Tenet Healthcare Corp. reported a promising start to the year with increasing patient demand for acute and emergency care.
The CEO, Dr. Saum Sutaria, highlighted the Dallas-based for-profit system’s commitment to expanding outpatient care during Tuesday’s earnings call, even though the system was a year behind the expansion plans stemming from the $1.2 billion deal with SurgCenter Development announced in 2021. As part of the deal, Tenet and its subsidiary United Surgical Partners Its International has agreed to take ownership stakes in 92 ambulatory surgery centers.
“The original plan is still the original plan,” Sutaria said on the call.
United Surgical Partners added three centers in the first quarter and recorded a 7.9% year-over-year increase in surgeries at the same facility, showing strength in gastrointestinal procedures. , urology and orthopedics, CFO Daniel Cancelmi said during the earnings call. The health system plans to invest at least $250 million in outpatient care each year.
Cancelmi says there is an opportunity to improve profitability in acute care. The segment reported a 4.3% increase in hospital admissions. The number of non-COVID admissions alone increased 14%. Sutaria also noted Tenet’s efforts to improve efficiency in emergency rooms.
“I think as we enter this post-pandemic environment, hospitals will be able to maintain and deliver services naturally as they bring in the right infrastructure, doctors and technology for more accurate services that don’t have an alternate location to go to. And for us, that’s an important part of the recovery puzzle,” says Sutaria.
Tenet reported first-quarter net income of $143 million, or $1.32 per share, compared with $140 million, or $1.28 per share, a year. before.
Revenue rose 5.8% to $5.02 billion. Operating expenses increased about 8% to $4.48 billion, excluding any facility sales or consolidation, with costs for supplies increasing by 13.5% and 3.5% for wages. and wages. Executives said they expect contract labor costs to fall further throughout the year, although those costs are unlikely to return to pre-COVID levels.
Tenet raised its financial outlook for adjusted earnings before interest, taxes, depreciation and amortization by $50 million, to a range of $3.21 billion to $3.41 billion—making making it the second for-profit company after HCA Healthcare to raise expectations for 2023.
Shareholders responded favorably. Shares of Tenet are up more than 4% from Monday’s close, opening at $72 a share on Tuesday.
