A new four-year national contract with Aetna spurred a rally Monday for Tenet Healthcare Corp.'s stock price, though Tenet shares are still down almost 40% for the year.
The stock rose 11% after Aetna and Tenet announced that the deal would give Aetna's 8.5 million members across its commercial and government-funded insurance lines in-network access to Tenet's 87 hospitals, 2,130 employed physicians and 218 outpatient centers.
That network includes two of Tenet's newest hospitals, Baptist Health System in Birmingham, Ala., and Carondelet Health Network in Tucson, Ariz., both of which Tenet added under joint ventures with not-for-profit health systems.
Investors failed to extend the Tenet stock rally Tuesday. Its share closed at $30.32, down 27 cents or about 1% for the trading session.
Tenet's earnings, and consequently its stock price, have been under pressure as insurance enrollment has slowed under the Affordable Care Act.
Other large investor-owned hospital companies, including Community Health Services and HCA, have felt the same sting.
In its third quarter, ended Sept. 30, Dallas-based Tenet posted a net loss $29 million compared with net income of $9 million in the year-earlier quarter.
In November, Tenet said it was selling its five hospitals and clinics in Atlanta to WellStar Health System of Marietta, Ga., for $575 million in cash and the assumption of $86 million of debt.
In a statement, Tenet Chief Managed Care Officer Clint Hailey said the Aetna contract extends and expands upon a long relationship with Tenet's largest health plan customer.
“It is always our goal to work collaboratively with insurance companies to bring high-quality, convenient and affordable options” to members, Hailey said.
On Tuesday, the Modern Healthcare Hospital Stock Index closed at 639.94, down 6.87 or -1.06%.
