Dallas-based Tenet Healthcare Corp. posted a net loss of $24 million in the fourth quarter of fiscal year 2013 — compared with a $49 million profit last year — due mostly to acquisition-related costs and higher operating expenses.
In October, Tenet bought Nashville, Tenn.-based Vanguard Health Systems for $1.8 billion in cash and assumed $2.5 billion of Vanguard's debt. The fourth-quarter loss included $73 million in increased pretax interest expenses, which stem from the added debt and acquisition costs.
Despite the net loss, Tenet's net revenue increased heavily in the fourth quarter by adding on Vanguard's hospitals. Revenue soared from $2.33 billion in 2012 to $3.89 billion this past year. Same-hospital adjusted admissions fell 0.5 percent in the fourth quarter, including a 2.3 percent drop in inpatient admissions, but same-hospital surgeries increased 21.5 percent year-over-year.
For all of FY 2013, Tenet's net losses totaled $134 million, compared with a $141 million profit in FY 2012. Net revenue topped $11.1 billion, but operating expenses rose at a rapid rate and chewed into the company's earnings. More than 58 percent of Tenet's net patient revenue came from managed care and private payers, while only 30.8 percent stemmed from Medicare and Medicaid.
Tenet's adjusted EBITDA rose slightly from $1.2 billion in FY 2012 to $1.34 billion last year. This year, the for-profit hospital chain expects adjusted EBITDA will be between $1.8 billion to $1.9 billion. In a news release, Tenet President and CEO Trevor Fetter said he expects a full year of utilizing Vanguard hospitals, as well as newly insured patients under the Patient Protection and Affordable Care Act, will benefit the company most this year.
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