This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
Operator
and welcome to the fourth quarter and full year 2020 UHS conference call. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone keypad. If you require operator assistance during the call, please press star zero. I'd now like to turn the call over to your speaker today, CFO Steve Filton. Thank you. Please go ahead, sir.
Steve Filton
Good morning. Thank you, James. Mark Miller is also joining us this morning, and we welcome you to this review of Universal Health Services results for the fourth quarter ended December 31, 2020. 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 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, 2020. 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 $3.60 for the fourth quarter of 2020. After adjusting for the impact of the items reflected in the supplemental schedule as included with the press release, our adjusted net income attributable to UHS per diluted share was $3.59 for the quarter ended December 31, 2020. As of December 31, 2020, we had received approximately $417 million of funds from various governmental stimulus programs, most notably the CARES Act, included in our reported and adjusted income for the three and 12 months ended December 31, 2020, which is approximately $20 million, $200 million, excuse me, and $413 million respectively of net revenues recorded in connection with these stimulus programs. For the full year of 2020, approximately $316 million of those revenues were attributable to our acute facilities and $97 million were attributable to our behavioral health facilities. In addition, during 2020, we received approximately $695 million of Medicare's accelerated payments, which had no impact on our earnings during the year. We have commenced the repayment process and anticipate the $695 million of funds will be repaid to the government in March or April of 2021. As previously disclosed, on September 27, 2020, we experienced an information technology incident, which resulted in the suspension of user access to our information technology applications in the United States. Our information technology applications were substantially restored at acute and behavioral hospitals at various times in October 2020 on a rolling and or staggered basis, and our facilities generally resumed standard operating procedures at that time. We estimate that this incident had an unfavorable pre-tax impact of approximately $67 million during the year ended December 31, 2020, as a result of lost revenues, incremental recovery expenses, and delayed coding and billing. We estimate that approximately $12 million of the unfavorable pre-tax income impact was experienced during the third quarter of 2020 and approximately $55 million was experienced during the fourth quarter of 2020. During the fourth quarter of 2020, we also continue to experience a material unfavorable impact on our operations and financial results from the COVID-19 pandemic before giving effect to the revenues recorded in connection with the CARES Act and other governmental grants. Specifically, we experienced an increased wave of COVID patients in December 2020, which peaked in the first half of January of 2021. The negative impact resulting from this elevated level of COVID volumes was primarily a function of accompanying declines in elective and scheduled procedures, declines in both acute and behavioral patient days, along with increased expense pressures, particularly on salaries and wages. Our cash generated from operating activities was 2.36 billion during the full year of 2020. as compared to 1.438 billion during 2019. Included in our 2020 cash provided by operating activities was the 695 million of Medicare accelerated payments, which we plan to repay to the government very soon. We spent $731 million on capital expenditures during the full year of 2020 as compared to 634 million during 2019. Our accounts receivable days outstanding increased to 55 days during the year ended December 31, 2020 as compared to 50 days during 2019. The increase was due in part to the coding and billing delays caused by the information technology incident. At December 31, 2020, our ratio of debt to total capitalization declined to 37.9% as compared to 42% at December 31, 2019. During 2020, we opened 439 new beds in our existing acute and behavioral health hospitals and opened Canyon Creek Behavioral Health Hospital, a new 102-bed hospital in Temple, Texas. We also opened three new freestanding emergency departments or FEDs and expect to open five more in 2022 to bring our total number of FEDs to 22. We continue to grow our behavioral health joint venture portfolio and recently announced the opening of two more de novo facilities, the 102-bed Southeast Behavioral Hospital, a joint venture with Southeast Health located in Southeast Missouri, and the 134-bed Clive Behavioral Health Hospital, a joint venture with MercyOne located in Clive, Iowa. During 2021, we expect to spend approximately $850 million to $1 billion on capital expenditures, which includes construction of a new 170 bed acute care hospital in Reno, Nevada, which is expected to open in the first quarter of 2022. As of December 31, 2020, we had a little over $1.2 billion of aggregate available borrowing capacity pursuant to our $1 billion revolving credit facility and our $450 million accounts receivable securitization program. In addition, as of December 31, 2020, we had approximately $1.2 billion of cash and cash equivalents. In light of our expectation that the COVID volumes are likely to continue a downward trajectory in 2021, As more vaccines become available and the accompanying pressures on our operations and financial results ease, our Board of Directors have approved the resumption of our regular quarterly dividend with the first quarterly payment of 20 cents per share to be made on March 31st. We also plan to resume our share repurchase program in the second quarter of 2021, pending Board of Director approval. Similarly, our 2021 operating results forecast, which was provided in last night's release, assumes that the negative impact of the COVID virus will diminish in 2021. The pace of that recovery from the pandemic is still difficult to predict with precision, but we assume the COVID impact will generally ease at an increasing cadence throughout 2021. Mark and I are pleased to answer your questions at this time.
Operator
At this time, I'd like to remind everyone in order to ask a question, please press star followed by the number one on your telephone keypad. And we'll pause for just a moment while we compile the Q&A roster. Our first question comes from the line of Andrew Mock with Barclays. Go ahead, please. Your line is open.
Andrew Mock
Hi, good morning. When I compare the 2021 guidance to the pre-COVID plan for 2020, revenue is tracking ahead, but EBITDA is tracking behind. resulting in margin compression of about 80 basis points. I would think that margin should be more resilient given the cost structure that's been rebased lower. So can you walk us through the drivers of that lower margin profile and how you expect margins to evolve as COVID abates? Thanks.
Steve Filton
Yeah, I think, you know, obviously it can be a more nuanced answer, but I think at the 20,000 foot level, the best explanation is that we presume that demand will recover faster than some of the accelerated pressures we've been feeling in our expenses, particularly salaries and wages. We do believe that as the volume of COVID patients declines, those labor pressures will ease. But I think we have a point of view that they may take longer to ease than demand will to recover. And that's, I think, why you're seeing that margin compression, which I think will likely occur more in the first half of the year than the second.
Andrew Mock
Got it. That's helpful. And as a follow-up, CapEx is expected to meaningfully accelerate to a range of $850 million to $1 billion this year. How should we think about the CapEx spend across the segments? Are there specific service lines or geographies targeted for 2021? Thanks.
Steve Filton
Yeah, so I tried in my prepared remarks to highlight some of the significant increases We are building a new hospital in Reno, Nevada, where we have an existing hospital, but obviously this will expand our presence in that market as well as in the statewide market of Nevada. That's probably $150 million of capital spend in 2021 by itself. I also highlighted the joint venture activity we have of building a number of new de novo behavioral hospitals with mostly not-for-profit joint venture partners, that's consuming, I think, some incremental capital. And then, you know, FEDs and, I think, more broadly, you know, investment in ambulatory services on the acute side are also consuming some incremental capital. Those, I think, are sort of the big areas where there's increased spending.
Andrew Mock
Great. Thanks a lot, Holly.
Operator
Our next question comes from the line of Kevin Fishback with bank of America. Go ahead, please. Your line is open.
Kevin Fishback
Great.
Operator
Thanks.
Kevin Fishback
Um, maybe wanted to follow back up with, uh, that earlier question about kind of margins. I guess, I guess as we think about, um, 2020, obviously bonded or depressed, but pricing was quite strong. Um, as the volume comes back, you know, it would be lower acuity volumes. Um, and, um, you know, it seems like maybe Medicare volumes and some of your Medicaid volumes have been more depressed than commercial. So I might think that the volume that comes back also would have maybe a negative payer mix coming with it. So I guess we'd like to kind of hear about how you think about incremental margins on, on that volume return, giving, given that potential or whether you think maybe that's not the way it would play out.
Steve Filton
So Kevin, I mean, I think broadly the, really unfavorable pressure from the COVID dynamic has been the idea that in both of our business segments, the presence of COVID patients have crowded out other non-COVID patients. And as a consequence, emergency room volumes are down and elective and scheduled procedures are down from pre-pandemic levels and patient days in both acute and behavioral are down from pre-pandemic levels. And the business that's missing or absent, if you will, from the hospital is essentially, I think, the higher margin business, and the COVID business is lower margin business that is temporarily replaced in 2020. I think as the COVID volumes ease in 2021, as we expect they will, and I think as they have started to do so, I think you'll see more of a return to kind of a normal medical-surgical mix on the acute side and more of a return or a rebound in behavioral patient days on the behavioral side, and revenues will begin to increase and margins will begin to increase, but as I noted in my previous comment, what we have experienced particularly later in 2020 is really accelerated pressure on our labor force, and that pressure I think will ease slowly in 2021, but I think the The revenue mix of patients will clearly be better in 2021. And as the labor supply sort of equalizes, I think our margins will also improve as the year continues.
Kevin Fishback
So I guess, you know, historically, I think of higher acuity equaling higher profitability. But your point is that that might be the case normally, but surgical versus medical weighs that, right?
Steve Filton
Yeah, I mean, what really drove the higher acuity in the acute segment in 2020 was COVID patients. And to your point, historical thinking about higher acuity doesn't really apply to COVID patients. They're medical patients. They're sick. They're often older. Their length of stay is quite a bit longer. And they're just simply not as profitable as surgical or procedural patients.
Kevin Fishback
Okay. And then just on the... behavioral side, obviously understand, you know, the dynamics of COVID putting pressure on that. But, you know, obviously, your peers showing much stronger volume growth than you. So how do you think about your market share? I guess over the last year, do you feel like you've been able to sustain market share or have there been market share losses across your businesses?
Steve Filton
Yep, so market share data is not as widely available in the behavioral space as it is in the acute space, but I think to this degree that it is available. We believe for the most part that we have maintained our market share. I think the other important metric that we look at internally, Kevin, is the amount of sort of express demand and we measure that in a number of ways, but we measure it in a primary way by sort of incoming inquiries, telephone calls, internet inquiries, et cetera. And what we have generally noted in 2020 is that the level of intake or inquiries has remained rather strong. And what has really occurred, particularly I think later in the year, is more challenges for us to meet that demand, either because of COVID patients in our behavioral facilities that preclude us from admitting non-COVID patients, you know, proxies to them on their units and, you know, on their floors, whatever, or because we've got a significant chunk of our labor force that either has been exposed to the virus or has the virus or is out for some other, I'll call it virus-related reason, and we simply can't sort of operate all of our beds in a particular hospital or a particular geography at a point in time. So your sort of question about comparing to our public peer, difficult for me to do that because I just don't know what their experience has been with you know, COVID patients in their markets, what their protocol is for, you know, treating and isolating and keeping their COVID patients and employees safe. I just don't know. So, you know, really all we can do for the most part is, you know, look at what's impacting us internally. And I think we have a strong belief that the biggest impact on our behavioral volumes in 2020 has been COVID and COVID-related dynamics, and when those dynamics ease in 2021, behavioral volume should resume to pre-pandemic levels. And quite frankly, we believe, you know, potentially higher than pre-pandemic levels because we think that the underlying demand for behavioral care has been increasing.
Kevin Fishback
That's helpful. Thank you.
Operator
Our next question comes from the line of Ralph Giacote with Citibank. Go ahead, please. Your line is open.
Ralph Giacote
Thanks. Good morning. Steve, maybe, maybe a little bit more on sort of that last part of that question. Can you help on maybe guidance or how you're thinking about it between the segments, maybe just volume and pricing assumptions and betting embedded in for sort of both and, and maybe any differences on the margin side in terms of either greater improvement or degradation one, one versus the other.
Steve Filton
Yeah. I mean, you know, honestly, Ralph, I think when we, you know, commenced the process of developing our 2021 budget or forecast. We did so with the sort of basic underlying presumption that 2020 was kind of a lost year that, you know, we were mostly focused on dealing with the pandemic, keeping our patients safe, getting them well, keeping our employee base safe and well, those were all extraordinary challenges. And in many ways, I think 2020 was otherwise a lost year in terms of business development, you know, really taking advantage of capacity expansion, service line expansion, that sort of thing. And so when we began to think about a 2021 forecast, we really kind of started with our original 2020 budget and what our, you know, forecasts had been for 2020. And I think that's really largely true for both business segments. So I think we have a point of view that both business segments will sort of grow off of, if you will, a 2019 pre-pandemic base at kind of mid-single digit levels, et cetera, although it will be in a trajectory that I think is different from what's the normal or historical trajectory so that historically, Q1 is our biggest earnings quarter and we earn more in the first half of the year than we do in the second half of the year. I think we have a point of view that 2021 will look differently because of this dynamic of COVID volumes declining as the year goes on. and revenue increasing and labor pressures easing and margins increasing as the year goes on. So I think the two business segments sort of grow in that historical single-digit range, although in sort of a different cadence and a different trajectory than we would normally expect.
Ralph Giacote
Okay. All right. Fair enough. And any early read on the first couple months of the year? I know obviously limited data, but Is it tracking similar to 4Q, you know, and then maybe anything specific to some of the storms and impact of weather more recently, particularly for you in Texas?
Steve Filton
Yeah, so on the first point, And as I said in my prepared remarks, we saw a significant surge in COVID volumes in December. On a percentage basis, we had more COVID patients in December of 2020 than any other month of the year. And that surge continued at almost all of our hospitals into the first half of January. I think COVID volumes tended to peak for virtually all of our hospitals in the first half of January. and have been declining and declining rather rapidly. And I think we view that as an encouraging sign since then. But again, one of the things that we've noted several times during the year and during the ebbs and flows of the pandemic is as COVID volumes surge and that pressures and crowds out other business, when the volumes drop, that other business returns, but it's not an immediate and instantaneous sort of thing. So, you know, I think it takes, depending on the hospital and the service line, et cetera, weeks, maybe, you know, a month or two for that to happen. That's the expectation. And again, I think we're encouraged by the fact that the COVID volumes seem to have peaked in the first half of January. And the hope is that obviously as the vaccine becomes more widely available and distributed, those trends will continue. As to your question on the storms, and I would make the point that I think the storms affected a broad swath of the country, not just Texas, but in our case, Texas and Oklahoma and Louisiana, Mississippi, Tennessee. I think the good news is that because these storms were sort of widespread, unlike things like the cyber incident where we faced the risk and faced the actual dynamic of during a relatively short period of time, business went elsewhere because we were struggling with our systems. During the weather event, everybody in our geographies was struggling in much the same way. And so I don't think we lost business to anybody else. I think because it occurred in the middle of a quarter, the likelihood that the business sort of recovers a week or two or three weeks later is more likely. And my guess, and it's clearly a guess at this point, is that when we get to the end of the first quarter, the weather event, other than some incremental expenses and things, which, you know, and many of which will be covered by insurance, you know, shouldn't have a big impact.
Ralph Giacote
Okay. All right. Thank you.
Operator
Our next question comes from the line of AJ Rice with Credit Suisse. Go ahead, please. Your line is open.
AJ Rice
Hi, everybody. Maybe first just thinking about some of the negotiations with managed care coming out the other end of the pandemic. I think on the behavioral side, you've said that some of the pressures you were feeling from managed Medicaid and length of stay and all and other issues on the behavioral side, they may be eased up. Have you seen any of that reverse itself or what are your discussions? like with managed care really on both sides of the business in terms of any changes you're seeing?
Steve Filton
Yeah, so I think, you know, the dynamic that you're alluding to as it relates to the behavioral business, AJ, is that really since the pandemic began, our revenue per adjusted day has been up in the kind of 5%, 6% range as compared to sort of maybe 2%, 3% increases pre-pandemic. And we've attributed that, at least to some degree, to a change in behavior on the part of some of our insurers and managed care companies. Clearly, and this trend certainly continued into the fourth quarter, we see the level of charity care and the level of denials down about 10% from prior year comparisons. And there may be a number of reasons for that, but I think to some degree it certainly is attributable to less aggressive utilization management behavior on the part of some of our insurers at least. We also have negotiated during the year some measurable contractual price increases, particularly in our managed Medicaid portfolio. These are not big increases, but I think they come on top of a number of years of relatively suppressed price increases in that space. So that's been helpful as well. And I think, by the way, much needed. Again, we've gone, at least with some payers, for a number of years without increases. That can be a difficult population to treat with some incremental expenses, et cetera. So I think those increases are justified, but that's been helpful as well. I would say on the acute side, not as much change during the pandemic in terms of our managed care or insurance behavior one way or the other and not in terms of renegotiating prices or in terms of utilization management behavior, et cetera. I would say it's mostly business as usual.
AJ Rice
Okay. And maybe a follow-up question around the 2021 guidance. There's obviously some debate about things like the public health emergency and how long that will stay in place. I know that The 20% COVID DRG add-on for Medicare relates to that timeframe. There's some FMAP funding as well. And then there's also some debate about the Medicare sequestration timeframe, which I guess now would expire at the end of March. How have you factored that into your guidance, or what are you assuming on those two issues or any other variables like that?
Steve Filton
So as to the Medicare sequestration, as you noted, we've assumed that it's waived through the first quarter, but then our guidance presumes that it is restored for the balance of the year. As far as the public health emergency timing, but more so the 20% DRG add-on, I'll make the point that we've benefited from the DRG add-on but only to the degree that it's covering increased costs. So I think we've not made an explicit assumption about it in our 2021 budget, but what we really assume is that as COVID volumes decline, COVID expenses will decline. And we assume that as that occurs, the government at some point will lift the the 20% add-on. So we haven't really, again, made an explicit assumption about that. It's really more built into our broader assumption that as the year progresses, acuity and revenue per adjusted admission will come down, but so will expenses.
AJ Rice
Okay.
Operator
All right. Thanks a lot. Our next question comes from the line of Peter Chickering with Deutsche Bank. Go ahead, please. Your line is open.
Peter Chickering
Good morning, guys. Thanks for taking my questions. A question for you on guidance again. You mentioned that margin pressure should ease in the back half of the year. Looking at past years, as you referenced, about 52% or 54% of EBITDA comes in the first half of the year. Can you help us quantify what that should be for 2021?
Steve Filton
So I guess the short answer is no. I mean, I think we have historically not given quarterly guidance, and if I start throwing out percentages, it's effectively giving quarterly guidance. And I think given our historical reluctance to do it, 2021 would certainly not be the year that we would choose to say that we had a much better visibility and are prepared to do it. So I think I tried in an earlier question to certainly talk about the fact that We would expect the cadence and the trajectory of 2021 to look differently and not to have that front half waiting that you alluded to. But we're not prepared to give specific percentages because, as I said in my opening remarks, what this is really all premised on for the most part is the pace at which the COVID virus eases and how that affects our labor force, et cetera. And those things are just very difficult to predict.
Peter Chickering
Okay, fair enough. I had to give it a try anyway. And then to follow up on the behavioral admissions, it's really a 10% Delta in fourth quarter versus your largest public peer. Can you quantify, as you defined it, the express demand from your referral sources like ER and other sources? And can you remind us what percent of those admissions come from those referral sources?
Steve Filton
Yeah, so... again, you know, I'm referencing what we would describe as sort of call volume, which is kind of inbound inquiry volume, which is, again, telephone calls and Internet inquiries, et cetera. And those really haven't declined during the pandemic. Our conversion rate or the rate at which those inquiries or inbound calls turn into admissions has fallen. And I think we attribute that in large part to our inability to you know, literally put the patient in a bed either because the bed itself is unavailable because it's proximate to a COVID patient or multiple COVID patients or because we don't have enough qualified clinical staff to staff those beds. So we've not historically given out our call volume, et cetera. I don't know that any of our peers do anything like that, but I will say, repeat again the notion that the call volume itself has not declined, and that's what leads us to believe that the underlying demand hasn't really changed. Our biggest challenge in 2020 has been meeting that demand And I think we'll just be in a much better position to do that in 2021 as we become less and less focused on the COVID virus itself.
Peter Chickering
All right. And then one more quick follow-up here on the average length of stay. A follow-up on Ada's question. You know, when you talk to you managed care about your mental health and the denials they're doing today, do you think that the focus of mental health post the COVID means that these level denials will stay? at these current levels for 2021 and beyond, or do you think they sort of revert back to normal as the world returns to more of normal utilization rates?
Steve Filton
Yeah, I mean, that's a difficult question, obviously, for us to answer, Peter, because I think it's really the behavior of the managed care companies that have changed. It's difficult for us to ascribe, you know, rationale to that. I mean, obviously, I think, you know, broadly, the managed care companies have done quite well and prospered financially during the pandemic because of the lower utilization and lower volumes that we've been discussing as providers. I guess my gut reaction is that as utilization and volumes return to something approaching pre-pandemic levels, while we would hope that their behavior remains more reasonable and rational, it certainly would make intuitive sense that they'd return to a more aggressive posture. But I really think that question is better posed than that. Great. Thanks so much.
Operator
Our next question comes from the line of Justin Lake with Wolf Research. Go ahead, please. Your line is open.
spk06
thanks good morning uh first just steve i apologize if i missed this but uh you know i'd love to hear some more detail on the uh on the cost side specifically around labor anything you could share with us in terms of specifics between the acute care business versus behavioral specific markets is it temp you know nursing that you're having this good money on uh and why do you think it's transitory
Steve Filton
Sure. Well, again, and I think this has been true for some time, I think we have talked for the last several years about the fact that labor shortages have impacted the two divisions somewhat differently. On the acute side, the impact has been what I would describe as more traditional. That is elevated labor costs. We're spending more money on overtime for our own employees. We're spending more money on temporary and traveling nurses. and those sorts of things and paying shift differentials and sign-on bonuses and all that sort of thing. And I think it's really been exacerbated during the last year because COVID has created all sorts of different and new dynamics and pressures. First of all, it has created a number of instances where employees, nurses, and other clinicians are out sick They have the virus and they've been exposed to the virus, although they're often being exposed and contracting the virus outside of the hospital, but either way, they're on the sidelines for a period of time. Or they don't have the virus, but they've been exposed and they're quarantining. Or there's certainly been some element of burnout that we've all read about. It's been a very trying and difficult environment for clinicians to work in. have just, I think, decided to either step aside or try and work in less risky, less stressful environments. And then sort of at the other end of the spectrum, we know that there are significant numbers of employees who have been chasing premium work dollars. Nurses who want to and are willing to relocate and willing to work six shifts a week or whatever can make four or five times their regular salary, and some nurses have certainly taken advantage of that opportunity. So all those expenses are reflected, I think, in our increased salary and wage expense on the acute side. On the behavioral side, as I've mentioned I think a number of times already on the call, the impact manifests itself somewhat differently. We do have a somewhat elevated level of labor expense, but the real impact is just the sheer inability to find sufficient numbers of clinicians, especially nurses, and therefore an inability to accept as many qualified patients as we could otherwise. And so it's reflected in kind of lower volumes rather than in elevated expense. And the notion is that obviously as the COVID virus frequency eases in 2021, the dynamics that I talked about all start to reverse themselves. We don't have nearly as many nurses out. Many of our nurses and other employees are being vaccinated in real time, so that should be helpful. The level of burnout should ease. The ability of nurses to chase premium dollars elsewhere will diminish. All those things should get better as COVID volumes decline, and that's why we believe that the current labor pressure is somewhat transitory. Although, again, as I noted, particularly about our first half 2021 guidance, it will take some time for that to develop and occur.
spk06
Thanks for all the detail. And just a quick follow-up on capital deployment. You talked about getting back the share of a purchase in the second quarter. You reinstituted the dividend. But it doesn't look like you put any real – it didn't look like your share count was down much for the fourth quarter in the guide. Maybe you could talk about the timing and magnitude of that share of a purchase and just Give us a kind of reset on kind of where you ended the year in terms of deployable capital.
Steve Filton
Yeah, so we, you know, again, as I sort of referenced before in a different context, you know, we went into 2020 with a guide towards an elevated level of share repurchase. You know, prior to 2020, we had been repurchasing about $400 million a year in shares a couple of years before that. We went into 2020 with a guide towards doubling that and said we would repurchase $800 million worth of shares in 2020. And in fact, we repurchased $200 million in the first quarter before we suspended the share repurchase as the pandemic broke out in mid-March. I think much like our operating forecast, we're sort of going back to those assumptions in
Operator
2021 and assuming that share repurchase again will be at that sort of elevated seven to eight hundred million dollar level thanks and again as a reminder if you would like to ask a question please press star followed by the number one on your telephone keypad our next question comes from the line of josh raskin with nephron go ahead please your line is open
Josh
Hi, thanks. Good morning. Just first one, just a clarification or I guess confirmation on your guidance. 2021 excludes any potential impact from CARES Act, but is there a rough range in terms of potential payments that you guys think you could collect in 2021?
Steve Filton
So, you know, we did disclose in our 10-K that we've received subsequent to December 31st another close to $200 million of CARES Act funds, but we have made no estimation of whether any of that or any portion of that could or would be taken into income and are not prepared to do that. But we did disclose that we've received another slightly less than $200 million.
Josh
Okay, so that's a starting point for the potential.
Steve Filton
And to your point, Josh, just to be clear, there are no CARES funds in our operating income forecast for 2021.
Josh
Right, right, right. Okay. And then the second question, just I'm curious on your views on sort of physician and provider connectivity. I'm thinking more specifically on the behavioral health side. You know, do you think this movement towards sort of virtual visits downstream and in the behavioral health segment, is that having any impact on inpatient trends? Or are you seeing anything there? Do you feel a need to, you know, sort of think more strategically around some of those changes?
Steve Filton
Well, I think what the expansion of telehealth capabilities and behavioral reflects, you know, as I think the expansion of telehealth capabilities more broadly, you know, reflects is that during the pandemic, people were reluctant to access the system to seek assessment, to seek alternatives of care, kind of through the traditional means. You know, ER visits went down. Visits to private psychiatrists were down. Referrals from school systems were down in large part because in-person schooling was down significantly. And telehealth helps, I think, to augment some of those other activities. I think at the end of the day, the fundamental services that we provide, however, are not competitive with telehealth. if somebody calls a telehealth line and speaks with a clinician and expresses suicidal ideation or homicidal thoughts or just sort of a lack of functionality in daily life, if the person on the other end, the clinician, is in any way a responsible clinician, they're gonna refer a person to more intensive care, whether that's inpatient care or partial hospitalization outpatient care, but something more intensive than a telephone visit. And so we've spent a lot of the past year standing up our capabilities and building out our capabilities in telehealth so that we ourselves can offer those services, but also partnering with others who do, and I don't think we have any objection to the fact that others are doing it, but really trying to make sure that patients who are identified as needing further intensive care get it in the appropriate place. And obviously we feel like our facilities, both in and outpatient, are terribly appropriate. And most telehealth providers just are not in a position to really provide a significant amount of care beyond that initial assessment or kind of a traditional you know, 50 minute therapy session that you get in a private psychiatrist or therapist's office. And those things are obviously gonna continue and they've existed, you know, before the pandemic and they'll exist appropriately afterwards.
Josh
Okay. Yeah, that's helpful. I wasn't insinuating that telehealth could supplant inpatient care or anything like that. It was really, again, more on that provider connectivity. Is there a chance you're missing out on the sort of new path for patients as they kind of move from downstream to potentially upstream? But it sounds like you've got some plans in there.
Steve Filton
Yeah, look, I think it's a fair statement. I mean, we said it in the beginning, you know, look, I think it has definitely had an impact that acute care emergency room visits are down across the country by, you know, somewhere between 20 and 30% routinely during the pandemic. And we do get, you know, a measurable number of referrals from acute care hospital emergency rooms. So I think that's, you know, an issue. Now, again, I think telehealth to a degree has replaced some of that activity. And we've done a lot to reach out to our communities to make sure that if people are reluctant to go to an emergency room or community mental health center that they will reach out in some other way that they feel more comfortable, again, with a telephone call, et cetera. But, again, I don't think, which I think was the crux of your question, I don't think we believe that the increased presence of telehealth has really put a damper on that overall demand. Again, I'll go back to what I was saying before. We think the demand is there. Our biggest challenge, and we think it'll ease some in 2021, is meeting that demand, having sufficient beds and sufficient personnel to meet that demand.
Josh
Yeah, that's perfect.
Operator
Thanks, Steve. Our next question comes from the line of Jamie Purse with Goldman Sachs. Go ahead, please. Your line is open.
Steve
Hey, good morning, guys. I love your thoughts just real quick on how you're thinking about deferred care these days, just how much is out there, how much of that might come back over the next few years, and just what's in guidance for impact from deferred care on volumes this year.
Steve Filton
Yeah, Jamie, it's a great question. You know, we have said throughout the pandemic that we do believe sort of both anecdotally, you know, we hear this from lots of physicians, but also objectively as we look at, you know, our service line volumes that there are people who have deferred care during the pandemic. And there's also evidence, and we've talked about this before, that there are people who, when they come to the hospital, are sicker and more acutely ill than they would have been had they come on a more timely basis. We're also hearing anecdotally from a lot of physicians at the current time that they've got patients in their practice who are sort of queued up for elective sorts of procedures who are just waiting to get vaccinated. And as soon as they get vaccinated, they're willing to have that hip implant or knee implant or other surgery that they may have delayed. Now, to be perfectly fair, Jamie, we're unable to quantify that in any sort of specific way. It's not that I can tell you that we have X amount of this specific kind of surgery queued up for 2021. But what our 2021 guidance broadly assumes is that, again, as COVID volumes decline in 2021, non-COVID volumes, increase and, you know, elective and scheduled procedures get to pre-pandemic levels by the back half of the year and, you know, and maybe there's even some catch up and behavioral and acute patient days get to pre-pandemic levels as the year goes on. So that, you know, I think implicit in that assumption is that some of this deferred demand from 2020 resurfaces and is satisfied.
Steve
Okay, thanks for that. And then just touching on Vegas for a minute, I know you don't guide the markets or anything like that, but curious how you're thinking about that market and the cadence of potential recovery relative to other markets. Is it faster? Is it slower? Just any thoughts on how that market might impact your business over the next year would be great. Thank you.
Steve Filton
Yeah, I mean, look, you know, obviously the Las Vegas market has been particularly hard hit by the pandemic and because the gaming industry has been particularly hard hit by the pandemic. And I think particularly hard hit by the decline in airline travel, both domestically and internationally. We've been encouraged, you know, when the gaming properties reopened, I think in the June timeframe, mostly to local business, meaning people in Nevada and Arizona and California who would drive to the properties. I think they reopened at 50% capacity and, you know, there were many days when they were reaching, you know, those limits. And I think more recently, a number of the gaming properties I've read have expanded their capacity and are, you know, opening more days and opening more, you know, services, restaurant shows, you know, whatever. So I think there is, again, you know, I think all the comments that I made about our business and the gradual improvement in 2021 likely apply to the broader, you know, gaming and travel and leisure industry in Las Vegas. I'll make the same comments, however, that I've made before that, you know, That precise pace of recovery is difficult for us to predict. I think broadly we would say that we're still incredibly bullish on the Las Vegas market. We continue to invest new capacity in that market. We opened a new tower at our Centennial Hills Hospital this past year. We continue to expand our capacity in the Henderson section of the Las Vegas market, which has been you know, a significant, you know, boom for us. So, you know, we're very bullish on the long-term prospects in Las Vegas. You know, whether the next three months are difficult or six or nine months, that's more, you know, I think difficult to say. But every confidence that that market will fully recover and that our investment in that market will fully recover.
Steve
All right. That's great. Appreciate the comments. Thanks.
Operator
Our next question comes from the line of Whitmail with UBS. Go ahead, please. Your line is open.
Whitmail
Hey, thanks. Steve, I know we've talked about this in the past, but looking at the non-same-store segment, if you will, for behavioral, you've got roughly 20 facilities sitting there burning $20 million a year now. Just remind us what's in that bucket, what's happening. It's kind of a moving target. Can we get these back to break even? Do you need to shut facilities down, sell them? Just feels like there's this persistent cluster of assets that are just kind of dragging you down. So just wanted to get a little bit better perspective.
Steve Filton
Well, I think the dynamic, Whit, is as we, you know, most of these new facilities are these joint ventures. When they open, you know, as with most new openings, there is a period of ramp up and, you know, usually sort of diluted earnings. It does vary by market. But as this sort of becomes a rolling program, I think the good news is the comparison will not be as negative because we'll have just a number of facilities that are opening at any time. But I think more importantly, we're starting to see the first of those facilities mature and really get up to division-wide or segment-wide margins, and in some cases, even better than that. And I think over the next few years, Those projects will be a bit less of a drag and a bit more of a driver of growth. But you're right, in the early stages of the openings of these, they've been a drag. And again, there is just some element of ramp up that we do everything we can to get started, get these projects started as quickly as possible. But there is some ramp up that's just unavoidable.
Whitmail
Yeah, but I mean there's 22, I think, hospitals you have that aren't in the same store category, and I don't think there are 22 new hospitals that you've opened. So is there not a group of hospitals that have been in the non-same store category for some time that have either been underperforming? It just feels to me like there are some underperforming hospitals here that you could probably do something with.
Steve Filton
No, I think that's true. And I think part of the reason they're in the non-same store is they've been closed. And so there has been an ongoing effort over the last several years to evaluate the portfolio and prune those underperforming hospitals as we go through the process of closing them, they get put in the same store. So you're right. There are some hospitals that are either in the process of being closed or are closed, but, you know, still incurring some expenses or, you know, some run out that are in those numbers as well.
Whitmail
So if we've got, you know, minus 20 million of EBITDA in 2020, does that number, does it break even this year? Does it, Is it down 10? I'm just trying to think over the next maybe year or two, what's the right way to think about those losses turning into earnings?
Steve Filton
Yeah, I think that overall number will come down, and I apologize. I mean, I don't have that detail in front of me, so my answer by definition is going to be a little bit broader, but I think they'll come down. I think some of those Both those newer openings as well as the closures, their drag was exacerbated by the pandemic. So I believe that those numbers will come down in 2021. So again, I'm going to say from a $20 million run rate to let's say 10. But I'll take a more detailed look after the call and try to provide more color.
Whitmail
We can talk later on. But my last one is just still sticking just with behavioral. And I mean, you guys have been whacking at this for some time now. You've got some new leadership. I mean, are there any new investments that need to be made? I mean, there's not a lot of technology. There's no EMR around behavioral. As you approach just the overall strategy, has anything evolved that you would care to share or anything that we should look to hear about over the next year? I don't know if Mark has any views on this.
Mark
yeah I can tell you I mean there's a lot I'm not sure how much I want to share on this call right now but we're changing up a lot of the way that we look at especially our behavioral segment and we're doing a lot more on the project management side trying to ramp up some of our current and existing programs and then really get into some new areas that we think will provide greater you know, revenue opportunities going forward. So I'm not going to go into detail on this call, but there's a lot happening, especially on the behavioral side, that we're excited about right now.
Whitmail
Okay, great. Look forward to hearing more. Thanks, guys.
Steve Filton
I will just say, Witt, I mean, you know, and I think we touched on this before, I mean, you know, I think some of that investment is on the ambulatory side. I think, you know, much like on the acute side, there's a notion that payers in particular are looking to see, if services can't be delivered in more efficient, lower cost settings. And so I think we're focused on providing at least the alternative or the optionality for more ambulatory care on the payroll side.
Operator
And there are no further questions in queue at this time. I'd like to turn the call back over to Mr. Filton.
Steve Filton
Okay, well, we thank everybody for their presence and look forward to speaking again next quarter.
Operator
Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.
Disclaimer