The action alleges that the defendants failed to disclose material adverse information and misrepresented the truth about the company, its financial performance, earnings momentum, and future business prospects. Among the allegations are that: (a) UHS was unable to compete effectively in key markets; (b) UHS hospitals were losing better-paying patients to their competitors and the proportion of uninsured patients, who constitute a greater credit risk, was increasing; (c) due to poor case management, certain UHS hospitals were unable to effectively anage their caseloads and had experienced an increase in the number of patients who remained hospitalized at UHS facilities beyond the period reimbursable by Medicaid and Medicare; (d) the defendants failed to properly write off uncollectible receivables, and materially overstated UHS's financial results by maintaining known uncollectible accounts as assets during the applicable period; (e) the company's allowance for doubtful accounts was insufficient and, as a result, its operating income was artificially inflated; and (f) the company's reported operating income was not a true measure of its operating performance because of questionable accounting practices.

On March 1, 2004, before the markets opened, the defendants shocked investors by withdrawing their guidance for 2004 and announcing that earnings per diluted share for the three-month period ending March 31, 2004, could be as much as 25% lower than the $0.84 per diluted share recorded in the same period in the prior year. The defendants attributed the decline in substantial part to UHS's inability to compete effectively in two key markets in Nevada and Texas, erosion of the company’s market share, poor case management resulting in an increase in the length of patient stays beyond the period reimbursable by Medicaid or Medicare, and a pronounced increase in bad debt from uninsured patients. The company had already increased its provision for doubtful accounts in the fourth quarter of 2003 to $74.3 million, or 7.8% of revenues, as compared to $58 million, or 6.9% of revenues, during the prior year's fourth quarter. The defendants also announced that bad debt in 2004 was likely to exceed the UHS's previously reported expectation of 9.5% of revenues. On this news, the price of UHS shares fell $9.05, or 17%, to $44.88.

If you purchased securities issued by UHS during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by May 21, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.