Tenet Healthcare came away with a nice consolation after selling its five Atlanta hospitals in April to WellStar Health System of Marietta, Ga.
WellStar has contracted with Tenet's revenue-cycle subsidiary, Conifer Health Solutions, for revenue-cycle services at all of its 11 hospitals in Georgia, Tenet Vice Chairman Keith Pitts told analysts at the Baird 2016 Global Healthcare Conference last week.
Conifer was already operating at the five hospitals that WellStar bought for $575 million. WellStar added Conifer at its other six hospitals, replacing a homegrown system.
WellStar declined to comment on the contract, citing a confidentiality clause. But Conifer has hired the ex-WellStar revenue-cycle employees at the hospitals that were added and now has more than 400 employees at WellStar, a WellStar spokesman said.
With the acquisition of the Tenet hospitals, WellStar is among the largest hospital systems in Georgia, with projected annual revenue of about $3 billion. Dallas-based Tenet is the nation's third-largest, investor-owned hospital chain with 79 hospitals.
At the Baird conference, Pitts said the WellStar deal exemplified the large-scale system integrations that Conifer has executed over time.
Conifer was developed inside of Tenet and is now being sold commercially. Conifer's largest customer outside of Tenet is 103-hospital Catholic Health Initiatives, based in Englewood, Colo.
Revenue-cycle management is a crucial function of a hospital's finance department. It consists of using software to register patients, authorize insurance payments, send bills, finance payments and collect debts that are not in arrears more than 120 days.
Conifer contributed $386 million in revenue in the second quarter, about 8% of the $4.87 billion posted by Tenet in the quarter.
Its income contribution was even larger. Of total Tenet earnings before interest, taxes, depreciation and amortization in the second quarter of $617 million, Conifer posted EBITDA of $63 million, or 10.2% of the total.
Pitts told the Baird analysts that a differentiator for Conifer is that it was developed inside of Tenet specifically for healthcare, unlike some other revenue-cycle products that were modified for healthcare from other industries.
The $386 million in Conifer second-quarter revenue was a 14% increase over the same period of 2015, while the $63 million in EBITDA was up 5% over the $60 million in the year-earlier quarter.
