Universal Health Services Inc (NYSE: UHS), one of the largest hospital operators in the U.S., is experiencing sustained and growing demand for healthcare services, particularly within behavioral health. Despite steadily expanding its bed capacity for years, UHS continues to face significant challenges meeting the needs of patients due to persistent behavioral health workforce shortages.
Steady Growth in Bed Capacity Over 15 Years
For more than a decade and a half, UHS has been consistently increasing its capacity by adding between 300 and 400 beds each year. Headquartered in King of Prussia, Pennsylvania, the company now operates over 300 facilities across 38 mainland U.S. states, as well as Alaska, Puerto Rico, and the United Kingdom. This large footprint allows UHS to serve a diverse and geographically widespread patient base.
Much of UHS’s recent growth comes through strategic joint ventures with acute care providers. These partnerships allow UHS to expand behavioral health services in hospitals that often struggle to run these programs effectively on their own.
Behavioral Health Often a Low Priority in Acute Care Hospitals
At the 42nd Annual Cowen Health Care Conference, UHS Chief Financial Officer Steve Filton explained that many acute care hospitals rank behavioral health services very low among their priorities—sometimes as low as 10th or 12th. Filton noted that these hospitals generally acknowledge their limitations in delivering quality behavioral health care.
This creates a strong opportunity for UHS, which specializes in behavioral health, to step in as a trusted partner. “More than 50% of the behavioral beds in the U.S. are run by acute care hospitals,” Filton said. “Most of those hospitals seem to acknowledge that they don’t do a very good job of running that service line.” Despite this, acute care providers prefer to maintain some stake in behavioral health rather than exiting the business, which makes joint ventures an appealing arrangement.
The Challenge of Behavioral Health Workforce Shortages
While UHS is optimistic about the demand for behavioral health services, the company is simultaneously confronting serious behavioral health workforce shortages that limit its ability to keep pace. Staffing shortages in this sector are widespread across the country; over one-third of Americans currently live in areas where access to behavioral health providers is severely limited due to workforce gaps.
Filton highlighted the contradiction of expanding bed capacity but lacking the staff needed to fill those beds: “What has limited that opportunity over the last several years—even though we’re building the beds—is we’re having trouble staffing the beds.”
Nurses are a critical part of the behavioral health care team, providing vital support by ensuring patients attend therapy, maintain daily routines, and remain safe. However, in behavioral health settings, nurses often earn between $15 and $20 per hour, which makes recruitment and retention a challenge. To combat behavioral health workforce shortages, UHS has launched programs focused on mentorship and educational advancement to attract and retain these essential workers.
The Pandemic’s Impact on Staffing
The COVID-19 pandemic intensified behavioral health workforce shortages as many nurses and other healthcare workers took contract jobs elsewhere, often with higher pay in acute care settings. This trend left behavioral health providers even more understaffed at a time when demand was increasing rapidly.
Filton remains hopeful that as the broader healthcare industry recovers from pandemic-era staffing challenges, behavioral health providers like UHS will regain critical personnel. “As all these other service lines and businesses recover from the labor shortage, it will provide some opportunity for us to discharge some of these patients and have a more efficient discharge process,” he said.
UHS’s Strategies to Overcome Workforce Challenges
In response to these shortages, UHS is ramping up efforts to recruit and retain behavioral health staff by increasing resources for hiring and training. The company is implementing mentorship programs designed to support nurses early in their careers and offering education advancement opportunities to build a more skilled workforce.
Filton is particularly focused on improving conditions for nurses, who play an indispensable role in behavioral health care delivery. By providing better support and career growth options, UHS hopes to address behavioral health workforce shortages more effectively and ensure that newly built beds can be fully utilized.
Looking Ahead: Confidence in Long-Term Growth
Despite the ongoing challenges posed by behavioral health workforce shortages, UHS remains confident in the long-term prospects of its behavioral health business. The company’s approach of expanding bed capacity, forming strategic joint ventures with acute care hospitals, and prioritizing workforce development reflects its commitment to addressing America’s growing behavioral health needs.
Filton emphasized that the company’s optimism is grounded in strong indicators of demand, including the high volume of patient inquiries and positive industry trends. By focusing on these areas, UHS expects to improve access to quality behavioral health services and meet the urgent needs of patients in the coming years.
