Dallas-based hospital operator Tenet Healthcare revealed plans to scale back its insurance business after officials attributed the company's lukewarm third-quarter earnings to its health plan business, reports The Dallas Morning News.
During a conference call to discuss Tenet's third-quarter financial report, company Chairman and CEO Trevor Fetter said Tenet's health plan business accounted for much of the company's earnings shortfall this year, according to the article. Tenet ended the third quarter with a net loss of $9 million, an improvement from the $28 million net loss the company recorded in the same period of 2015.
Tenet operates health plans in Texas, Arizona, Michigan, California and Illinois, extending coverage to about 139,000 people total. During the earnings call this week, Mr. Fetter said Tenet has signed a definitive agreement to sell Harbor Health Plan in Michigan, and the company intends to sell off its health plans in Texas and Arizona next year.
"The health plans business we acquired with Vanguard [Health Systems] is not a core element of our capabilities in value-based care. It's subscale and not profitable in aggregate and it requires capital. So, we are exiting it," said Mr. Fetter during the earnings call.