Despite a strong spike in demand for urgent care during the pandemic, Tenet Healthcare announced Friday it's largely getting out of that business.
Dallas-based Tenet and FastMed Urgent Care reached a definitive agreement for FastMed to buy 87 of the investor-owned hospital chain's urgent-care centers for $80 million, which Tenet said is the vast majority of urgent care center it owns. Tenet shares were trading about 1% lower on the news as of midday Friday.
The proposed deal comes as the COVID-19 pandemic has shifted a significant contingent of patient care into urgent-care facilities that previously would have been treated in emergency rooms. Skyrocketing demand for COVID testing in hot spots is responsible for at least some of that demand.
Tenet itself saw "very strong growth" across its urgent-care centers in the third quarter, which ended Sept. 30, driving 8% year-over-year growth in United Surgical Partners International's non-surgical visits, Chief Financial Officer Dan Cancelmi said on the company's recent earnings call.
Tenet said in a news release that this deal will help the company sharpen its focus on growing and expanding its ambulatory surgery sector. Just last week, Tenet said it plans to buy up to 45 ambulatory surgery centers for $1.1 billion. News of that deal triggered a stock transaction that netted Tenet CEO Ron Rittenmeyer $9.6 million.
Tenet reported owning 108 urgent-care centers at the end of 2019, including 69 MedPost facilities in its hospital operations division and 39 CareSpot facilities under USPI, although Tenet spokeswoman Lesley Bogdanow said the company has trimmed the portfolio since then. She declined to share how many urgent-care centers Tenet will own once the FastMed transaction is complete.
The acquisitions expand FastMed into Florida and California, where most of the centers are located, and increases its reach in Arizona and Texas. The parties said they expect the deal to close in the first quarter of 2021 pending regulatory approvals and closing conditions.
FastMed is already one of the country's largest independent urgent-care providers, with 104 locations in North Carolina, Arizona and Texas. The company has corporate offices in Raleigh, N.C., Scottsdale, Ariz., and Houston, Texas.
Tenet's Chief Operating Officer, Dr. Saum Sutaria, said on the third quarter call that despite slower emergency department demand during the pandemic, he doesn't predict a permanent shift from EDs to urgent care.
"I'm not yet committed to the concept that that demand has gone forever from hospitals," he said. "We'll see how that plays out over the next year or two."