Profile: Universal Health Services, Inc. (UHS.N)

Universal Health Services, Inc., through its subsidiaries, owns and operates acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers and radiation oncology centers. As of February 26, 2009, the Company owned and/or operated or had under construction, 26 acute care hospitals (including one facility being constructed) and 101 behavioral health centers located in 32 states, Washington, D.C. and Puerto Rico. As part of its ambulatory treatment centers division, the Company manages and/or owns outright or in partnerships with physicians, nine surgical hospitals and surgery and radiation oncology centers located in six states and Puerto Rico. Services provided by its hospitals include general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services and behavioral health services. The Company provides capital resources, as well as a variety of management services to its facilities, including central purchasing, information services, finance and control systems, facilities planning, physician recruitment services, administrative personnel management, marketing and public relations.

During the year ended December 31, 2008, the Company acquired a 76-bed behavioral health facility located in Lawrenceville, Georgia. During 2008, it sold assets and operations of Central Montgomery Medical Center, a 125-bed acute care facility located in Lansdale, Pennsylvania; sold its ownership interest in a third-party provider of supply chain services, and sold the ownership interest in an outpatient surgery center and certain other real property assets. Net revenues from the Company’s acute care hospitals, surgical hospitals, surgery centers and radiation oncology centers accounted for 74% of its consolidated net revenues during 2008. Net revenues from its behavioral healthcare facilities accounted for 25% of its consolidated net revenues in 2008.

The Company receives payments for services rendered from private insurers, including managed care plans, the federal government under the Medicare program, state governments under their respective Medicaid programs and directly from patients. Medicare and Medicaid revenues represented 36% of the Company’s net patient revenues during 2008. Revenues from managed care entities, including health maintenance organizations and managed Medicare and Medicaid programs accounted for 46% of its net patient revenues during 2008. Under the Medicare program, for inpatient services, the Company’s general acute care hospitals receive reimbursement under the inpatient prospective payment system (IPPS). It operates inpatient rehabilitation hospital units that treat Medicare patients with specific medical conditions, which are excluded from the Medicare IPPS diagnosis related group (DRG) payment methodology.

The Company receives a large portion of its revenues either directly from Medicaid programs or from managed care companies managing Medicaid. All of the Company’s acute care hospitals and most of its behavioral health centers are certified as providers of Medicaid services by the appropriate governmental authorities. It receives a large concentration of its Medicaid revenues from Texas, and significant amounts from Nevada, Florida, California, Washington, DC and Illinois. A significant portion of the Company’s net patient revenues are generated from managed care companies, which include health maintenance organizations, preferred provider organizations and managed Medicare (referred to as Medicare Part C or Medicare Advantage) and Medicaid programs. Its hospitals also provide services to individuals covered by private healthcare insurance.