Tenet Healthcare Corp. is postponing the spin-off of its revenue-cycle subsidiary by a year, citing delays related to the COVID-19 pandemic.
The Dallas-based company originally expected to complete the transaction to turn Conifer Health Solutions into a separate, publicly traded company around the end of the second quarter of 2021. The additional year will now begin at the end of Q2.
Ron Rittenmeyer, Tenet's CEO, explained on the company's fourth-quarter earnings call Wednesday that there are a number of tasks that still need to be completed, including getting a new management team in place and fully scaling the company's new global business center in Manila, where the company has outsourced hundreds of revenue-cycle and other positions. Tenet is also completing its commercial contract with Conifer assuming the hospital chain is an independent client.
"We believe it is prudent to take an additional 12 months to prepare Conifer for a highly successful and sustainable spin," Rittenmeyer said.
Tenet initially pursued selling the business, but leaders said the offers were underwhelming, especially given the company's improved performance in recent years.
In response to an analyst's question about whether Tenet would still consider selling the subsidiary if it received another offer, Rittenmeyer said he would.
"I can't sit here and say we wouldn't consider things—we will," he said. "That's just the nature of the business."
Tenet generated $414 million in net income to shareholders in the fourth quarter of 2020, which ended Dec. 31, a significant swing from its $3 million net loss in the prior-year period. For full-year 2020, that worked out to $399 million in net income to shareholders, up from a $215 million net loss in 2019.
Tenet's revenue was $4.9 billion in the 2020 quarter, up 2.3% from $4.8 billion in the prior-year period. Full-year 2020 revenue was $17.6 billion, down 4.5% from $18.5 billion in 2019.
Much like HCA Healthcare reported last week, sicker than usual patients pushed Tenet's revenue per adjusted admission way up in the final quarter of 2020. On a same-hospital basis, that metric was up 19.4% compared with the fourth quarter of 2019. In Tenet's ambulatory segment, same-facility revenue per surgical case was up 5% year-over-year.
