Tenet Healthcare Corp. has been growing and diversifying rapidly, and the cost of that growth was evident in the chain's bottom line in the second quarter.
Yet while expenses increased for the Dallas-based hospital operator, it also is seeing greater patient volume as well as additional revenue from its acquisition and joint venture strategy.
Tenet reported a net loss of $61 million in the second quarter on $4.5 billion in revenue compared with a net loss of $26 million on $3.9 billion in the prior-year period.
Its hospitals saw a 1.7% increase in admissions, or 2.3% when adjusted for outpatient activity. The number of paying admissions increased 2.1% as charity and uninsured admissions decreased 4.9%. In its six states that expanded Medicaid eligibility, uninsured and charity-care admissions were down as much as 31.5%.
Tenet also closed two large deals in the quarter: its 50.1% stake in United Surgical Partners International through a joint venture with USPI's private equity owner Welsh, Carson, Anderson & Stowe and its takeover of London-based Aspen Healthcare, another Welsh Carson portfolio company.
Those two transactions contributed to a 6.8% increase in surgical and imaging cases in its ambulatory-care division.
Conifer, Tenet's revenue-cycle management division, also continued its rapid growth, with a 19.3% increase in revenue in the second quarter compared with the prior-year period.
The numbers suggest patient volume in 2015 could be higher than the chain originally forecast earlier this year, or 2% to 3% instead of 1.5% to 2.5%. Revenue per adjusted admission also is expected to be above earlier projections—but so are expenses.
In its earnings guidance to investors, Tenet is now forecasting full-year revenue in the range of $18.1 billion to $18.5 billion, up from $17.4 billion to $17.7 billion. But it tempered expectations for earnings per share, narrowing its range to $1.32 to $2.21 from $1.32 to $2.40.