The Tenet Healthcare Corporation this week reported an increase in first quarter earnings of 7.2 percent over the first quarter of 2009.
Dallas-based Tenet revealed an adjusted EBITDA of $298 million for the quarter ending March 31, 2010, an increase of $20 million over the $278 million reported for the same period in 2009. Tenet Healthcare is one of the largest for-profit healthcare delivery systems in the nation with 49 acute care hospitals in 11 states.
The hospital company also reported an adjusted EBITDA margin increase of 12.7 percent in the first quarter of 2010, an increase in 40 basis points over the first quarter of 2009.
"We achieved another quarter of solid progress in EBITDA growth," said Trevor Fetter, Tenet's president and chief executive officer. "Strong unit revenue growth offset soft volumes to drive revenue growth of 3.4 percent in the first quarter. This growth, coupled with solid cost control, produced a 7.2 percent increase in adjusted EBITDA."
Fetter said net income attributable to common shareholders in the first quarter of 2009 was $178 million, or 37 cents per diluted share.
"In the context of the continuing weak economic environment this was a very strong performance," Fetter said.
According to Fetter, admissions and outpatient visits at Tenet hospitals declined by 2 percent and 1.8 percent, respectively, in the first quarter. He said a very light flu season and weather-related disruptions in some markets contributed to the softening in patient volumes.
The company's commercial managed care admissions and outpatient visits declined by 7.2 percent and 6.4 percent, respectively, but the acuity of those volumes increased.
Tenet's net operating revenues increased by $77 million, or 3.4 percent, which Fetter said reflected not only unit revenue improvement, but also higher acuity and a slight increase in favorable prior year cost report adjustments.
Unit revenue growth was particularly strong in the company's outpatient business, which reported a 7.7 percent increase in net outpatient revenue per visit. Commercial managed care revenues increased by 2.8 percent.
Tenet did experience a 1.3 percent increase in total controllable operating expenses in the first quarter. This was due primarily to a 4.5 percent increase in salaries, wages and benefits per adjusted patient day.
The company's bad debt expense increased by $33 million, or 21.2 percent, which Fetter attributed primarily to the result of an increase in uninsured admissions of 11.9 percent and a decline in collection rates from the first quarter of 2009.
Tenet also experienced a decline in self-pay collection from 31.4 percent in the first quarter of 2009 to 29.9 percent in the first quarter of 2010. The significant decline in charity volumes in the first quarter of 2010 moderated the growth in the cost of providing uncompensated care, which increased by $6 million as compared to the first quarter of 2009.