Psychiatric Solutions, Inc., the for-profit company with allegations of mismanagement detailed in lawsuits, state and federal investigations, and the media (most notably Pro Publica), will be acquired by Universal Health Services, Inc for $3.1 billion in cash. Universal Health Services, a Fortune 500 management company, operates acute care centers, ambulatory surgical centers and behavioral health treatment programs from adolescent through adult, through subsidiaries mostly concentrated in the East and South. The announcement followed months of rumors that PSI was in conversation with investment firms.
As a business model, Wall Street considered PSI successful with the nation's largest holdings of psychiatric beds. Rapid growth keyed to a well-documented need for hospital services for children and adults outside the public system drove the stock price higher. But as a service organization, with a mission treating children and adults with a psychiatric problem, numerous law suits exposed abuse, improper treatments, poor staffing, and neglect leading to death. Earlier this month, it was told to stop admitting youngsters in Florida after an investigation found "unsafe conditions."
In the meantime, new lawsuits mounted, with a recent justice department subpoena, and shareholder law suits charging business mismanagement.
