環球健康 (UHS) 2012 Q1 法說會逐字稿

Good morning, my name is Christy and I will be your conference operator. At this time, I would like to welcome everyone to the UHS first quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) I will now turn the conference over to Mr Steve Filton, CFO.

Thank you. Good morning. Alan Miller, our CEO is also joining us this morning. Welcome to this review of Universal Health Services' results for the first quarter ended March 31, 2012. During this conference call, Alan and I will be using words such as believes, expects, anticipates, estimates and similar words that represent forecasts, projections and forward-looking statements. For anyone not familiar with the risks and uncertainties inherent in these forward-looking statements, I recommend a careful reading of the Section on risk factors and forward-looking statements and risk factors in our Form 10-K for the year ended December 31, 2011. We'd like to highlight just a couple of developments and business trends before opening the call up to questions.

As discussed in our press release last night, the Company recorded net income attributable to UHS per diluted share of $1.31 for the quarter. After adjusting for the prior year impact of several reimbursement items recorded during the quarter, our adjusted net income attributable to UHS per diluted share for the quarter ended March 31, 2012, was $1.13. On a same facility basis revenues in our behavioral health division increased 5.3% during the first quarter of 2012. We note that the PSI facilities are included in our same-store data for the entire quarter.

Adjusted admissions in patient days to our behavioral health facilities owned for more than a year increased 9.2% and 2.8% respectively during the first quarter. Revenue per adjusted patient day rose 2.4% during the first quarter of 2012 over the comparable prior-year quarter.

Operating margins for our behavioral health hospitals owned for more than a year increased to 26.8% during the quarter ended March 31, 2012. As compared to 26.5% during the comparable prior-year period. On a same facility basis in our acute care division, revenues increased 0.8% during the first quarter of 2012. The increase resulted primarily from a 1.6% increase in adjusted admissions to our hospitals owned for more than a year.

The relatively muted revenue growth reflects a difficult comparison to the prior-year quarter when our net revenues were favorably impacted by positive changes in payer mix, especially stabilization in uninsured volumes. On a same facility basis, operating margins for our acute hospitals decreased to 18.6% during the first quarter of 2012, from 20.5% during the first quarter of 2011. We also note that there are no EHR-related revenues included in our quarterly financial statements.

Our acute care hospitals provided charity care and uninsured discounts based on charges at established rates amounting to $315 million and $223 million during the three-month period ended March 31, 2012 and 2011. As a percentage of acute care net revenues, bad debts, charity, care expense and the uninsured discount in this year's first quarter were at levels higher than those experienced during the first quarter of 2011. However, due primarily to the increase in behavioral health revenues and the very low levels of bad debt and uninsured discounts in that business, our overall percentage of bad debt, charity care and uninsured discounts were lower than those experienced during the first quarter of 2011.

Our cash from operating activities was approximately $134 million during the first quarter of 2012, as compared to $183 million in the first quarter of 2011. Our Accounts Receivable days outstanding increased to 56 days during the first quarter of 2012, primarily due to a lack of Medicaid payments from the State of Illinois, and a lack of disproportionate share payments from Texas, as well as the Rural Floor settlement recorded as a receivable during the quarter. At March 31, 2012, our ratio of debt to total capitalization was 59.6%.

We spent $93 million on capital expenditures during the first quarter. Included in our capital expenditures were the construction costs related to the ongoing construction of a new acute care hospital in Temecula, California and a new bed tower at our Wellington facility in Florida. Effective in the first quarter of 2012, we have completed all of the divestitures required by the FTC as part of the PSI acquisition.

Alan and I would be pleased to answer your questions at this time.

(Operator Instructions) Adam Feinstein, Barclays Capital.

This is Brian Sekino on behalf of Adam this morning. Just wanted to know if you could provide us with some details in Vegas on some of the mix shift that you saw in the acute care versus the strong Q1 of 2011. If you could provide us with some details on how the mix shifted, if that was really the bolus of the mix shift in the quarter?

Sure, Brian. I think that in talking about the comparison, the anomaly was in the first quarter of last year. For those of you who recall, we talked a great deal in Q1 of 2011 about the fact that rather dramatically, unemployment rates had declined in the Vegas market from 15% at the end of 2010 to 12% in the first quarter of 2011, that we saw a benefit from that in our business almost immediately. We saw a reduction in uninsured volumes in the first quarter of 2011, that had an extremely favorable effect on our results and our revenues per admission, et cetera. As the 2011 progress, the payer mix regressed back to a normal mean, if you will, both in the Vegas market and I think in the portfolio in general.

Most of those trends continued into the first quarter of 2011 -- excuse me, to the first quarter of 2012. Those trends are, again, the same as we've talked about the last few quarters, commercial volumes are down, Medicare volumes are down, really the only volumes that are up are Medicaid, which is actually managed Medicaid and to some degree our uninsured volumes. That's particularly true in some of our more economically troubled markets like Vegas and South Texas, but it's generally true through the portfolio. And that's what made the comparison so difficult from an acute care perspective in Q1.

Okay. Then just a question on the behavioral side, looks like adjusted admissions were up very strong and adjusted patient days were up, but there was a gap in the growth. Is there a shift in more acute versus RTC? Or is there also some length of stay pressures from the Medicaid payers as well?

Brian, again, it's a continuing trend where we're seeing compression in our length of stay, not anything new but also not something that seems to be decelerating yet at this point. It is primarily focused in the residential business, length of stay is down on both sides of our behavioral business but primarily on the residential side. And it is mostly, I think a function of Medicaid and managed Medicaid payers intentionally, obviously trying to get their patients out of the residential facilities sooner than previously.

Tom Gallucci, Lazard Capital.

Thanks for the details, Steve. Just on volumes, over and above mix on absolute utilization, did you see anything that was new or different as you look inside the details of the numbers that indicate that anything is better or worse to maybe where the trends have been in recent quarters? Or more stabilization?

The growth in volumes, that 1.6% growth in adjusted admissions, same-store admissions, we thought seemed to be much as expected, and a reasonable number. I think Tom, we're more focused on the fact that when the economy begins to improve, in a number of our markets but in particularly some of our larger markets, that we're well-positioned to benefit from that, and we're waiting patiently for that to happen. Obviously, this has been an extended recession and it's been particularly extended again in some of our most important markets. So that's really what we're keeping our eye on most importantly.

Okay. So not same things worse but it does sound like you're still waiting for things to get a little bit better. On the cash flow you mentioned some of the state collections I guess in particular, was there anything else that you can talk about on collections? Are rates still pretty consistent relative to outside of the states that you mentioned?

I think from a rate perspective, there's nothing significant going on either from our government payers or our private payers. The biggest collection issue, which we discussed last quarter as well, is almost a complete lack of payments from Illinois Medicaid, although payments did resume again this past week, so we view that as an encouraging sign. And we believe the Texas Medicaid disproportionate share payments, which were not made in Q1, we're actually expecting at least a portion of those payments to be made either today or Monday. So we're hoping to get a little bit of easing of that pressure.

Okay. Then as Illinois resumed, do they have a catch up or how fast do you expect to make up what you haven't been paid in the past?

I wish I could precisely answer that question, Tom. The state is not terribly helpful in letting folks know what their plan is, although they certainly have taken the position consistently that they intend to pay all the outstanding receivables. So that's our expectation and obviously that's the way we've reflected in our financials. But there is no plan that the state has issued as to when the timing of those payments will take place.

Darren Lehrich, Deutsche Bank.

A couple things here. First, I want to start with capital deployment. It does look like you held a little back in the quarter on share repurchase. I guess I'd be curious just to know if you are preserving capital for any particular reason at the moment, and to the extent that ties into what you're seeing in the acquisition pipeline, how we should be thinking about that and how maybe that's changed over the last six months or so as you think about deploying capital?

Darren, I don't think there's anything terribly new this quarter. As I think we've probably said, pretty consistently over the course of the last few quarters, we are mostly focused on generating cash and repaying debt. As effectively as we can. We are entertaining other opportunities, both internal and external to deploy capital. If we discover or are able to take advantage of opportunities that we find really compelling, we're prepared to do so. But again, I'll make the point that in our minds, they're going to have to be pretty compelling.

Okay. Then just with the NAP deal looking like it's off the table for now, is there anything else that looks more imminent in the pipeline? Just on the acute side, would love to get a comment or two there about what kinds of things you're evaluating.

Yes. So as we discussed last quarter, the NAP deal that we had previously announced has lapsed, largely because the seller has been unable to meet all their obligations and are involved in some litigation at the moment. So you're right, we put that off to the side. As is our practice, Darren, I don't think we're going to make any specific comments about opportunities on either side of the business. Again, just suffice it to say that we're continuing to look and we're continuing to pursue internal opportunities as well. I mentioned in my remarks that we're building new hospitals, or new acute capacity in California and Florida. And we certainly continue to explore those opportunities as well.

Great. Okay. Then as you look at the acute business, obviously the comp was the big factor here. Is there any way to help us think about how things progressed over the course of the quarter? And can you just comment a little bit about how you see that comp impacting Q2? I know it was still pretty strong throughout the first half last year, but how should we be thinking about that?

Well, as far as the progression goes, Darren, I would say that both volumes and payer mix probably strengthened a little bit as the quarter went on although in fairness, I don't -- I'm not exactly sure how or what to read into that. You're absolutely right, our expectations that we set a couple months ago when we gave guidance for 2012 is that acute care revenue growth would be fairly modest in 2012 in the 2.5% to 3% range. Part of that thinking was that we knew that in the first half of the year, the comparisons would be difficult so even though we didn't get into specifics and won't do that today either, I think the notion was we would be somewhat lower than the 2.5% to 3% in the first half of the year and a little bit higher in the back half of the year as the comparisons got easier. And that's still our view. I should make the point that I think the first quarter played out very consistent with our internal expectations, certainly from an overall basis. But from a pricing perspective, we are I think a little disappointed with the level of acute care pricing but don't view it as all as out of line with our full-year guidance.

Ralph Giacobbe, Credit Suisse.

Steve, going back to what you said in terms of the pricing number down 0.8% on the acute care side, obviously impacted by the mix but I was just wondering on the pure pricing side maybe you could remind us what rates you're getting from managed care, if it's in line with what you historically gotten a little bit lower and maybe even on the Medicaid side, maybe tell us what the pure price decline was in the first quarter?

Yes. I think from a rate perspective, Ralph, we continue to get commercial rate increases in the 5% to 7% range that we've talked about for some time. Our Medicaid declines as we've been saying since July of last year are in the 3% to 4% range, and I think what's driving -- as I tried to outline before, what's driving the pressure on acute care pricing is not rates from a particular payer, but the mix of business. And that mix continues to shift from our better paying commercial and Medicare patients to our weaker paying Medicaid and frankly non-paying patients. That trend has been in place for a while now, and that's -- the fact that, that trend was interrupted in the first quarter of 2011 last year and we're seeing it resumed in the back half of 2011 and into 2012, that's really what's driving that very difficult comparison in Q1.

Okay. That's fair. Maybe you can give us in terms of your managed care contracts, do you have what percentage is done for 2012 versus 2013?

I would say at this point, we've probably got somewhere between two-thirds and 0.75 of our 2012 contracts done and maybe a 0.25 to a third of our of 2013 contracts.

Okay. Then just going back to the behavioral side where your conversation earlier around the decline in length of stay, is this something we should think about that's going to comp out shortly, or is there just a lot more days to come out as more -- as we get more of a shift to managed Medicaid?

I'm not sure, Ralph, that we can answer that question with great confidence. This pressure on length of stay has been existing now for some time. I think it is largely a function of state Medicaid programs or their contractor, managed Medicaid providers who are attempting to address budgetary concerns and drive costs down by reducing length of stay. As we expect with Medicaid rates, we think that pressure will ease a little bit in this next budgetary cycle beginning this summer. But I suspect that we may not see length of stay compression completely stabilize at that point. It may still continue to trend downward.

AJ Rice, UBS.

A couple of questions, if I could ask. On the acute side, the year-to-year margin trend, down 190 basis points, I assume that you would say that's mostly due to the top line pressure, but I did want to at least ask is there anything on labor or supply that's worth calling out that you saw in the quarter? That was particularly noteworthy absent just a natural effect of the pressure on the top line?

No, AJ, I think that we would attribute the margin decline almost exclusively to the top line pressure.

Okay. You didn't recognize any high-tech revenue in the quarter or incentive payments in the quarter. You did collect it looks like [$17] million in cash. Do you have an updated estimate or what is your thought on how much you would likely collect in cash this year? And any thought -- updated thought on timing of recognition?

I think I would just reiterate what we talked about from a free cash flow perspective last year. Excuse me, at our 2012 -- guidance, and that is we expect to generate free cash flow in the $400 million to $500 million range. And again much like our operating income guidance, I don't think we have any changes to that.

Okay. Then just finally on the Medicare proposed rule, any comment or thought or reaction to that relative to what you were thinking?

I don't know what others have said, but I think we probably reacted by thinking that the update was maybe 100 to 150 basis points lower than we expected, mostly because of higher than expected coding adjustment and a higher threshold on the outliers. I'm not smart enough to predict how the final rule will look. Obviously the industry will lobby hard for some relief on both those issues.

AJ, you guys did very well in the draft. You've got a first rounder in Jim Forbes.

Gary Lieberman, Wells Fargo.

Behavioral continues to be very strong. Is it possible for you to parse out how much of that is organic, how much of that is continuing to benefit from the synergies on the site solution assets?

I don't know that I can do it precisely, Gary. I will tell you that we continue to improve the margin on the PSI assets. Or the PSI portfolio. And I think our view is that there is still a benefit -- a continuing benefit to be had, so we're generally positive about behavioral performance for two reasons. One is we view the revenue growth in that business as very solid and strong. We've been growing at above 5% for 2.5 years now in the teeth obviously, of a very severe recession. So we feel real good about the underlying demand in that business. Then we still feel, as I said that there are opportunities that we've talked about in many occasions before to continue to drive slightly higher margins in the PSI portfolio.

And so the total compared to when you first purchased the assets, the total expectation is higher, lower, the same in terms of the total synergies that you'll be able to get out of it?

In terms of the margin improvement, which we pegged all along at 50 to 100 basis points, cumulatively I'd say we feel fairly confident we'll come in at the high end of that number.

Gary Taylor, Citigroup.

Just had two questions. Steve, is this the first quarter that PSI is fully in the same store or was that last quarter?

No. It's the first quarter where we have a full quarter comparison.

Okay. That's what I thought. So you had been running on the legacy UHS north of 6% revenue growth for some time and this number is 5.3%. Did I miss any comment in terms of -- have you parsed out at all PSI versus legacy UHS? Or is the length of stay issue kind of impacting both of the assets?

I think that the length of stay issue is affecting the residential assets primarily again in both portfolios. I will say -- I don't know that you were getting to this question or getting to this point with your question, but having the PSI facilities in for a full quarter of comparison, we get a little bit of a drag from their Pines facilities in Virginia. Those were facilities that were somewhat of a problem for PSI, they were having troubled facilities at the time that PSI owned them and quite frankly remain so for us. So including that, we closed down one of the three campuses that we operate there. That clearly drove revenue down in the quarter in an effort to right that ship and get the quality issues in line for future growth, which I think we feel well poised to do, but it was a bit of a drag in the quarter and the mechanics of having PSI in the same-store comparison contributed to that.

Okay. Yes, that is what I was after. I presume you're not going to want to break those out separately anymore, but I'm just wondering if the slightly slower revenue growth was the impact of PSI coming into the quarter and it sounds like it was. Would you agree -- does leap year have a positive benefit for the behavioral book?

I always been a believer that leap year doesn't have much of an effect either way. It affects the cosmetic metrics a little bit, you've got an extra obviously, day of both admissions and patient days but you also have an extra day of salary expense. And so I don't think it makes a whole lot of difference.

Okay. My last question, maybe more for Alan, I'd be interested I was reading the other day about this $1.5 billion Union Village development in Las Vegas that's supposed to have four hospitals and just wondering if you guys have a view if that's still a pipe dream at this stage or if at any point that geographically that would possibly create any threat to you if they eventually get these hospitals built, any thoughts around that?

I'll take that one, Gary. So that big development, which is in the Southeast part of Las Vegas, or in Henderson, has been on the boards for many, many years. It sounds like it's a little bit closer to reality, perhaps than it has been from a hospital perspective. I think the developers went to Catholic Healthcare West because they clearly have historically dominated that quadrant of the market. What we have heard -- and I don't mean it in any way to be definitive is that whether or not Catholic Healthcare West will build -- what they will build as part of that development is very much still uncertain at this point. So no, I think from our perspective, that is not a quadrant of the city that we have ever competed terribly robustly in. And I don't think that's changing anytime soon.

Kevin Fischbeck, Bank of America.

It wasn't clear to me whether you answered this in response to AJ's question, but as far as the EPS guidance, that you're giving, are you reaffirming that kind of ex the Medicare boost?

Yes. Our practice I think always is if we don't say anything, we're not changing anything. But we would reconfirm our year end guidance.

Okay. Then the Medicare boost would be on top of that -- the one-time items discussed this quarter would be on top of that?

Right. As we're excluding that from our guidance just like we excluded them during the quarter.

Okay, all right. Perfect. I guess maybe the answer was -- in response to Gary's question, but I would have thought that the same-store behavioral revenue growth would have been a little bit stronger given the leap year. Is it really just that one facility or is there anything else -- how much was closing down that one campus to your same-store metrics?

I don't know the precise impact, but that was probably the biggest impact, Kevin. We closed the facility in Missouri, a residential facility in a process to convert it to acute care beds. That had again, a slightly negative impact in the quarter although obviously we think an ongoing more positive impact. We continue to work on some regulatory issues in Illinois that I think long-term should have a positive impact, but I don't know that any of those had real needle moving impacts.

Okay. Then as far as Vegas goes, I guess we're kind of seeing some modest economic improvement in Vegas. How in your experience, how long is there between a change in the underlying economic metrics in a market before that starts to really flow through to the numbers? Because it sounds like it's not showing up yet, but when would you start to expect that to show up?

I think that historically, Kevin, our view is that there's usually something like a two to four quarter lag before our business, the hospital business starts to really get the impact of underlying economic metrics particularly changes in unemployment. It's why we were so surprised a year ago that we seemed to get an almost real-time immediate benefit from a decline in unemployment in that market and why we frankly at the time didn't think that was necessarily going to be sustainable. But to your point, I think that some of the news coming out of the Vegas market over the last few months has been encouraging. We're certainly encouraged by it, and we would hope that by the end of this year, we'd start to see some of that benefit in our business.

Todd Corsair, UBS.

Just wondered if you guys could comment on your outlook for allocating free cash flow as someone earlier pointed out, you had only a couple million spent on share repurchase during the quarter, and I think per your 10-K, you are expecting a pretty significant amount of free cash flow. So really just interested in hearing where you stand in terms of the balance sheet at this point. Do you want to -- are you guys prioritizing moving back toward investment grade or might we expect a more balanced allocation of free cash flow perhaps with a little more towards the equity in terms of stock repurchase going forward?

Todd, I think that Darren asked a similar question before, and I just very quickly reiterate that absent compelling opportunities on the M&A front, we are largely dedicating our free cash flow to debt repayment. But are exploring these opportunities and if compelling ones arise, we will be prepared to take advantage of them.

But outside of M&A, stock repurchase is a far lower priority than debt reduction?

I think all the priorities have to be considered at the same time. So I think that if there is a lack of compelling M&A opportunities, we might have a different point of view about free cash flow -- about share repurchase, but I don't think we can answer the opportunity in a vacuum. I think we are exploring all those alternatives at the same time.

That's very helpful, thanks. Lastly, if could you just refresh us on what remaining capacity you have under existing authorization?

I think our existing authorization is fairly thin, but I don't think that's a determinant factor. If we think it's appropriate to move forward, we certainly, I think, can expand that authorization with without a great deal of difficulty.

No obstacle there.

(Operator Instructions) Whit Mayo, Robert W Baird.

Just a couple final questions. Steve, is it still your expectation that the Medicare rule for behavioral will be a notice and will probably avoid the formal rule making session? Does that really mean anything to you one way or the other?

Well, Whit, I think that the question has been put to us quite differently over the course of the last few months. And that is where we expecting major changes to the site PPS regulations? And we said no. We expected that the action of CMS would likely either just be the regular market basket update or some minor tweaks to the system. That remains our expectation. It strikes me more about this than I do, but it strikes me that the investors and the investing public are coming around to that point of view. We've had that point of view for some months now.

I'd agree. Maybe one other question, several of your peers are feeling the pinch on salaries and other expenses from employment costs, income guarantees, whatever physician strategy they have. It's really never been central to what you guys view as core to your strategy. Just wanted to confirm that nothing has really changed one way or the other as you think about realigning interest with physicians.

Well, I think just to be clear, we certainly believe as I think most of our peers do that physician integration is a critical piece of our strategy moving forward. I think as you've described it and I think, fairly described it, we may not be as enthusiastic about the idea that the only way to address the physician integration issue is through employment and acquisition. We're pursuing a whole array of alternatives, including clinical integration, et cetera, and we'll continue to do so in large part because we recognize I think as you alluded to in your comments that the purchase of physician practices and the employment of physicians often results in negative consequences, like increased cost, et cetera that if we can we'd prefer to avoid. But we very much view physician integration as a market by market issue and as I said, we don't have a one solution fits all approach to it. But we are very conscious of the fact that providers over the years have had very negative experiences in many cases with the economics of physician employment and acquisition. So we're very cautious about it.

Yes. Maybe shifting gears just to high-tech and maybe a longer-term question, but do you have any internal thoughts as you look out to Stage Two and the requirements, I know it's a little over the horizon but I'm curious what's on the top of mind with your IT department right now.

I'm not exactly sure what you're asking, Whit. If you are asking, do you think we can comply with the Stage Two requirements, I think the answer is yes. Our EHR implementation, which is still in relatively early stages, but we've got probably a quarter of our hospitals implemented at this point, we're feeling pretty good about the way it's going. We're not yet there in terms of meeting the meaningful use requirements, but we expect to be there and are feeling generally positive about the process.

I guess I was just asking whether or not you felt that there were going to have to be more additional internal resources committed to get to Stage Two and Three and maybe a corollary to that being the cost associated with it. I guess a few of us have a great idea for what it looks into Stage Two and Three at this point.

Okay. No, I understand the question better. I think that at this point, our overall estimates of what the EHR implementation will cost us have not changed. Butt in fairness, I think your question points to a good point or makes a good point, yes, it's a changing process. Every time we do an implementation, we rethink our approach, et cetera. So it's certainly not impossible that at some point down the road we come back and revise our estimates of cost or whatever. But at the moment, I think we're comfortable with what we've put out there.

Got it. One last one, sorry to slip this in, may have missed it, but did you give any colors on surgical growth and maybe what you're seeing with the birthrate and maybe acuity in the quarter?

Acuity has not really changed for us. We've not had any significant changes in acuity. I think birthrate remains as it has been for the last few years, down a little bit. From a surgical perspective, I think our overall surgeries were probably down 1% or 2% for the quarter, with inpatient surgeries being down a little bit more and outpatient surgeries being a little bit better than that.

Adam Feinstein, Barclays.

I know we asked one previously, so I will be brief here, but I just wanted to maybe ask -- you guys have done a great job of investing CapEx over the years in some of these bigger projects. So I just thought maybe it would be helpful just to give a quick update on some of the bigger projects in recent years, maybe just talk about how those have ramped up. As you think about doing future projects, just wanted to get a quick update on some of the large ones in recent years like Texoma and Palmdale and Wellington, coming up.

Sure. So the three big acute care projects that we've completed in the last few years, Adam, are a new hospital, a replacement facility in the acquired Texoma market, which is North of Dallas. A replacement facility for our Lancaster Hospital in Palmdale, California and then a significant new tower for Summerlin in Las Vegas. Obviously -- although this wasn't contemplated when we undertook those three projects that were all, frankly, begun around the same time, they were all begun right in the -- frankly, before the recession and opened in the middle of the recession, and so I think we've said a number of times that all three of those projects have been somewhat slower to ramp up than our original expectations. On the other hand, I don't think that our fundamental view of any of those projects has fundamentally changed from when we undertook them. We think that they will all be ultimately accretive and helpful to our earnings.

Texoma's probably the one that's had the most success so far. It's a market that probably has had the least economic drag. Southern California and Las Vegas have had more of an economic drag, so the Summerlin and Palmdale projects have been a little bit slower. In terms of the new projects that we have going, the new hospital in Temecula, California, is part of our Riverside County network where we got three existing hospitals. There's data out there that shows that Temecula is the largest metropolitan area without a hospital in the US, so we think that there's a tremendous unmet demand there that we're hoping to serve. Then our Wellington Hospital on the East Coast of Florida has been a hospital that has been extremely successful for us particularly over the last five or seven years. We're just trying to take advantage of the fact that we've had some capacity constraints there, and so we'll have that tower opened by the end of this year.

Frank Morgan, RBC Capital Markets.

I hopped on late so I apologize here if you've already answered this. But did you talk about, Steve, the uninsured admit rates as either the growth in it or the mix as a percentage of total admits that were uninsured?

Frank, I think what we've said is that basically the trend we're seeing in our acute care business is lower commercial and Medicare admits and higher managed Medicaid and self pay admits. And that's a trend that frankly has probably been present now for a good three, maybe four quarters.

There are no further questions at this time.

Okay. Well, we thank everybody. We know everybody has a busy morning and we look forward to speaking with you again next quarter.

Thank you again for participating in today's conference call. You may now disconnect.