VOL. 126 | NO. 178 | Tuesday, September 13, 2011
Medicaid Growth Impacts Tenet 2011 Profit Forecast
DALLAS (AP) – Tenet Healthcare expects 2011 earnings at the lower end of its previously announced guidance, the hospital operator said Monday, largely because of the growth in Medicaid admissions, which offer relatively low reimbursement.
Tenet operates in Memphis St. Francis Hospital and St. Francis Hospital-Bartlett.
The Dallas company has said it expects adjusted earnings before interest, taxes, depreciation, and amortization to range between $1.17 billion and $1.27 billion.
Tenet said Medicaid patient admissions made up 75 percent of its growth so far in the third quarter. Medicaid is the state-federally funded program that provides health insurance for the needy, aged, blind and disabled. It offers lower reimbursement than private health insurance.
CEO Trevor Fetter said the company started some cost cutting measures in early August to reduce the impact Medicaid, and that the hospital expects a more visible impact from that in the fourth quarter.
The company also said its results are being unfavorably impacted by the effect of decreasing interest rates on medical malpractice and other discounted liabilities.
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