Leaders at Tenet Healthcare Corp. chalked up their strong third quarter performance in part to an uptick in high-acuity surgeries, a major focus area the for-profit hospital chain.
Dr. Saum Sutaria, Tenet's new CEO as of September 1, told investors on a call Thursday that cardiac interventions are recovering to 2019 levels.
Orthopedic cases across the company's ambulatory surgery centers grew 22% year-over-year, and ambulatory joint replacements have more than doubled from 2020.
"We are encouraged that net revenue per case is almost 10% higher than in 2019, demonstrating that our higher acuity services are showing an even enhanced growth rate," he said.
Dallas-based Tenet is also expanding robotics for general surgery, cancer services and bone and joint programs in more than 20 hospitals. The company has also added inpatient capacity for new services in multiple markets, including San Antonio and El Paso. It's expanding trauma accreditations, most recently at a hospital in the Coachella Valley, Sutaria said.
Tenet generated about $450 million in net income to shareholders in the third quarter, which ended Sept. 30. That's compared with a net loss of almost $200 million in the prior-year period. The company's share price grew more than 6% Thursday on the results.
The quarter got a boost from closing the sale of five Miami-area hospitals to Steward Health Care, a deal that generated a $409 million pre-tax gain. The proceeds allowed Tenet to repay $1.1 billion in outstanding debt and lower its annual interest payments by $50 million.
Tenet recently announced it plans to buy ownership and management interest in nine ambulatory surgery centers from Compass Surgical Partners. The deal includes partnerships with 125 independent surgeons who perform predominately high-acuity procedures, including lots of spine surgeries and total joints, Sutaria said.
Tenet has been adding doctors in its ambulatory surgery segment, called United Surgical Partners International. Sutaria said the company has added 1,700 new physicians year-to-date, including about 580 in the third quarter.
"It's important to note that these are independent physicians choosing to come and work at our facilities," he said.
Admissions in Tenet's hospital segment grew 2.6% year-over-year, while outpatient visits grew 15.3% in that time. Emergency department visits grew 25% since the third quarter of 2020. Sutaria noted that some of the emergency volume that's returning is the type of low-acuity visits that declined in 2020. That puts pressure on revenue given the high cost of staffing emergency departments, he said.
In Tenet's USPI division, same-facility surgery cases grew 6.8% year-over-year. Sutaria noted that USPI's volumes are now at 101% of 2019 levels, a metric he said has improved each quarter of 2021.
COVID-19 admissions represented just under 10% of total hospital admissions in the third quarter, which Sutaria said is lower than in prior COVID spikes. He noted that Tenet was able to continue performing elective procedures in its hospitals during the quarter despite COVID spikes in its markets.
