Tenet just put out there numbers and I know they are implementing Cerner Medical records in many of their hospitals and perhaps that has an impact.  We know this is a big expense these days and the systems and roll outs are complex.  This of course is only part of the costs that roll in. 

Tenet Healthcare Set to Roll Out Cerner Millennium Solutions at 47 Hospitals Currently Using Paper Records

By contrast if you look at what Dignity has done to increase revenue by creating a new company with United Healthcare, hmmm…those business intelligence algorithms.  What Dignity is doing by contrast is also complex to make and save money, even though they are a not for profit.  A lot of software licenses it appears to be sold by the IT representations here (United subsidiary for a some of it) and of course it’s all about money with forming a new company with Optum, a subsidiary of United Healthcare called Optum 360.  Some of the current hospital employees will not become a part of the new company as well as some of the Optum folks.  With so many subsidiarity creations it clouds where real revenue stream originate at times. 

United Healthcare Adding Yet One More Subsidiary to the Very Large Number of Subs They Already Own/Operate-Optum and Dignity Healthcare (A System Wide Cerner EHR Client) Form New Venture Called Optum 360–Subsidiary Watch

Now also in contrast we have UPMC who’s making a ton of of “excess revenue”, what you call “profit” for the non profits or not for profits.  The city of Pittsburgh wants to take their non profit status away as they want some of the money and need it.  Now when you look at the large network of hospitals run by Tenet versus this much smaller non profit, is this making sense?

Legal Battle With City of Pittsburgh and UPMC Medical Center Heating Up Again–Non Profit Hospital Pays No Property Taxes & Gets $200 Million Dollar Tax Break With $1 Billion in Excess Profits

We can’t expect hospital to not make some money of course but the contrasts here with the 3 are phenomenal.  It’s not the fact that one is doing something much better than the other with operating either, but rather some lucky breaks at times. 

You can toss in the Mayo Clinic and most of their excess revenue dollars were pretty much possible due to over $361 million in donations as their revenue was $395 million.  As a side note you can read here as now you have the CEO of Mayo promoting United Labs (another subsidiary of Untied Healthcare) doing a commercial of sorts asking others to contribute their data, and we know that’s all about data for sale as United is one of the biggest data sellers out there in healthcare and has been for years.  So take in the Dignity United (Optum) deal and this one and one has to ask what are the insurers doing with subsidiaries. 

Tenet Hospitals also has a subsidiary called Conifer Health Systems which does revenue cycling and Catholic Health Initiatives is a minority owner there so I am guessing they benefit a little of Tenet’s subsidiary is making money.  Is your head spinning yet?  Tenet also had a joint venture with this company MED3000 which is now owned by McKesson.

Tenet Announces Joint Venture with MED3OOO – Focus on Electronic Medical Records and Business Intelligence

So you basically have the Tenet subsidiary in the revenue cycling business that competes with Optum with their marketing and sales, so you see the strange things like the Dignity/Optum link and new subsidiary noted above.   Again, I keep telling all that a lot of the activity today is taking place in the subs, keep your eyes open here.  In 2010 Conifer bought this company’s technologies, MediHealth. 

Tenet Subsidiary Conifer Health Solutions Buys MediHealth Outsourcing-Even Hospitals Are Becoming Software Factories Today Purchasing More Algorithmic Formulas–Subsidiary Watch

It is not all about running hospitals anymore when you really dig in with coming back to selling and analyzing data for profit, sold both to for profits and non profits so you have an insurance subsidiary in competition with a revenue cycle company owned by a hospital system.  Can ownership in healthcare gimageet any more complicated?  It’s the complex math models used by insurers…I keep mentioning these and how math models make profit and may not be ethical when you drill down to the effect some have on the end consumer. 

Obamacare: The Continuous Rise and Fall Of The Machines With Complex Insurance Math Models Resulting In Spasmodic, Executing “Killer Algorithms”–And Gov Can’t Model…

Tenet also bought another hospital chain, Vanguard in the summer of this year for $1.8 billion in cash.  Here’s a little more back history on Vanguard.   Seriously as healthcare companies continue to merge and add more software I don’t know have any idea how the average bliss investor can see all of this.  As reported with most other hospitals, patient count has been down.  BD 

Tenet Healthcare Corp.'s THC -2.63% third-quarter profit slid 32% as the hospital operator recorded higher expenses, masking an increase in revenue.

Shares slid 2.6% to $47 in after-hours trading, as results for the latest quarter and outlook for the current quarter missed expectations.

Looking ahead, the company sees fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization between $400 million to $450 million. Analysts surveyed by Thomson Reuters had seen $482 million.

The broader hospital sector has been consolidating as the industry is poised for major changes related to the U.S. health-care overhaul. Tenet last month completed its acquisition of Vanguard Health Systems Inc., a move that aims to broaden its geographic reach.

Tenet reported a profit of $28 million, down from $41 million a year earlier. On a per-share basis, which included preferred dividend impacts in 2012, earnings fell to 27 cents from 37 cents last year.



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