Tenet Reports First Quarter Profit, Fewer Hospital AdmissionsTenet Healthcare lowered some expenses in the first quarter, but the company said that admissions and the number of patients with private insurance declined, the AP/Salon reports. Compared with the same quarter last year, which had an extra day because of leap year, same-hospital admissions dropped by less than 1% in the quarter. Admissions of privately insured patients fell by 2% -- adjusted for leap year -- to 34,468. Tenet CEO Trevor Fetter said that increases in unemployment mean there are fewer jobs and companies offering health benefits, leading to fewer patients with private insurance coming to hospitals.
Leerink Swann analyst Jason Gurda said the figures serve as "early warning signs" for the hospital industry. He said that admissions of privately insured patients will fall sharply going into 2010 because of job losses. However, Gurda said that Tenet "has made some encouraging operating improvements and strengthened its financial outlook."
According to the AP/Salon, Tenet lowered contract labor and malpractice costs, in addition to other expenses during the quarter. In addition, it gained $134 million from swapping $1.6 billion worth of notes due in 2011 and 2012 for debt due in 2014 and 2019. In total, it earned $178 million, or 37 cents per share, compared with a loss of $31 million, or six cents per share in the same period a year earlier. Revenue also rose by 5% to $2.28 billion. The earnings were above analyst estimates.
Bad debt increased by 4% to $153 million from $147 million in the same period a year ago. The company attributed the increase to lower collection rates from uninsured patients, higher pricing and higher patient health insurance deductibles (Murphy, AP/Salon, 5/5). This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.