Becker's Hospital Review

16 CFO / FINANCE Tenet sees revenue slide, posts $27M loss in Q1 By Ayla Ellison T enet Healthcare saw its revenue de- cline year over year in the first quar- ter of 2019, and the Dallas-based company ended the period with a net loss. Tenet ended the first quarter of 2019 with revenues of $4.5 billion, down from $4.7 billion in the same period a year earlier. e company said the decline was largely due to hospital divestitures. Net patient service revenue climbed 1.9 percent on a same-hospital basis from the first quarter of 2018 to the same period of 2019. When adjusted for outpatient activity, same-hospital admissions increased 0.6 per- cent year over year in the first quarter of 2019. Tenet said a decline in flu cases dampened admissions in the first quarter of this year. Excluding the divestiture of London-based Aspen Healthcare, adjusted earnings be- fore interest, taxes, depreciation and amor- tization in Tenet's ambulatory segment was $177 million in the first quarter of 2019, up 12 percent year over year. Aer factoring in operating expenses and one-time costs, including a $47 million pre-tax loss from the early extinguishment of debt, Tenet reported a net loss attribut- able to shareholders of $27 million in the first quarter of 2019. In the first quarter of 2018, Tenet posted net income of $98 million. A $13 million gain from the sale of Tenet's minority interests in four Texas hospitals and a $98 million gain from the sale of MacNeal Hospital in Berwyn, Ill., pushed the company's net income higher in the first quarter of last year. "We had a solid start to the year, building on the many positive changes we made across the enterprise in 2018," Ronald A. Rittenmeyer, executive chairman and CEO of Tenet, said in an earnings release. "ese changes include the continued ad- dition of new leadership as well as an infu- sion of fresh thinking, which are helping to transform our approach to operations and overall enterprise culture." Tenet reconfirmed its 2019 outlook for reve- nue, adjusted EBITDA and adjusted EPS. n Walmart increasingly comparing physicians over cost: 5 things to know By Morgan Haefner R etail giant Walmart is upping its efforts to hand-pick which physicians are most likely to reduce healthcare spending on employees, according to The Wall Street Journal. Five things to know: 1. Large companies like Walmart are examining data from public records and their own health plans, and tapping consultants, to compare individual physician costs. 2. The top physicians Walmart chooses sport the best results at the most com- petitive costs. The company excludes or shies away from physicians with poor performance metrics. 3. More than 5,000 Walmart health plan members have visited hand-selected physicians. The company's health plan covers travel and medical costs to pair employees with these top physicians for services like surgery and cancer care. 4. Lisa Woods, senior director of U.S. Health Care at Walmart, told WSJ that the results from choosing top physicians have made the strategy vital. While health plans have narrowed provider networks, the selection has largely focused on hospitals and physician groups rather than specific physicians. 5. The efforts are paying off for retailers: Walmart, Lowe's and McKesson Corp. saved about $19.4 million in 2017 when their employees saw specific spine and joint sur- geons picked by the employers, according to the Harvard Business Review. n Many consumers would not pay more for care at an academic medical center, survey finds By Kelly Gooch C ost-conscious patients are less willing to go to higher-priced academic medical centers for low-acuity care, according to a PricewaterhouseCoo- pers Health Research Institute report. A May 2018 survey of 1,250 U.S. consumers found that 58 percent of respon- dents were not willing to pay more for primary care received at an academic medical center, and only half were willing to pay more to receive specialty med- ical care at an academic medical center. Forty-nine percent said they would pay more for specialty surgical care at an ac- ademic medical center. "Increasingly, there is an assumption that the vast majority of providers provide a basic acceptable quality of healthcare; thus, as with commodities, price becomes the primary differentiator," Lilly Marks, vice president for health affairs at the Uni- versity of Colorado in Boulder and chair of the Association of American Medical Colleges, said in the PwC report. The PwC report noted that academic medical centers are increasingly partner ing or acquiring lower-cost community hospitals to overcome these challenges as volume of profitable, low-acuity services declines. "The challenge for AMCs is updating their business models to be consumer cen- tric while at the same time honoring their tripartite mission of medical education, research and patient care," Gurpreet Singh, U.S. health services leader at PwC, told Becker's. n

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