Universal Health Services, Inc. (UHS, Financial) is a leading operator of acute care hospitals, and it is also the country’s largest provider of behavioral health services. The company’s shares rose sharply in late-June in response to the U.S. Supreme Court’s decision to uphold a key provision of the Affordable Care Act (ACA), which has expanded insurance coverage to almost 13 million Americans. The court’s decision removes meaningful future legal challenges to the ACA, which has driven a meaningful increase in hospital utilization. This court decision came on the heels of solid quarterly earnings results. As the dominant acute care provider in some of the fastest growing markets in the U.S., we continue to like Universal’s positioning and prospects. We are particularly excited about the opportunity for its behavioral health business to gain more favorable reimbursement treatment for Medicaid patients.
From Baron Funds' second quarter commentary.
