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New words:
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Financial report summary
?Risks
- If we are unable to enter into, maintain and renew managed care contractual arrangements on competitive terms, if we experience material reductions in the contracted rates we receive from managed care payers or if we have difficulty collecting from managed care payers, our results of operations could be adversely affected.
- Future changes in healthcare laws generally, and the Medicare and Medicaid programs or other government healthcare programs specifically, including reductions in scale and scope, could have an adverse effect on our business.
- It is essential to our ongoing business that we attract an appropriate number of quality physicians in the specialties required to support our services and that we maintain good relations with those physicians.
- Our labor costs have been, and we expect will continue to be, adversely affected by competition for staffing, the shortage of experienced nurses and other healthcare professionals, and labor union activity.
- Our hospitals, outpatient centers and other healthcare businesses operate in competitive environments, and this competition can adversely affect our operations.
- We cannot predict the future course and impacts of COVID-19, or the potential emergence and effects of a future pandemic, epidemic or outbreak of an infectious disease, on our operations, financial condition and liquidity.
- Our business could be significantly and negatively impacted by security threats, catastrophic events and other disruptions affecting our information technology and related information systems and confidential business data.
- We are subject to operational cybersecurity risks that could materially impact our business.
- The industry trends toward value-based purchasing and alternative payment models may negatively impact our revenues.
- Violations of existing regulations or failure to comply with new or changed regulations could harm our business and financial results.
- Violations of existing consumer protection regulations or failure to comply with new or changed regulations could harm our revenue cycle management services business.
- We could be subject to substantial uninsured liabilities or increased insurance costs as a result of significant legal actions.
- Any future cost-reduction initiatives may not deliver the benefits we expect, and actions taken may adversely affect our business.
- Adverse financial trends affecting our actual or anticipated results may require us to record impairment and restructuring charges that may negatively impact our results of operations.
- Inflation, consumer behavior and other economic factors have had, and may continue to have, an adverse impact on our volumes and our ability to collect outstanding receivables on a timely basis, among other things.
- When we acquire new assets or businesses, we become subject to various risks and uncertainties that could adversely affect our results of operations and financial condition.
- We cannot provide any assurances that we will be successful in divesting assets we wish to sell.
- USPI and our hospital-based joint ventures depend on existing relationships with key health system partners. If we are unable to maintain synergistic relationships with these systems, or enter into new relationships, we may be unable to implement our business strategies successfully.
- Our joint venture arrangements are subject to a number of operational risks that could have a material adverse effect on our business, results of operations and financial condition.
- Our level of indebtedness could, among other things, adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and prevent us from meeting our obligations under the agreements relating to our indebtedness.
- We may not be able to generate sufficient cash to service all of our indebtedness, and we may not be able to refinance our indebtedness on favorable terms. If we are forced to take other actions to satisfy our obligations under our indebtedness, these actions may not be successful.
- Restrictive covenants in the agreements governing our indebtedness may adversely affect us.
- Despite current indebtedness levels, we have the ability and may decide to incur substantially more debt or otherwise increase our leverage. This could further intensify the risks described above.
Management Discussion
- •Ambulatory Care, which is comprised of USPI’s ASCs and surgical hospitals.
- Same‑hospital net operating revenues increased by $324 million, or 8.8%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to a more favorable payer mix, higher patient volume and acuity, and negotiated commercial rate increases. This increase was also partially attributable to additional Medicaid supplemental revenues in Michigan of $88 million.
- The collection of accounts receivable is a key area of focus for our business. At March 31, 2024 and December 31, 2023, our Hospital Operations segment collection rate on self‑pay accounts was approximately 29.6% and 29.9%, respectively. Our self‑pay collection rate includes payments made by patients, including co‑pays, co‑insurance amounts and deductibles paid by patients with insurance. Based on our accounts receivable from uninsured patients and co‑pays, co‑insurance amounts and deductibles owed to us by patients with insurance at March 31, 2024, a 10% decrease or increase in our self‑pay collection rate, or approximately 3.0%, which we believe could be a reasonably likely change, would result in an unfavorable or favorable adjustment to patient accounts receivable of approximately $8 million. There are various factors that can impact collection trends, such as changes in the economy and inflation, which in turn have an impact on unemployment rates and the number of uninsured and underinsured patients, the volume of patients through our emergency departments, the increased burden of co‑pays and deductibles to be made by patients with insurance, successful cyberattacks against us or the third‑party systems we interact with, and business practices related to collection efforts. These factors continuously change and can have an impact on collection trends and our estimation process.