JPM 2022: Omicron wave bumps UHS’ hopes for labor price restoration again at the least 3 months

The tone of Common Well being Providers’ (UHS’) investor name final October was usually hopeful because the for-profit chain loved greater-than-expected acute care revenues and projected a gentle decline in COVID-19 issues with the approaching new yr.

Talking as we speak on the digital J.P. Morgan Healthcare Convention, nevertheless, Chief Monetary Officer Steve Filton acknowledged that his firm’s hopes have been placed on pause for at the least three months as a result of newest omicron surge.

“As we take into consideration 2022, we really feel like our total view of the companies has not modified dramatically however the timeline has been elongated and the restoration we thought was going to happen all through the fourth quarter has now been postponed to someday within the first quarter,” he mentioned.

The corporate’s acute care operations are being challenged, however not fairly to the extent they had been one yr prior, Filton mentioned.

The excessive transmissibility however comparatively much less extreme nature of omicron infections signifies that acute care volumes are excessive however proportional ICU utilization is decrease through the present surge, he mentioned. Alongside the COVID-19 instances, shoppers haven’t stopped lining up for the procedures and non-emergency care providers that had been in danger early within the pandemic.

“We don’t imagine that … the underlying and elementary demand for each of those enterprise segments has actually modified through the pandemic,” Filton mentioned.

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The main problem throughout UHS’ enterprise has been labor, Filton mentioned, with its behavioral section nonetheless in danger for staffing-related service shutdowns as behavioral well being nurses go away for higher-paying acute positions.

The corporate is constant to eat the elevated prices of contract employees, he mentioned and is working below the idea that the labor market will restabilize through the months after nationwide COVID-19 instances have lastly wound down.

The brand new wrinkle of omicron is that extra employees than ever are being sidelined by their very own COVID-19 infections, he mentioned.

Whereas this has made the final month’s labor scenario harder than through the earlier pandemic, there may be the silver lining of much less extreme sickness and faster returns to work, he mentioned.

On the flip aspect, much less extreme COVID-19 sufferers haven’t translated to shorter size of keep at UHS hospitals, Filton famous, and challenges discharging sufferers into downstream care settings preserve the necessity for hospital employees excessive.

“We’re discovering virtually throughout the board difficulties in discharging sufferers on a well timed foundation as a result of the services to which we’re referring are experiencing all the identical points that we’ve,” he mentioned. “So in regardless of the group is, the nursing residence has 20% of their beds residence, the rehab middle has two flooring closed or no matter as a result of they will’t discover sufficient of us they usually’ve obtained all the identical points I described at first.

“Once more, our hope and expectation because the omicron scenario begins to stabilize and volumes go down, is that stabilization happens all through the continuum and we’ll get … aid.”

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