Tenet Health is still betting big on emergency surgery despite last year’s setbacks.
Dallas-based for-profit health system about a year behind ramping up plan stemming from $1.2 billion deal with SurgCenter Development announced in 2021, CEO , Dr Saum Sutaria told investors on Thursday’s earnings call. Under the agreement, Tenet and its subsidiary United Surgical Partners International held an ownership stake in 92 ambulatory surgery centers. Tenet also signed a $1.1 billion deal with SurgCenter to buy shares in 45 centers by 2020.
Sutaria attributed the delay to the company’s expansion plans because of “a variety of assets,” including many centers that are in early development, compared with more mature operations acquired in the previous SurgCenter deal. there.
“The agenda for making progress has not stalled. Since Q3, we’ve completed six more purchases with multiples unchanged from previous purchases. We have opened the majority of de novo centers with the remaining seven on track to open this year,” said Sutaria.
Sutaria said the emergency surgery represented a “sustainable and positive headwind” for Tenet. He said the company plans to invest about $250 million in the space each year. Tenet recently struck a deal with Washington-based Renton, Providence, a longtime partner, that will add 15 to 20 locations over the next two years.
Tenet reported mixed financial results for 2022 on Thursday. The company reported net income attributable to common shareholders of $102 million for the fourth quarter, down nearly 60% year-on-year in 2021. Operating revenue grew 2.8% to $4.99 billion and costs rose 5.1% to $4.56 billion.
For the full year, Tenet recorded $411 million in net income, down sharply from $914 million in 2021. Operating revenue fell 1.6% to $19.17 billion while expenses fell by 1. 2% to $17.25 billion.
Labor costs continue to burden health systems. Tenet’s chief financial officer, Daniel Cancelmi, said contract labor costs peaked in September, starting to decline in the fourth quarter and will continue to do so.
“What we are really focused on is replacing contract labor to the greatest extent possible,” says Cancelmi. “Clearly we have taken into account increased investment in our employees when thinking about reducing contract workers. It will obviously be replaced by some form of employee expense.”
Last month, Cancelmi announced it would be retiring at the end of the year; Tenet has not yet named a successor.
