King of Prussia, Pa.-based Universal Health Services' stock has plunged 20 percent since Dec. 7, when BuzzFeed published an investigative story alleging UHS' psychiatric hospitals put profits ahead of patients.
BuzzFeed's story was the result of a yearlong BuzzFeed News investigation, which involved reviewing internal documents and interviews with 175 current and former UHS staff and more than 120 patients, government investigators and other experts. The story alleges UHS psychiatric hospitals kept patients longer than necessary and against their will to maximize reimbursement from insurers. The report also raised questions about the quality of care provided at the psychiatric hospitals.
In a press release issued in response to the story, UHS denied the conclusions drawn by the reporter. UHS said the story "misses the mark in several important ways leading to an inaccurate portrayal of UHS's behavioral health operations."
After the BuzzFeed story went live Dec. 7, UHS' stock tumbled 12 percent. Following a negative research report from Raymond James, UHS' stock fell an additional 7 percent Wednesday.
According to MarketWatch, the Raymond James analyst said a letter from Sen. Chuck Grassley (R-Iowa) to HHS' Office of Inspector General requesting an update on the investigation into UHS takes "the political risk to a more dangerous level" and "could invite more caution and/or red tape into the admissions process — either externally or from self-policing."
In his letter to the OIG, Sen. Grassley asked the agency to detail the steps it is taking to investigate UHS by Dec. 23. Regarding the BuzzFeed story, Sen. Grassley said, "The pattern of conduct described by the report paints a picture of greed and raises serous questions about patient safety."
Since the investigative report was published, UHS' stock has fallen 20 percent, which has reduced the for-profit hospital operator's market value by $2.4 billion, according to BuzzFeed.
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