“2024 was an outstanding year for Tenet characterized by robust revenue growth, efficient operations, high levels of patient satisfaction and clinical quality, and a portfolio transformation that drove substantial balance sheet deleveraging,” Saum Sutaria, MD, chair and CEO of Tenet said during the Feb. 12 earnings call. “Our focused strategy, disciplined operating management, and the strong demand for acute care and ambulatory surgical services provide us with momentum as we begin the year and confidence to achieve our full year 2025 expectations.”
With an eye on continued expansion, Tenet plans to invest $250 million annually in ambulatory mergers and acquisitions, reinforcing its position as the largest ASC operator in the U.S.
Tenet has reshaped its business model in recent years to focus on USPI. In 2024, Tenet sold 14 hospitals across California, South Carolina, and Alabama for more than $4.8 billion. Operating cash flows for the year included $855 million in income tax payments related to gains from these sales.
USPI now holds an 8.1% share of the ASC market, with interests in 518 ASCs (375 consolidated) and 25 surgical hospitals (seven consolidated) across 37 states.
In 2024, the company added at least 57 new ASCs, with another 10 to 12 standalone centers planned for 2025. De novo facilities are a growing focus alongside acquisitions.
“Consistent with our move into more high-acuity ambulatory surgical work, de novos also represent a significant value shift in markets,” Tenet Executive Vice President and CFO Sun Park said in the call. “By building from the ground up, we’re moving procedures into a lower-cost setting, which benefits consumers and payers.”
De novo ASCs, he added, come with lower build costs and quicker turnaround times once partnerships are syndicated.
“There’s work upfront in syndicating the partnership that takes time, but that’s not a capital-intensive activity,” Mr. Park added. “…We also focus on measuring and following our overall return on invested capital within the organization. And obviously, the more we shift into this ambulatory segment, the more that gets better.”
Despite investor concerns over potential Medicaid cuts, Tenet remains confident because of USPI’s strong ASC positioning. Since the company’s centers utilize freestanding rates and maintain a low Medicaid mix, they are less vulnerable to reimbursement fluctuations.
Tenet’s revenue reached $20.7 billion in 2024, up from $20.5 billion in 2023. The company projects operating revenues between $20.6 billion and $21 billion for 2025. USPI reported $4.5 billion in net operating revenue for 2024, a 15.4% increase from $3.9 billion in 2023. For 2025, USPI anticipates revenue between $4.9 billion and $5 billion.
The company’s ASC case mix involved more total joint cases, and it is continuing its strategy of reducing high-volume, low reimbursement procedures.
