Dallas-based Tenet Healthcare Corp. on Wednesday reported growth of more than $77 million, or 40 percent, in adjusted earnings before interest, tax, depreciation and amortization compared to last year’s third quarter.
Tenet, the parent company of Saint Francis Hospital-Bartlett and Saint Francis Hospital-Memphis, experienced 5.8 percent growth in net operating revenues spurred by pricing increases as well as outpatient and surgical volume.
“Last night’s election results are encouraging for the full implementation of the Affordable Care Act,” Trevor Fetter, Tenet past president and chief executive officer, said in a statement. “Based on our model of expanded coverage under the act, all of our hospitals are in markets that will see an increase in covered lives, and in virtually all of our markets that growth exceeds the rate for the country as a whole.”
Tenet expects the act to be a strong driver for earnings over the next few years. Presidential challenger Mitt Romney had vowed to dismantle the health care reform act if elected.
Tenet remains focused on physician alignment and outpatient center strategies, as it will acquire a total of 15 outpatient centers and open 14 newly built outpatient centers this year. By the end of the year, Tenet will operate 124 outpatient centers across the country, almost double the number from four years ago.
Tenet’s net operating revenues for the third quarter were $2.22 billion, an increase of $121 million, or 5.8 percent, compared to net operating revenues of $2.1 billion in the third quarter of 2011. Net income attributable to common shareholders in the quarter was $40 million, or $0.37 per diluted share, compared to $6 million, or $0.05 per diluted share, in the third quarter of 2011.
“The positive trends led to our strongest third quarter in the past 10 years,” said Daniel J. Cancelmi, Tenet chief financial officer, who explained that Tenet forecasts revenue growth of 10 percent to 12 percent next year.
The company’s strong third-quarter performance was fueled by a 1.4 percent increase in adjusted admissions, marking the eighth consecutive quarter that Tenet has experienced increasing adjusted admissions. Overall, surgeries grew by 1.8 percent, including 6.3 percent growth in outpatient surgeries, and total ER and outpatient visits rose by 4.9 percent apiece during the quarter.
“Our fundamental business trends in terms of volume growth, pricing and cost control remain solid,” Fetter said. “We saw significant strengths in targeted service lines like cardiovascular medicine, nephrology, cath EP and neurological medicine.”
Tenet also expects growth through acquisitions for its service business, Conifer Health Solutions. Last month Conifer announced a deal to acquire management and services company InforMed Health Care Solutions, and earlier this week Conifer announced the completed acquisition of Dell’s Revenue Cycle Solutions, a management system for hospitals and health care facilities.
Tenet Healthcare operates 49 hospitals, more than 100 free-standing outpatient centers, and Conifer Health Solutions, which serves more than 500 hospital and health care entities nationwide.