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Dallas-based Tenet Healthcare is expanding its ambulatory care as the company begins to recover from the Covid-19 pandemic, executives reported during an earnings call this week.
The for-profit hospital operator aims to invest $250 million annually into growing United Surgical Partners International (USPI), its ambulatory business segment, Tenet EVP and CFO Daniel Cancelmi said. This quarter, the company added three new ambulatory surgical centers, Tenet CEO Saum Sutaria said. Tenet’s USPI business operates or has ownership interests in more than 465 ambulatory surgery centers and surgical hospitals across the US.
This quarter, USPI experienced a 7.9% increase in same-facility surgical cases compared to 2022, reporting strong growth in gastrointestinal, urology, ENT, and orthopedic procedures, Cancelmi said. Same-hospital adjusted admissions grew 6.7% compared to Q1 2022. Tenet’s fiscal year runs from Jan. 1 to Dec. 31.
“Across our businesses, a post-pandemic environment is taking shape. Covid admissions are down, a wider range of acuity is returning to the hospitals, deferred [gastrointestinal] procedures are returning, and our workforce is starting to stabilize,” Sutaria said.
Still, Tenet is one year behind on its initial ambulatory expansion plan announced in 2021, Sutaria said. As part of the plan, Tenet and USPI acquired SurgCenter Development and its 92 ambulatory surgical centers for ~$1.2 billion, according to the press release. USPI also has the option to partner with SurgCenter to develop at least 50 centers over a five-year period.
“The original plan is still the original plan,” Sutaria said.
Tenet execs are also focused on reducing rates for contract labor, whereby hospitals employ nurses for temporary assignments, usually through a staffing agency, but the rates may not reach pre-pandemic levels this year, Sutaria said. Fellow for-profit HCA Healthcare saw a 21% decrease in contract labor rates this quarter compared to Q1 2022, the company reported in its earnings call.
“As the contract labor rates come down…it opens up the ability to improve access for services,” Sutaria said. “We know the demand has been there. It’s always been a bit about whether that demand, that scale was serviceable with very high contract labor costs.”