In January, Universal Health Services (NYSE: UHS) will welcome its first new CEO in more than 40 years.
Alan Miller has been at the helm of the company since he founded it back in 1979. Since then, he’s grown the business into one of the nation’s largest hospital management organizations, with 330 facilities across two continents on the behavioral health side alone.
But in 2021, Miller will step down, retaining only his title as executive chairman of the board of directors and certain management responsibilities. Meanwhile, his son Marc D. Miller, current president of UHS, will take over as CEO.
BHB recently connected with the incoming CEO to discuss the transition, as well as his goals in filling his father’s shoes. The younger Miller said continuity is key — as is adding new outpatient and telehealth services to keep up with the growing demand for behavioral health care.
You can find BHB’s conversation with Marc D. Miller below, edited for length and clarity.
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BHB: Congrats on the new position. You officially step into the CEO role in January. How are you preparing for the transition?
Marc D. Miller: There’s not that much that’s going to change as far as the daily operations. I’ve been in the president’s role now for almost 12 years, so we’re planning and expect to have a very smooth transition.
Even though UHS is a huge, publicly traded company, it’s sort of a family business, too. You’ll be replacing your father, who founded UHS back in 1979. What does that mean to you personally and for the company overall?
Continuity is probably the biggest thing.
We are a large publicly traded company, and we act like it. But there are certain nuances to our company that are a little bit different.
Obviously, having the top two people be in the same family is different. We never knew it would end up like this, but when I decided to get involved with the company and had my career progression, it just worked out this way.
I do think it works well for us. I think the culture of our company is one that’s maybe a little bit different than other large publicly traded companies. People like working at UHS, and one of the ways that we know that is just by the long tenures of so many of our folks both at the corporate level and in the field.
What are your main goals and priorities for UHS when you become CEO? I’m interested in the behavioral side of your business, specifically.
Our priorities are not gonna change too much.
We’re a financially healthy company. We spend a lot of time trying to ensure that we have a healthy balance sheet and that we’re going to be able to remain healthy so that we can provide services well into the future.
How do we maintain that stability, especially through COVID and other unexpected shifts in the market, so that we know that we’re going to be a sound provider for many years to come? That’s what we’re focused on.
Speaking of COVID-19, UHS is still feeling the impact of the virus. At its behavioral health facilities on a same facility basis, UHS saw admissions decrease 5.6% year-over-year in Q3, while adjusted patient days decreased 3.6% as compared to the third quarter of 2019. When do you expect to hit that breakeven point?
It’s hard to say, especially with the COVID uptick in some communities.
We have seen a lot of the business come back. Certainly some of our residential treatment centers have continued to see some softness, and a lot of that has to do with schools.
A lot of schools have not been back in person since March. Because of that, we’ve seen a softness in the referral patterns that we usually get from those schools. That’s all across the country, in many, many states. We would expect that to come back once students are back in school.
Until we get past this totally, we still expect to see some of that softness, but we have been encouraged that so much of our business has started to return.
How many referrals tend to come from schools?
For the residential treatment centers, it’s a good chunk. It’s certainly a main factor.
Got it. Another thing the coronavirus has done is worsen the nation’s behavioral health, so more people are in need of these services. How do you expect that to translate from a demand or business standpoint going into 2021?
We’re seeing that demand increase.
One of the things that we’ve been doing for a long time but certainly are trying to do now is increase our number of offerings.
While inpatient remains an important part of our business, our offerings in the outpatient settings continue to increase. We are offering more outpatient alternatives in more markets, and more different types of programming.
We expect that to continue, and we’re working on new things for 2021. That includes teleservices. We’ve had teleservices at UHS for many years, but we’re continuing to try to perfect those services and increase offerings in that area.
It seems like growth in those offerings is a big opportunity for you guys. On the other side of the coin, what are some of the challenges you’re expecting for UHS and the behavioral health industry going forward?
There are a lot of challenges.
Staffing is certainly something that we all look to as a challenge from time to time, and it’s different by market. The advantage of UHS is that we’ve got a great reputation nationally, as well as in our markets, so that helps us on the staffing side.
We’ve already talked a little bit about COVID.
Then, I think as we look to increase our service offerings, there will be some things that are predicated upon reimbursement.
If the federal government and insurers continue to reimburse for teleservices, as they have during the pandemic, that’s going to be a benefit to patients who now have another way to access care.
[Before COVID-19,] a lot of the insurance companies were not covering some of these services, or they we’re not covering them at a rate that was acceptable to providers. So hopefully that will remain and increase access for patients.
Still looking ahead, what does the 2021 behavioral health JV pipeline look like for UHS? Has COVID-19 impacted any of your plans there?
Our planned JVs thus far have not been affected. We have a number of JVs that are being rolled out right now with some of the largest not-for-profit healthcare systems in the country.
We continue to be very excited about our ability to partner with some of these great health systems to assist where we can on the behavioral side — bringing our knowledge base, then also learning from them about their markets to affect positive change for patient care.
We continue to talk with systems about opportunities to do new deals and new joint ventures. I’m not sure if any of those systems have slowed down their timetables, but we continue to move forward at a pretty rapid pace.
Any specific growth goals you can share?
We are a growth company, and we always have been. We continue to work on our development opportunities, like we always have, and we seem to be able to grow at a good rate by doing so.
But we never want to say that we’re looking to add a certain number of deals or a certain amount of revenue. We don’t want to force ourselves into anything. If we see things that make sense for us to grow into, we’ll certainly pursue those, just like we have over the past 41 years.
Switching gears a little bit here: I’ve noticed UHS is trying some new things to improve behavioral health outcomes. For example, the company recently partnered with Eleos Health to launch an artificial intelligence pilot. How that’s going and what opportunities do you see with AI going forward?
We have a couple of things that we’re doing in an effort to innovate at UHS.
One of them is our Innovation Hub, which is something we do internally. It’s a way we process through and evaluate new ideas and opportunities, some of which are partnerships and some are things we’re doing on our own.
The partnership with Eleos Health was one of the things that came from the Innovation Hub.
Eleos has decision support software that is going to allow us to analyze voice and speech patterns from patients during therapy sessions. That hopefully will let us care better for the patients and learn different things than we would without it, to ultimately produce better outcomes.
It’s things like that we’re very excited about. We’re continuing our pilots with Eleos, and we hope to have something to move forward on very soon.
Exciting. Any other innovative areas you’re interested in or would like to highlight?
We have a number of partnerships we’re working on in the AI space — and on other technological advances — to help us clinically in the behavioral health space.
We hope 2021 is going to see us sign a few more partnerships to advance the ability to care for patients in a way that we aren’t able to do without these types of ventures.
UHS has been in the headlines a lot recently following a cyber attack that hit the company in late September. How are things going there and what actions are you taking on that front?
It was obviously very unfortunate what happened with the cyber attack.
Our company spends a lot of money, time and effort on cyber security. We thought we were as well protected as any other health care company in the industry, and yet, we still got hit.
The good news was that a lot of the efforts we had undertaken allowed us to get out of this situation … better than what we’ve seen happen to some of our colleagues in the industry.
We didn’t lose any data. No personal information was compromised. We were able to get back up and running ourselves, just working with our own cyber team internally and a couple of external partners.
We were alerted to the problem almost immediately, so we shut down our systems right when those alerts came in. By doing so, none of our equipment was compromised. We had all of our PCs that we had to reimage, but other than that, all of our medical equipment was safe. We shut that down for a period of time, then we could safely bring it back up.
We did learn a lot of lessons, and we continue to do a forensic audit to make sure we haven’t missed anything. We will make some corrections, and just try to revamp and increase what I thought was and I still believe was a pretty good security apparatus. But you can always learn and always do a little bit better.
Anything else you’d like to add?
Just to wrap it up how we started: We’re excited about the CEO transition, but we knew that this transition would happen at some point.
We expect to continue on the same path that we’ve been on and hopefully continue with our success.