Hospital Giant UHS Has Lost $2.4 Billion In Value In A Week – BuzzFeed News

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UHS-owned Millwood Hospital in
Arlington, Texas. Laura
Buckman for BuzzFeed News

ID: 10176248

Shares of hospital chain Universal Health Services fell another
7% Wednesday, following a negative research report from the
brokerage firm Raymond James. The company’s stock fell 12% last
week following a
BuzzFeed News investigation detailing allegations that it
aggressively diagnoses mental health patients to maximize
revenue from insurance payments.

The Raymond James analysts
said a letter from Iowa Senator Charles Grassley last week,
asking the inspector general of the Department of Health and
Human Services for an update on its investigation into UHS was
“an escalation in events surrounding last week’s BuzzFeed
article” that “takes the political risk to a new level.” The
Department oversees the Medicare and Medicaid programs.

Grassley had asked for the update in response to the BuzzFeed
News story, writing, “The pattern of conduct described by the
report paints a picture of greed and raises serious questions
about patient safety.” UHS has
disputed the article, calling it “an inaccurate portrayal
of UHS’s behavioral health operations.”

UHS shares
tumbled almost immediately in response to the BuzzFeed News
investigation and did not rebound when the company’s finance
chief, speaking at an investor conference, dismissed the

Altogether, the stock has fallen by 20% since the article was
published, reducing the company’s market value by $2.4

“We think it’s possible that the heightened political scrutiny
could invite more caution and/or red tape into the admissions
process — either externally or from self-policing,” the Raymond
James analysts said Wednesday. Referring to the inspector
general’s probe, the analysts said, “Add in the ongoing OIG
investigation, and we think the risk-reward is no longer


This post has been updated to reflect a fuller account of
Raymond James’ analysis and UHS’s denial of allegations
contained in the original BuzzFeed News investigation.

ID: 10177644

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