On an earnings call Tuesday, Tenet Healthcare Executive Chairman and CEO Ronald Rittenmeyer said the company is “on track to achieve the $1 billion in proceeds outlined last year” through its divestitures, according to a Seeking Alpha transcript of the call.
The Dallas, Texas-based organization has sold its Philadelphia hospitals, and it signed an agreement to sell St. Louis-based Des Peres Hospital. Next month, Tenet expects to wrap up the sale of MacNeal Hospital in the Chicagoland area and restructure its joint venture with Baylor.
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“We will continue to evaluate individual hospitals and markets based on total cost of ownership and make necessary adjustments dictated by our analysis,” Rittenmeyer said.
During the call, he also touched on Tenet’s progress on a potential sale of Conifer, its healthcare business services subsidiary. Tenet officially announced the possibility of a sale of Conifer last December.
The company is “very pleased with the level of interest that has been generated” in Conifer, Rittenmeyer said. He didn’t give any clues as to the timeline of when a sale would go through.
In the fourth quarter of 2017, Conifer’s revenue was at $394 million, compared to $402 million in Q4 of 2016. The business brought in $79 million of adjusted EBITDA in Q4, up from $72 million in Q4 of 2016. Still, Rittenmeyer said “Conifer’s results were also ahead of our expectations.”
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In addition to divesting, Tenet is taking steps to generate $125 million in cost savings this year and “exit 2018 with a run rate of $250 million in annualized savings,” Rittenmeyer said during the call.
In an effort to save money, last October, the company announced plans to cut 1,300 jobs. Then in January at the J.P. Morgan Healthcare Conference, Rittenmeyer said Tenet will eliminate about 700 more jobs, for a grand total of 2,000 job cuts, according to the Dallas Morning News.
Overall, The Dallas organization reported a net loss of $230 million in Q4 of 2017. This compares to a $79 million loss in the same period of 2016.
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