Tenet Healthcare, Dallas, announced the hospital chain would cut more than $25 million from expenses before the end of December and close the year with performance near the “lower end” of expectations.
Tenet lowers performance expectations
Tenet said in a news release that its adjusted earnings before interest, taxes, depreciation and amortization would be closer to $1.175 billion for the year (PDF) because of an influx of Medicaid patients and less-acutely ill Medicare patients. Tenet's prior outlook said its adjusted EBITDA could climb as high as $1.275 billion.
The company is expected to squeeze another $30 million from operations next year in addition to $50 million already projected, the news release said.
Tenet released some details of its performance through the first 10 weeks of its third quarter. Admissions increased 1.8% compared with the same period a year ago and Medicaid accounted for three-quarters of the increase. Higher acuity among commercially insured Tenet patients did not fully offset the drop in acuity among Medicare patients, the company said. During the second quarter, Tenet's acuity remained flat after an increase in acuity among privately insured patients compensated for a slight decline in Medicare acuity.
By mid-afternoon, Tenet's stock was down roughly 8% from the prior day's close of $5.02.
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