Tenet Healthcare, the Dallas-based parent company of United Surgical Partners International, is rapidly pivoting its strategy by selling off hospitals and concentrating on Ambulatory Surgical Centers (ASCs). This move marks a significant shift in the company’s business model.
According to CEO Saum Sutaria, MD, during Tenet’s fourth-quarter earnings call, the company is entering a new era where a larger portion of its performance will come from its highly efficient ambulatory surgical business. This transition is expected to reduce Tenet’s debt and provide financial flexibility to enhance shareholder value over the long term.
The sell-off of hospitals has been met with positive market reactions, driving momentum in Tenet’s stock. Despite a 1.6% decline in full-year sales to $19.2 billion in 2023, these new deals are poised to generate billions in sales.
So far in 2024, Tenet has sold several major hospitals, including:
- Brookwood Baptist Health: Sold to Orlando Health for approximately $910 million, including five hospitals in Alabama.
- Pacific Coast Network: Sold to UCI Health for $975 million, comprising four medical centers in California.
- Sierra Vista Regional Medical Center and Twin Cities Community Hospital: Sold to Adventist Health in California.
- Three South Carolina Hospitals: Sold to Novant Health for $2.4 billion.
Tenet’s shift towards ASCs highlights a growing trend in healthcare as more companies prioritize outpatient care and efficiency.