Universal Health Services, Inc.

218.540.96 %$UHS

NYSE

Healthcare

Medical Care Facilities

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Company Overview

Business Model: Universal Health Services, Inc. (the "Company") primarily owns and operates acute care hospitals, outpatient facilities, and behavioral health care facilities through its subsidiaries. The Company's services encompass general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services, and behavioral health services. Universal Health Services, Inc. provides capital resources and a range of management services to its facilities, including central purchasing, information services, finance and control systems, facilities planning, physician recruitment, administrative personnel management, marketing, and public relations. In 2024, net revenues from acute care hospitals, outpatient facilities, and its commercial health insurer constituted 56% of consolidated net revenues, while behavioral health care facilities and the commercial health insurer accounted for 44%.

Market Position: Universal Health Services, Inc. believes community-based hospitals remain central to healthcare delivery and is committed to a philosophy of self-determination for its hospitals. The Company emphasizes expanding outpatient services in response to cost containment pressures and technological advancements. It implements programs to enhance financial performance and efficiency, including optimizing staff and equipment utilization, improving patient management, and streamlining billing and collection. Universal Health Services, Inc. actively recruits qualified physicians and develops provider networks to establish its facilities as key sources of quality healthcare. The Company operates in a highly competitive industry, facing competition from governmental, non-profit, specialty, and physician-owned facilities, as well as outpatient and addiction treatment centers.

Recent Strategic Developments:

Expansion and Divestiture: Universal Health Services, Inc. selectively pursues acquisitions, construction, or leasing of new hospital facilities for rational growth. It also considers divesting facilities that do not align with its growth or operating strategy. The behavioral health segment focuses on partnerships with non-Universal Health Services, Inc. acute care hospitals through purchases, leased beds, and joint ventures.
Operational Enhancements: Ongoing development activities include applying for certificates of need to add new services in existing hospitals.
Technology Investment: The Company has made significant investments in technology for electronic health records (EHR) adoption and utilization to meet "meaningful use" criteria.
Debt Refinancing: In September 2024, Universal Health Services, Inc. issued $500 million of 4.625% Senior Secured Notes due 2029 and $500 million of 5.050% Senior Secured Notes due 2034. Concurrently, it amended its credit agreement to extend the maturity to September 2029, increase the revolving credit facility to $1.3 billion, and reduce the Tranche A term loan facility by approximately $1.0 billion to $1.2 billion.
Facility Changes: The newly constructed 150-bed West Henderson Hospital in Las Vegas, Nevada, opened in the fourth quarter of 2024. In early 2023, Universal Health Services, Inc. discontinued all inpatient operations at Desert Springs Hospital Medical Center in Las Vegas, Nevada, and plans to continue emergency department services while constructing a new free-standing emergency department on campus.
Washington D.C. Project: In 2020, Universal Health Services, Inc. entered agreements with the District of Columbia to manage the development and construction of an acute care hospital and other facilities, expected to be completed in Spring 2025. The Company will lease and operate these facilities for 75 years and has committed to expend at least $75 million over a 12-year period in healthcare infrastructure in Washington, D.C.

Geographic Footprint: As of February 26, 2025, Universal Health Services, Inc. owned and/or operated 359 inpatient facilities and 60 outpatient and other facilities across 39 states, Washington, D.C., the United Kingdom, and Puerto Rico.

U.S. Facilities: 28 inpatient acute care hospitals, 33 free-standing emergency departments, 10 outpatient centers & 1 surgical hospital, 181 inpatient behavioral health care facilities, and 14 outpatient behavioral health care facilities.
U.K. Facilities: 147 inpatient behavioral health care facilities and 2 outpatient behavioral health care facilities.
Puerto Rico Facilities: 3 inpatient behavioral health care facilities.
Revenue Concentration: Facilities in Texas, Nevada, and California contributed 16%, 18%, and 11%, respectively, to consolidated net revenues in 2024.

Financial Performance

Revenue Analysis

Metric	Current Year (2024)	Prior Year (2023)	Change
Total Revenue	$15,827,935 thousand	$14,281,976 thousand	+10.8%
Gross Profit	N/A	N/A	N/A
Operating Income	$1,681,814 thousand	$1,175,381 thousand	+43.1%
Net Income	$1,163,109 thousand	$719,307 thousand	+61.7%

Profitability Metrics:

Operating Margin: 10.6% (2024) vs. 8.2% (2023)
Net Margin: 7.3% (2024) vs. 5.0% (2023)

Investment in Growth:

R&D Expenditure: Not explicitly disclosed as a separate line item.
Capital Expenditures: $943,810 thousand (2024) vs. $743,055 thousand (2023).
Strategic Investments:
- Acquisitions of businesses and property: $18,998 thousand (2024) vs. $3,728 thousand (2023).
- Capitalized interest on major projects: $38,922 thousand (2024) vs. $24,422 thousand (2023).
- Construction commitments: $31,568 thousand for two behavioral health care facilities scheduled for completion in 2025.
- Healthcare infrastructure in Washington D.C.: $61 million committed over a projected 12-year period (approximately $14 million incurred as of December 31, 2024).

Business Segment Analysis

Acute Care Hospital Services

Financial Performance (Same Facility Basis):

Revenue: $8,565,845 thousand (+8.5% YoY)
Operating Margin: 10.1% (2024) vs. 7.1% (2023)
Key Growth Drivers: Inpatient admissions increased by 3.1%, adjusted admissions by 2.9%, patient days by 2.0%, and adjusted patient days by 1.8% in 2024 compared to 2023. Net revenue per adjusted admission increased by 5.1%, and net revenue per adjusted patient day increased by 6.3%. Results for 2024 included approximately $186 million of net reimbursements from the Nevada state directed payment program. Salaries, wages, and benefits expense increased by 3.4% but decreased as a percentage of net revenues to 40.9% (2024) from 42.9% (2023), partly due to reduced premium pay and a restructuring. Other operating expenses increased by 9.9%, including a $36 million increase in self-insured professional and general liability reserves. Supplies expense increased by 3.3% but decreased as a percentage of net revenues to 15.9% (2024) from 16.7% (2023).

Product Portfolio: Services include general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services, and/or behavioral health services. As of February 26, 2025, the segment includes 28 inpatient acute care hospitals, 33 free-standing emergency departments, and 10 outpatient centers & 1 surgical hospital in the U.S.

Market Dynamics: The occupancy rate, based on average available beds, was approximately 67% in 2024 compared to 66.5% in 2023. The average length of inpatient stay was 4.8 days in 2024 compared to 4.9 days in 2023. The segment derives a significant portion of its revenue from third-party payers, including Medicare, Medicaid, and private insurers, and is impacted by various state-specific Medicaid supplemental payment programs.

Behavioral Health Care Services

Financial Performance (Same Facility Basis):

Revenue: $6,700,469 thousand (+10.7% YoY)
Operating Margin: 20.4% (2024) vs. 17.9% (2023)
Key Growth Drivers: Inpatient admissions increased by 1.0%, adjusted admissions by 0.7%, patient days by 1.9%, and adjusted patient days by 1.7% in 2024 compared to 2023. Net revenue per adjusted admission increased by 9.8%, and net revenue per adjusted patient day increased by 8.8%. Salaries, wages, and benefits expense increased by 7.3% but decreased as a percentage of net revenues to 53.6% (2024) from 55.3% (2023). Other operating expenses increased by 8.0%, including an $18 million increase in self-insured professional and general liability reserves. Supplies expense increased by 6.0% but decreased as a percentage of net revenues to 3.4% (2024) from 3.6% (2023).

Product Portfolio: The segment focuses on behavioral health services. As of February 26, 2025, it includes 181 inpatient and 14 outpatient behavioral health care facilities in the U.S., 147 inpatient and 2 outpatient facilities in the U.K., and 3 inpatient facilities in Puerto Rico.

Market Dynamics: The occupancy rate, based on average available beds, was 73% in 2024 compared to 72% in 2023. The average length of inpatient stay was 13.5 days in 2024 compared to 13.4 days in 2023. A significant portion of net revenues from the U.K. behavioral health facilities is derived from governmental payers. The segment is subject to competition from other healthcare providers, including addiction treatment centers, and is influenced by state-specific Medicaid supplemental payment programs.

Capital Allocation Strategy

Shareholder Returns:

Share Repurchases: Universal Health Services, Inc. repurchased approximately 2.98 million shares at an aggregate cost of $599 million in 2024 under its stock repurchase program. An additional 375,248 shares were repurchased for $72 million in connection with income tax withholding obligations from stock-based compensation.
Dividend Payments: The Company paid $53.3 million in dividends, or $0.80 per share, in 2024.
Future Capital Return Commitments: As of December 31, 2024, Universal Health Services, Inc. had an aggregate available repurchase authorization of $824.4 million under its stock repurchase program, which has no expiration date.

Balance Sheet Position:

Cash and Equivalents: $125,983 thousand (2024) vs. $119,439 thousand (2023).
Total Debt: $4,504,541 thousand (2024) vs. $4,912,469 thousand (2023).
Net Cash Position: $(4,378,558) thousand (2024) vs. $(4,793,030) thousand (2023).
Credit Rating: Not disclosed in the filing.
Debt Maturity Profile: As of December 31, 2024, total debt maturities (before unamortized financing costs) were $4,524,366 thousand, with significant maturities in 2026 ($740,402 thousand) and 2029 ($1,655,608 thousand). The weighted average interest rate on fixed-rate debt was 3.5% and on variable-rate debt was 5.8%. The average effective interest rate on revolving credit, Tranche A term loan, and senior notes was 4.8% in 2024, down from 4.9% in 2023.

Cash Flow Generation:

Operating Cash Flow: $2,067,101 thousand (2024) vs. $1,267,797 thousand (2023).
Free Cash Flow: Not explicitly disclosed.
Cash Conversion Metrics: Days Sales Outstanding (DSO) improved to 50 days in 2024 from 57 days in 2023.

Operational Excellence

Production & Service Model: Universal Health Services, Inc. operates a diverse portfolio of acute care and behavioral health facilities, providing a broad range of medical and behavioral health services. The Company's operational philosophy emphasizes service excellence, continuous improvement, employee development, ethical treatment, teamwork, compassion, and innovation. It implements programs to enhance efficiency and financial performance, including optimizing staff and equipment utilization, improving patient management, and streamlining billing and collection processes.

Supply Chain Architecture: Key Suppliers & Partners:

Group Purchasing Organization: Premier, Inc., with whom Universal Health Services, Inc. has a group purchasing organization agreement and a minority ownership interest.
Medical Waste Disposal: Engages with suppliers compliant with federal, state, and local environmental laws.
Water Safety: Co-manages a Water Management Program with a third-party specializing in water safety, adhering to ANSI/ASHRAE Standard 188 and ANSI/AAMI ST108: 2023 Water standards.

Facility Network:

Manufacturing: Not applicable to Universal Health Services, Inc.'s service-based business model.
Research & Development: While not a distinct facility network, the Company's R&D focus is integrated into its operations through continuous assessment of equipment needs and adoption of technological advancements.
Distribution: Centralized purchasing and information services support the operational network.
Overall Network: As of February 26, 2025, the Company operates 359 inpatient and 60 outpatient facilities across 39 states, Washington, D.C., the United Kingdom, and Puerto Rico. This includes 28 U.S. acute care hospitals, 33 free-standing emergency departments, 10 outpatient centers & 1 surgical hospital, 181 U.S. inpatient behavioral health facilities, 14 U.S. outpatient behavioral health facilities, 147 U.K. inpatient behavioral health facilities, 2 U.K. outpatient behavioral health facilities, and 3 Puerto Rico inpatient behavioral health facilities. Administrative offices are located in multiple states.

Operational Metrics:

Acute Care (Same Facility Basis): Average licensed beds: 6,657 (2024); Average available beds: 6,485 (2024); Patient days: 1,600,445 (2024); Average daily census: 4,372.8 (2024); Occupancy (licensed beds): 65.7% (2024); Occupancy (available beds): 67.4% (2024); Admissions: 331,113 (2024); Length of stay: 4.8 days (2024).
Behavioral Health (Same Facility Basis): Average licensed beds: 24,165 (2024); Average available beds: 24,065 (2024); Patient days: 6,397,790 (2024); Average daily census: 17,480.3 (2024); Occupancy (licensed beds): 72.3% (2024); Occupancy (available beds): 72.6% (2024); Admissions: 472,798 (2024); Length of stay: 13.5 days (2024).

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

Direct Sales: Implied through its physician recruitment services and direct patient care models.
Channel Partners: Extensive network of relationships with private insurers, managed care plans (HMOs, PPOs), and federal and state government programs (Medicare, Medicaid, managed Medicare, managed Medicaid).
Digital Platforms: Utilizes information technology systems for managing clinical and financial data, and patient communication, supporting its service delivery.

Customer Portfolio: Enterprise Customers:

Tier 1 Clients: Includes major private insurers and managed care organizations, with whom Universal Health Services, Inc. negotiates service contracts.
Strategic Partnerships: Engages in joint ventures and affiliation agreements with third-party hospitals, particularly in its behavioral health segment, to operate services or provide indigent care. An example is the joint venture for Clive Behavioral Health.
Customer Concentration:
- Medicare: 11% of total net revenue (2024).
- Managed Medicare: 12% of total net revenue (2024).
- Medicaid: 14% of total net revenue (2024).
- Managed Medicaid: 15% of total net revenue (2024).
- Managed Care (HMO and PPOs): 28% of total net revenue (2024).
- Uninsured patients: Represent a primary collection risk, with charity care and uninsured discounts provided.

Geographic Revenue Distribution:

United States: The primary market for Universal Health Services, Inc.
United Kingdom: Behavioral health care facilities generated approximately $880 million in net revenues in 2024.
Puerto Rico: Operates behavioral health care facilities.
Key States by Revenue: Texas (16% of consolidated net revenues in 2024), Nevada (18% in 2024), and California (11% in 2024) represent significant revenue concentrations.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The healthcare industry is highly competitive, with intensifying competition for patients and physicians driven by regulatory and technological changes, the increasing adoption of managed care payment systems, cost containment pressures, and a shift towards outpatient treatment. There is an increasing focus on quality measures, with Centers for Medicare and Medicaid Services (CMS) publishing performance data and patient satisfaction surveys. Price transparency requirements mandate public disclosure of standard charges and payer-specific negotiated rates. The industry is also trending towards value-based purchasing, linking financial incentives to quality and efficiency of care.

Competitive Positioning Matrix:

Competitive Factor	Company Position	Key Differentiators
Technology Leadership	Moderate	Significant investments in electronic health records (EHR) and health information technology.
Market Share	Competitive	Operates a large network of 359 inpatient and 60 outpatient facilities across diverse geographies.
Cost Position	Competitive	Implements productivity enhancement programs and cost reduction initiatives, including optimizing staffing, reducing premium pay, and consolidating medical supply vendors.
Customer Relationships	Strong	Focuses on service excellence, physician recruitment, and developing provider networks to attract and retain patients.

Direct Competitors

Primary Competitors:

Governmental Agencies: Tax-supported hospitals that may benefit from tax exemptions and endowments not available to Universal Health Services, Inc.
Nonprofit Corporations: Hospitals supported by endowments and charitable contributions, also often exempt from taxes.
Other For-Profit Healthcare Companies: Compete for acquisitions and market share.
Private Equity and Venture Capital Firms: Actively compete for hospital acquisitions.
Specialty and Large Hospitals: In some markets, these offer a broader range of services and equipment.
Outpatient Surgical and Diagnostic Centers: Increase competition due to the industry shift towards outpatient care.
Physician-Owned Facilities: Hospitals or surgery centers that are fully or partially owned by physicians.
National Health Service (NHS) in the U.K.: The principal provider of healthcare services in the United Kingdom, competing with Universal Health Services, Inc.'s U.K. behavioral health facilities.
Independent Sector Providers in the U.K.: Additional competition in the U.K. healthcare market.

Emerging Competitive Threats: New entrants, disruptive technologies, and alternative solutions are recognized as potential threats, though not specifically detailed in the filing.

Competitive Response Strategy: Universal Health Services, Inc. aims to maintain its competitive advantage by:

Strategic Growth: Selectively acquiring, constructing, or leasing additional hospital facilities.
Service Innovation: Introducing new services and improving existing ones, coupled with physician recruitment.
Operational Efficiency: Implementing financial and operational controls, and expanding outpatient services.
Talent Acquisition: Aggressively recruiting and retaining qualified physicians and medical support personnel.
Payer Relations: Negotiating favorable service contracts with managed care organizations and other group health care service purchasers.
Technology Upgrades: Continuously assessing and upgrading medical equipment and technology.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

Geographic Concentration: Significant revenue concentration in Texas (16%), Nevada (18%), and California (11%) makes Universal Health Services, Inc. particularly vulnerable to adverse regulatory, economic, public health, environmental, and competitive changes in these states.
Third-Party Payer Dependence: A substantial portion of revenue is derived from Medicare, Medicaid, and private insurers, making the Company sensitive to changes in reimbursement policies, rates, and coverage.
Uninsured and Underinsured Patients: An increase in these patient populations or a decline in the collectability of their accounts could negatively impact financial results.
Competition: Intense competition from various healthcare providers could lead to reduced patient volumes.
Value-Based Purchasing: The industry trend towards value-based purchasing, linking reimbursement to quality and efficiency, may adversely affect revenues if quality standards are not met.
Utilization Review and Denials: Controls imposed by third-party payers to reduce admissions and lengths of stay, along with increasing rates of denied claims, can reduce net revenues and increase operating costs.
Economic Conditions: Worsening economic conditions, including inflation and rising interest rates, could lead to higher unemployment, reduced health insurance coverage, and decreased patient volumes, particularly for elective services.
Climate Change and Severe Weather: Facilities in high-risk areas are susceptible to revenue loss, cost increases, or damage from natural disasters. Climate change may also increase property insurance costs or limit coverage availability.
Technological Obsolescence: Failure to continually update medical equipment and technology could lead to patients seeking care from competitors.

Technology Disruption:

EHR Compliance: Failure to consistently meet "promoting interoperability" criteria for electronic health record systems could result in reduced Medicare reimbursement.

Customer Concentration:

Employer Dependency: Local economies often rely on a few large employers; their failure or reduction in workforce could negatively impact patient volumes and insurance coverage.

Operational & Execution Risks

Supply Chain Vulnerabilities:

Tariffs and Trade Policies: Changes in trade policies, such as new tariffs on imported pharmaceutical ingredients, medical devices, and equipment, could disrupt supply chains, increase costs, and impact competitive positioning.
Inflationary Pressures: Ongoing inflationary pressures, particularly in personnel costs, construction materials, and labor, could increase operating expenses faster than revenue growth, potentially reducing returns on capital projects.

Geographic Concentration:

Natural Disasters: High concentration of facilities in states prone to severe weather conditions (e.g., wildfires, hurricanes, earthquakes) exposes the Company to significant operational disruptions and potential uninsured losses.

Capacity Constraints:

Staffing Shortages: A nationwide shortage of nurses and other clinical staff, exacerbated by the COVID-19 pandemic, could necessitate higher-cost temporary labor or increased wages/benefits, or require limiting services.
Labor Union Activity: Increased unionization efforts could lead to higher labor costs.

Financial & Regulatory Risks

Market & Financial Risks:

Interest Rate Fluctuations: Rising interest rates have increased borrowing costs. A 1% change in interest rates could impact pre-tax income by approximately $13 million based on variable rate debt as of December 31, 2024.
Access to Capital: The Company requires substantial capital for growth and ongoing expenditures; inability to secure financing on acceptable terms could harm the business.
Goodwill Impairment: Deterioration in economic conditions or unfavorable financial results could lead to future impairment charges for goodwill and other intangible assets.
Foreign Exchange Risk: Exposure to fluctuations in foreign currency exchange rates, primarily the pound sterling for U.K. operations, may adversely affect financial results despite hedging efforts.

Regulatory & Compliance Risks:

Medicare and Medicaid Funding: Potential for significant reductions or adverse changes in federal and state Medicare and Medicaid funding, including scheduled Medicaid Disproportionate Share Hospital (DSH) allotment reductions starting in 2025.
Healthcare Reform Uncertainty: Ongoing political and legal challenges to the Patient Protection and Affordable Care Act (the "Legislation") and other reform initiatives (e.g., Braidwood Management v. Becerra, Inflation Reduction Act of 2022) create uncertainty regarding future reimbursement and market dynamics.
No Surprises Act: Implementation of legislation preventing surprise medical bills, particularly the Independent Dispute Resolution (IDR) process, has faced litigation and delays, potentially affecting timely payments.
EMTALA Obligations: The requirement to treat emergency medical conditions regardless of ability to pay, and potential expansion of these obligations, could increase uncompensated care.
Extensive Laws and Regulations: Non-compliance with complex federal, state, and local laws (e.g., False Claims Act, HIPAA, anti-kickback statute, Stark Law) could result in severe civil or criminal penalties, fines, exclusion from government programs, or significant operational changes.
UK Regulation: Operations in the United Kingdom are subject to a high level of regulation, including data protection laws (U.K. Data Protection Act, U.K. GDPR), with potential for substantial penalties for non-compliance.
Loper Bright Enters. v. Raimondo: The Supreme Court's decision modifying regulatory interpretation standards could introduce uncertainty in highly regulated areas like Medicare reimbursement and healthcare fraud and abuse compliance.

Legal Proceedings:

The Pavilion Behavioral Health System Litigation: A jury awarded $60 million in compensatory damages and $475 million in punitive damages (later remitted to $120 million punitive) in a sexual assault case. Universal Health Services, Inc. is appealing the judgment and contesting asset discovery.
Cumberland Hospital for Children and Adolescents Litigation: A jury awarded $60 million in compensatory, $180 million in trebled, and $120 million in punitive damages (expected to be reduced to $1.05 million by law) in multi-plaintiff lawsuits. Appeals are ongoing, and approximately 40 additional similar claims are pending.
Insurance Coverage Limitations: The ultimate financial exposure for the Pavilion and Cumberland matters is uncertain. As of December 31, 2024, $221 million of aggregate commercial insurance coverage remains for the 2020 policy year. Resolution of these matters could exhaust a significant portion of available coverage or require large bonds, materially impacting future results and capital resources. Commercial insurance coverage for March 2025 onwards includes less favorable terms, such as exclusions for sexual molestation/abuse, higher premiums, and lower aggregate limitations.
Government Investigations: Ongoing inquiries and potential qui tam actions could lead to material fines, penalties, or exclusion from government healthcare programs.

Geopolitical & External Risks

Geographic Dependencies:

International Operations: Operations in the United Kingdom and Puerto Rico expose the Company to specific country risks and regulatory environments.
Trade Relations: Changes in U.S. and other countries' trade policies, including tariffs, could impact supply chains and costs.

Trade Relations:

Tariffs and Trade Barriers: New tariffs on imported pharmaceutical ingredients, medical devices, and equipment could significantly strain supply chains, increase costs, and impact competitive positioning.

Sanctions & Export Controls: Not specifically detailed as a material risk beyond general compliance.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

Electronic Health Records (EHR): Universal Health Services, Inc. has made significant investments in technology to adopt and utilize EHR systems, aiming to be "meaningful users" of health information technology.
Information Technology (IT) Systems: The Company relies extensively on IT systems for managing clinical and financial data, facilitating communication with patients, payers, and vendors, and analyzing operating results.
Innovation in Service Delivery: A core commitment of the Company's mission is innovation in service delivery.

Innovation Pipeline:

Technology Upgrades: The Company continually assesses its equipment needs and upgrades when significant technological advancements occur to remain competitive.
IT Applications Development: Investments include ongoing operation of an electronic health records application, purchase and implementation of revenue cycle and other applications for facilities, and the development, implementation, and operation of an enterprise resource planning application.

Intellectual Property Portfolio:

Patent Strategy: Not explicitly detailed in the filing.
Licensing Programs: Not explicitly detailed in the filing.
IP Litigation: Not explicitly detailed in the filing.

Technology Partnerships:

While not explicitly detailed as specific partnerships, the Company's reliance on third-party IT systems and services implies collaborations to support its technological infrastructure.

Leadership & Governance

Executive Leadership Team

Position	Executive	Tenure	Prior Experience
Executive Chairman of the Board	Alan B. Miller	Since 1979 (Chairman/CEO)	President, Chairman of the Board and CEO of American Medicorp, Inc.
Chief Executive Officer, President and Director	Marc D. Miller	Since Jan 1, 2021 (CEO/President)	President since May 2009; Senior Vice President and co-head of Acute Care Hospitals since 2007; Vice President in 2005; various capacities in acute care division since 2000.
Executive Vice President, Chief Financial Officer and Secretary	Steve G. Filton	Since 2003 (CFO); since 1999 (Secretary)	Senior Vice President since 2003; Vice President and Controller since 1991; Director of Corporate Accounting since 1985.
Executive Vice President, President of Behavioral Health Division	Matthew J. Peterson	Since Sep 2019	Chief Operating Officer for OptumGovernment (UnitedHealth Group); various Senior VP/VP roles at UnitedHealth Group; Brigadier General in Air National Guard (retired Aug 2024).
Executive Vice President, President of Acute Care Division	Edward H. Sim	Since Dec 2022	Chief Operating Officer at Centura Health (since 2017); senior leadership roles at Baptist Health for 11 years.

Leadership Continuity: The long tenures of several senior executives, including Alan B. Miller and Marc D. Miller, suggest a degree of leadership stability. The appointment of Edward H. Sim as President of Acute Care Division in December 2022 and Matthew J. Peterson as President of Behavioral Health Division in September 2019 indicates strategic leadership appointments for key segments.

Board Composition: The Board of Directors has established committee charters for Audit, Compensation, Nominating & Governance, and Quality and Compliance. As of March 18, 2024, holders of Class A and Class C Common Stock (10.8% of aggregate outstanding shares) have the right to elect five directors and hold 90.5% of general voting power. Holders of Class B and Class D Common Stock (89.2% of outstanding shares) elect two directors and hold 9.5% of general voting power. Alan B. Miller and his family control a substantial majority of Class A and Class C shares, enabling them to elect a majority of directors and influence most stockholder actions.

Human Capital Strategy

Workforce Composition:

Total Employees: Approximately 99,000 as of December 31, 2024.
Geographic Distribution: Approximately 86,000 employees in the U.S. (63,000 full-time) and approximately 13,000 employees in the U.K.
Skill Mix: Hospitals are staffed by licensed physicians (approximately 370 in acute care, 510 in behavioral health employed by subsidiaries), nurses, pharmacists, lab technicians, and other healthcare professionals. Approximately 970 employees at three hospitals are unionized.

Talent Management: Acquisition & Retention:

Hiring Strategy: Universal Health Services, Inc. has strengthened recruitment efforts and improved the overall hiring and onboarding experience, with 89% of new hires reporting satisfaction.
Retention Metrics: An Employee Engagement Survey showed a 72% participation rate, with 83% of staff feeling included on their team/work unit. Retention is supported by engagement efforts such as service awards, safety programs, and employee-led service excellence/culture committees.
Employee Value Proposition: The Company promotes an employee assistance program and provides a UHS Resource Guide detailing benefits and support tools. Financial assistance programs, including educational reimbursement, are offered to support employees in degree, certification, and continuing education programs.

Diversity & Development:

Diversity Metrics: Universal Health Services, Inc. is committed to Equal Employment Opportunity (EEO) and fostering a culture of diversity, equity, and inclusion, regularly monitoring employment practices for inclusivity.
Development Programs: Training opportunities, including formal instructor-led, virtual, informal mentoring, and self-administered online courses, are available for all employees. These programs are designed for personal and skill development, career advancement, and succession planning. The Company partners with universities (e.g., Chamberlin University, Drexel University) to provide clinical experience opportunities, with over 1,000 clinical rotations for Chamberlin University students in 2024.
Culture & Engagement: The Company's culture is guided by its founding principle of Service Excellence, which includes continuous improvement, employee development, ethical and fair treatment, teamwork, compassion, and innovation. Service Excellence Facilitator Certification Workshops are offered, with 137 individuals certified in 2024.

Environmental Commitments: Climate Strategy:

Emissions Targets (U.K. facilities): Committed to net zero carbon for direct (Scope 1) and indirect (Scope 2) emissions by 2035, and net zero carbon emissions in the supply chain (Scope 3) by 2040.
Carbon Neutrality: U.K. facilities procure 100% of their electricity from renewable sources.
Renewable Energy: U.K. facilities actively source renewable energy.
Energy Management: Utilizes smart building technology and automation for energy management. A Centralized Utility Billing Management System monitors energy usage in U.S. facilities, and automatic fault detection and diagnostics software is implemented in approximately 75% of acute care hospitals for HVAC efficiency.
Green Building Standards: New facilities and major renovations are required to meet or exceed federal, state, and local energy-efficient codes. Projects costing at least $20 million are assessed for Green Globes® and/or U.S. Green Building Council’s Leadership in Energy and Environmental Design certifications. Newly constructed acute care facilities are expected to achieve an ENERGY STAR® Portfolio Manager Score of 90 or higher.
Vehicle Fleet (U.K.): The Lightfoot vehicle tracking and driver training program, installed on all company-owned vehicles in the U.K., has reduced CO2 emissions by 236 metric tons since 2020.

Supply Chain Sustainability:

Responsible Disposal: Facilities adhere to policies and procedures compliant with the Environmental Protection Agency, local health departments, and other regulators for the responsible disposal of pollution and waste.
Water Management: A Water Management Program (WMP), co-managed with a third-party water safety company, oversees potable, process, and utility water, ensuring compliance with ANSI/ASHRAE Standard 188 and ANSI/AAMI ST108: 2023 Water standards.

Social Impact Initiatives:

Community Investment: The Universal Health Services, Inc. Foundation provides support to employees and their families affected by natural disasters.
Product Impact: Not explicitly detailed in the filing.
Workplace Safety: The Company prioritizes workplace safety through continuous training and has launched a "We Care" program guide to support employees in the event of injury.
Education and Development: Offers educational and work opportunities, including internships and clinical field placements, and partners with universities like Chamberlin University and Drexel University.

Business Cyclicality & Seasonality

Demand Patterns:

Seasonal Trends: The acute care services business typically experiences seasonality, with higher patient volumes and net patient service revenue in the first and fourth quarters of the year, primarily due to increased illness during winter months.
Economic Sensitivity: Patient volumes, revenues, and financial results are significantly influenced by the prevalence of health insurance coverage, which is largely dependent on employment status. A worsening of economic conditions, including inflation and rising interest rates, could lead to higher unemployment, a decrease in insured patients, and a corresponding reduction in patient volumes, particularly for less intense or elective services, or an increase in services provided to uninsured patients.
Industry Cycles: Overall utilization and occupancy rates across the healthcare industry are affected by advancements in clinical practice, medical technology, and pharmacology, as well as shifts in reimbursement policies by third-party payers.

Planning & Forecasting: Universal Health Services, Inc. employs demand forecasting, inventory management, and capacity planning as part of its strategy to improve operations and adapt to changing market conditions.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

Government Healthcare Participation: Universal Health Services, Inc. is subject to extensive federal, state, and local laws and regulations governing participation in government healthcare programs like Medicare and Medicaid.
Licensure, Certification & Accreditation: All U.S. hospitals must comply with federal, state, and local health agency requirements, municipal codes, and maintain accreditation by The Joint Commission to receive Medicare and Medicaid reimbursement.
Reimbursement: Payments from federal and state government programs are subject to statutory and regulatory changes, administrative rulings, utilization review, and funding restrictions.
Health Information Privacy & Security: Compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Health Information Technology for Economic and Clinical Health Act (HITECH Act), and the Federal Trade Commission (FTC) Red Flags Rule is required for protecting patient health information.
Fraud & Abuse: The Company must comply with federal and state anti-kickback statutes, the Stark Law (prohibiting physician self-referrals), and the False Claims Act, which prohibit illegal inducements, false claims, and self-referrals.
Certificates of Need (CON): Certain states require CONs for hospital capital expenditures, construction, expansion, or new services.
Emergency Medical Treatment and Active Labor Act (EMTALA): Hospitals with emergency departments must provide medical screening and stabilization regardless of a patient's ability to pay.
Patient Safety and Quality Improvement Act of 2005: Establishes a confidential reporting structure for patient safety.
Corporate Practice of Medicine: State laws in some operating regions prohibit corporations from employing physicians or engaging in certain fee-splitting arrangements.
Price Transparency: CMS regulations require hospitals to publicly disclose standard charges and payer-specific negotiated rates.
No Surprises Act: Legislation aimed at preventing surprise medical bills, with an Independent Dispute Resolution (IDR) process that has been subject to litigation and delays.
Medicaid Managed Care Rule: CMS's April 2024 rule strengthens standards for timely access, quality, and fiscal/program integrity for state directed payments, potentially impacting provider payment levels.
Loper Bright Enters. v. Raimondo: The Supreme Court's decision modifying the regulatory interpretation standard may impact the healthcare industry, particularly in areas like Medicare reimbursement and fraud and abuse compliance.

International Compliance:

U.K. Regulation: Operations in the United Kingdom are subject to a high level of regulation, including registration, licensing, employee regulation, clinical standards, environmental rules, and data protection laws (U.K. Data Protection Act, U.K. GDPR).
Anti-Corruption Laws: Universal Health Services, Inc. is subject to the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act in its dealings with foreign officials.