Dive Brief:
- Tenet posted a profit of $449 million for the third quarter, rebounding from a loss during the same quarter last year, which was upended by the pandemic. The for-profit health system reported the vast majority of its hospital markets exceeded company expectations for the quarter even amid a COVID-19 surge.
- Emergency room visits were up a whopping 25% compared to the prior-year period. Outpatient volumes increased by about 15% while hospital admissions increased by nearly 3%.
- The company is raising its outlook and expectations for the remainder of the year following third quarter results.
Dive Insight:
The third quarter challenged hospital operators as the delta variant fueled another rise in hospitalizations and cases around the country.
The wave of cases from this summer again caused hospitals from Florida to Utah to delay non-emergency procedures in a bid to free up resources for incoming COVID-19 patients.
Even with the availability of vaccines, the 2021 summer wave of COVID-19 was the second largest wave, falling behind last year's winter surge.
Despite the operating challenges poised by COVID-19 in the third quarter, Tenet was able to manage through the headwinds, executives said Thursday during a call with investors.
"What we achieved in the third quarter is notable ... particularly given the significant surge of COVID cases in many of our markets," Ron Rittenmeyer, executive chairman, said.
Tenet leaders said COVID-19 cases accelerated during the third quarter, representing about 10% of admissions in the quarter, compared with just 4% from the second quarter.
Still, "we were able to perform elective procedures in our hospitals, even during the COVID spikes across our markets," Saum Sutaria, the newly appointed CEO, said during Thursday's call.
Volumes are nearly back to normal for the Dallas-based health system.
Emergency room visits, a laggard in the recovery for many operators, have reached 97% of pre-COVID-19 levels, nearing a full recovery. Hospital admissions have reached 91% of pre-pandemic levels and outpatient visits are at 93%.
And some Tenet units are outperforming the 2019 metrics. USPI, Tenet's ambulatory surgery center business, is 101% above the pre-COVID levels.
Tenet has invested heavily in its surgery business, a unit that is a key part of its long-term strategy.
Just recently, USPI entered into a deal with Compass Surgical Partners to acquire ownership and management interests in nine ambulatory surgery centers located in Florida, North Carolina and Texas.
Last year, Tenet significantly scaled its surgery center portfolio after signing a $1.1 billion cash deal to acquire up to 45 surgery centers from SurgCenter Development.
As a result of the strong quarter, Rittenmeyer said that for the third time this year the company is raising its earnings expectations for 2021, signaling a "positive trajectory for the remainder of the year."
