Most health systems and their executives continue to look, publicly at least, at an uncertain future persistently clouded by the lingering effects of the pandemic.
Saum Sutaria, MD, CEO of Dallas-based Tenet Healthcare, however, may just quietly be relishing the fourth quarter of this year and beyond.
Perhaps much of that comes from the hospital operator's booming ASC business, United Surgical Partners International, whose EBITDA margins are expected to reach about 43% in the last three months of the year after a 40% performance in the third quarter.
"We feel pretty good about what the business [USPI] is achieving right now with so much momentum so far for the full year," Dr. Sutaria said on a recent results conference call. "And the Q4 ramp for USPI is real and it's something that we're really interested in seeing and we're well prepared for as the first kind of post-pandemic Q4 to see how that goes."
While he couched the more upbeat outlook with admitting there could still be an unwanted COVID surge in the fourth quarter — a scenario he categorized as unlikely — such conservative optimism does contrast with many public statements from health systems about the near future that typically stress the ongoing uncertainty caused by the past few years.
On an investor call Nov. 7, for example, Butler (Pa.) Health CEO Ken DeFurio said the health system's story over the past five years is a "story of COVID-19."
The system, which merged with Greensburg, Pa.-based Excela Health to form Independence Health on Jan. 1, reported an operating margin of -10.9% in fiscal 2023. It expects an improved but still negative operating margin (-5.1%) in fiscal 2024 as it slowly continues to emerge from pandemic-era pressures.
King of Prussia, Pa.-based Universal Health Services said in a Nov. 8 Securities and Exchange Commission filing related to third-quarter results that inflationary pressures will continue to provide uncertainty and that staffing shortages "could continue to have an unfavorable material impact on our results of operations for the foreseeable future."
The end of regulatory flexibilities and federal funding related to the pandemic now that the public health emergency is over are also weighing on the system.
"We cannot predict whether the loss of any such favorable conditions available to providers during the declared PHE will ultimately have a negative financial impact on us," according to the filing.
For-profit health systems like UHS and Tenet were reluctant to offer much in the way of guidance for 2024 operating performance when they released their quarterly results in recent days. Nashville, Tenn.-based HCA Healthcare did come out with a 4% to 6% EBITDA growth forecast for next year Nov. 9, but other systems expect more clarity once the fourth quarter is in the books.
But perhaps the days of persistent negative horizons may be starting to recede in the rearview mirror, at least for some.
"We are interested in seeing what a fourth quarter looks like post-pandemic for the first time in many years," Tenet's Dr. Sutaria said.