While Dallas-based Tenet Healthcare significantly improved its net income performance in the second quarter, the for-profit operator struggled in some year-over-year metrics, according to its recently released earnings report.
Tenet, which oversees 68 hospitals, generated $24 million in net income for the second quarter of 2018 — a significant turnaround from the $56 million lost during the same period a year ago. Its adjusted earnings before interest, taxes and amortization was $634 million in the second quarter of 2018, compared to $570 million in the second quarter of 2017.
Overall, Tenet saw a net operating revenue of $4.5 billion, down 6.2 percent from the same quarter one year prior. The operator saw a healthy spike in ambulatory segment revenue, but those gains were offset by lower revenue in its hospital business and revenue cycle management business Conifer Health Solutions.
Net operating revenues for hospital operations totaled $3.73 billion, a decrease of 8.6 percent from the second quarter of 2017. Overall, the operator saw admissions decline by 2.3 percent, a trend it attributes to drops in two markets: Chicago and Detroit. Tenet said its revenue drop was a result of its strategic hospital divestiture plan to shed its underperforming facilities in Chicago and the wind-down of its health plan.
In contrast, on a same-facility basis, the company's ambulatory segment posted revenue growth of 6.9 percent, with cases up 4.3 percent and revenue per case up 2.4 percent. Its surgical business, which represents most of the revenue in the ambulatory segment, grew 6.6 percent with cases up 3.4 percent and revenue per case increasing 3.1 percent. Overall, Tenet's ambulatory segment produced net operating revenue of $531 million during the quarter, compared with $472 million in the second quarter of 2017.
Its Conifer business posted revenues of $386 million, down from $400 million in the second quarter year-over-year.
"We are becoming a more agile and decisive organization and are pleased with our strong financial results for the third quarter in a row," said Ronald Rittenmeyer, Tenet's executive chairman and CEO. "We have demonstrated our ability to appropriately minimize costs, which will be an ongoing fundamental part of how we do business."
Based on its second-quarter performance, Tenet bumped its 2018 net income outlook from $115 million to $186 million.