UHS Looks to ‘Step-In’ Behavioral Push as Key Volume Growth Driver
Seeking to capture more of the growing behavioral health market, Universal Health Services Inc. executives plan to ramp up work on a series of freestanding outpatient clinics around the country.
In recent weeks, President and CEO Marc Miller and CFO Steve Filton have told analysts and investors that UHS—which is based in King of Prussia, Pa., and runs 29 acute-care hospitals and 345 inpatient behavioral health facilities—expects to grow its outpatient mental health services business more quickly than other units for a while. (Through the first nine months of this year, outpatient behavioral revenues were $853 million versus nearly $8.9 billion for more intensive inpatient services.)
Key to that, Filton told the recent 7th Annual Wolfe Research Healthcare Conference, is that both public and private payers are pressuring providers to move more treatments to outpatient sites. That has opened up an opportunity for UHS in so-called step-in services, an area where Filton said the company has not devoted a lot of its attention in the past.
“We do know that there are patients who require that sort of care but don’t want to receive it on a hospital campus and in a facility associated with a the hospital because they have fears—whether they’re founded or unfounded—that they’re going to be sort of swept up in that sort of inpatient dynamic,” Filton said at the Wolfe event.
The sites aren’t a massive investment—it costs UHS between $1 million and $2 million to build out and staff a step-in clinic—and Filton said that his teams benefit from newly dedicated clinical and sales teams as well as the company typically being an in-network provider with strong referral relationships in most of its markets. That’s helping to position UHS as a more streamlined option to outpatient behavioral care being delivered in hospital emergency rooms, urgent-care centers or other clinics.
“A number of the managed care companies say […] behavioral utilization broadly and nationally is up across the board. A lot of that seems to be on the outpatient side. And I think that’s being delivered in a very […] fragmented way,” Filton said on UHS’ third-quarter earnings conference call. “We think we can do a better job of capturing more of that outpatient activity through, frankly, better focus as well as new and additional dedicated outpatient facilities.”
Growing UHS’ outpatient business is a key plank to executives’ broader goal of pushing the growth of overall behavioral volumes from the 1.3 percent it was in the third quarter to close to 2 percent by the middle of next year. In all, UHS registered more than 4.8 million patient days in the three months that ended on Sept. 30.
About the Author
Geert De Lombaerde
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post for more than a decade and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.