Tenet outlines plans to handle baby boomers’ impact

Tenet Healthcare Corp., Dallas, said that it plans to deal with the influx of baby boomers on Medicare, and the accompanying pressure on reimbursements, by spreading the best practices of its most efficient hospitals. During a conference call to discuss its first quarter, Tenet said its Medicare Profitability Initiative will focus on five DRGs chosen for each hospital and seek to improve clinical outcomes and cut costs on those services.

Comparing the first quarters of 2009 and 2008, Medicare admissions increased 0.8%, compared with 1.3% decline in total admissions. The company plans to offer more details at its June investor conference.

As Tenet previewed last month, the company recorded a profit of $178 million for the quarter, compared with a loss of $31 million in 2008’s first quarter. Revenue increased 4.6%, to $2.28 billion. The profit was driven largely by cost control, stable bad debt and favorable patient mix. “The weak economy enables everyone to appreciate and support cost-reduction initiatives,” said Trevor Fetter, Tenet’s president and CEO.

Tenet also said that it sold its 50% interest in Metairie, La.-based Peoples Health, an administrator of Medicare Advantage plans, on May 1. The company expects to record a $15 million pre-tax gain on the sale in the second quarter.

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