Tenet Reports Drop in Revenue
Tenet Healthcare Corp. reported a first-quarter profit Tuesday on price increases and cost cuts.
Net income was $70 million, or 15 cents a share, contrasted with the restated loss of $4 million, or 1 cent a share, a year earlier, the Dallas-based company said. Revenue from continuing operations fell 3.5% to $2.41 billion as unfavorable publicity from lawsuits and government probes eroded admissions, Tenet said.
U.S. health officials said Monday that Tenet’s Alvarado Hospital Medical Center in San Diego should be barred from government-run health programs because of alleged kickbacks to doctors.
Also, San Diego U.S. Atty. Carol Lam, in a motion filed late Monday, argued against dropping criminal charges against Tenet over the alleged physician kickbacks after two trials ended in hung juries. Lam noted that a majority of jurors in both cases leaned toward convicting a Tenet unit of multiple felonies. A possible third trial in the case is the subject of a hearing May 22.
Tenet, the second-largest U.S. hospital operator, also faces a probe of its billing for high-cost patients.
“The thing that doctors are going to remember is that a Tenet hospital may be excluded from the Medicare program because of past sins,” said Sheryl Skolnick, an analyst at CRT Capital Group. “Any progress that has been made in the quarter is irrelevant.”
Tenet said income from continuing operations was $15 million, or 3 cents a share, down 25% from $20 million, or 4 cents, a year earlier.
Admissions at hospitals open a year or more, excluding Gulf Coast facilities disrupted by Hurricane Katrina, fell 3.3%, the company said, as admissions through commercial managed-care programs fell 8.2% to 46,768. Charity-case admissions rose 25% to 2,945. Patient count has fallen the most in California, Florida and Texas, Tenet said.
Tenet had been expected to report a loss of 2 cents a share for the quarter, according to the average estimate of analysts tracked by Thomson Financial.
Shares of Tenet fell 37 cents, or 4.6%, Tuesday to $7.59.
