Tenet Healthcare Reports Smallest Loss in Six Quarters
Officials for Santa Barbara-based Tenet Healthcare on Tuesday announced a third-quarter loss of $70 million, or 15 cents per share, compared with a loss of $308 million, or 66 cents per share, in the same quarter last year, Bloomberg/Philadelphia Inquirer reports. The loss is the company's smallest in six quarters.
Tenet CEO Trevor Fetter reduced operating expenses by 2.6% from the second quarter by selling more than one-fourth of the company's hospitals, including 19 in California. Excluding hurricane-related expenses of approximately two cents per share, hospitals sales and legal costs, Tenet's quarterly loss would have been eight cents per share. The results contain $74 million in restructuring charges.
Third-quarter inpatient admissions dropped 2.1%; outpatient visits fell 9.6% compared with third-quarter visits last year; and outpatient visits in hospitals open at least a year dropped 11%. According to Robert Mains, an analyst with Advest, the "key question" will be whether this quarter's decline in patient volumes stems from the hurricanes in Florida or represents a continuing trend (Ryerson-Cruz, Bloomberg/Philadelphia Inquirer, 11/3).
In the third quarter, Tenet provided about $392 million in uncompensated care, and nearly 24% of patients treated in Tenet's emergency department did not have health insurance, compared with about 20% in the second quarter (Girion, Los Angeles Times, 11/3).
Tenet on Monday announced that it has completed the sale of four of its Los Angeles-area hospitals to California-based AHMC for $95 million as part of an ongoing effort to divest itself of 27 hospitals nationwide, Los Angeles Business reports (Los Angeles Business, 11/1).
In January, Tenet, the nation's second-largest for-profit hospital chain, announced plans to sell 27 of its 100 hospitals, including 19 in its core California market. Tenet began downsizing last year when it announced plans to sell or divest 14 facilities as part of an ongoing cost-cutting effort. However, unlike last year's sales, which focused largely on noncore markets, the hospitals in the upcoming sales will include several in larger markets, including California, Louisiana, Massachusetts, Missouri and Texas (California Healthline, 1/29).
The four hospitals in the deal completed this week are 210-bed Garfield Medical Center, 101-bed Monterey Park Hospital in Monterey Park, 117-bed Greater El Monte Community Hospital in South El Monte and 181-bed Whittier Hospital Medical Center in Whittier.
AHMC and its affiliated companies operate 144-bed Alhambra Hospital Medical Center and 108-bed Doctors' Hospital Medical Center of Montclair.
Under the agreement, Tenet received $50 million in cash proceeds upon closing and entered into a $50 million senior secured loan agreement with AHMC. The loan due from the buyer matures Dec. 16. According to Los Angeles Business, Tenet will use the money from the sale of the hospitals for "general corporate purposes."
In related news, Tenet also said Monday that one of its subsidiaries has returned operations of 182-bed Suburban Medical Center in Paramount to owner Promise Healthcare. The Tenet subsidiary's lease of the facility expired Sunday. Promise will operate Suburban as a community hospital with an added emphasis on extended acute-care services (Los Angeles Business, 11/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.