Tenet Healthcare Corp., Santa Barbara, Calif., said weak volume and high bad-debt expense will depress its fourth-quarter financial results below the company's third-quarter net loss of $70 million. Tenet also said that while it expects results to be better in 2005 than in 2004, the coming year will likely yield an operating loss, before impairment, restructuring, litigation or other charges. In addition to the volume and bad-debt challenges, Tenet said it faces a shift of a portion of its managed-care business to lower-paying contracts and continued pressure on expenses, especially labor and supplies. The company will hold a conference call with investors Wednesday to provide more details.
Tenet took another step toward completing its nearly year-old divestiture program, signing a definitive agreement to sell St. Charles General Hospital, New Orleans, to Preferred Continuum Care, Birmingham, Ala. Terms of the deal were not disclosed, but Tenet said its net after-tax proceeds would be $11 million. Tenet has divested 11 of 27 hospitals on a divestiture list announced in January 2004 and has agreements in place to divest 11 more. Preferred Continuum was formed in January as a long-term acute-care provider by Thomas Scott and Eugene Smith, one of the original founders of HealthSouth Corp. Tenet will operate 69 core hospitals once the divestiture program is completed. The company said the previously announced move of its headquarters to Dallas will be effective Jan. 3. -- by Vince Galloro