Tenet posts lower net profit, absorbs Vanguard


Nov 4 (Reuters) - Tenet Healthcare Corp said itsthird-quarter net income slid from a year earlier due to costsrelated to its acquisition of smaller hospital chain VanguardHealth Systems Inc.

Tenet completed the acquisition of Vanguard for about $1.8billion on Oct. 1 to expand into new markets and position itselfto benefit from an increase in patients who have healthinsurance under President Barack Obama's healthcare reform.Tenet on Monday said the integration of Vanguard was proceedingsmoothly.

Income excluding special items rose in the third quarter asthe hospital operator reduced expenses and improved revenuegrowth.

Dallas-based Tenet said income from continuing operations,excluding acquisition-related, legal, restructuring and othercosts, rose to $46 million, or 45 cents a share, from $35million, or 33 centsa share, the year before.

Earnings before interest, tax, depreciation and amortizationand excluding special items increased 7.1 percent to $288million.

Net income fell to $28 million, or 27 cents a share, from$40 million, or 37 cents, a year ago. Net operating revenue inthe quarter rose 8.4 percent to $2.41 billion.

Tenet said its inpatient admissions fell 2.6 percent in thethird quarter, offsetting a 3.5 percent rise in outpatientvisits. The combined figure, called adjusted admissions,declined 0.5 percent.

Hospitals are struggling with declining admissions as manyAmericans continue to stay away from the doctor due to lack ofinsurance or high deductibles on their plans. But anticipationof more paying customers under health reform has buoyed theshares of publicly traded hospital companies this year.

Tenet's uncollected bills increased to $210 million in thelatest quarter, up $4 million from a year earlier.

The company expects admissions to grow and uncollected billsdecline when more Americans become eligible for insurancestarting in 2014 through exchanges set up under the healthcarereform law.

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