By Dave Muoio -February 8, 2024 –
Tenet Healthcare’s push to flesh out acute care hospitals with higher acuity services and in-market support has yielded a secondary benefit for the company—nonprofit health systems willing to pay top dollar for a piece of the pie.
The company recently shared news that its $2.4 billion sale of three South Carolina hospitals to Novant Health had closed and that it had cut a new deal with UCI Health to sell four others for $975 million.
Investors tuning into Tenet’s “exceptional” fiscal 2023 earnings call Thursday admitted they were surprised by the “unusually high” price tags the company was able to secure and wondered whether Tenet was shopping around other hospital assets as a result.
CEO Saum Sutaria, M.D., replied that the valuations were a recognition of Tenet’s work over the past half-decade to focus its hospitals on high-acuity procedures that generate strong profits. Being able to do so while demonstrating “solid quality, safety [and] service” offers health systems an “attractive” base to build an expansion upon, he said.
“It’s a lot of work to get them into that position … so they’re high-quality assets,” he said.