Tenet Healthcare Corp gave up substantial gains in after hours trading today, after releasing an earnings report showing a fourth quarter loss of $97 million. Tenet had reported a profit during the same period last year. Earnings were adjusted for one-time gains and costs and those results beat Wall Street expectations.
Part of the difficulty that publicly-traded hospital operators have faced relates to collections lag. More patients are being enrolled in high deductible health plans through employers and ACA related exchanges. As a result, more healthcare is being paid for by patient dollars before the deductible is reached and the lag in those collections have affected health system revenues. Additional cashflow lag relates to the affects of State programs such as California’s Provider Fee program.
Overall, health systems are adjusting to a myriad of health coverage and reimbursement changes in addition to embracing greater financial risk.0