Tenet's strategic shift to ASCs: 5 details

Tenet is moving away from high-cost, lower margin hospitals and deepening its portfolio of lower cost, higher margin ASCs.

Seeking Alpha published a report outlining Tenet's strategic shift to ASCs through United Surgical Partners International, its ASC division. Five things to know:

1. Tenet's adjusted EBITDA margin for ASCs has grown from 37.3 percent in 2015 to 41.5 percent in 2019. Over the same time period, the company's adjusted EBITDA margin for hospitals dropped from 9.8 percent to 9.2 percent.

2. The number of hospitals in Tenet's portfolio shrunk from 86 in 2015 to 65 in 2019. Over the same four-year period, the number of ASCs grew 24 percent from 192 to 238 centers.

3. Tenet added to its ASC portfolio last year and purchased 45 ASCs from SurgCenter Development for $1.1 billion. The company will own controlling interest in the centers when the transaction is complete.

4. Tenet sold 87 urgent care facilities to FastMed last year for $80 million. 

5. Revenue for Tenet's ASCs grew 125 percent from $959 million in 2015 to $2.1 billion in 2019. Hospital revenue dropped from $16.9 million to $15.5 million over the same time period.

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