Becker's Hospital Review

15 CFO / FINANCE UHS 'can be more selective' of patients it treats based on payer rates, CFO says By Alan Condon K ing of Prussia, Pa.-based Universal Health Services, the largest private psychiatric hospital operator in the U.S., cherry-picks certain patients based on how much it will be paid by insurers, CFO Steve Filton said July 26 during the health system's second-quarter earnings call. "We've been going to our lowest payers and either demanding increases from them or canceling those contracts that we view to be inadequate and simply admitting patients whose insurance will pay us more," Mr. Filton said. "In an environment where we can only treat a limited number of patients, we can be more selective about who we treat and the fairness of what we think we're being paid." Mr. Filton's comments came aer a question about rate increases — both on the commercial and Medicaid side — for behavioral health. UHS, a for-profit health system, has seen fairly consistent rate increases, with revenue per day in its behavioral division generally increasing by 2 percent to 3 percent a year, leaders said during the earnings call. During the pandemic, those numbers rose to around 5 percent to 6 percent. "But I think generally the pricing environment in behavioral [health] remains strong," Mr. Filton said. "We remain aggressive that we've terminated or issued notice of termination in a great many markets to a great many payers. We're pursuing this strategy pretty aggressively and feel like there's runway to do so for the foreseeable future." Second-quarter revenue from UHS' acute care services was up 9.7 percent year over year on a same facility basis, while revenue from its behavioral health services increased by 7.8 percent, according to the health system. Total revenue increased 6.8 percent to $3.5 billion in the second quarter, compared to $3.3 billion during the same period in 2022. n What CEOs want CFOs to focus on By Alan Condon F ifty-four percent of CFOs say that their CEOs are asking them to focus on cost reduction while 40 percent indicate that their CEOs want them honing in on strategy and transformation, according to Deloitte's "CFO Signals Survey 2Q 2023." More than one-quarter of CFOs in the survey reported that their CEOs are asking them to focus on working capital efficiency and risk management while over one-third of CFOs said their CEOs want them focused on strategy and transformation, performance management, revenue growth, investment and capital/financing. Since 2010, Deloitte has surveyed leading CFOs representing some of North America's largest companies to provide insight into the business environment, company priorities and expectations, finance priorities and CFOs' priorities. Participating CFOs represent diversified, large companies, with 81 percent of respondents reporting revenue in excess of $1 billion. Twenty-three percent are from companies with more than $10 billion in annual revenue, according to Deloitte. n Virginia health system cuts salary expenses as supply costs remain high By Nick Thomas W inchester, Va.-based Valley Health System was able to cut some of its salary and benefits expenses during the second quarter while reporting operating income of $14.9 million for the period. While salary and benefits expenses were down almost 4 percent to total $245.4 million in the second quarter, supply expenses rose approximately 18 percent on the previous year. Overall expenses totaled $613.7 million, up 5.7 percent, while revenues totaled $628.6 million. The six-hospital system was able to boost its operating income with solid gains on investments to total a net income for the quarter of $48.2 million compared with a net loss of $84.8 million in the same period of 2022. n

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