Tenet Narrows Losses as Physicians, Admissions Grow

Strong admissions growth and revenue from new insurance helped Tenet Healthcare Corp. narrow its loss by 81 percent in the fourth quarter. The report sent shares of the large investor-owned hospital chain up more than 10 percent in early morning trading.

Dallas-based Tenet reported that it lost $75 million, or 16 cents a share, in the period ending December 31, 2007, compared to a year ago when it lost $386 million, or 82 cents a share. Revenue rose 6 percent in the fourth quarter to $2.2 billion from $2.1 billion.

Tenet said a 9 percent increase in the number of physicians with admitting privileges boosted same hospital admission. Net inpatient revenue rose nearly 4 percent to $10.9 million during the quarter from $10.5 million a year ago.

“We are delighted to report positive admissions growth in the fourth quarter,” Trevor Fetter, Tenet’s president and chief executive said in a press release. “This continues the improving volume trends which have been evident since mid-2007.”

Fetter said admissions growth was up 2.3 percent in January and that the chain was seeing positive growth trends for February.

Tenet said it set aside $132 million in the fourth quarter for bad debt expense, an increase of $15 million, or 12.8 percent, from the fourth quarter of 2006. The company said the increase in bad debt was largely from an increase in uninsured admissions, which rose 10 percent and uninsured outpatient visits, which increased 3.2 percent from a year ago.

Despite the increase, Tenet said it has had better success collecting on self-pay accounts over the last 18 months, which has helped reduce bad debt expense during the quarter by $19 million.

For 2008, Tenet is forecasting revenues to grow more than 5 percent on the strength of same hospital admissions growth and outpatient visits.