Tenet Healthcare's strong Q4 revenue and income results were driven in large part by its partnership and growth in ambulatory surgery centers.
Tenet partners with United Surgical Partners International (USPI), among the largest ambulatory surgery platforms in the United States.
"USPI had a fantastic year in 2024," Tenet Chairman and CEO Saumya Sutaria said during the Feb. 12 earnings call. "USPI adjusted EBITDA [earnings before interest, taxes, and amortization] grew 17% in 2024, fueled by a 7.8% increase in same-facility revenues, and 19% year-over-year growth in high-acuity cases such as total joint replacements," Sutaria said.
"Importantly, customer service levels in our centers remain quite high as we earned a 96.6 overall patient experience score in 2024," he said.
Nearly 70 ambulatory surgical centers were added in 2024.
Tenet intends to invest approximately $250 million each year toward M&A in the ambulatory space, and Sutaria said he anticipates adding 10 to 12 stand-alone facilities this year.
As to headwinds of potential regulation, its ASCs operate with freestanding ASC rates, which insulates them from potential changes in site neutrality rules, Tenet said.
WHY THIS MATTERS
The for-profit Tenet Healthcare, based in Dallas, owns approximately 46 hospitals.
In 2024, Tenet sold 14 hospitals, generating $5 billion in gross proceeds.
For the year, the hospital segment generated $2.185 billion in adjusted EBITDA, a 9% growth.
Same-store hospital admissions were up 4.7% as Tenet continues to open up capacity to respond to a strong utilization, according to the earnings report.
Tenet is expecting adjusted EBITDA growth of approximately 5.7% at the midpoint for 2025, driven in part by 2% to 3% adjusted admissions growth.
In addition, hospital segment performance will be enhanced by capital deployment service lines and contributions from the new Westover Hills Baptist Hospital in San Antonio, which opened in July 2024. The hospital is part of the Baptist Health System, which is owned by Tenet.
Tenet also expects growth from expanded relationships that its Conifer Health Solutions subsidiary has with the hospitals that were sold. Conifer provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients.
Sutaria said, "Our fourth-quarter results were above our expectations driven by continued same-store revenue strength, high acuity growth as well as effective cost management."
THE LARGER TREND
Sun Park, Tenet's executive vice president and CFO, said adjusted EBITDA in Q4 2024 was $1.048 billion, compared with $1.012 billion in Q4 2023, reflecting strong same-hospital admissions growth, strong ambulatory net revenue per case growth, favorable payer mix and increased Medicaid supplemental revenues in Michigan, partially offset by the impact of hospital divestitures.
Email the writer: SMorse@himss.org