Despite Q1 Loss, Tenet Highlights Positive Trends
Despite fully integrating Vanguard Health Systems and reaping early benefits from healthcare reform, Dallas-based Tenet Healthcare Corp. posted a $32 million loss in the first quarter of this year.
That total compared with a loss of $88 million in the same quarter a year ago. Several events adversely affected Tenet's first-quarter profitability, including a $25 million hit from Medicare sequestration, losses related to its newly acquired health plan in Arizona, reductions from California's provider fee program, declines in one-day admissions due to Medicare's two-midnight rule and a harsh winter.
Tenet's operating income totaled $170 million, a 16 percent boost from $146 million in 2013. Revenue soared to $3.93 billion, as Tenet fully absorbed Vanguard's hospitals. Last October, Tenet completed its merger with Vanguard, which gave the for-profit hospital chain 77 acute-care hospitals.
Even though the company posted an eight-figure loss, Tenet President and CEO Trevor Fetter said there were several positive trends. On a same-hospital basis, Tenet posted a 13.1 percent increase in surgeries, 2.7 percent rise in emergency department visits and 2.5 percent increase in outpatient visits. Pro forma adjusted admissions increased by 0.3 percent. Mr. Fetter attributed stable volume growth in part to the Patient Protection and Affordable Care Act's Medicaid expansion — in the four states where Tenet operates and Medicaid was expanded, Medicaid admissions rose 17 percent, while uninsured admissions dropped 33 percent.
Tenet's first-quarter adjusted EBITDA rose more than 41 percent to $387 million, and the company reaffirmed its outlook for the rest of 2014.
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