Admissions declines in Chicago, Detroit facilities drag down boost in other regions, Tenet says

earnings
Tenet Healthcare released its second-quarter earnings late Monday. (Pixabay)

Tenet Healthcare saw an overall decline in admissions in the second quarter of 2018, a trend it attributes to drops in two major markets: Chicago and Detroit.

Tenet’s admissions dropped by 2.3% in the second quarter, and the company said in its quarterly financial filings (PDF) released Monday evening that growth in several markets was upset by the declines in those two major cities.

CEO Ronald A. Rittenmeyer said during the company’s earnings call Tuesday morning that Tenet is continuing to work with Wayne State University to establish a new partnership after their previous agreement ended in May. 

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Rittenmeyer said Tenet is committed to Detroit Medical Center and continuing to serve patients in Detroit. 

“We are very encouraged and resolving issues in Detroit. We expect a good outcome,” Rittenmeyer said. “These are not systemic issues. 

Tenet is divesting its underperforming Chicago portfolio as it looks to bounce back from significant financial turmoil over the past several years. Rittenmeyer said that Tenet is pleased that its deal to sell off its Chicago hospitals are with buyers who will “preserve what’s best for the hospitals.” 

He said those deals are expected to be finalized by the end of the year. 

Tenet projects between $17.9 billion and $18.3 billion in revenue over the course of 2018, and Rittenmeyer said the results are encouraging and proof of progress on the system’s efforts to right the financial ship. 

“We had another solid quarter of performance,” Rittenmeyer said. 

RELATED: Tenet Healthcare to slash 1,300 positions to cut $150M in expenses

Though admissions declined overall in the second quarter, same-hospital revenues and revenues per adjusted admission were up, according to the filings. Same-hospital revenue increased by 4.3% and per adjusted admission revenues increased by 3.5%.

Tenet also noted revenue increases in the ambulatory care sector, with same-facility revenues systemwide up by 6.9%. Ambulatory care visits also increased, by 4.3%, and revenues per case went up by 2.4%.

The system also saw increases in surgical care revenue, which increased by 6.6%.

Conifer Health Solutions, Tenet’s healthcare management arm, didn’t fare as well in the second quarter, as revenues decreased by 3.5% amid divestitures. Conifer has been a prime sale target, though no deals have been announced. 

Rittenmeyer said the potential to sell Conifer is a work in progress, and that they’re meeting with bidders to conclude negotiations and settle on a final deal quickly. In the meantime, Tenet will continue to operate Conifer “with full speed ahead” he said. 

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