- After a string of mergers and acquisitions, Tenet Healthcare is applying the brakes on further growth, The Dallas Morning News reported.
- The Dallas-based company, which is now the No. 3 hospital operator in the U.S., recently left the S&P 500 because of a sharp decline in its market value. Since last July, Tenet’s market cap slid more than 50% to about $2.8 billion.
- The company is also carrying the highest debt burden in the business and dealing with fallout from a kickback scandal and whistleblower lawsuit, The Dallas Morning News noted.
Tenet’s long-term debt has roughly tripled over the past three years to $14.4 billion, the report stated.
The operator had reported in 2015 a loss of $140 million and offered to pay $238 million to settle a False Claims Act lawsuit. Just last month, the organization paid a fine for improperly denying prescription drug coverage and for "hindering policyholder appeals."
To turns things around, the company is focused on enhancing operations and improving cash flow, rather than more M&A. The company recently sold five Atlanta-area hospitals and will concentrate its efforts in markets where it is one of the key players.
Tenet is also looking to the outpatient market to spur financial growth. In 2015, the hospital operator merged with United Surgical Partners, a major outpatient surgery network.
The company’s struggles are indicative of how the Affordable Care Act is impacting the healthcare industry with lower investor interest in hospitals and pressure to curb expensive inpatient treatments.