Dive Brief:
- Tenet Healthcare announced Q3 earnings that significantly beat expectations, with revenue rising 74% to $4.18 billion, rather than the expected $4.02 billion.
- Tenet raised its 2014 EBITDA outlook to fall somewhere in the range of $1.90 to $1.95 billion. Big growth areas included a 4.9% increase in adjusted admissions, a 6.1% increase in paying admissions and 9.8% and 5.1% increases in surgeries and emergency room visits, respectively.
- The surge was driven primarily by a glut of newly-insured and paying customers under the Affordable Care Act. Tenet spokespeople said that the health law was responsible for about 40% of its growth in volume, contributing to a 23% rise in admissions and a 24% rise in outpatient visits.
Dive Insight:
It appears that healthcare reform is continuing to prop up some health systems' bottom lines by expanding the market of consumers who can pay for (and seek) medical care. Tenet also made a savvy move by acquiring Vanguard Health Systems in late 2013, helping the provider expand its reach into multiple locales.
States that expanded Medicaid in particular contributed to Tenet's rosy earnings. In fact, in the five states that Tenet services that expanded Medicaid under the health law, admissions from the public insurance pool rose 24% while uninsured and charity admissions dropped a staggering 59%.
Tenet's overall profits were $9 million, or $0.09 per share, in Q3.
