Earnings Call Transcript
UNIVERSAL HEALTH SERVICES INC (UHS)
Earnings Call Transcript - UHS Q3 2022
Operator, Operator
Good day and thank you for standing by. Welcome to the Third Quarter 2022 Universal Health Services Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentations, there will be a question-and-answer session. Please be advised that today's conference may be recorded. I would like to hand the conference over to your speakers today, Steve Filton, Executive Vice President and CFO; and Marc Miller, President and CEO. Please go ahead.
Steve Filton, CFO
Thank you, Michelle. Good morning. We welcome you to this review of Universal Health Services' results for the third quarter, ended September 30, 2022. During the conference call, we 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 those forward-looking statements, I recommend a careful reading of the section on Risk Factors and forward-looking statements in our Form 10-K for the year-ended December 31, 2021, and our Form 10-Q for the quarter-ended June 30, 2022. 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 reported net income attributable to UHS per diluted share of $2.50 for the third quarter of 2022. After adjusting for the impact of the item reflected on the supplemental schedule, as included with the press release, our adjusted net income attributable to UHS per diluted share was $2.54 for the quarter ended September 30, 2022.
Marc Miller, CEO
During the third quarter, we experienced a decrease in the number of patients with a COVID diagnosis treated in our hospitals compared to the prior-year quarter. As a percentage of total admissions, COVID-diagnosed patients made up 16% of our admissions in the third quarter of 2021, but only 6% of our admissions in the third quarter of 2022. In our Acute segment, this decline in COVID patients resulted in reduced revenues due to lower acuity and less of the incremental government reimbursement associated with COVID patients. While overall surgical volume tended to recover to pre-pandemic levels, there was a measurable shift from inpatient to outpatient, resulting in further overall revenue softness. While we were able to continue to reduce the amount of premium pay in the quarter, which declined from $117 million in the second quarter to $81 million in the third quarter, there was insufficient revenue growth to offset the accelerated rate of wage increases and other inflationary pressures. The $25 million we received in quality incentive fund payments in Texas helped to narrow the gap, leading to an Acute EBITDA result in the quarter only slightly below our internal forecasts. At the same time, this decline in COVID activity allowed our Behavioral hospitals to continue to reduce their labor vacancies, resulting in a reduction of the capping of bed capacity. The effect of increased volumes combined with solid pricing increases largely offset higher labor costs, leading to a Behavioral EBITDA result in the quarter slightly below our internal forecasts.
Steve Filton, CFO
We also note that the third quarter included approximately $8 million in losses related to startup facilities and $4 million to $5 million in losses due to the impact of Hurricane Ian in late September. For the nine months ended September 30, 2022, we incurred about $45 million in losses linked to the startup facilities. Our cash generated from operating activities was $221 million during the third quarter of 2022, compared to $442 million during the same quarter in 2021. The decrease was mainly due to the timing of payroll disbursements, the opening of new facilities, and the timing of certain supplemental reimbursements. We spent $570 million on capital expenditures during the first nine months of 2022. In response to the earnings softness this year, we reduced the pace of our capital expenditures by about 22% to $165 million for the first nine months. Similarly, while we moderated the pace of our share repurchases, we plan to remain active in acquiring our own shares. For the full year of 2022, we estimate that we will acquire about 80% of the number of shares projected in our original guidance. During the third quarter of 2022, we repurchased around 1.6 million shares at a total cost of about $158 million. In the first nine months of 2022, we repurchased approximately 5.85 million shares at a total cost of around $704 million.
Marc Miller, CEO
Yesterday morning, we announced the appointment of Eddie Sim to Executive Vice President and President Acute Care Division, succeeding Marvin Pember, who has announced his intention to retire. Eddie, who brings nearly 30 years of healthcare and leadership experience, most recently served as Chief Operating Officer at Centura Health in Denver, Colorado, where he led the system's three operating groups, clinical delivery, and shared services, with annual revenues of approximately $5 billion. In this role, he was responsible for supporting improved care coordination, operational and clinical excellence, and alignment across Centura's ecosystem of 19 facilities and more than 250 clinics. Prior to joining Centura Health, Eddie served in senior leadership roles of increasing responsibility for 11 years, at Baptist Health in Jacksonville, Florida. As president of physician integration there, he was responsible for an employed physician network of 380 physicians and a clinically integrated network with more than 900 physicians. As we look forward to Eddie joining the company in early December, we thank Marvin for his 11 years of service to UHS. Under Marvin's leadership, our Acute Care Division has experienced robust growth and expansion in key markets, as well as achieved a significant number of industry accolades and public recognition for quality and service. Marvin will remain with the organization for a transition period following Eddie's start with us on December 5. We are pleased to answer questions at this time.
Operator, Operator
Thank you. And our first question comes from the line of Kevin Fischbeck with Bank of America. Your line is open. Please go ahead.
Kevin Fischbeck, Analyst
Great, thanks. I guess everyone's starting to look towards 2023. I don't know if you're hesitant to provide any comment in that direction, that would be fantastic. If not, most of your peers have given us kind of one-time items in 2022 to level-set the base we should be thinking about when thinking about 2023. Can you help us on either side of that analysis?
Steve Filton, CFO
Sure, Kevin. You know, it has never been UHS' practice to give guidance for the following year until our fourth-quarter earnings announcement in February. And we're not going to depart from that this year. I think we've been pretty clear about the non-recurring items in our financials for the year. I'll just sort of comment on the third quarter. The QIF, or Q-I-F reimbursement that we received in Texas for $25 million that Marc mentioned in his opening remarks, we believe should be a recurring reimbursement item, which is why we did not suggest tossing it out of the third quarter consideration. Other than that, we've identified the startup losses; we've identified the impact of the hurricane, in theory, and they should not reoccur next year. And then, finally, I know at least one of our peers described this DPP reimbursement in Florida, another sort of special Medicaid program. We do not record any of those funds in Q3 of this year, although we expect to record something in the neighborhood of about $30 million of those next quarter, in the fourth quarter, and a similar amount next year.
Kevin Fischbeck, Analyst
Okay, that's helpful. Are you thinking about like the government PHE money as kind of a headwind next year or was that tied to COVID volumes and therefore not really necessarily something we should be backing out of this year's numbers?
Steve Filton, CFO
See, I think it's the latter, Kevin. I mean, those government programs that were meant to subsidize hospitals, whether it was HRSA or the 20% add-on or the sequestration waiver, all were designed to help hospitals deal with the higher acuity and higher expense of COVID patients. As there are fewer COVID patients I think there's less of a need for that. I think the real variable as we think about the Acute business is, particularly in 2022, as COVID volumes have declined, non-COVID volumes, electives and other procedures have been a little bit slower to recover and snap back than they were in 2021. I think we see them slowly coming back. And I think we think that will continue into 2023. But in my mind, the pace of that recovery is probably sort of the most important variable as we think about the performance of the Acute Division, in addition to the other prevalent item which, of course, is just the tightness in the labor market.
Kevin Fischbeck, Analyst
All right, great. Thank you.
Operator, Operator
Thank you. And our next question comes from the line of Ann Hynes with Mizuho Group. Your line is open. Please go ahead.
Ann Hynes, Analyst
Hi, good morning. Maybe on 2022 guidance, you didn't mention in the press release. Is that still a good gauge for this year? And directionally, would you prefer consensus estimates to go to the low-to-mid range given the first three months? How should we think about that for Q4?
Steve Filton, CFO
Yes, and so I think, and consistent with our prior practice, as we don't mention guidance in the press release, we're affirming our previously issued guidance, which is what we're doing. I think during the third quarter, and in some public appearances at conferences, et cetera, I think I conceded that the top end of the guidance was practically not a reasonable target. But I think we feel like as long as the trends that we saw in Q3 continue to a reasonable degree in Q4, some place in the lower half of guidance, it should be very achievable, especially with some of the non-recurring items, particularly the DPP moneys in Florida, that I mentioned in my previous response.
Ann Hynes, Analyst
All right. And just one follow-up question, I think you said in your prepared presentation that you're reducing your expectations for share repurchase by 20%. Can you just talk about the drivers of that, and how we should view this for next year, and also CapEx for next year? I mean, I know you've reduced your budget by 33%, is that just a wait-and-see, or do you think that will continue into next year? Thanks.
Steve Filton, CFO
Yes, and so just to clarify what I said in the prepared remarks was our original guidance for the year presumed about $1.4 billion in share repurchases, obviously at a higher price than what we've been currently trading at. What I said is that we'd likely repurchase about 80% of the original number of shares. Probably from a dollar standpoint, that's more like 60%, $800 million-$850 million of the original $1.4 billion. Similarly, I think we've trimmed our CapEx forecast from $1 billion originally, to something, again, more in like the $800 million range. In both cases, we've done that, I think, out of an abundance of caution. Obviously, in an environment of rising interest rates and just on certain operating trends, we want to be appropriately cautious. We continue to believe that investing in our own EBITDA growth and our own earnings stream is still one of the most prudent investments we can make. So, I think we'll continue to be an active acquirer of shares into next year. We'll be much more specific about what our precise assumptions are when we give our guidance in February. But I'd suggest as people think about their models today, they think about CapEx and share repurchase in those sort of ranges of 2022, $800 million-some-odd for CapEx and $800 million-$850 million for share repurchase.
Ann Hynes, Analyst
Great, thanks.
Operator, Operator
Thank you. And our next question comes from the line of Noah Comen with FactSet. Your line is open. Please go ahead.
Noah Comen, Analyst
Hi, good morning. Wanted to follow up on Justin’s labor question, Steve, I think you mentioned another $15 million to $20 million in potential improvement in the fourth quarter. Do you have visibility into that level of improvement today based on the current trend and anything else you would point to that’s going to drive sequential EBITDA improvement in the fourth quarter? Thanks.
Steve Filton, CFO
All I would say Andrew is, we’ve obviously had a significant amount of success in the Acute division in reducing premium pay. It peaked at about $150 million in Q1. It was $117 million in Q2, as Mark said, and then $81 million in this third quarter. So, we’ve seen that trending down and believe that we can continue to propel that further reduction. Obviously, there is some sort of level of fixed amount of premium pay that is appropriate. I was saying, of a $35 million pre-pandemic. I don’t think that’s a realistic target at this point. But that’s the basis on which we believe that we can continue to reduce that number. It’s clearly a trend and it has not yet flattened out and I don’t think it will.
Operator, Operator
Thank you. And we will move on to the next question. And our next question comes from the line of Jason Cassorla with Citi. Your line is open. Please go ahead.
Jason Cassorla, Analyst
Great, thanks. Good morning. Just on your prepared remarks around the measurable shift in surgical volumes, the outpatient setting in the quarter, do you believe this move is a sustained construct moving forward, or would you call this as more of a one-time consideration and you would expect a reversion back to a more gradual shift over time?
Steve Filton, CFO
The shift from inpatient to outpatient settings in the industry has been ongoing for over a decade and accelerated during the pandemic. Many people now feel more comfortable receiving care outside of hospitals and emergency rooms. For instance, our freestanding emergency departments, of which we have about 25 across the country, have seen significant traffic during the pandemic, particularly in the last six to twelve months. While there may be a return to hospitals as concerns about COVID diminish, payors are also pushing to move more services to outpatient settings. We recognize this trend and have been investing in outpatient development in both of our business segments. This shift may have been heightened during the pandemic, but it is part of a longer-term trend that our business strategy accounts for.
Jason Cassorla, Analyst
Yes, okay, thanks. And then, just as a follow up here, just as we think about the potential wind down of the COVID public health emergency early next year, you have talked in the past about some of the considerations on Medicaid re-determinations and on volumes, but I guess that the incremental dollars that are also coming to an end. I know it’s early, but I was wondering what your outlook is for Medicaid rates next year for both sides of the business. And if you think there could be pressure there just given the ending of SMAP?
Steve Filton, CFO
Yes, I mean I think sort of mechanically the ending of SMAP probably creates some incremental headwind although I don’t think it’s necessarily material. Again, I think at a sort of 20,000 foot level, it’s going to be difficult for our reimbursement especially from the government at the Medicare and Medicaid level to fully offset inflation. I think the way we are presuming that the biggest offset to these inflationary increases will be a return to pre-pandemic volumes, and quite frankly, volumes above and beyond pre-pandemic levels, because to be perfectly frank, I don’t think that pricing can account or can offset all of the inflationary pressures that we are going to face.
Jason Cassorla, Analyst
Got it. Okay, thanks for all the color.
Operator, Operator
Thank you and one moment for our next question. And our next question comes from the line of A.J. Rice with Credit Suisse. Your line is open. Please go ahead.
A. J. Rice, Analyst
Thank you. Hello everyone. I would like to ask about the behavioral trends from the last quarter. It's evident that there was a significant recovery. Revenue increased by 8%, and we saw good margin leverage. I assume some of this improvement is due to the fact that COVID impacted certain psychological cases last year, making this year's comparisons easier. Could you share any updated insights on where we stand in terms of returning to a normal growth cycle, possibly in the mid-single digits or slightly better in the psychiatric hospital sector, along with the relationship between revenue and volume? Historically, this has been around 2% to 3% growth. Any updated thoughts on this considering the strong quarter we just had?
Steve Filton, CFO
We have mentioned several times during the pandemic that our experience indicates that when COVID utilization is high, the Behavioral business tends to struggle more than the Acute business. There are no advantages for the Behavioral business during these times; there is no increase in severity of cases or reimbursement, just the difficulty of isolating COVID patients from others, which often leads to closed beds. Additionally, there’s increased pressure on labor during COVID surges, as more employees are out sick, even if only for short periods, which adds to the strain in an already tight labor market. What we observed in Q3 mirrors our previous experiences, such as in the second quarter of 2021, when COVID utilization was low, leading to fewer patient matching issues and a greater capacity to fill labor vacancies. This capacity allows us to admit more patients. We have discussed our potential to achieve mid-single-digit to upper single-digit revenue growth in the Behavioral business in a post-COVID or endemic environment, similar to our historical performance before the pandemic. The third quarter reflected our ability to reach that growth. However, I am uncertain if this trend will be consistent, as we may encounter another COVID surge this winter. Nevertheless, we believe the underlying demand for Behavioral services remains strong. As we continue to tackle labor issues, we expect to see revenue growth that aligns more closely with our historical trends.
A. J. Rice, Analyst
Okay. And maybe just a question on the Acute side, if I look at some of the metrics length of stay showed a meaningful improvement that obviously is a favorable benefit for you. Any comment on what was going on there? And then some of the companies are talking about even if not year-over-year, because last year had a lot of COVID. Sequentially, they're starting to see stabilization and metrics like payer mix, and in revenue per adjusted admission, particularly on the commercial side was some a little bit of optimism around rate updates for next year. Any comment on any of those metrics that you would want to give?
Steve Filton, CFO
Yes, I mean I think as to the length of stay question is directly related to the metrics that Marc discussed in his opening remarks. Last year's quarter had 16% of our Acute patients as COVID diagnosed this year at 6%. The reduction in the number of those high acuity COVID patients, I think is sort of directly related to the length of stay decline. I would add that I think we believe that further reductions in length of stay are possible, and are actually maybe one of the most, if not the most significant opportunity, we have to be more efficient in control costs. For many of our patients, certainly for almost all of our government patients, and for even a significant chunk of our commercial patients, we're paid on a per admission basis. So, to the degree that there's an extra day or two of length of stay that is really unnecessary, we're just incurring additional costs without additional reimbursement. And we've struggled during the pandemic for a number of reasons, a lot of it has to do with the inability to refer patients to traditional subacute venues, because they're struggling with some of the same capacity issues we have, and other reasons, but we're very focused on the continued reduction in length of stay. As far as your other question, I don't think we've had a lot of volatility in payer mix during the pandemic. So, I would say it's probably as stable and then continues to be stable. Again, I would say the same thing I've now said a number of times, I think what we look forward to, as more and more people just get accustomed to living and working and getting their healthcare in a COVID environment or an endemic environment, that more people will be comfortable seeing their physicians, getting a primary and specialty care that they've historically gotten and getting that care in hospital settings and hospital outpatient settings. And we think that that trend has started to manifest itself and will continue.
A. J. Rice, Analyst
Okay. Thanks a lot.
Operator, Operator
Thank you. And one moment for our next question. And our next question comes from the line of Andrew Mok with UBS. Your line is open. Please go ahead.
Andrew Mok, Analyst
Hi, good morning. Wanted to follow-up on Justin’s labor question, Steve, I think you mentioned another $15 million to $20 million in potential improvement in the fourth quarter. Do you have visibility into that level of improvement today based on the current trend and anything else you would point to that’s going to drive sequential EBITDA improvement in the fourth quarter? Thanks.
Steve Filton, CFO
Yes. Right now, the process is somewhat fragmented. We are focusing on developing some Medication-Assisted Treatment facilities and exploring small acquisitions. As I have mentioned previously, we do not see this as a significant growth driver for the future, but rather as a way to enhance our comprehensive continuum of care in the Behavioral health space. We address nearly all diagnoses in both inpatient and outpatient settings, and incorporating MAT fills an existing gap. We will continue to explore this opportunity in some of our markets, but it is just one part of a broader strategy to be one of the most comprehensive providers of Behavioral services in the country.
Andrew Mok, Analyst
Great. Thanks for the color.
Operator, Operator
Thank you. And one moment for our next question. And our next question comes from the line of Stephen Baxter with Wells Fargo. Your line is open. Please go ahead.
Stephen Baxter, Analyst
Yes. Hi, thanks for the question. Wanted to ask a follow-up on the pricing discussion earlier, I think you suggested that it might be challenging for your pricing yield to keep up with inflationary pressures, but just wanted to clarify that. Was that commentary specific to your government yield or your overall pricing yield? And I guess my actual question would’ve been just wanted to get an update on your commercial rate negotiations for 2023. I guess what percentage of your commercial book will be in the first year of a new contract in 2023? And then what do you think the incremental yield would be compared to a typical update? Thank you.
Marc Miller, CEO
Yes. My earlier comments highlighted that since half of our revenue comes from government sources, and they are currently not keeping pace with inflation, that is likely our biggest challenge. However, we anticipate ongoing incremental increases from these government sources over the next few years. On the commercial side, we continue to pursue higher rates and greater recognition from our commercial payers regarding the need for increased reimbursement to navigate this inflationary environment. In terms of Behavioral services, our overall pricing remains strong, particularly this quarter. We have previously discussed our proactive approach with various payers, largely due to capacity constraints in that area. It is reasonable for us to require our lowest-paying payers to adjust their reimbursement to market levels or to terminate those contracts altogether. If we need to limit patient intake, it makes sense to cut ties with the most inadequate payers. Regarding our Acute contracts, many of them include short-term exit options, typically 90 or 120 days. We are currently renegotiating contracts in both Acute and Behavioral sectors whenever we identify opportunities, especially if a payer appears to be under market. We believe we can leverage this situation to secure better rates. So we are actively seeking relief on the pricing front, especially in our commercial business, while acknowledging that the shortfall is primarily on the government side.
Operator, Operator
Thank you. And we’ll go to our next question. And our next question comes from the line of Whit Mayo with SVB Securities. Your line is open. Please go ahead.
Whit Mayo, Analyst
Thanks. Just wanted to follow up on contract labor for just one second, Steve, how much of the improvement in the third quarter was utilization versus bill rates? And do you have an idea of what your exit rate was in the quarter? I’ve got you pegged at around 10% of Acute SWB in the quarter, but just wondering if that trended maybe a little bit more favorably towards the end of the quarter. Thanks.
Steve Filton, CFO
I believe it’s quite clear that the improvement in premium pay results from both rates and utilization. As the demand for temporary and traveling nurses decreases, the rates they command also decline. Thus, I would say it's a fairly balanced decline in both rate and volume. I don’t have the exact month-by-month premium pay figures available, but as I mentioned earlier, we've observed a gradual decline in premium pay since the start of the year when COVID volumes were at their highest. Therefore, I think our exit rate for the quarter reflects a lower amount of premium pay compared to the beginning of the period.
Whit Mayo, Analyst
Okay. And do you have a number for the contract labor spin in the Behavioral segment? I know and recognize that it’s not as significant of a pain point, but just wanted to see if you had that.
Steve Filton, CFO
Yes. I mean I think historically it’s been about a third of what it is in the Acute side, but I don’t have the specific number in front of me.
Whit Mayo, Analyst
Okay. Well, one last one, just corporate overhead, I know this number bounces around, but came in lower than sort of where we thought it might shake out. Just any developments or anything to call out would be helpful. Thanks.
Steve Filton, CFO
Yes. I don’t think anything terribly specific. I will say that the decline in corporate overhead in Q3 of this year was pretty consistent with what we experienced last year, but as we’ve analyzed those numbers, there’s nothing terribly material driving that.
Gary Taylor, Analyst
Hi, good morning. Just a couple quick ones for me, it doesn’t sound like on the hurricane any material impact expected to continue into the fourth quarter, that was just a disruption, but nothing damaging that would be continuing?
Marc Miller, CEO
That’s correct, Gary. We didn’t suffer fortunately any significant physical damage in any of our facilities. So, I think all the impacts were temporary and most should be recovered in the fourth quarter.
Gary Taylor, Analyst
And then on the Florida DPP for 4Q I know you’d mentioned that earlier in the year. I just want to make sure I understand a $30 million, is that the EBITDA impact or is there I’m thinking of the other companies have had like a gross revenue number or a provider tax number associated with it, and then a net sort of EBITDA?
Steve Filton, CFO
Yes, so that $30 million is the EBITDA impact.
Gary Taylor, Analyst
Okay. And then last one, when I look at modeling the Acute segment, the line that really is most challenging for me I am just struggling to stay up it and perhaps understand is that other operating expense line that’s up almost $100 million year-over-year. I don’t think there is any contract labor in there. I think it’s professional fees and utilities and insurance is like the most largest items cited in that bucket. Could you just maybe confirm that? And maybe just help us think about that up a $100 million year-over-year, what the two or three largest drivers of that are?
Steve Filton, CFO
Sure. So, clearly and we have talked about this on previous calls the most significant driver and I think the biggest distortion is the insurance subsidiary where we record our medical loss ratio in that line. And because the medical loss ratio for our insurance subsidiary like any insurance subsidiary is 85 or 90% of revenues. Otherwise, that other operating expense line for our hospitals is more something like 20% revenue. And to a degree that there is a revenue increase in the insurance subsidiary, it sort of distorts that line. So, in the third quarter, there is about $30 million to $40 million increase in insurance subsidiary revenues and expenses. If you adjust that out of other operating expenses, I think rather than like a 15% increase quarter-over-quarter it’s certainly like 10%. And I think that’s probably a reasonable go-forward. I don’t have the year-to-date numbers in front of me. But, we can certainly provide those. We will make a point I think when we give guidance for 2023 of trying to separate out the impact of the insurance subsidiary and those numbers. So, it’s easier for people to follow. I understand the difficulty that creates.
Gary Taylor, Analyst
Yes. Steve, I have the three largest buckets of spend on the Acute other OpEx correct, when we think about professional fees, utilities, and insurance?
Steve Filton, CFO
Yes, I would say after adjusting out the insurance, there is a bunch of miscellaneous things. Probably the other most volatile item in the most recent past has been physician payment. So, our payments to physicians including locum physicians and increased subsidies for hospital-based physicians, et cetera would be recorded on that line. And so you are seeing some impact of that, and then just the impact of broad general inflation.
Operator, Operator
Thank you. And one moment for our next question. And our next question comes from the line of Pito Chickering with Deutsche Bank. Your line is open. Please go ahead.
Pito Chickering, Analyst
Yes, good morning, guys. Thanks for taking my questions. Three follow-up questions that is focused on Behavioral, number one, how did behavioral business track in September and October? Is it fair to think about 3Q admission growth continuing in the fourth quarter? Number two, if 3Q margins in Behavioral the right sort of run rate for the fourth quarter? And number three, thinking about 2023 behavioral if pricing is in the 4% to 5% range and wages in the low 4% range, is there any reason we should not think about margin improvement in Behavioral in 2023? Thanks so much.
Steve Filton, CFO
Yes, I think we made these comments generally, and most hospitals have shared similar observations. July volumes in both Behavioral and Acute were quite low. August showed improvement, and September seemed to reflect the performance of the two previous months combined. So, the trend appears to be upward. However, we've learned during the pandemic that trends can be more volatile than they were historically. That said, we are fairly confident that during periods of lower COVID utilization, Behavioral volumes will tend to increase, which has been our experience. Regarding whether mid-single digit and upper single-digit revenue growth, as we experienced in Q3, should support margin improvement, I believe the answer is yes. We observed this in the quarter, and I see no reason why this trend shouldn't continue moving forward.
Pito Chickering, Analyst
What’s the follow-up on the Acute wages, are you seeing your competitors sort of raise full-time employee wages multiple times during 2022, like it did in 2021? Or are we just generally all coming with same levels and, hence, why you think the wage inflation in Acute should be less in '23 than in '22?
Steve Filton, CFO
Yes, I mean we definitely saw our acute care peers raising wage rates, often multiple times during 2022, and again particularly during COVID surges. As I said, I mean I think that our hope is that with COVID volumes more stable, and hopefully without another really significant surge, like we saw in January '20 and January '21, wage rates will be more reasonable, and wage rate increases will be more reasonable in 2023. Look, the other issue is, I think as most people know, I mean I think most of our not-for-profit peers are struggling financially, and then that may be an understatement. So I think, again, the hope is that their willingness to give what we believe will be characterized as outsized pay increases, they're going to have much less of an appetite for that in 2023 than maybe they did in '21.
Pito Chickering, Analyst
Great, thanks so much.
Operator, Operator
Thank you. And one moment for our next question. And our next question comes from the line of Sarah James with Barclays. Your line is open. Please go ahead.
Sarah James, Analyst
Thank you. You said in your prepared remarks that you were able to lower the previous admission cap in Behavioral due to filling the vacant positions. Can you give any color on what percentage of admissions you had to turn away in Q3, and what that looked like pre-pandemic?
Steve Filton, CFO
Yes, Sarah, we generally don’t give those metrics because I think they're hard to measure across the portfolio consistently, not every hospital tracks it the same way, et cetera. We do try and track it, but internally. But I've been reluctant to give those metrics out publicly. And what I will say is what we do know during the pandemic is that the percentage of inbound call volume that we were able to satisfy was significantly lower than it was pre-pandemic. And the main reason for that was because of again, I'm going to describe it as capped beds. And the beds could have been capped either because we were isolating COVID patients in certain units or because we didn’t have enough staff. And again, what we have manifested many times when COVID volumes decline is we know that the number of uncapped beds increases as COVID volumes come down. It's difficult to give a precise impact of that. But again, I think you can see it in the 8% same-store revenue growth in Q3.
Sarah James, Analyst
Got it. And given the, roughly, $200 million reduction in CapEx guide in conjunction with your commentary in 2Q that you're leaning on de novo openings this year related to staffing shortages. What impact does that have on openings going forward? And is it influencing your thoughts around what new builds might happen in '23?
Steve Filton, CFO
I believe it's primarily a matter of timing. We see that capital expenditure investments that are economically viable and yield a reasonable return are indeed sensible. However, from a timing standpoint, it may not be practical to expand capacity when we're currently struggling to adequately staff the existing facilities. Ultimately, these projects will be completed, but I don't anticipate any significant changes for 2022. The truth is that large expansion projects scheduled for 2023 are likely already in motion. I think our decision to defer or delay capital expenditures may push some projects originally set for 2024 into 2025, and those planned for 2025 into 2026, rather than causing any immediate effects in 2023.
Sarah James, Analyst
That makes sense. Thank you.
Operator, Operator
Thank you. And our next question comes from Noah Comen with FactSet. Your line is open. Please go ahead.
Noah Comen, Analyst
Hi, good morning. I am showing no further questions at this time. And I would like to turn the conference back over to Steve Filton for any further remarks.
Steve Filton, CFO
We'd like to thank everyone for their time this morning and look forward to the future.
Operator, Operator
Please go ahead. This does conclude today's conference call. Thank you for participating. You may all disconnect. Everyone, have a great day.