TENET HEALTHCARE CORP earnings calls

Commercial pricing and payer relationships

Q (Jason Cassorla · Guggenheim): They asked what Tenet is realizing on commercial rates, how Tenet works with payers to raise revenue and cut admin costs, and whether favorable commercial pricing is sustainable.

A: They said commercial pricing has not materially changed from prior commentary. Renewals are generally in the 3% to 5% range, they are fully contracted for this year and over 90% contracted for next year, and Conifer's capabilities and tech investments support sustaining revenue yield.

"We still are seeing good renewals a lot of them at the 3% to 5% range." — Sun K. Park (CFO)

Medicaid supplemental payments impact

Q (Ryan Langston · TD Cowen): They asked what percentage of disclosed Medicaid supplemental payments will not be reduced under HR 1.

A: Management did not provide an answer to this specific question on the call.

Medicaid expansion share of admissions

Q (Ryan Langston · TD Cowen): They asked what percentage of total adjusted admissions come from Medicaid expansion individuals.

A: They said about 60% of their admissions come from expansion states and pointed to states like Michigan where they are important providers.

"So when you look at our admissions, I would say is about 60% of our admissions that are from expansion states." — Sun K. Park (CFO)

EBITDA adjustment and surgery trends

Q (Kevin Fischbeck · BofA): They asked whether EBITDA growth next year ex-Conifer just adjusts for the $450 million and about what Tenet is seeing in surgeries broadly.

A: On surgeries, they said results are generally consistent with or better than the industry across hospitals and ASCs, USPI focused on its Acuity strategy, and the environment is not "gangbusters." On EBITDA, they said they expect total EBITDA to grow next year once you normalize for the $450 million of one-time transition items.

"We do believe we will grow total EBITDA next year once you normalize for the $450 million of 1-time transition items that we called out this year?" — Sun K. Park (CFO)

Uncompensated care and exchanges

Q (Stephen Baxter · Wells Fargo): They asked about trends in uncompensated care, noting upticks in unpaid admissions and outpatient visits in Q3 versus Q2, and whether this goes beyond exchange effects.

A: They said Q3 is largely a stabilization following Q2 acceleration and that the uptick in uncompensated care is really tied to exchange volume reductions.

"it is really, exchange volume reductions that we discussed." — Sun K. Park (CFO)

CommonSpirit and $450 million timing

Q (Whit Mayo · Leerink Partners): They asked if there is a hospital revenue headwind from CommonSpirit leaving in Q4 and whether the $450 million headwind next year is spread evenly across quarters.

A: They said the main hospital revenue timing issue was $97 million that moved into Q3 that otherwise would have been in Q4. For next year, a big portion of the $450 million is expected to be spread ratably, while about $160 million is second-half weighted between Q3 and Q4.

"For next year, the 450 I would say, a big portion of that is would be spread ratably throughout the year, and that is the, you know, the overall contribution of the common spirit contract that we saw this year." — Sun K. Park (CFO)

Salaries and cost savings

Q (Brian Tanquilut · Jefferies): They asked whether the lower salaries (SWB) line is due to the Conifer transition or to broader cost-effort improvements and whether this is a sustainable baseline.

A: They said the salary and SWB improvements are primarily from the company's efficiency efforts across the business, with additional transition-related impacts to come in Q3 and Q4 but overall driven by cost control work done this year.

"But a lot of-- a majority of that is from our efficiency efforts." — Sun K. Park (CFO)

ASC growth beyond orthopedics

Q (Pito Chickering · Deutsche Bank): They asked what other ASC growth areas (beyond ortho) to expect and what drove the modest core EBITDA guidance raise.

A: They said beyond orthopedics they are pursuing urology, general surgery, advanced body robotics, spine and some new cardiac centers, plus de novo development in higher-acuity areas. On the guidance change, they said the adjustment was largely mechanical driven by one-time items, revenue recognition, and out-of-period Medicaid rather than core operational shifts.

"But in addition for us, you know, as you know, we have been pursuing growth in urology in general surgery, in advanced body robotics, in spine, I mean, there are a number of areas standing up some new cardiac centers." — Saumya Sutaria (CEO·CHAIR)

Market impact of recent ASC deals

Q (Albert Rice · UBS): They asked whether recent nonprofit system purchases of ASC assets at high premiums change market pricing, competition for assets, or Tenet/USPI's approach to capturing value.

A: They said their practical response is to keep delivering differentiated earnings growth and use free cash flow given equity valuation; their acquisition pipeline remains strong with many non-competitive deals coming to USPI and they are also pursuing de novo development and contracting to move care into lower-cost settings.

"I mean, again, as I commented at the end, I think from a practical perspective, the 2 things that we can do are continue to deliver differentiated earnings growth." — Saumya Sutaria (CEO·CHAIR)

Hospital margin life cycle

Q (Justin Lake · Wolfe): They asked whether the hospital margin gains still have meaningful runway or if future core growth will be more top-line driven.

A: They said they continue to find cost and efficiency opportunities, have accelerated adoption of technologies and AI tools this year, and while it is hard to say exactly where in the life cycle they are, they expect access to improved technologies and will continue managing operating expenses.

"I think it is reasonable to assume that we will have access to, you know, even more improved technologies and other solutions as we go." — Sun K. Park (CFO)

Total joint growth drivers

Q (Andrew Mok · Barclays): They asked what drove the reacceleration in total joint growth and whether share is coming from hospitals.

A: They said much of the growth is migration from hospital outpatient departments to freestanding ASCs as surgeons get comfortable with USPI sites; surgeon convenience, patient convenience, safety protocols and trial opportunities for surgeons help drive organic growth.

"I think the driver of that is the continued efforts that we make in helping surgeons realize that they have a service differentiated site of care that as they get comfortable with it, they can continue to grow their activity in that in that environment." — Saumya Sutaria (CEO·CHAIR)

Surgical share and business mix

Q (Sarah James · Cantor Fitzgerald): They asked if Tenet/USPI are gaining surgical share in 2026, in which venues, and how surgical vs medical mix looks for 2027.

A: They said their strategy focuses on capturing share in higher-acuity surgical areas while growing foundational ASC access points, and that they are increasing the proportional share occurring in the lower-cost ASC setting. They also noted acute care this year tilted more to emergent and medical care, while the high-acuity focus supports revenue intensity and expense management.

"The summary from both of those is that we are increasing the proportional share that is happening in the lower cost ASC setting." — Saumya Sutaria (CEO·CHAIR)

Long-term segment targets

Q (Ann Hynes · Mizuho): They asked whether Tenet has long-term growth targets by segment and if they expect to grow within those targets.

A: They said they have not provided long-term segment targets beyond the recurring annual guidance, and they are waiting for more clarity on HR1, which they view as highly subject to change depending on election outcomes.

"we have not indicated any kind of long term targets in the segments" — Saumya Sutaria (CEO·CHAIR)

Transfer program strategy durability

Q (Craig Hettenbach · Morgan Stanley): They asked about the strategy behind the hospital transfer program and whether it is durable.

A: They said the transfer program is a long-term strategy to partner with smaller and rural hospitals by receiving and returning patients, that these operational partnerships have been sustainable over years, and that Tenet has particular expertise in caring for high-acuity transferred patients, saving ICU capacity and managing ED obligations.

"We also have built a better expertise than the market in taking care of high acuity patients and transfers." — Saumya Sutaria (CEO·CHAIR)

Ortho demand and 2027 outlook

Q (Benjamin Hendrix · RBC): They asked whether a lull in clinic and imaging volume is delaying high-acuity ortho procedures and whether that affects 2027 growth expectations.

A: They said the environment is not "gangbusters" but USPI is performing well on a differentiated basis and remains strategic in building revenues and earnings. After planning, they could not see anything visible suggesting they would not be able to deliver another consistent year ahead at USPI, and M&A activity remains supportive.

"we could not see anything visible that suggested that we should not be able to deliver another you know, as I as I called it, consistent year ahead at USPI." — Saumya Sutaria (CEO·CHAIR)

OR productivity and anesthesia

Q (Benjamin Rossi · JPMorgan): They asked how OR throughput, anesthesia coverage, scheduling and physician recruitment are being managed for longer, higher-acuity cases.

A: They said longer case times improve OR capacity utilization and they are testing patient outreach and agentic solutions plus analytics to reduce cancellations and optimize OR scheduling. On anesthesia, the market has stabilized and they favor working with in-network anesthesia groups.

"1 of the sort of just simple operational benefits of longer case times in higher acuity surgery is you know, productive OR capacity utilization." — Saumya Sutaria (CEO·CHAIR)