Psychiatric Solutions Inc., a mental health care provider that has been the subject of several ProPublicastories, will be acquired by Universal Health Services Inc., another large operator of hospitals and psychiatric facilities. The companies announced the deal today.
The Chicago Tribune and ProPublica, in partnership with the Los Angeles Times, have published reports detailing violence, sexual abuse and neglect at several PSI hospitals across the country.
By absorbing PSI, Universal becomes the dominant player nationally in inpatient psychiatric care, with almost 200 facilities across the country. PSI, which has more than 90 hospitals and treatment centers, operates about one in five free-standing psychiatric facilities in the United States.
Wall Street responded positively to the deal, driving Universal’s stock price higher. Universal Health Services will pay $2 billion in cash for the sale and take on $1.1 billion of Psychiatric Solutions’ debt. But PSI’s portfolio may bring headaches as well as benefits.
The company reported last week that the U.S. Department of Justice is investigating its executive compensation practices, demanding records on pay, stock sales, stock options and options exercises, as well as communications between managers and investment firms. In an SEC filing, PSI said it was cooperating and providing the information requested.
Several PSI facilities have drawn harsh sanctions from regulators for failing to meet government health and safety standards. Florida authorities recently halted admissions to Manatee Palms Youth Services, a 60-bed facility for children and adolescents, after repeatedly finding deficiencies that put patients in danger.
In a conference call, Universal Health Services Chief Financial Officer Steve Filton said the company’s staff would work with existing staffers to ensure that acquired facilities provided "the utmost in patient care."
