Universal Health Services, Inc.

What they do

UHS owns and operates acute care hospitals and outpatient facilities in the U.S. alongside a large behavioral health care platform in the U.S., the U.K. and Puerto Rico. Its hospitals provide general and specialty surgery, internal medicine, obstetrics, emergency care, radiology, oncology, diagnostic and coronary care, pediatrics, pharmacy and behavioral health services. Corporate services provided to facilities include central purchasing, information services, finance and control systems, facilities planning, physician recruitment, administrative personnel management and marketing.

Revenue drivers

• Acute care hospitals and outpatient facilities (U.S.) — Includes 29 inpatient acute care hospitals, 35 free-standing emergency departments, 13 outpatient centers and 1 surgical hospital; together with the commercial health insurer, these accounted for approximately 57% of consolidated net revenues in both 2025 and 2024.
• Behavioral health care facilities — 346 inpatient and 119 outpatient behavioral facilities, including 182 U.S. inpatient and 110 U.S. outpatient sites, 161 U.K. inpatient and 2 U.K. outpatient sites, and 3 inpatient and 7 outpatient sites in Puerto Rico; with the commercial health insurer, approximately 43% of consolidated net revenues in 2025 and 2024.
• U.K. behavioral health operations — U.K. behavioral health facilities generated approximately $1.001 billion of net revenues in 2025 versus $880 million in 2024, with total assets of approximately $1.531 billion at December 31, 2025.
• State and county-based programs, including Medicaid — UHS receives annual Medicaid revenues of approximately $100 million or more from each of California, Texas, Nevada, Florida, Washington D.C., Illinois, Pennsylvania, Kentucky, Mississippi, Virginia, Michigan, Massachusetts, Tennessee, Arizona, Ohio and Washington; most programs are approved year-to-year.

Recent performance

Second quarter 2026 net income attributable to UHS was $358.4 million, or $5.98 per diluted share, versus $353.2 million, or $5.43 per diluted share, in the second quarter of 2025. Net revenues rose 8.3% to $4.638 billion from $4.284 billion. Second quarter 2026 results included a favorable net pre-tax impact of approximately $72 million, comprising a $100 million favorable Florida Medicaid managed care directed payment program item (net of provider taxes) and a $28 million unfavorable increase to the self-insured professional and general liability reserve. EBITDA net of NCI was $680.2 million in the second quarter of 2026 versus $651.4 million a year earlier, and Adjusted EBITDA net of NCI was $677.9 million versus $642.9 million. For the first six months of 2026, reported net income was $707.1 million, or $11.63 per diluted share, versus $669.9 million, or $10.23 per diluted share, with net revenues up 8.9% to $9.1 billion.

Strategy

UHS describes its principal business as owning and operating acute care hospitals and outpatient facilities and behavioral health care facilities, supported by a stated mission of quality service to patients, physicians, purchasers, employees and investors. The company commits to service excellence, continuous improvement in measurable ways, employee development, ethical and fair treatment, teamwork, compassion and innovation in service delivery. It provides capital resources and centralized management services—central purchasing, information services, finance and control systems, facilities planning, physician recruitment, administrative personnel management, marketing and public relations—to its facilities. The company also notes a change in its outpatient behavioral health facility counting convention during the third quarter of 2025, which explains substantially all of the increase from prior periods.

Risks

• Medicaid funding reductions under the One Big Beautiful Bill Act — UHS estimates that, commencing with 2028 state fiscal years, its aggregate annual net benefit will be reduced on an annually increasing and relatively pro rata basis by approximately $500 million by 2032 due to provider fee limits and Medicaid eligibility work requirements.
• Expiration of insurance exchange subsidies and premium tax credits — Enhanced premium tax credits and enhanced ACA exchange subsidies expired December 31, 2025, exchange enrollment has already been adversely impacted, and H.R.1834 (passed by the House on January 8, 2026) would extend EPTCs for three years but no such law has been enacted.
• Concentration in state Medicaid and supplemental payment programs — UHS receives approximately $100 million or more in annual Medicaid revenues from each of sixteen states plus Washington D.C., and most of these programs are approved on a year-to-year basis with no assurance revenues continue at current rates or at all.
• Self-insured professional and general liability claims — In the second quarter of 2026 UHS recorded a $28 million unfavorable pre-tax impact from an increase to its reserve for self-insured professional and general liability claims.

Outlook

On July 27, 2026, UHS revised its 2026 full year operating results forecast, and the second quarter items—the Florida Medicaid directed payment program benefit and the liability reserve increase—had not been included in the original 2026 forecast disclosed on February 25, 2026. Management flags that the One Big Beautiful Bill Act's Medicaid provisions, and the expiration of enhanced exchange subsidies, could materially unfavorably affect results and may reduce revenue and increase uncompensated care.