Tenet Healthcare Corp. announced Monday that it expects its 2015 financial results to outpace those of 2014, even as the Dallas-based hospital chain anticipates 2014's adjusted pre-tax earnings to land at the top of its previously issued outlook range. Expected increases in both outpatient and inpatient admissions will drive the gains, putting Tenet in a select group seeing inpatient business pick up.
While inpatient admissions have been declining at many hospitals systems across the country, Tenet actually saw its inpatient admissions climb 4% during the fourth quarter of 2014. Outpatient visits rose 9.5% compared to the year-ago period, in part due to what has thus far been a strong flu season, according to Stern Agee analyst Brian Wright. Same-hospital adjusted admissions were up 4.8% for the quarter.
Tenet management is predicting its 2015 adjusted earnings before taxes, interest and other charges will be in a range of $2.05 billion to $2.15 billion. That's higher than Tenet's 2014 adjusted results, which management told investors will be near the top of a $1.90 billion to $1.95 billion range, thanks in large part to year-end growth in volume across both inpatient and outpatient settings.
Fiscal 2015 performance expectations are based on an assumption that same-hospital adjusted admissions will increase 2.5% to 3.5% during the year, the company said.
“We are confident that our strategies will drive continued growth in our hospitals and outpatient facilities and that our Conifer subsidiary will become an even better partner for Tenet and other health systems seeking to improve quality and lower the total cost of care for patients,” Trevor Fetter, Tenet president and CEO, said in a release.
Payer mix also has been an important component of what is driving Tenet's financial performance. Paying admissions were up 6.1% during the fourth quarter. Tenet also saw a 21.9% drop in uninsured and charity admissions across the entire company as Medicaid admissions rose 9%.
Looking only at the five states in which Tenet operates that expanded Medicaid, the drop in uninsured and charity admissions was significantly greater, representing a decline of 62.4%. In those states, Medicaid admissions climbed 20.5%.
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