Tenet Loss Narrows in 4th Quarter
Tenet Healthcare Corp. on Thursday reported cutting its loss in the fourth quarter, but the hospital company rattled investors by missing expectations and reporting a drop in patient admissions.
Tenet, which owns 69 hospitals, including 18 in California, said its fourth-quarter results were hurt by unpaid patient bills and a 2.5% decline in patient admissions caused by doctor defections to rival hospitals.
Tenet said that for the three months that ended Dec. 31, it narrowed its net loss to $286 million from $2.19 billion a year earlier. It was the 12th consecutive quarterly loss.
The loss from continuing operations was $251 million, or 54 cents a share, compared with $1.7 billion, or $3.66, for the same period a year earlier.
Excluding one-time items, the loss was 12 cents a share, missing the consensus estimate of 6 cents by analysts surveyed by Thomson Financial. That helped send shares down 5% to $7.34.
Despite the improvement, “I’m still very much wait-and-see because the fundamentals are still awful,” said CRT Capital analyst Sheryl Skolnick.
Chief Executive Trevor Fetter said the company, in a bid to boost admissions, was taking steps to win back physicians who were referring patients to competitors.
He also said the Dallas-based company would benefit from improved deals it negotiated with managed-care companies during the quarter.
The company’s belt-tightening efforts succeeded in holding cost increases to 5%, less than the rate of medical inflation, Fetter noted.
Still, he said, the effort to restore the company to profitability would be challenged until it was able to resolve long-standing government probes into its business practices.
“We believe our ability to successfully reverse this volume erosion is limited by the continuing overhang of government litigation and investigations,” Fetter said.
Also hanging over Tenet is a criminal trial over whether administrators bribed physicians in an effort to induce them to steer patients to its Alvarado Hospital in San Diego. The jury in that case has been deliberating since late December.