Dallas-based Tenet Executive Chairman and CEO Ron Rittenmeyer gave a presentation at the 37th Annual J.P. Morgan Healthcare Conference in San Francisco Jan. 8.
In the presentation, he discussed the company's growth trajectory and examined the place of its ASC line.
The health system currently includes 68 hospitals, 112 urgent care centers, 79 imaging centers and 23 surgical hospitals. United Surgical Partners International, Tenet's ASC business, has 267 centers and the largest share of ASCs in the U.S. market. Here are five things to know:
1. Tenet is focused on growth. With the total company's adjusted EBITDA hitting 9 percent for 2018, USPI reported 11 percent adjusted EBITDA less facility-level NCI growth. USPI represents 31 percent of the company's enterprise portfolio.
2. USPI has ownership interest in 5 percent of Medicare-certified ASCs in the fragmented $68 billion U.S. market. Around 60 percent of all ASCs in the U.S. are currently independent centers, leaving a huge opportunity for acquisitions and denovos in the future.
In 2019, USPI expects to spend around $150 million to $175 million investing in ambulatory acquisitions.
3. Culture change was a big part of 2019, with 20 percent of Tenet's corporate leaders and 35 percent of its hospital leaders transitioning. Half of the governing board has joined the company since October 2017, and the new organizational strategy aims to increase accountability and decrease the time lapsed between making a decision and execution.
4. Last year, Tenet completed its buy-up of 95 percent of USPI, which continued to report strong overall organic revenue and earnings growth. The company sees physician satisfaction and recruitment, as well as the coordination and integration of the hospital and ambulatory platforms as opportunities for improvement next year.
5. In 2019, Mr. Rittenmeyer expects ambulatory growth to experience 8 percent to 10 percent adjusted EBITDA less-NCI growth, with a 2 percent to 3 percent growth in both volume and pricing.