829608--2/25/2009--PSYCHIATRIC_SOLUTIONS

related topics

{regulation, government, change}

{debt, indebtedness, cash}

{acquisition, growth, future}

{control, financial, internal}

{personnel, key, retain}

The economic downturn and continued deficit spending by the federal government and state budget pressures may result in a reduction in payments and covered services. Lower reimbursement rates for our services would have an adverse effect on our business, financial condition and results of operations. Government investigations may reduce our earnings. Companies within the health care industry continue to be the subject of federal and state investigations, which increases the risk that we may become subject to additional investigations in the future. The volatility and disruption of the capital and credit markets and adverse changes in the United States and global economies could impact our ability to access both available and affordable financing, and without such financing, we may be unable to achieve our objectives for strategic acquisitions and internal growth. As a provider of health care services, we are subject to claims and legal actions by patients and others. We depend on our ability to attract and retain key management personnel. The agreements governing our indebtedness contain various covenants that limit our discretion in the operation of our business and our failure to satisfy requirements in these agreements could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Our substantial indebtedness could adversely affect our financial condition and our ability to fulfill other obligations. Acquired businesses will expose us to increased operating risks. If we fail to integrate or improve, where necessary, the operations of existing and acquired inpatient facilities, we may be unable to achieve our growth strategy, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. We depend on our relationships with physicians and other health care professionals who provide services at our inpatient facilities. Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price. We may be required to spend substantial amounts to comply with legislative and regulatory initiatives relating to privacy and security of patient health information and standards for electronic transactions.

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829608--2/25/2009--PSYCHIATRIC_SOLUTIONS_INC