Tenet Healthcare said it will slash an additional 700 jobs on top of previously announced job cuts, ultimately cutting 2% of its workforce and $250 million in expenses.
The Dallas-based healthcare system previously announced it would eliminate 1,300 positions amid a management shakeup when longtime CEO Trevor Fetter stepped down.
Ronald A. Rittenmeyer, who is serving as executive chairman and CEO while the organization searches for Fetter’s permanent replacement, outlined the company’s plans (PDF) for investors Monday during the J.P. Morgan Healthcare Conference in San Francisco.
He said in a release that the organization is “focused on focused on flattening and simplifying our enterprise, growing our hospital and ambulatory positions in attractive markets and reducing costs to improve our financial performance and enhance returns for our shareholders.”
Those cost-reductions include cutting approximately 2,000 positions, reducing corporate overhead by 20% compared to 2016, eliminating the “regional management layer” in its hospital business and selling its Conifer Health Solutions business unit, which provides revenue cycle management to 800 hospitals in 43 states.
Conifer, Rittenmeyer said in the presentation, is a valuable but nonstrategic asset. The process for the sale is underway but the organization also wants to ensure the unit is in the best position to continue to provide quality service to its clients.
The Conifer sale could raise cash to lower Tenet’s $15 billion in debt, The Wall Street Journal reported. Rittenmeyer also didn’t rule out the possibility of selling any other assets, during an interview with the publication.
“At this point, I would say that we’re very focused on providing our shareholders the best possible return in the quickest amount of time,” he told The Journal.
The company, he said in the presentation, is focusing resources to grow Tenet’s leadership position in healthcare delivery. Next steps include:
- Completing divestitures of noncore markets.
- Focusing capital investments on services for chronic disease patients, higher acuity care, ambulatory access points and telemedicine.
- Buying up to 95% ownership stake and further integrating United Surgical Partners International into Tenet’s healthcare delivery business.
- Identifying and reducing further run-rate costs.
- Continuing to refresh the board with capabilities consistent with the new strategic direction.
Ultimately, Rittenmeyer told The Journal, these steps will help “reshape” the company so it’s more effective, efficient and focused on patient care.