Tenet Healthcare’s Loss Widens to $2.02 Billion in 4th Quarter
Tenet Healthcare Corp., the second-largest U.S. hospital chain and the biggest in California, said its fourth-quarter loss widened to $2.02 billion on costs including a write-down in the value of hospitals in two regions.
The loss amounted to $4.33 a share, compared with a loss of $954 million, or $2.05, a year earlier, Dallas-based Tenet said. Revenue fell 2% to $2.41 billion.
Tenet had $1.11 billion in costs to slash the value of hospitals in the Texas-Gulf Coast and Florida-Alabama regions as business slowed, contracts with insurers paid less and unpaid patient bills mounted. The company, which put about a quarter of its hospitals up for sale last year to cut costs, said admissions at hospitals open at least a year slumped in the fourth quarter.
The quarterly loss was the eighth in a row for Tenet, which is seeking to restore confidence and settle lawsuits and government investigations that include allegations the company overcharged Medicare.
Chief Executive Trevor Fetter has sold all but five of the 27 hospitals he sought to shed and is negotiating to get higher payments for treatment from managed-care insurers.
Tenet’s loss excluding some items was 6 cents a share. On that basis, the company was expected to have a loss of 9 cents, according to analysts surveyed by Thomson First Call.
Shares of Tenet rose 10 cents to $11.13 on the New York Stock Exchange. They have declined 7.3% in the last year.
Tenet also said hospital admissions at facilities open at least a year fell 3.8% in the fourth quarter to 167,822. Smaller reimbursements from health insurers also hurt revenue in 2004. Revenue was $2.46 billion in the year-earlier quarter.
The company confirmed a December forecast that 2005 results won’t exceed break-even, excluding potential legal payments or restructuring costs.
Fetter took over in May 2003 when former CEO Jeffrey C. Barbakow resigned. Tenet says it is seeking to settle investigations by the Justice Department, the Securities and Exchange Commission and the Department of Health and Human Services. U.S. attorneys in at least five cities also are conducting probes.
The company said it spent $426 million during the fourth quarter to settle litigation with former patients.
In December, the company said it would set aside $395 million to settle patient lawsuits claiming doctors at a California hospital performed unnecessary heart surgeries. The same month, Tenet agreed to pay $31 million to resolve 106 individual lawsuits against a hospital in Palm Beach, Fla., over complications from heart surgery.
Meanwhile, prosecutors in San Diego will retry a case involving Tenet’s Alvarado Hospital Medical Center after a judge declared a mistrial last month. The medical center was charged with paying illegal kickbacks to doctors in exchange for Medicare patient referrals.
For the full year, Tenet’s loss widened to $2.64 billion, or $5.66 a share, from $1.48 billion, or $3.17, in 2003.
