Hospital opened a neonatal intensive care unit in February and is building a new patient tower with 90 additional beds that are scheduled to open this summer.

Valley Hospital expanded its emergency room March 11, increasing beds to 43 from 28.

Earlier this month, Spring Valley opened a six-bed nursery for critical babies and added an acid reflux surgery to their services.

Desert Springs announced Wednesday it will form a partnership with long-term care provider Kindred Healthcare Inc. to provide long-term care services within the hospital.