Morningstar Rating

Stock Research and Analysis

by Michael Waterhouse
A decline in uninsured patients and a boom in the 65 and older population should bode well for the acute-care industry in the long run. This translates into favorable volume for Tenet, one of the largest private hospital operators in the U.S., with   Read more 

Bulls Say

The 65 and older population will be the fastest-growing segment in the U.S. during the next decade. With significant operations in Florida, the state with the highest expected concentration of individuals aged 65-plus, Tenet should realize decent admissions growth.
The majority of Tenet's facilities are in the Sun Belt states, which contain fast-growing urban areas and have had historically less stringent regulatory oversight for health-insurance premium increases.
As a large private hospital, Tenet enjoys more scale advantages than its public competitors, which helps keep costs lower. Read more 

Bears Say

The high unemployment rate has increased Tenet's provision for doubtful accounts. Unemployment will continue to be a hindrance to hospital profitability as long as stagnant economic conditions continue.
Slower growth in Medicare reimbursement rates as part of the Affordable Care Act may keep Tenet's pricing growth lower than inflation. Additional Medicare cuts triggered by recent debt ceiling legislation could cause reimbursements to fall further.
State budget pressure and the end of federal stimulus spending on Medicaid should pressure Tenet's reimbursement rates. Read more 

Management

We think Tenet has average stewardship practices. We continue to believe management has improved Tenet's shareholder-friendliness since the reimbursement scandal that plagued the company in the previous decade. However, the recent Community Health bid   Read more 

Profile

Based in Dallas, Tenet Healthcare is one of the largest acute-care firms in the U.S., accounting for about 1% of the country's hospital admissions. It operates 50 acute-care   Read more 

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