<PAGE>
 
                                   FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549


(Mark One)

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended: September 30, 1996

                                       OR

(_)  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from _______________________


Commission file Number: 0-20086

                       UNIVERSAL HOSPITAL SERVICES, INC.
                       ---------------------------------
            (Exact Name of Registrant as  specified in its charter)


          Minnesota                                        41-0760940
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


                              1250 Northland Plaza

                             3800 West 80th Street

                      Bloomington, Minnesota  55431-4442
                      ----------------------------------

                    (Address of principal executive offices)
                                   (Zip Code)


                                  612-893-3200
                                  ------------

              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

              Yes   X                                   No
                  -----                                     -----

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.

<TABLE> 
<CAPTION> 
    Class                       Outstanding as of October 31, 1996
    -----                       ----------------------------------
    <S>                         <C>  
    Common Stock                5,357,218 shares
</TABLE> 

<PAGE>
 
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS



                       UNIVERSAL HOSPITAL SERVICES, INC.

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                             THREE MONTHS ENDED          NINE MONTHS ENDED
                                                SEPTEMBER 30,              SEPTEMBER 30,
                                          -------------------------  ------------------------
                                              1996         1995         1996         1995
                                          -----------   -----------  -----------  -----------
<S>                                       <C>           <C>          <C>          <C>
REVENUES:
 Equipment rentals                        $12,350,719   $11,434,730  $37,119,173  $34,030,646
 Sales of supplies and equipment            1,262,599     1,563,640    4,204,016    4,952,970
 Other                                        135,827       131,955      452,156      462,386
                                          -----------   -----------  -----------  -----------
  Total revenues                           13,749,145    13,130,325   41,775,345   39,446,002

COSTS AND EXPENSES:
 Cost of equipment rentals                  3,188,173     2,982,589    9,743,353    8,632,406
 Rental equipment depreciation              3,223,202     2,875,000    9,018,202    8,035,000
 Cost of supplies and equipment sales         997,344     1,231,933    3,367,240    4,027,550
 Selling, general and administrative        4,723,912     4,497,383   14,410,736   13,866,018
 Write-down of DPAP inventory                                          1,030,500
 Interest                                     656,212       512,256    1,690,624    1,295,457
                                          -----------   -----------  -----------  -----------
  Total costs and expenses                 12,788,843    12,099,161   39,260,655   35,856,431
                                          -----------   -----------  -----------  -----------
Income before income taxes                    960,302     1,031,164    2,514,690    3,589,571
Provision for income taxes:
 Current                                      269,000       267,000      706,000      985,000
 Deferred                                     151,000       170,000      384,000      528,000
                                          -----------   -----------  -----------  -----------
                                              420,000       437,000    1,090,000    1,513,000
                                          -----------   -----------  -----------  -----------
NET INCOME                                $   540,302   $   594,164  $ 1,424,690  $ 2,076,571
                                          ===========   ===========  ===========  ===========
NET EARNINGS PER SHARE OF COMMON STOCK          $0.10         $0.11        $0.26        $0.38
                                          ===========   ===========  ===========  ===========
Weighted average common shares
 outstanding                                5,459,194     5,515,868    5,512,430    5,489,388
                                          ===========   ===========  ===========  ===========

 
       The accompanying notes are an integral part of the unaudited financial statements.
</TABLE>
                                                                               2
<PAGE>
 
                       UNIVERSAL HOSPITAL SERVICES, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                     SEPTEMBER 30,  DECEMBER 31,
                                                         1996           1995
                                                     -------------  ------------
<S>                                                    <C>           <C>
                                     ASSETS

CURRENT ASSETS:
 Cash                                                  $   436,958   $     --
 Accounts receivable, net                               11,316,312    10,588,579
 Inventories                                             2,612,499     2,848,559
 Prepaid expenses                                          917,478       424,634
 Deferred income taxes                                     912,000       520,000
                                                       -----------   -----------
   Total current assets                                 16,195,247    14,381,772

PROPERTY AND EQUIPMENT:
 Rental equipment, net                                  44,633,524    40,847,236
 Property and office equipment, net                      3,608,049     3,409,694
                                                       -----------   -----------
   Total property and equipment, net                    48,241,573    44,256,930

INTANGIBLE ASSETS, LESS ACCUMULATED AMORTIZATION:
 Goodwill, net                                          15,252,773     8,186,639
 Other                                                     871,372        24,131
                                                       -----------   -----------
   Total Assets                                        $80,560,965   $66,849,472
                                                       ===========   ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts payable                                      $ 2,977,023   $ 6,284,934
 Accrued compensation and pension                        1,555,593     2,428,471
 Accrued expenses                                          990,927       609,983
 Current portion long-term debt                          1,607,743     2,800,000
                                                       -----------   -----------
   Total current liabilities                             7,131,286    12,123,388

Accrued compensation and pension                         1,607,769     1,426,876
Deferred income taxes                                    4,576,000     3,800,000
Long-term debt                                          37,730,438    20,787,667

Commitments and contingencies

SHAREHOLDERS' EQUITY:
 Preferred Stock, $.01 par value; 5,000,000 shares
  authorized, no shares issued and outstanding
 Common Stock, $.01 par value; 10,000,000 shares
  authorized, 5,357,218 and 5,445,270 issued and
  outstanding at September  30, 1996 and
  December 31, 1995                                         53,572        54,453
 Additional paid-in capital                             14,765,572    15,385,450
 Retained earnings                                      14,696,328    13,271,638
                                                       -----------   -----------
   Total shareholders' equity                           29,515,472    28,711,541
                                                       -----------   -----------
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $80,560,965   $66,849,472
                                                       ===========   ===========
</TABLE>

     The accompanying notes are an integral part of the unaudited financial
                                  statements.
                                                                               3
<PAGE>
 
                       UNIVERSAL HOSPITAL SERVICES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              NINE MONTHS ENDED SEPTEMBER 30,
                                                             --------------------------------
                                                                    1996          1995
                                                                ------------   -----------
<S>                                                             <C>            <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                     $  1,424,690   $  2,076,571
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                                   9,898,700      8,734,931
   Provision for doubtful accounts                                   114,773        213,488
   Gain on sales of equipment                                       (122,648)      (165,392)
   Write-down of DPAP inventory                                    1,030,500
   Deferred income taxes                                             384,000        528,000
 Changes in operating assets and liabilities,
  net of impact of acquisition:
   Accounts receivable                                               347,047     (1,395,124)
   Inventories and other operating assets                         (1,127,257)    (1,696,871)
   Accounts payable and accrued expenses                          (1,525,037)     1,242,947
                                                                ------------   ------------
     NET CASH PROVIDED BY OPERATING ACTIVITIES                    10,424,768      9,538,550
                                                                ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Rental equipment purchases                                      (11,261,144)   (16,092,862)
 Property and office equipment purchases                            (658,757)      (481,328)
 Proceeds from sale of equipment                                     446,920        303,463
 Acquisition of BERS, net of cash acquired                       (12,074,854)
 Other                                                              (374,095)
                                                                ------------   ------------
     NET CASH USED IN INVESTING ACTIVITIES                       (23,921,930)   (16,270,727)
                                                                ------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of common stock, net of offering costs       106,616         98,844
 Repurchase of common stock                                         (727,375)      (275,000)
 Proceeds under loan agreements                                   47,419,000     23,327,000
 Payments under loan agreements                                  (32,049,338)   (16,259,000)
 Decrease in book overdraft                                         (814,783)      (159,667)
                                                                ------------   ------------
     NET CASH PROVIDED BY FINANCING ACTIVITIES                    13,934,120      6,732,177

NET CHANGE IN CASH AND CASH EQUIVALENTS                              436,958         ---

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                       ---           ---
                                                                ------------   ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                      $    436,958   $     ---
                                                                ============   ============

SUPPLEMENTAL CASH FLOW INFORMATION:
     Interest paid                                              $  1,531,000   $  1,211,000
                                                                ============   ============
     Income taxes paid                                          $    876,000   $  1,057,000
                                                                ============   ============
     Rental equipment purchases included in accounts payable    $    831,975   $    946,399
                                                                ============   ============
</TABLE>


     The accompanying notes are an integral part of the unaudited financial
                                  statements.

                                                                               4
<PAGE>
 
                       UNIVERSAL HOSPITAL SERVICES, INC.

                    NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                        
 
1. BASIS OF PRESENTATION:
 
   The financial statements included in this Form 10-Q have been prepared by the
   Company, without audit, pursuant to the rules and regulations of the
   Securities and Exchange Commission. Certain information and footnote
   disclosures normally included in financial statements prepared in accordance
   with generally accepted accounting principles have been condensed, or
   omitted, pursuant to such rules and regulations. These financial statements
   should be read in conjunction with the financial statements and related notes
   included in the Company's Form 10-K filing for the year ended December 31,
   1995.
 
   The financial statements presented herein as of September 30, 1996, and for
   the three and nine months then ended reflect, in the opinion of management,
   all adjustments necessary for a fair presentation of financial position and
   the results of operations for the periods presented. Except as discussed in
   Note 4 below, these adjustments are all of a normal, recurring nature. The
   results of operations for any interim period are not necessarily indicative
   of results for the full year.

   The December 31, 1995 Condensed Balance Sheet data was derived from audited
   financial statements, but does not include all disclosures required by
   generally accepted accounting principles.
 
2. ACQUISITION OF BIOMEDICAL EQUIPMENT RENTAL AND SALES, INC. (BERS)
 
   On August 13, 1996, the Company acquired BERS pursuant to a Stock Purchase
   Agreement among the Company and the shareholders of BERS. Pursuant to the
   agreement, the Company acquired all of the outstanding capital stock of BERS
   for approximately $11 million paid to shareholders of BERS and repayment of
   approximately $1.6 million of outstanding indebtedness of BERS. The
   acquisition was accounted for using the purchase method. Accordingly, the
   purchase price was allocated to assets acquired based on their estimated fair
   values. This treatment resulted in approximately $7.3 million of cost in
   excess of net assets acquired, which is being amortized over 15 years. BERS'
   operations have been included in the Company's consolidated results of
   operations since the date of acquisition.
 
   The following summarized, unaudited pro forma results of operations for the
   three months and nine months ended September 30, 1996 and 1995, assume the
   acquisition of BERS occurred as of the beginning of the respective periods:

<TABLE>
<CAPTION>

                    
                       THREE MONTHS ENDED SEPTEMBER 30,     NINE MONTHS ENDED SEPTEMBER 30,
                       --------------------------------     -------------------------------
                           1996                 1995           1996                 1995
                       -----------          -----------     -----------         -----------

<S>                    <C>                  <C>             <C>                 <C>         
TOTAL REVENUES         $14,360,536          $14,621,941     $45,332,106         $43,917,415  
                                                                                            
NET INCOME             $   431,590          $   550,592     $ 1,115,651         $ 1,823,374 
                                                                                            
NET EARNINGS PER                                                                            
 COMMON SHARE          $      0.08          $      0.10     $      0.20         $      0.33  
</TABLE>

3. LONG TERM DEBT
 
   Effective with the acquisition of BERS, the total credit available under the
   bank revolving credit agreement was increased to $20,000,000. Borrowings are
   uncollateralized and bear interest at a rate of between 1.50% and 2.25% per
   annum over the bank's Reserve Adjusted Certificate of Deposit Rate (RACD) as
   defined in the agreement. At September 30, 1996 the Company's interest rate
   was 7.43%, based on the bank's RACD of 5.43%.
 
   In September 1996, pursuant to a Note Purchase and Private Shelf Agreement
   with an insurance company, $4,000,000 of uncollateralized Series B Notes were
   issued by the Company which mature on June 1, 2009 and bear interest at 8.29%
   The proceeds of the notes were used to reduce the borrowings under the
   revolving credit agreement. The agreement includes certain covenants which
   restrict dividend payments and stock repurchases and require, among other
   things, that the Company maintain certain working capital and financial
   ratios.

                                                                               5

<PAGE>
 
                       UNIVERSAL HOSPITAL SERVICES, INC.

              NOTES TO UNAUDITED FINANCIAL STATEMENTS, CONTINUED


                                        
 
4. WRITE-DOWN OF DPAP INVENTORY

   During the second quarter of 1996, the Company recorded a $1,030,500 charge
   to adjust the carrying value of Demand Positive Airway Pressure device (DPAP)
   inventory to its estimated realizable value. The provision was recorded based
   on price concessions necessary to liquidate the excess DPAP inventory
   resulting from slower than expected market acceptance of DPAP.  During the
   third quarter of 1996, the Company continued to experience declining sales of
   DPAP and has initiated new promotional campaigns in an attempt to accelerate
   the reduction of excess DPAP inventory.
 
5. COMMON SHAREHOLDERS' EQUITY
 
   In July 1996, the Board of Directors of the Company authorized a stock
   repurchase program under which up to 300,000 share of the Company's common
   stock may be repurchased.  Such purchases may be made at the prevailing
   prices on the open market, by block purchase or in private transactions at
   any time until June 30, 1997.  Under this plan, 103,000 shares were
   repurchased for $727,375 during the third quarter of 1996

6. SUBSEQUENT EVENT
  
   The Company adopted on November 8, 1996, a shareholder rights plan under
   which rights to purchase shares of a new series of preferred stock have been
   declared as a dividend at the rate of one right for each share of common
   stock held by shareholders of record at the close of business on November 21,
   1996. The rights will automatically accompany current shares outstanding and
   will trade with them. The distribution is not taxable to shareholders. The
   Board of Directors had previously considered a shareholder rights plan at its
   October meeting and at that time had scheduled a November 8, 1996 meeting for
   the purpose of considering the adoption of the shareholder rights plan.

   Each right under the shareholder rights plan will entitle the holder to buy
   one 1/100th of a share of a new series of junior preferred stock at a price
   of $40.00. The rights will be exercisable only if a person or group acquires
   or makes a tender offer for 15% or more of the Company's outstanding common
   stock (except in connection with an offer permitted by the Board of
   Directors and other limited exceptions). Certificates representing the rights
   will be sent to shareholders only if and when they become exercisable. The
   rights are redeemable at 1/10th of a cent per right at any time prior to the
   acquisition of a 15% position. The rights will expire on November 8, 2006.

   If a person or group acquires 15% or more of the Company's common stock
   (except in connection with a permitted offer), each right will entitle its
   holder to purchase, at the right's then-current exercise price, the Company's
   common stock having a market value of twice the right's exercise price. If
   the Company is acquired in a merger or sells 50% or more of its assets or
   earning power, each right will entitle its holder to purchase, at the rights'
   then current exercise price, the acquiring Company's common stock having a
   market value of twice the right's exercise price.













                                                                               6
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following should be read in conjunction with the accompanying unaudited
financial statements and notes.


RESULTS OF OPERATIONS

The following table provides information on the percentages of certain items of
selected financial data bear to total revenues and also indicates the percentage
increase or decrease of this information over the prior comparable period:

<TABLE>
<CAPTION>
                                             Percent of Total Revenues                   Percentage Increase (Decrease)
                            ----------------------------------------------------------   ------------------------------
                            Three Months Ended Sept. 30,   Nine Months Ended Sept. 30,   Qtr 3 1996    Nine Months 1996
                            ----------------------------   ---------------------------      Over             Over
                                 1996           1995            1996         1995        Qtr 3 1995    Nine Months 1995
                                 ----           ----            ----         ----        -----------   ----------------
                                     (Unaudited)                   (Unaudited)                    (Unaudited)
<S>                            <C>            <C>             <C>           <C>          <C>           <C>
REVENUES
   Equipment rentals            89.83%         87.09%          88.85%        86.27%          8.01%            9.08%      
   Sales of supplies and         9.18%         11.91%          10.07%        12.56%        -19.25%          -15.12%              
    equipment                                                                                                                      
   Other                         0.99%          1.00%           1.08%         1.17%          2.93%           -2.21%              
                               ------         ------          ------        ------                                     
    Total revenues             100.00%        100.00%         100.00%       100.00%          4.71%            5.91%              
                                                                                                                                   
RENTALS AND SALES COSTS                                                                                                            
   Cost of equipment            23.19%         22.72%          23.32%        21.88%          6.89%           12.87%              
    rentals                                                                                                                        
   Rental equipment             23.44%         21.90%          21.59%        20.37%         12.11%           12.24%              
    depreciation                                                                                                                   
   Cost of supplies and          7.25%          9.38%           8.06%        10.21%        -19.04%          -16.39%              
    equipment sales            ------         ------          ------        ------                              
GROSS MARGIN                    46.12%         46.00%          47.03%        47.54%          4.96%            4.78%              
                                                                                                                                   
SELLING, GENERAL AND            34.36%         34.25%          34.49%        35.15%          5.04%            3.93%              
 ADMINISTRATIVE                                                                                                                    
WRITE-DOWN OF DPAP                                              2.47%                         N/A              N/A                
 INVENTORY                                                                                                                         
INTEREST                         4.77%          3.90%           4.05%         3.29%         28.10%           30.50%              
                               ------         ------          ------        ------                                            
                                                                                                                                   
INCOME BEFORE INCOME TAXES       6.99%          7.85%           6.02%         9.10%         -6.87%          -29.94%              
                               ------         ------          ------        ------                                  
                                                                                                                                   
INCOME TAXES                     3.06%          3.32%           2.61%         3.84%         -3.89%          -27.96%              
                               ------         ------          ------        ------                                         
                                                                                                                                   
NET INCOME                       3.93%          4.53%           3.41%         5.26%         -9.06%          -31.39%   
                               ======         ======          ======        ======                   
</TABLE>









                                                                               7
<PAGE>
 
GENERAL

The following discussion addresses the financial condition of the Company and
its consolidated subsidiary, Biomedical Equipment Rental and Sales, Inc. (BERS)
as of September 30, 1996 and the results of operations for the three and nine
month periods ended September 30, 1996 and 1995.  This discussion should be read
in combination with the financial statements included elsewhere herein and the
Management's Discussion and Analysis and Financial Statement sections of the
Company's December 31, 1995 Annual Report on form 10-K.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:  Statements in this filing looking forward in time involve risks and
uncertainties, including, but not limited to, the effect of changing economic or
business conditions, the successful reduction of Demand Positive Airway Pressure
devices (DPAP) inventory, increased utilization of the Bazooka bed, the impact
of competition and other risk factors described more fully below under the
captions "Write-Down of DPAP Inventory", "Industry Assessment" and "Rental
Equipment Build Up" and in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 under the caption "Business".

REVENUES

Equipment rental revenues increased during the third quarter of 1996 over the
third quarter of 1995 by $916,000 and increased for the nine months ended
September 30, 1996 over the first nine months of 1995 by $3,089,000. Of the
quarterly rental revenue increase, the acquisition of BERS, completed August 13,
1996, contributed $593,000. Rental revenue growth from the Company's alternate
care customers remains strong, but the rental revenue growth from the Company's
acute care customers was less than anticipated. The Company believes factors
influencing the current downturn in the growth rate of acute care rental
revenues include continuing low census rates, a very cost sensitive market and
consolidations in the acute care sector of the industry. The Company expects the
rental revenue generated from the alternate care market to continue to increase
as the health care environment increases alternate site stays for patients.

Sales of supplies and equipment represent primarily disposable medical supplies
used in connection with the Company's rental equipment. The Company believes
that supplying these products is important to its full service business even
though the commodity-like nature of these products results in substantially
lower gross margins than its rental equipment business.  Sales of supplies and
equipment decreased $301,000 and $749,000 during the third quarter of 1996 and
the nine months ended September 30, 1996, respectively, compared to the same
periods in 1995. Sales of DPAP decreased $187,000 from third quarter 1995 to
third quarter 1996.  DPAP sales decreased $43,000 for the nine months ended
September 30, 1996 compared to the same period in 1995.

The Company has initiated several new campaigns regarding the DPAP device
intended to increase visibility and accelerate the reduction of excess DPAP
devices.  (See "Write-Down of DPAP Inventory" below).  The remaining decreases
in total sales reflected a continuing trend by a major vendor of disposables to
market its products directly to some of the Company's larger customers.  The
Company expects sales of supplies and equipment to continue to decline as a
percentage of total revenues.

Other revenues, primarily representing net gains on sales of used rental
equipment, remain insignificant. The Company expects that such revenues will
continue to be a small portion of total revenues.

RENTAL COSTS

Cost of equipment rentals represents the direct costs of operating the Company's
district offices including occupancy, fleet operations, equipment repairs and
technical service costs.  These costs as a percentage of rental revenues
decreased to 25.8% for the third quarter of 1996 but increased to 26.2% for the
nine months ended September 30, 1996 from 26.1% and 25.4% for the third quarter
and the first nine months of 1995, respectively.  Without BERS, the percentage
for the third quarter increased to 26.4%.  These increases were primarily due to
the slowdown in rental revenue growth whereas these expenses are generally fixed
in nature and do not fluctuate with changes in equipment rental revenues.

Rental equipment depreciation as a percentage of rental revenues increased to
26.1% for the third quarter of 1996 versus 25.1% for the comparable quarter in
1995.  For the nine months ended September 30, 1996, rental equipment
depreciation as a percent of rental revenues increased to 24.3% compared to
23.6% for the same period in 1995. These increases were due to the slowdown in
rental revenue growth and depreciation expense on surplus Bazooka beds (See
"Rental Equipment Build Up" below.)







                                                                               8
<PAGE>
 
GROSS PROFIT

Gross margin on rentals represents equipment rental revenues reduced by the cost
of equipment rentals and rental equipment depreciation. Gross margin on rentals
decreased from 48.8% in the third quarter of 1995 to 48.1% in the third quarter
of 1996 and from 51.0% to 49.5% for the nine month periods ended September 30,
1995 and 1996, respectively. The decreases were the result of the previously
discussed lower than expected rental revenues for the first nine months of 1996
and the excess depreciation expense discussed above. In response to these margin
decreases, the Company has begun a program to identify means of minimizing costs
without compromising quality or service, in an effort to enhance efficiencies
and improve margins. (See "Expense Control Initiatives" below).

Sales gross margin as a percentage of sales of supplies and equipment decreased
slightly from 21.2% for the third quarter of 1995 to 21.0% for the same period
in 1996 while it increased from 18.7% for the first nine months of 1995 to 19.9%
for the same period in 1996.  During 1996, the sales gross margin increased due
to a vendor selling lower margined products directly to hospitals, which
resulted in a higher margin percentage on a lower volume of total sales and due
to the impact of higher margin DPAP sales as an increasing portion of total
sales.  During the second quarter of 1996, sales margins on DPAP dropped
significantly as a result of price concessions in conjunction with the Company's
planned reduction of DPAP inventory.   (See "Write-Down of DPAP Inventory"
below.)

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses as a percentage of total revenues
remained relatively unchanged from the third quarter of 1995 to the third
quarter of 1996 while decreasing 0.7 % of total revenues from the first nine
months of 1995 to the first nine months of 1996.  These changes were the result
of positive leverage gained by the overall growth in rental revenues outpacing
the growth in selling, general and administrative expenses.  The growth in
selling, general and administrative expenses continued to slow during the third
quarter of 1996 as compared to the same period in 1995, reflecting, in part, a
decrease in performance based incentive and profit sharing expenses as a result
of the slower than anticipated rental revenue growth. (See "Expense Control
Initiatives" below).

DEFERRAL OF NEW OFFICE OPENINGS

In August 1996, the Company announced the deferral of the opening of the
previously announced offices to be located in Oklahoma City, OK and Nashville,
TN.

EXPENSE CONTROL INITIATIVES

The Company has implemented several expense control initiatives to reduce or
defer costs. In August, the Company announced executive salary cuts and a
moratorium on new hires.  In October, the Company announced the elimination of
10 corporate positions by functional consolidation and cutting nonessential
activities and changed the Company's employee benefit program from a total
company-paid plan to a shared-cost program, effective January 1, 1997.  The
Company expects the cost reduction in 1997 to be approximately $1 million for
the full year, beginning in the first quarter of 1997.  However, there can be no
assurance that these programs will result in decreased total expenses or that
their reduction will materially improve margins.

WRITE-DOWN OF DPAP INVENTORY

Because market acceptance of DPAP did not meet expectations, the Company, during
the second quarter of 1996, recorded a special charge of $1,030,500 to write-
down the carrying value of DPAP inventory to its estimated realizable value. The
Company continues to experience declining sales of DPAP devices and surplus DPAP
inventories and, as a result, has initiated new promotional campaigns in an
attempt to accelerate the reduction of excess DPAP inventories.  However, the
value of these assets may still be affected by changes in consumer demand and by
pricing pressure as other distributors of DPAP or competitive products enter the
market.







                                                                               9
<PAGE>
 
INTEREST EXPENSE

Interest expense increased by $144,000 from the third quarter of 1995 to the
third quarter of 1996 and $395,000 from the first nine months of 1995 to the
first nine months of 1996, primarily reflecting the carrying costs of surplus
DPAP and Bazooka inventories and incremental borrowings associated with customer
driven capital spending for additions to the Company's rental equipment pool.
The third quarter increase was also affected $137,000 by the BERS acquisition
debt.  Average borrowings increased from $23,600,000 in the third quarter of
1995 to $32,100,000 in the third quarter of 1996 and from $20,800,000 in the
first nine months of 1995 to $28,400,000 in the first nine months of 1996.

INCOME TAXES

The Company's effective tax rate increased from 42.1% in the first nine months
of 1995 to 43.3% in the first nine months of 1996.

NET INCOME

Net income decreased $54,000 from the third quarter of 1995 to the third quarter
of 1996 and $652,000 from the first nine months of 1995 to the first nine months
of 1996.

Without the acquisition of BERS and the associated debt of the acquisition, net
income for the third quarter of 1996 would have increased $27,000 from the third
quarter of 1995.


CAPITAL RESOURCES AND LIQUIDITY

As an asset intensive service business, the Company requires continued access to
capital to support the acquisition of equipment for rental to its customers. The
Company expects that rental equipment purchases will approximate $14,500,000 in
1996.  The Company has financed its equipment purchases primarily through
internally generated funds and unsecured borrowings.

As of September 30, 1996, these unsecured borrowings were comprised of term
loans and a revolving credit facility available through June 30, 1999.

Effective with the acquisition of BERS, the total credit available under the
bank revolving credit facility was increased to $20,000,000.  Borrowings are
uncollateralized and bear interest at a rate of between 1.50% and 2.25% per
annum over the bank's Reserve Adjusted Certificate of Deposit Rate (RACD) as
defined in the agreement.

As of September 30, 1996, approximately $6,900,000 of the $20,000,000 revolving
credit facility was unused.

In September 1996, pursuant to a Note Purchase and Private Shelf Agreement,
$4,000,000 of uncollateralized Series B  Notes were issued by the Company which
mature on June 1, 2009 and bear interest at  8.29%.  The proceeds of the notes
were used to reduce the borrowings under the revolving line of credit agreement.

The Company believes that net cash flow from operating activities and use of its
existing revolving credit facility will be sufficient to fund working capital
and capital expenditure needs for the foreseeable future.  Assuming debt
financing continues to be available at reasonable rates, the Company anticipates
maintaining a ratio of long-term debt to total capitalization in the range of
40% to 60% (57.1% as of September 30, 1996).

The Company does not maintain cash balances at its main banking facility under a
Company policy whereby the net of collected  balances and cleared checks at the
Company's option is applied to or drawn from the credit facility on a daily
basis.

                                                                              10
<PAGE>
 
COMPLETED ACQUISITION

On August 13, 1996, the Company completed its acquisition of Biomedical
Equipment Rental and Sales, Inc. (BERS) pursuant to a stock purchase agreement
among the Company and the shareholders of BERS.  As a result of the acquisition,
the Company acquired all of the outstanding capital stock of BERS, and BERS
became a wholly owned subsidiary of the Company.  In connection with the
acquisition, the Company paid approximately $11,000,000 to the shareholders of
BERS and repaid approximately $1,650,000 of outstanding indebtedness of BERS.

INDUSTRY ASSESSMENT

The Company's customers, primarily acute care hospitals and other health care
providers, have been and continue to be faced with cost containment pressures
and uncertainties with respect to health care reform.  The Company believes
that, although specific legislation has not been enacted, reform has begun with
movement toward health care related consolidations, managed care and the
formation of Integrated Healthcare Systems.  There appears to be an effort by
providers of health care to coordinate all aspects of patient care irrespective
of delivery location.  Likely changes in reimbursement methodology, and a
gradual transition toward fixed, per-capita payment systems and other risk-
sharing mechanisms will reward health care providers who improve efficiencies
and effectively manage their costs, while providing care in the most appropriate
setting.  Although future reimbursement policies remain uncertain and
unpredictable, the Company believes that the current reform efforts will
continue to focus on cost containment in health care, with universal access to
care and quality of care being important, but nonetheless secondary
considerations.

The Company believes its Pay-Per-Use Equipment Management Programs respond
favorably to the current reform efforts by providing high quality equipment
through programs which help health care providers improve their efficiency while
effectively matching costs to patient needs, wherever that care is being
provided.  While the Company's strategic focus appears consistent with the
providers' efforts to contain costs and improve efficiencies, there can be no
assurances as to how health care reform will ultimately evolve and the impact it
will have on the Company.

Because the capital equipment procurement decisions of health care providers are
significantly influenced by the regulatory and political environment for health
care, historically the Company has experienced certain adverse operating trends
in periods when significant health care reform initiatives were under
consideration and uncertainty remained as to their likely outcome.  To the
extent general cost containment pressures or health care spending and
reimbursement reform, or uncertainty as to possible reform, causes hospitals and
other health care providers to defer the procurement of medical equipment,
reduce their capital expenditures or change significantly their utilization of
medical equipment, the Company's results of operations could be adversely
affected.


RENTAL EQUIPMENT BUILD UP

The Company acquired it's equipment pools of Bazooka portable specialty beds
under an exclusive agreement which was terminated in March 1996. The Company
does not expect to acquire any additional Bazooka beds. Utilization of Bazooka
beds in the Company's pool is currently below the desired level, resulting in a
temporary product imbalance (approximately $2,600,000 of excess equipment at
September 30, 1996 versus $3,200,000 at June 30, 1996). The Company believes
this supply/demand imbalance will continue to be reduced. However, in the event
that anticipated growth in customer demand for this product does not occur, the
value of these assets owned by the Company and the Company's results of
operations could be adversely affected. The value of these beds may also be
affected as competitive products enter the market.

                                                                              11
<PAGE>
 
PART II - OTHER INFORMATION



     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
     (a)  Exhibits:

          (4.7) Amendment dated September 19, 1996 to Note Purchase and Private
          Shelf Agreement dated July 24, 1996 between the Company and The
          Prudential Insurance Company of America, (including form of the
          Company's 8.29% Series B Senior Notes Due 2009)

          (10.8(a)) Amendment to Universal Hospital Services, Inc. Top
          Management Change-In-Control Severance Plan

          (11)  Schedule of Computation of Per Share Earnings

          (27) Financial Data Schedule
 
     (b)  Reports on Form 8-K:
 
          Date of Earliest Event Requiring Report:    August 13, 1996
          Date of Filing:                             August 21, 1996
          Items Reported:                             Items 2 and 7
          Subject:                                    Acquisition of Biomedical
                                                      Equipment Rental and
                                                      Sales, Inc.
 
          Date of Earliest Event Requiring Report:    August 13, 1996
          Date of Filing:                             October 28, 1996
          Items Reported:                             Item 7
          Subject:                                    Acquisition of Biomedical
                                                      Equipment Rental and
                                                      Sales, Inc.

                                                                              12
<PAGE>
 
                                  SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
 

Date:  November 13, 1996
       -----------------


                                       UNIVERSAL HOSPITAL SERVICES, INC.


                                       By  /s/  Thomas A. Minner
                                           -------------------------------------
                                       Thomas A. Minner,
                                       President and Chief Executive Officer




                                       By  /s/  David E. Dovenberg
                                           -------------------------------------
                                       David E. Dovenberg,
                                       Vice President of Finance and
                                       Chief Financial Officer
 



                                                                              13
<PAGE>
 
                       UNIVERSAL HOSPITAL SERVICES, INC.

                     EXHIBIT INDEX TO REPORT ON FORM 10-Q

<TABLE> 
<CAPTION> 

EXHIBIT
NUMBER             DESCRIPTION                                              PAGE
------             -----------                                              ----
<S>                <C>                                                      <C> 
4.7                Amendment dated September 19, 1996 to                    XX
                   Note Purchase and Private Shelf Agreement
                   dated July 24, 1996 between the Company and
                   The Prudential Insurance Company of America,
                   (including form of the Company's 8.29% Series 
                   B Senior Notes Due 2009)
                   

10.8(a)            Amendment to Universal Hospital Services, Inc. 
                   Top Management Change-In-Control Severance Plan          XX
                                          
                                                                     
11                 Schedule of Computation of Per Share Earnings            XX
                                                

27                 Financial Data Schedule                                  Electronically Filed
</TABLE>