(Adds CEO comments, admissions details)
By Susan Kelly
Aug 4 Hospital operator Tenet Healthcare Corp on Monday posted a narrower quarterly net loss and raised its full-year outlook, saying patient admissions grew at a near-record pace.
Patients with commercial insurance, inpatient admissions, outpatient visits, surgeries and emergency department visits all grew at near-record rates, Tenet said.
The company, the third-largest U.S. for-profit hospital chain, said it gained market share because of strategic investments and from positioning itself to benefit from the healthcare reform law.
"We think we are gaining market share, because nowhere in our industry are we seeing such strong admissions growth," Tenet Chief Executive Trevor Fetter said in an interview.
About one-third of Tenet's patient volume growth can be linked to the Affordable Care Act, Fetter said.
Millions of Americans have signed up for private health insurance under President Barack Obama's healthcare law, and growing numbers of patients also are enrolling in the government's Medicaid program for the poor.
Commercially insured patient volumes were the strongest in a decade, Fetter said. "What's driving that is the addition now of people who have obtained commercial insurance through the health exchanges," he said.
Hospital operators including HCA Holdings Inc, LifePoint Hospitals Inc and Universal Health Services Inc all raised their earnings outlooks for the year.
Tenet also is benefiting from its acquisition last year of smaller hospital chain Vanguard Health Systems, which is exceeding expectations, Fetter said.
Adjusted admissions, which include inpatient and outpatient visits, rose 4 percent in the second quarter on a pro forma basis, which is calculated as if Tenet had owned Vanguard a year ago.
Tenet reported a net loss of $26 million, or 27 cents a share, in the second quarter, compared with a net loss of $50 million, or 49 cents a share, a year ago.
Adjusted second-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $460 million from $336 million a year ago.
The increase in the number of patients with insurance is helping hospitals to reduce bad debts acquired from treating patients without the means to pay.
Tenet said its bad debt expense fell 18.2 percent from a year ago to $320 million on a pro forma basis.
Tenet raised its outlook for full-year EBITDA, excluding one-time items, to a range of $1.85 billion to $1.95 billion, from its previous forecast of $1.8 billion to $1.9 billion. (Reporting by Susan Kelly in Chicago; Editing by Jonathan Oatis and Steve Orlofsky)