Dallas-based Tenet Healthcare said at the beginning of the year it would invest approximately $250 million annually into its ASC business, United Surgical Partners International.
That investment appears to be paying off with EBITDA margins for the division close to 40% in the third quarter and expected to rise to about 43% in the last three months of the year.
"Our financial results in the third quarter were strong with USPI and our hospitals' adjusted EBITDA well above expectations," CFO Dan Cancelmi said on an investor call Oct. 30 discussing third-quarter results.
Net operating revenues at the USPI business were up 16.7% in the quarter year over year to $941 million, while adjusted EBITDA was up approximately 16% to $370 million. In the nine months ending Sept. 30, such revenues totaled $2.8 billion, compared with $2.3 billion in the same period in 2022.
While there was some moderation compared with the opening months of the year, the overall trajectory of the business remains highly positive with expectations for a very strong fourth quarter, said CEO Saum Sutaria, MD.
"It is still incredibly robust growth," he said on the call. "I'm very pleased with that continuing strength."
USPI will continue to be a major focus for Tenet, Mr. Cancelmi said.
"We are pleased with the continued strength of USPI's performance as we grow this business both organically and inorganically in attractive markets across the country."
Tenet reported net income of $101 million in the third quarter on revenues of $5.1 billion.