Tenet Healthcare plans to sell more hospitals in order to focus on its primary markets where it is first or second in market share, company executives said on a second-quarter earnings call Tuesday.
Tenet, the nation's third-largest investor-owned hospital chain, previously sold three hospitals in Houston to HCA for $750 million on Aug.1, and it will offload more non-core assets as part of its financial strategy. Tenet Vice Chairman Keith Pitts during Tuesday's call did not specify how many additional hospitals are for sale or the annual revenue they produce.
Hospital systems as healthy as Ascension and cash-strapped as Community Health Systems have also pared back their portfolios to focus on key markets. In April, Ascension sold its Ministry St. Joseph's hospital in Marshfield, Wis. The month before, the Idaho attorney general approved the sale of Ascension's St. Joseph Regional Medical Center to RCCH HealthCare Partners, a for-profit hospital chain formed through the merger of RegionalCare and Capella Healthcare.
CHS last week said it expects to sell a group of hospitals with a combined revenue of $1.5 billion. That's not including an additional 30 hospitals previously slated for sale.
Tenet is adding access points and specialty service lines in its key markets, such as Detroit, El Paso, Texas, San Antonio, Texas, and Delray Beach, Fla.
A Tenet spokeswoman declined to comment further.
Tenet posted a net loss on operations of $56 million in the second quarter on slumping admissions.
CEO Trevor Fetter said Tenet used the $750 million in cash from its Houston hospital divestitures to pay down a revolving loan that the company had previously employed to increase its majority ownership of United Surgical Partners International.
As of June 30, Tenet now owns 80% of USPI, one of the largest ambulatory surgery center businesses in the country that Tenet is expanding to offer ambulatory access both inside and beyond its hospital markets.
Tenet is selling other assets as well.
Tenet's health plan is expected to be completely wound down by year end, said Chief Financial Officer Dan Cancelmi during the call.
As part of the wind down, Tenet on June 1 sold Medicare Advantage and commercial group membership from its Allegian Health Plans to Blue Cross and Blue Shield of Texas. Terms were not disclosed.
Tenet first noted last year that it was getting out of its money-losing health plan business.
And in the second quarter, Tenet realized a $23 million gain predominantl from the sale of its home health and hospice business to Amedisys, a Baton Rouge, La.-based home care chain.