- Tenet reported admissions, ER visits and hospital surgeries fell significantly in March as elective procedures were halted nationwide to slow the growth of COVID-19 infections. The hospital operator's first quarter earnings release also showed a substantial portion of its outpatient surgery center business USPI has been closed or operating on very limited hours.
- Despite the hit from COVID-19, Tenet swung back to black and delivered net income of $94 million from continuing operations after a net loss of $20 million the prior-year period. Tenet CEO Ron Rittenmeyer said the Dallas-based company was trending above expectations through early March and then, in a "snap of a finger," hit a wall.
- The chain has started to resume "vital elective procedures" and is starting to reopen methodically. Rittenmeyer said during Tuesday's call with investors he viewed May as the "beginning of the recovery."
Hospitals have weathered a difficult first quarter, particularly in the last few weeks of March, as the pandemic depressed volumes, revenue and income. HCA reported a plunge in net income while Community Health Systems saw a narrower loss than a year earlier.
Prior to the pandemic hitting the shores of the U.S., Tenet was trending ahead of its own expectations, executives said Tuesday.
Admissions had been up 1.1%, outpatient visits 5.5% and ER visits 6% during the first few months of the quarter compared to the same period last year.
That all changed as the coronavirus gained a foothold in the U.S., which now has more than 1 million confirmed cases, according to the Johns Hopkins Coronavirus Resource Center.
Tenet's volumes across the board have taken a massive hit as states and municipalities across the country implemented stay-at-home orders to prevent the virus from sickening more Americans. That meant halting elective procedures, which are typically lucrative lines of business.
In March alone, adjusted admissions fell nearly 18% and ER visits were down 16%. Hospital surgical cases plunged 21%. The depressed volumes have continued into April, executives said Tuesday, and the system has furloughed 10% of its workforce and pulled its previous guidance for the year.
Tenet said the pandemic negatively affected its adjusted EBITDA by $125 million in the last few weeks of March.
Although Tenet's facilities are not being overwhelmed by COVID-19 patients, certain markets have experienced a heavy impact, including Detroit, Massachusetts, Florida and Southern California. Currently, across its entire system of 65 hospitals, Tenet is treating 771 positive patients and another 308 under investigation.
"We have now shifted our focus to a comprehensive recovery effort across our entire system in compliance with state and local orders," Rittenmeyer said in a statement.
Rittenmeyer detailed plans on how the system will reopen and said it is hard to predict when volumes will bounce back to normal.
"We view May as the beginning of the recovery and are pleased with many facilities opening at 50% of pre-COVID surgeries last week and a more promising schedule this week," Rittenmeyer said. He said USPI has seen about 40% of its pre-COVID cases as it starts to reopen locations.
However, he also cautioned the restart may be slower in some markets such as Detroit that have been hard hit by the virus.
In the past 10 days, the demand among backlogged cases at USPI locations has increased rapidly. They are somewhere between 40% and 50% of normal caseload and the week-over-week increases are substantial. The higher complexity cases are coming back more quickly, executives said Tuesday, citing spine, total joints and general surgery.
Gastroenterology, pain and ear, nose and throat are cases that are coming back more slowly.
"When that gets back to 90% or 100% or 105% — I don't have a way of predicting right now. What we're focused on right now, more than anything, is ensuring that we're ready to serve that demand," COO Saum Sutaria said.
As of May 1, Tenet had $2.2 billion of excess cash and $1.9 billion of credit available. Tenet also disclosed that it received $345 million in Coronavirus Aid, Relief, and Economic Security Act funding and another $1.5 billion in Medicare advanced payments through May 1.