Dallas-based Tenet Healthcare said Monday it ended the first quarter with a net loss. However, the company said it has entered into several agreements to improve its financial picture in the long term.
Tenet recorded revenues of $4.8 billion in the first quarter of 2017, a 4.6 percent year-over-year decrease. The company's ambulatory care segment and revenue cycle management subsidiary had strong performance in the first quarter, but revenue from its hospital operations was down. Tenet said the decrease in revenue was attributable, in part, to the sale of its hospitals in Atlanta in April 2016 and not being able to record revenue under the California Provider Fee Program, since extension of the program hasn't been approved by CMS.
Tenet ended the first quarter with a net loss of $53 million, which was an improvement from the $59 million net loss it recorded in the same period of the year prior. The company expects its financial performance to improve further due to several strategic agreements it recently entered.
On Monday, Tenet announced it signed a definitive agreement to sell its three hospitals in Houston to Nashville, Tenn.-based HCA Holdings for about $725 million. The transaction, which is subject to regulatory approval, is expected to close in the third quarter of this year.
Tenet is also accelerating the purchase of ambulatory surgery center chain United Surgical Partners International. Tenet said its ownership interest in USPI would increase to 80 percent by July 3.
In addition to the hospital and ASC transactions, Tenet also announced it reached a new, multi-year agreement with Louisville, Ky.-based insurer Humana that calls for all of Tenet's hospitals, hospital-affiliated outpatient centers and employed physicians to be phased back into the insurer's network between June 1, 2017, and Oct. 1, 2017.
Tenet Chairman and CEO Trevor Fetter said the transactions and the new agreement with Humana "are part of a strategic effort to reduce complexity across the enterprise and enhance returns for our shareholders." In January, Mr. Fetter said Tenet's long-term strategy is to increase the percentage of markets where the company has the leading or second-place market share.
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