The Dallas-based for-profit hospital operator reported a quarterly net loss of $197 million.
Tenet Healthcare's performance in Q3 was more challenging than during Q2 due to a rise in COVID-19 cases, according to CEO Ronald Rittenmeyer in the company's latest earnings report released Tuesday afternoon.
"The third quarter of 2020 was in many ways more challenging than the second, with COVID positive inpatient census surging by approximately 64 percent in our markets in late July and August," Rittenmeyer said. "Our operators executed exceptionally throughout our entire system, ensuring they cared for the surge in COVID patients and continued the safe return of non-COVID patient volumes closer to normalized levels."
Tenet's hospital segment admissions during Q3 were 89% of pre-COVID levels while emergency room visits were 77% of pre-COVID levels.
The Dallas-based for-profit hospital operator reported a net loss of $197 million, which is an improvement on its $227 million net loss reported in Q3 2019, along with a consolidated adjusted EBITDA of $621 million.
The EBITDA metric excluded a $70 million reversal of COVID stimulus gran income from Q2 "based on revised guidance all providers received from the federal government" last month.
Tenet also saw its hospital segment net patient service revenue per adjusted admission rise 17% on a same-hospital basis year-over-year while its net cash from operations ballooned to $593 million, marking 42% growth compared to Q3 2019.
"Our operating discipline was further demonstrated as we exceeded expectations for both Adjusted EBITDA of $621 million, before adjusting for the changes in guidance issued by HHS in September, as well as cash flows, which increased by 26 percent on a year-over-year comparison before the additions of grants and advances," Rittenmeyer said in a statement. "With the issuance of revised guidance on grant income from HHS late in the quarter, we, along with other providers, are facing new challenges in terms of federal support. We believe our hospitals’ focus on additions of strategic service lines, coupled with continued positive growth and efficiency at USPI and Conifer, has positioned us well this quarter and provides the basis for continued solid performance going forward."
Tenet reported hospital segment net operating revenues of $3.803 billion, down slightly from $3.85 billion this time last year.
Excluding the impact of a $13 million reversal of grant income, Tenet's ambulatory segment adjusted EBITDA growth rose 10% year-over-year.
The company's adjusted diluted earnings per share from continuing operations held flat from Q3 2019 at $0.64.
By the end of business on Monday, Tenet had received around $1.5 billion in Medicare advance payments from the Centers for Medicare & Medicaid Services as well as nearly $900 million in grant aid from federal stimulus relief funds.
Tenet did experience one significant leadership change during Q3 in its revenue cycle operations.
In mid-August, Joseph Eazor, CEO of Conifer Health Solutions, stepped down from his position after only six months.
For complete financial information, review Tenet's filing with the Securities and Exchange Commission.
Correction: An earlier version of this story stated that hospital segment volumes and emergency room visits were down year-over-year. The metrics in Tenet's earnings report refer to the volume percentage compared to pre-COVID levels. This story has been updated to reflect that.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
Photo credit: KIEV, UKRAINE - Dec 18,, 2018: Tenet Healthcare company logo seen displayed on smart phone / Editorial credit: IgorGolovniov / Shutterstock.com