Tenet Healthcare Corp. is the latest for-profit system benefiting from recovering patient volumes in the first half of 2023.
Dallas-based Tenet said Monday same-hospital admissions in the second quarter grew by about 3% compared with a year ago, including a 5% growth in non-COVID-19 patients, while ambulatory surgical cases grew 6.6%.
The company reported second-quarter net income of $123 million, or $1.15 per diluted share, compared with net income of $38 million, or 35 cents per diluted share, a year ago. The results include about $23 million in additional income tax expense. Revenue jumped 9.6% to $5.08 billion, compared with $4.64 billion in the year-ago period.
The health system’s United Surgical Partners International subsidiary added 12 ambulatory centers to its platform in the quarter. CEO Dr. Saum Sutaria discussed Tenet’s commitment to invest in ambulatory care on an earnings call in April, despite the system being about a year behind schedule on a planned expansion stemming from the $1.2 billion SurgCenter Development deal announced in 2021. Tenet has more than 30 centers in development or under construction, Sutaria said on Monday’s earnings call.
United Surgical Partners continues to see strong demand in orthopedics and urology, in addition to gastrointestinal procedures as care grows among patients under age 50, Sutaria added.
“I like the operating environment right now because it is evolving such that higher-acuity-focused, effective capacity management and nimble cost control, all strengths of ours, support improving results in our business,” he said.
Following the strong results, Tenet again raised its 2023 financial outlook for adjusted earnings before interest, taxes, depreciation and amortization to a range of $3.31 billion to $3.46 billion, compared with the previous projection of $3.21 billion to $3.41 billion in April.
Quarterly operating expenses rose 7.2% to $4.54 billion, including a 7.5% increase for salaries, wages and benefits and a 9.9% jump for supplies. Contract labor costs dropped to 4.3% of salaries, wages and benefits, compared with 6.2% a year ago, Chief Financial Officer Daniel Cancelmi said on Monday’s call.
Tenet operates and/or owns 61 hospitals, 110 outpatient facilities and more than 475 ambulatory surgery sites.