Thomas Walsh

Thomas Walsh asked whether the potential removal of the inpatient-only list would be a net positive or negative for Tenet's enterprise.

Answer

Chairman and CEO Saum Sutaria stated that the discussion around the inpatient-only rule list is still uncertain. He noted that any benefit would primarily be in the USPI segment, potentially shifting more volumes from hospitals to outpatient settings. He added that Tenet's acute care hospitals, with their greater focus on high-acuity work, would be less affected proportionally than typical general acute care facilities.

Thomas Walsh inquired about the potential impact of the removal of the inpatient-only list on Tenet Healthcare's enterprise, whether it would be a net positive or negative.

Answer

CEO Saum Sutaria clarified that the inpatient-only list's removal is still under discussion and not confirmed. If it were to happen, the benefit would primarily be in the USPI segment, potentially pushing more volumes from hospitals to outpatient settings. He noted that Tenet's acute care hospital segment, with its focus on high-acuity work, would be less affected proportionally than typical general acute care facilities. No quantification has been shared, and the policy is still very much in discussion.

Thomas Walsh, on for Andrew Mok, noted that Q2 EBITDA guidance implies different seasonality than in prior years and asked for color on the expected trajectory of medical margin and EBITDA throughout 2025.

Answer

CFO Jeffrey Schwaneke explained that direct comparisons to prior years are difficult due to significant prior period development that occurred in Q3 of last year. He stated the current budget is built on an incurred basis, which restates the timing of those costs and alters the seasonal appearance. He advised to expect a normal progression with higher profitability in early quarters and the highest medical costs in Q4.