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Tenet to Spin Off Revenue Cycle Subsidiary Conifer Health Solutions

Analysis  |  By Steven Porter  
   July 24, 2019

The long-awaited news about Conifer's future comes after Tenet reviewed multiple revised offers from parties interested in purchasing the company.

By mid-2021, Dallas-based Tenet Healthcare Corp. expects to have completed a spinoff of its revenue cycle arm Conifer Health Solutions into a separate publicly traded company.

Tenet, a for-profit operator of 65 hospitals and about 500 outpatient centers, announced the plan Wednesday about a year and a half after saying its leaders would conduct a strategic review of Conifer's best path forward.

"This decision supports our longstanding objectives to maximize the value of Conifer, build on its strong growth potential and deliver the best outcome for Conifer and for Tenet shareholders," said Tenet Executive Chairman and CEO Ronald A. Rittenmeyer in a statement.

"Pursuing a tax-free spin-off is an important step forward in Conifer's evolution," Rittenmeyer added, "and we believe the business is well-positioned to capitalize on its growth opportunities as a standalone company."

Conifer, which offers outsourced revenue cycle management and other services to healthcare providers, generated more than $1.53 billion in revenue last year, with adjusted EBITDA of $357 million, up 26% from 2017, according to the announcement.

CommonSpirit Health—the large nonprofit health system created last year by the merger of Catholic Health Initiatives (CHI) and Dignity Health—owns a minority interest in Conifer and supports the planned spinoff, according to Tenet's announcement.

Conifer's CEO Replaced

Stephen M. Mooney, MBA, who had been Conifer's CEO since its formation in 2008, "has stepped down from his position," according to Tenet's announcement, which didn't give a reason for his departure. (His bio was removed from Conifer's website, as of Wednesday morning.)

Kyle Burtnett, who had been chief operating officer since joining the company in October 2017, has been appointed Conifer's interim CEO as Tenet conducts a national search for Mooney's permanent successor, with plans to evaluate internal and external candidates alike.

Rittenmeyer thanked Mooney for his dedication and work and praised Burtnett as "a driving force behind the company's exceptional cost management and margin improvement."

"His operational rigor and tenacity has helped to sharpen all corners of the organization to be more efficient and effective," Rittenmeyer said of Burtnett in the statement. "I look forward to working with him to advance the many important initiatives underway at Conifer."

Paths Not Chosen

Tenet's leaders conducted "an exhaustive review" of Conifer's potential strategic options, according to a presentation delivered Wednesday morning to investors. They focused on two potential options: either a cash sale of the enterprise or a merger and tax-free spin-off.

In exploring a possible Conifer sale, Tenet made initial contact with 74 parties, received nine preliminary bids, and narrowed the list down to three final parties that conducted diligence and revised their offers, according to Tenet's presentation.

They settled, however, on a spin-off, saying the proposed timing sets Conifer up for success as a standalone company to refocus on its own commercial strategy and grow.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

Photo credit: Casimiro PT /


If all goes as planned, Conifer will become its own independent company rather than being acquired.

The arrangement is contingent upon the ability to execute it in a tax-free fashion.

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