Dallas-based Tenet Healthcare saw many of its key financial metrics improve in the third quarter of 2021, according to its financial report released Oct. 20.
In the third quarter ending Sept. 30, the for-profit hospital system saw its net operating revenue hit $4.9 billion, up 7.4 percent from the $4.6 billion recorded in the same period last year.
Tenet saw revenue growth in its hospital and ambulatory divisions. In its hospital segment, revenue for the third quarter grew 6 percent year over year to $4 billion. Tenet attributed the growth to higher volumes and higher patient acuity. It said hospital segment growth was partially offset, given the Aug. 1 sale of five of its Florida hospitals. Tenet's ambulatory segment recorded $666 million in revenue in the third quarter, an increase of 17.9 percent compared to the same period last year.
Tenet did see revenue declines in its revenue cycle division, Conifer. Tenet said the revenue decline was primarily due to previously disclosed contract changes.
The for-profit health system saw its operating expenses increase in the third quarter year over year, driven by a 5.5 percent increase in supply costs and a 3.1 percent increase in salary, wages and benefit costs.
Tenet ended the third quarter with an operating income of $1 billion. In comparison, in the same quarter last year, Tenet had an operating income of $271 million.
After factoring in nonoperating items, including interest expenses, debt repayment and income tax expense, Tenet ended the period with a net income of continuing operations available to common shareholders of $448 million. Last year, Tenet recorded a net loss of $197 million.
"We are very pleased with our performance during the quarter and the drive to deliver consistent and sustainable growth across each of our operating segments," said Ron Rittenmeyer, executive chair of Tenet. "With the ongoing implementation of our transformation, we are positioning Tenet for continued high margin growth and strong cash flow generation."
During the third quarter, Tenet completed the sale of five of its hospitals for $1.1 billion. It used the proceeds from the deal to repay outstanding debt, which reduced future annual cash interest payments by about $50 million.