The Tenet Healthcare Corporation has raised its outlook for 2010 adjusted earnings by $50 million to a new range of $1.035 billion to $1.1 billion. The company's prior outlook range was $985 million to $1.05 billion.
"Continuing improvements in cost efficiencies are driving an improving earnings picture," said Trevor Fetter, Tenet's president and CEO. "While volumes remain soft, the trends are showing improvement. Should we experience a resumption of volume growth, we would expect even stronger financial results."
Dallas-based Tenet Healthcare is one of the largest for-profit healthcare delivery systems in the nation with 49 acute care hospitals in 11 states.
Tenet's management had lowered the outlook for 2010 controllable operating expense by $50 million, reflecting the effect of enhanced labor cost management, reduced clinical information technology expense and improving malpractice expense. According to Fetter, the impact on 2010 adjusted earnings from incremental healthcare information technology expense is now assumed to be $25 million, down from $40 million in the prior outlook.
Through early June, the trend for total admissions in Tenet hospitals improved by 80 basis points to a decline of 1.2 percent, as compared to the first quarter 2010 decline of 2 percent. Paying admissions and commercial managed care admissions trends also strengthened in this time period, showing improvements of 80 and 120 basis points, respectively.
According to Tenet's financial reports, the improvements are relative to the respective declines of 2.2 percent and 7.2 percent recorded in the first quarter of 2010. Paying admissions and commercial managed care admissions declined by 1.4 percent and 6 percent in the first 70 days of the second quarter.
The middle of the company's revised outlook range assumes the improved trend in commercial admissions continues for the balance of the year.