UHSUniversal Health Services

We note in your quarterly results on page 125, net income as a percentage of revenue declined significantly in the third quarters of 2016 and 2015 when compared to the other quarters of the respective years. Please explain to us why you have experienced higher expenses in the third quarter and tell us if this is indicative of a trend or a change in the relationship between costs and revenues in the third quarter.

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If so, please discuss in your future MD&A.

This letter is being written in connection with the Staff’s examination of the filings referenced above. Set forth below are our responses to the comments included in the Staff’s letter to us dated April 17, 2017, as well as an additional comment (#4) communicated to us verbally during our discussion with the Staff on April 20, 2017. Form 10-K for Fiscal Year Ended December 31, 2016 Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations, pages 47 and 48 We note in your quarterly results on page 125, net income as a percentage of revenue declined significantly in the third quarters of 2016 and 2015 when compared to the other quarters of

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the respective years. Please explain to us why you have experienced higher expenses in the third quarter and tell us if this is indicative of a trend or a change in the relationship between costs and revenues in the third quarter. If so, please discuss in your future MD&A Historically, as a percentage of our annual net revenues, and excluding the impact of acquisitions that may occur from year-to-year, net revenues generated during the third quarter of each year (covering the period of July 1st through September 30th) typically represent the lowest percentage of the year since our acute care services business is relatively seasonal. Our behavioral health services’ business tends to experience less fluctuation as a result of seasonality. Net revenues generated from our acute care services accounted for 52% and 51% of our consolidated net revenues during 2016 and 2015, respectively. Given that a substantial portion of our acute care services’ operating expenses are relatively fixed in nature, and therefore do not fluctuate in direct correlation to changes in our patient volumes and net revenues, the comparatively lower revenues generated during the third quarters of each year typically result in that quarter’s net income also representing the lowest percentage of each year’s annual net income. The Seasonality disclosure reflected below was contained in our MD&A on page 68 of our 2016 Form 10-K. If acceptable to the Staff, in addition to continuing to include the Seasonality disclosure in the future MD&A’s in our Form 10-K, we will also plan to include in Note 12 to the Consolidated Financial Statements – Quarterly Results. Disclosure contained in our 2016 Form 10-K (page 68): Seasonality —Our acute care services business is typically seasonal, with higher patient volumes and net patient service revenue in the first and fourth quarters of the year. This seasonality occurs because, generally, more people become ill during the winter months, which results in significant increases in the number of patients treated in our hospitals during those months. Notes to Consolidated Audited Financial Statements Please tell us and disclose the amount of revenues and long-lived assets domestically and attributable to foreign countries. If assets in the United Kingdom are material, they should be disclosed separately. Please refer to ASC 280-10-50-41 and 50-42. The net revenues generated from our behavioral health care facilities located in the United Kingdom, which comprise our foreign operations, amounted to approximately $241 million in 2016, $203 million in 2015 and $45 million in 2014. This information was provided in footnote (a) on page 125 of our 2016 Form 10-K in Note 11 to the Consolidated Financial Statements – Segment Reporting. Our behavioral health care facilities located in the United Kingdom had total assets of approximately $965 million as of December 31, 2016 and In all future filings, this information will be included consistent with the presentation in our Form 10-Q for the quarterly period ended March 31, 2017, footnote (a), in Note 6 to the Consolidated Financial Statements – Segment Reporting. Note 6) Segment Data, as contained in our Form 10-Q for the quarterly period ended March 31, 2017 Income/(loss) before allocation of corporate overhead and income taxes Income/(loss) after allocation of corporate overhead and before income taxes Includes net revenues generated from our behavioral health care facilities located in the U.K. amounting to approximately $101 million and $61 million for the three-month periods ended March 31, 2017 and 2016, respectively, and total U.K. behavioral health care facilities assets of approximately $992 million and $515 million as of March 31, 2017 and 2016, respectively. Supplemental Consolidated Statements of Income Information For the three and twelve months ended December 31, 2016 and 2015 We note that you exclude lease and rental expense from Operating income/margin (“EBITDAR”). Please explain to us why lease and rental expense are not normal, recurring, cash operating expenses necessary to operate your business. See Question 100.01 of the updated Non-GAAP Compliance and Disclosure Interpretations issued on May 17, 2016. Supplemental Consolidated Statements of Income Information previously reflected a consolidated basis computation of EBITDAR/operating margin, we discontinued that EBITDAR computation on the schedule beginning in the first quarter of 2017. Since we have historically not referenced our consolidated EBITDAR and/or operating margin in our earnings release narrative, there are no implications to discontinuing the metric, on a consolidated basis, going forward. Should an investor require our consolidated EBITDAR and/or operating margin, the information contained on our Consolidated Statements of Income, included with our quarterly earnings releases and related Form 8-Ks, enables them to do so. Historically, our filings on Form 10-K and 10-Q have not computed or referenced EBITDAR and/or operating margin based upon EBITDAR. However, we have historically provided “operating margin” for our two operating segments, acute care services and behavioral health care services, in our quarterly earnings releases and related Form 8-Ks. In those filings, we define “operating margin” as net revenues less salaries, wages and benefits, other operating expenses and supplies expense, divided by net revenues. We believe this segment specific operating performance metric is helpful to our investors as a measure of each segment’s operating performance as compared to our prior period performance or the performance of our peers in each respective industry. We believe operating margin, which is calculated before deductions for interest, taxes, depreciation and amortization and lease and rental expense, is an operating metric that enables our investors to compare the operating performance of our two operating segments to other companies, including our peers, without being affected by the method in which companies finance their assets (lease vs. buy). For example, if operating margin is calculated based upon EBITDA, rather than EBITDAR, and company A buys their real property assets while company B enters into operating leases for their real property assets, on a relative basis, company A’s EBITDA operating margin would be more favorable than company B’s. Company A’s EBITDA operating margin would be reflected before capital costs (depreciation and amortization and interest expense) while company B’s would be reflected after capital costs (lease and rental expense). Our utilization of operating margin based upon EBITDAR, is provided in our quarterly earnings releases for each of our operating segments on the Supplemental Statistical Information schedule which provides, on a same facility basis, the Acute Care EBITDAR Margin and the Behavioral Health EBITDAR Margin for the current year and prior year periods. Those operating margins for each of our operating segments, which are also referenced in the earnings release narrative under Acute Care Services and Behavioral Health Care Services, provide our investors with an operating performance metric enabling them to compare the operating performance of each of our operating segments to their respective industry peers. Since we have two operating segments, while most of our industry peers have only one, our investors are not able to compute the operating margin for each segment until our quarterly report on Form 10-Q is filed. That document contains detailed operating results for each operating segment. Typically, our Form 10-Q is filed approximately 12 to 15 days after our quarterly earnings release and related Form 8-K. We believe that if we ceased providing the operating margin for our two operating segments in our earnings releases and related Form 8-Ks, our investors would likely request those metrics during our quarterly conference calls which are held the morning following our earnings release. We believe that continuing to provide those metrics in our quarterly earnings releases is a timely and efficient method of providing our investors with information that they find useful in analyzing and benchmarking the quarterly operating results for each of our operating segments. Comment communicated to us verbally during our discussion with the Staff on April 20, 2017. Schedules of Non-GAAP Supplemental Consolidated Statements of Income Information We note that the calculation of EBITDA, as reflected on the above-referenced schedule, begins with net revenue before provision for doubtful accounts and calculates down to EBITDA. Please change the schedule’s presentation to begin with Net Income Attributable to UHS and addback depreciation and amortization, interest expense and provision for income taxes to calculate EBITDA. In response to the Staff’s request, as included in Exhibit 99.1 to Form 8-K as filed on April 25, 2017, we have amended the presentation of the Schedule of Non-GAAP Supplemental Information for the three-month periods ended March 31, 2017 and 2016. We believe the amended presentation, which is reflected below and which we intend to utilize in future filings if acceptable to the Staff, satisfies the Staff’s request. Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”) For the three months ended March 31, 2017 and 2016 Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) EHR-related net income attributable to noncontrolling interests, pre-tax

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Please tell us and disclose the amount of revenues and long-lived assets domestically and attributable to foreign countries. If assets in the United Kingdom are material, they should be disclosed separately. Please refer to ASC 280-10-50-41 and 50-42.

See the reply above.

We note that you exclude lease and rental expense from Operating income/margin (“EBITDAR”). Please explain to us why lease and rental expenses are not a normal, recurring, cash operating expenses necessary to operate your business. See Question 100.01 of the updated Non-GAAP Compliance and Disclosure Interpretations issued on May 17, 2016.

See the reply above.

We note your response to comment three. In your next earnings release, please discontinue the presentation of EBITDAR margin for your Acute Care and Behavioral Health reporting segments. The Staff believes the adjustment to remove lease and rental expense to determine Operating income/margin (“EBITDAR margin”) is inappropriate as such charges are normal, recurring cash operating expenses necessary to operate your

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business. Please refer to Question 100.01 of the updated Non-GAAP Compliance Disclosure and Interpretations issued on May 17, 2016.

Commencing with our earnings release for the three and six-month periods ended June 30, 2017, we will discontinue the presentation of EBITDAR margin for our Acute Care and Behavioral Health reporting segments on the Supplemental Statistical

Information schedule. Read in the reply ↗

Beginning on page 53 you discuss the results of your acute care hospital services segment in 2011 versus 2010 and 2010 versus 2009. Please tell us why the net revenues in your discussion on a same facility basis are the same as on an all acute care hospitals basis, but your other operating expenses are different.

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It does not appear that you acquired or disposed any significant acute care facilities in either 2010 or 2011 supporting the same amount of net revenues on a same facility and all acute care hospitals bases, but it is unclear why your operating expense amounts are therefore also not the same.

The voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both. Read in the reply ↗

On page 64 you disclose the receipt of $11 million in Medicaid program incentive payments associated with electronic health records, or EHR. You also disclose that you deferred these payments at December 31, 2011 and will record the amounts as revenue when the applicable hospitals are deemed to have met the meaningful use criteria.

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On page 41 of your June 30, 2012 Form 10-Q you disclose that you recognized the first $2 million of these payments as revenue in 2012. We do not believe that classification of these incentive payments as revenue is appropriate as they are not related to your ongoing central operating activities. Please address the following comments:  Please provide us propose revised policy disclosure to be included in future periodic reports that separately describes your accounting for Medicare and Medicaid EHR incentive payments.  Please explain to us how you will present the reclassification of your EHR incentive payments recorded in revenue during the second quarter of 2012 in your September 30, 2012 Form 10-Q and provide us proposed disclosure to be included in that filing that explains your reclassification and retroactive presentation.

Substantially all of the entity’s activities (for example, providing financing or buying assets) either involve or are conducted on behalf of an investor that has disproportionately few voting rights.

With respect to: 1) voting rights are proportional to each shareholder’s obligation to absorb losses and receive residual returns as each share of equity participates equally in the overall risks and rewards of the Trust.

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Therefore, both conditions above are not present and it does not indicate that the equity investors as a group lack the characteristic in (b)(1).

Therefore, based on the criteria set forth in ASC 810-10-15 and the relevant circumstances outlined above, we concluded that the Trust was not a variable interest entity subject to the consolidation provisions therein.

Other:

Also pursuant to your request, we hereby acknowledge that:

we are responsible for the adequacy and accuracy of the disclosure in the filing staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and we may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the

United States.

Below is my contact information where I can be reached should the Staff have any questions or require any additional information. Thank you for your consideration and cooperation regarding this matter.

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We acknowledge your disclosure regarding the adoption of ASU 2010-23. Please address the following comments:  Please provide us proposed revised charity care policy disclosure to be included in future periodic reports under ASC 954-605-50-3 that clarifies what “financial or economic criteria” must be met by a patient to qualify for charity care.

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 You disclose the estimated cost of providing “charity services” in the first full paragraph on page 106. It appears that you include the cost of services provided at a discount to uninsured patients in the cost of charity services. Please provide us proposed revised disclosure to be included in future periodic reports that: o Discloses the cost of charity care provided as required by ASC 954-605-50-3. In this regard, the glossary at ASC 954-60-20 defines charity care as health care services that are provided but are never expected to result in cash flows. It appears that your discounted services provided to uninsured patients included in “charity services” have some anticipated cash inflows and therefore do not qualify for charity care. o Revises throughout your filing the use of “charity services” as that term is confusingly similar to charity care.

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You disclose that you serve as Advisor to the Trust pursuant to an annual agreement whereby you conduct the day-to-day affairs of the Trust, provide it administrative services and present it with investment opportunities. Also, certain of your officers and directors are also officers and/or directors of the Trust.

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Please provide us your analysis supporting why consolidation of this trust is not appropriate and reference for us the authoritative literature you rely upon to support your position. In your response, demonstrate to us whether the Trust is a variable interest entity and, if so, whether you are the primary beneficiary.

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We acknowledge your response to our previous comment 2. As previously requested, please provide us proposed policy note disclosure to be included in future periodic reports that separately describes your accounting for Medicare and Medicaid EHR incentive payments.

In addition to the disclosure related to the Medicare and Medicaid electronic health records (“EHR”) incentive payments, as previously included in our response dated August 28, 2012 to comment 2 of the Staff’s letter to us dated

August 16, 2012 (which we will include in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our future filings), we will also include the following as a separate caption under Note

1-Business and Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements of our future filings on

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Form 10-K, and under Item 2: Management’s Discussion and Analysis of Financial Condition and Results of

Operations, Critical Accounting Policies and Estimates, in our future filings on Form 10-Q:

Accounting for Medicare and Medicaid

Electronic Health Records Incentive Payments: In July 2010, the Department of Health and Human Services published final regulations implementing the health information technology provisions of the American Recovery and Reinvestment Act. The regulation defines the “meaningful use” of Electronic Health Records (“EHR”) and established the requirements for the Medicare and Medicaid EHR payment incentive programs. The implementation period for these new Medicare and

Medicaid incentive payments started in federal fiscal year 2011 and can end as late as 2016 for Medicare and 2021 for the state Medicaid programs. We recognize income related to Medicare and Medicaid incentive payments using a gain contingency model that is based upon when our eligible hospitals have demonstrated “meaningful use” of certified EHR technology for the applicable period and the cost report information for the full cost report year that will determine the final calculation of the incentive payment is available.

Medicare EHR incentive payments: Federal regulations require that Medicare EHR incentive payments be computed based on the Medicare cost report that begins in the federal fiscal period in which a hospital meets the applicable “meaningful use” requirements. Since the annual Medicare cost report periods for each of our acute care hospitals ends on December 31st, we will recognize Medicare EHR incentive income for each hospital during the fourth quarter of the year in which the facility meets the “meaningful use” criteria and during the fourth quarter of each applicable subsequent year.

Medicaid EHR incentive payments: Medicaid EHR incentive payments are determined based upon prior period cost report information available at the time our hospitals meet the “meaningful use” criteria. Therefore, the majority of the Medicaid EHR incentive income recognition occurs in the period in which the applicable hospitals are deemed to have met initial “meaningful use” criteria. Upon meeting subsequent fiscal year “meaningful use” criteria, our hospitals may become entitled to additional Medicaid EHR incentive payments which will be recognized as incentive income in future periods.

Medicaid EHR incentive payments received prior to our hospitals meeting the “meaningful use” criteria are included in other current liabilities (as deferred EHR incentive income) in our consolidated balance sheet.

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We acknowledge your response to our previous comment 3. Please revise your proposed disclosure to specifically disclose the cost of the charity care component of your total uncompensated care as required by ASC 954-60-50-3.

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In this regard, we do not object to your disclosure of the costs to provide total uncompensated care but believe that the costs to provide charity care should be specifically disclosed to comply with the referenced guidance.

In addition to the disclosure related to the uncompensated care (consisting of charity care and uninsured discounts), as previously included in our response dated August 28, 2012 to comment 3 of the

Staff’s letter to us dated August 16, 2012, future filings will also include the following table which provides, separately, the cost of the charity care component of our total uncompensated care:

Estimated Cost of Providing Uncompensated Care

2011

2010

Estimated cost of providing charity care

$

145,337

129,787

Estimated cost of providing uninsured discounts related

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care

27,366

27,838

Estimated cost of providing uncompensated care

172,703

157,625

Below is my contact information where I can be reached should the Staff have any questions or require any additional information. Thank you for your consideration and cooperation regarding this matter.

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