Dive Brief:
- For-profit hospital and outpatient center operator Tenet Healthcare has reported markedly improved second quarter results year-over-year, suggesting that the company may be in the midst of a turnaround.
- Dallas-based Tenet, which operates 80 hospitals and 190 outpatient centers, posted a net loss of $26 million for its second quarter, down from $50 million in the second quarter of 2013.
- According to Tenet president and CEO Trevor Fetter, the improvement comes from capturing greater incremental market share, service line expansion, and profits reaped from key aspects of the ACA.
Dive Insight:
The healthcare chain, which completed the acquisition of Vanguard Health Systems last October, has seen net cash coming in the door go up 2.6% to $4 billion. Execs attribute this growth to rising volume, better terms in managed care contracts and the growth of its Conifer health software and management subsidiary.
Tenet has also made out handsomely under the ACA, benefiting from newly-subsidized exchange health plans and in some states, expanded Medicaid. These forces have resulted in Tenet growing at "near record rates" in commercial patient volumes, inpatient admissions, outpatient visits surgeries and emergency department visits, said CEO Fetter. Notably, inpatient hospital admissions increased by 2.8% year-over-year, with growth in commercial admissions leading to the best quarterly same hospital performance in more than a decade, the company said.
And here's a really striking figure. In the five states where Tenet operates that expanded Medicaid eligibility under the ACA, the company saw a 54.3% fall in uninsured plus charity admissions and a 22% increase in Medicaid-covered admissions.
While ACA-driven changes aren't going to be enough to completely support Tenet's progress, it does seem as though the ACA has paid a big role in Tenet's improved health this quarter. Let's see how Tenet does when the ACA's impact is already factored into the numbers and it has to keep improving its performance.