Business & Tech
MA Hospital Giant Made A Profit During Coronavirus Peak
Tenet Healthcare owns Worcester's Saint Vincent Hospital and the MetroWest Medical Center hospitals in Framingham and Natick.
WORCESTER, MA — Tenet Healthcare, the for-profit owner of major hospitals in MetroWest and Worcester, saw its profits increase during the peak of coronavirus in Massachusetts, a time when the company furloughed local employees.
According to an earnings report released Monday, Dallas-based Tenet earned $88 million between April and June, more than triple the same period in 2019. However, the company saw a large drop in elective surgeries and other services due to the coronavirus pandemic, and overall revenue was down to $3.6 billion compared to $4.5 billion in the second quarter of 2019.
Tenet owns the MetroWest Medical Center, which includes Framingham Union and Natick's Leonard Morse Hospital, and Saint Vincent Hospital in Worcester.
Tenet buoyed profits in several ways through April, May and June, according to the earnings report.
The company was able to recoup losses through approximately $867 million in grants from the federal CARES Act stimulus, plus about $1.5 billion in advance Medicare payments. Tenet CEO Ronald Rittenmeyer said that the stimulus payments provided the company "an important bridge to minimize the financial crisis."
During the pandemic, the company's 65 hospitals also spent much less on salaries and supplies compared to the same period in 2019. Salaries dropped from $1.8 billion in Q2 2020 to $1.5 billion during the pandemic, and supply costs dropped from $644 million to $530 million, according to the earnings report.
The cost of charity care and uninsured patients in the second quarter also fell from $205 million in 2019 to $188 million in 2020.
The company has been allowed to resume providing elective surgeries in some states, including Massachusetts. The earnings report says the company has access to cash and credit — and possible future government stimulus — that should allow it to remain in business if coronavirus reaches levels seen this spring.
However, the report cautions that a second coronavirus peak could have a serious impact on the company.
"The COVID-19 pandemic is significantly affecting our operations and financial condition, and our liquidity could also be negatively impacted, particularly if the U.S. economy remains unstable for a significant period of time," the earnings report warns.
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