Tenet beating expectations; announces leadership changes
In addition to exceeding its financial forecast, a national search will seek to replace its longtime CEO, who is retiring this year.
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Tenet Healthcare, a 61-hospital health system based in Dallas, said it expects to exceed the midpoint of its latest FY22 Adjusted EBITDA outlook range included in its third quarter 2022 earnings release. The system also announced key leadership updates meant to support long-term business performance.
Although Tenet's financial statement close process is not yet fully completed, the company anticipates its adjusted EBITDA, excluding any fourth quarter stimulus grant income related to the pandemic, will be slightly above the midpoint of its Adjusted EBITDA guidance of $3.425 billion for the year ended December 31, 2022.
"Our business units continued to demonstrate effective management capabilities and delivered strong results in the fourth quarter," said Tenet CEO Dr. Saum Sutaria by statement. "All three of our business units are expected to produce Adjusted EBITDA excluding grant income that was at or slightly above the midpoint of our guidance. We look forward to providing more details in a few weeks along with sharing plans to support a successful 2023."
WHAT'S THE IMPACT
Tenet also announced a number of leadership updates.
They include the retirement of executive vice president and chief financial officer Daniel Cancelmi at the end of this year. A national search is ongoing to identify a high-performing successor, said Tenet. The successor will be directly mentored and on-boarded by Cancelmi as part of the transition process.
"Dan was instrumental in the recent transformation of Tenet's performance and improvement of the balance sheet," said Sutaria. "Dan is an inspirational leader with a long legacy at Tenet, starting as a hospital CFO to becoming our corporate CFO."
Tenet also announced the retirement of Brett Brodnax, president and CEO of United Surgical Partners International, which is owned by Tenet. Andy Johnston has returned to USPI as its chief administrative officer as the company has nearly doubled in scale within recent years. Johnston is anticipated to be promoted once Brodnax steps down.
"Brett has not just positively shaped USPI, but the overall ambulatory surgery industry," said Sutaria. "He will always be a distinguished alumnus of the company and a supporter of USPI's team, community of doctors, and health system partners."
The announcement also included the retirement of Roger Davis, president and CEO of Tenet-owned Conifer Health Solutions, at the end of the first quarter. A national search is in progress.
THE LARGER TREND
Tenet Healthcare Corporation, operates 61 hospitals, more than 460 other healthcare facilities and Conifer Health Solutions, which provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients.
In late 2021, Tenet and subsidiary USPI announced they were expanding their ownership of ambulatory surgery centers, buying 92 from SurgCenter Development.
The $1.2 billion deal expanded USPI's reach into high-growth regions in Arizona, Florida and Texas and included a mix of service lines, including musculoskeletal care for total joint and spine procedures.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
