Tenet Healthcare Corp. saw more demand from patients with insurance through health reform exchanges during the third quarter compared with prior three months. The Dallas-based provider also continued to report fewer uninsured patients and unpaid medical bills in its third quarter compared with last year in states that expanded Medicaid.
Tenet reported third-quarter net income down from a year ago, even as demand for hospital and outpatient care continued to grow. Net income for the quarter was $9 million on revenue of $4.2 billion, compared with $28 million on revenue of $3.9 billion during the same three months the prior year.
Growth in the company's operating revenue stemmed primarily from higher volume, better terms from commercial insurers and growth of Conifer, the company's revenue-cycle arm, Tenet said in a release announcing its results. Revenues from Arizona's Medicaid program declined by $89 million compared with the same quarter a year ago.
Interest expense increased $95 million in the third quarter because of financing for its 2013 acquisition of Vanguard Health Systems, the company said.
Tenet hospital admissions, which recently suffered a slump, continued to rebound in the third quarter. Same-hospital admissions increased 3.9% during the quarter from the same three months a year ago. Paying admissions climbed 6.1%.
Third-quarter admissions increased 4.9% after accounting for outpatient demand. Tenet reported that outpatient visits increased 8.5%, nearly all from an influx of new patients instead of growth from acquisitions, the company said.
Tenet treated more patients with insurance sold through exchanges created under the Patient Protection and Affordable Care Act during the third quarter than the second quarter. Exchange patients' use of Tenet hospitals increased 23% during July, August and September compared with the prior three months. Outpatient visits by exchange-insured patients climbed 25% in Q3 compared with Q2.
The impact of Obamacare also was evident in five states where Tenet operates that expended Medicaid under the law. Tenet uninsured and charity admissions dropped by 59% and hospital patients covered by Medicaid increased by 24%. On the outpatient side, uninsured and charity visits dropped by 37% and visits for Medicaid patients increased 32%.
Trevor Fetter, president and CEO of Tenet, said in the news release that health reform contributed to the company's growth but stressed that reform had nothing to do with 60% of last quarter's volume gains.
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