UHS Can’t Beat Behavioral Health Staffing Shortage Even When Willing to Pay Premium

Universal Health Services Inc. struggled to staff up its behavioral health business despite being willing to pay a premium as it grapples with the national health care staffing shortage.

However, the King of Prussia, Pennsylvania-based acute care and behavioral health company simply can’t find enough workers to fully staff up to meet the demand that the behavioral health business has faced in recent months.

“On the behavioral side, while we were willing to pay those premium dollars in overtime and shift differential and temporary and traveling nurses, we often just simply couldn’t find the nurses and other employees to do that,” CFO Steve Filton said.


Filton, speaking at a session of the 2022 J.P. Morgan Healthcare Conference, added that the health care staffing shortage is muting volumes and patient days for Universal Health Services (NYSE: UHS).

Further complicating matters for UHS, the highly transmissible nature of the omicron variant of the coronavirus has put more UHS staff than ever before on the sideline in recovery and quarantine.

“There’s a fixed supply of nurses. So this incredibly high demand for nurses is being exacerbated by the fact that a portion of the working nurse population is now on the sidelines at any point in time” with issues with COVID, Filton said of the health care staffing shortage. “This system is not producing new nurses to fill in for them. What you have to pay for that smaller population of nurses — those rates just keep going up and up.”


The hospital-focused portion of its acute care business has done better financially than expected during the COVID surges that define 2021, especially the delta variant of the virus. The sicker patients who stay in the hospital longer generate more revenue than the cost to care for them, Filton said.

Still, the surging omicron variant has delayed the company’s overall recovery by three to six months, Filton said. At the end of the third quarter, UHS operated with the assumption that COVID cases would continue their decline going into the New Year and, as nurses and other staff no longer had high-paying, COVID-driven staffing agency work to chase, the workforce would rebalance.

“Obviously, that has not occurred and the year, the fourth quarter has played out differently than our expectations,” Filton said. “And obviously, we’re starting 2022 with very different expectations.”

UHS has said previously that the company is working with state regulators to get clearance to change how it operates its behavioral health operations in response to the health care staffing shortage. The company is moving models away from relying on registered nurses to relying more on licensed practical nurses, certified nursing assistants and non-clinical staffers.

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