Tenet Healthcare Corp reported a promising start to the year with rising patient demand in acute and ambulatory care.
CEO Dr. Saum Sutaria emphasized the Dallas-based for-profit system’s commitment on Tuesday’s earnings call despite being nearly a year behind on expansion plans stemming from a $1.2 billion deal with SurgeCenter Development announced in 2021. deal, Principle and its United Surgical Partners International subsidiary agreed to take an ownership stake in 92 ambulatory surgery centers.
“The original plan is still the original plan,” Sutaria said during the call.
United Surgical Partners added three centers in the first quarter and reported a 7.9% year-over-year increase in same-facility surgical cases, showing strength in gastrointestinal, urology and orthopedic procedures, CFO Daniel Cancellami said on the earnings call. The health system plans to invest at least $250 million in ambulatory care each year.
Raddami said opportunities exist to improve margins in acute care. The segment posted a 4.3% increase in same-hospital admissions. Non-COVID admissions alone were 14%. Sutaria also mentioned Tenet’s efforts to improve efficiency in its emergency rooms.
“I think that as we move into this post-pandemic environment, hospitals will naturally be able to catch up and deliver once they put in place the right infrastructure, doctors and technology for high-acuity services who have no choice. Places to go. And for us, that’s an important piece of the recovery puzzle,” Sutaria said.
Tenet reported first quarter net income of $143 million, or $1.32 per share, compared to $140 million, or $1.28 per share, a year ago.
Revenue increased 5.8% to $5.02 billion. Operating expenses increased nearly 8% to $4.48 billion, which does not include any facility sales or consolidations, with costs up 13.5% for supplies and 3.5% for salaries and wages. Executives said they expect contract labor costs to be down further throughout the year, though those costs are unlikely to return to pre-COVID levels.
Tenet raised its financial outlook for adjusted earnings before interest, taxes, depreciation and amortization by $50 million to a range of $3.21 billion to $3.41 billion.HCA To Raise Expectations For 2023 Making It Second Profiteer After Healthcare,
Shareholders reacted favorably. Shares of Tenet jumped more than 4% from Monday’s close to open Tuesday at $72 per share.