Tenet Healthcare's Q4 2024: Key Contradictions on Medicaid Payments, Volume Growth, and Market Demand

These are the key contradictions discussed in Tenet Healthcare's latest 2024 Q4 earnings call, specifically including: Medicaid Supplemental Payments, USPI Volume Growth Expectations, ASC Acquisition Multiples, ASC Volume Growth Expectations, and Market Demand and Volume Expectations:



Strong Financial Performance in 2024:
- Tenet Healthcare's 2024 results included revenue of $20.7 billion and consolidated adjusted EBITDA of $4 billion, representing 13% growth over 2023.
- The growth was driven by strong same-store revenue growth, disciplined operations, and effective capital deployment.

USPI Segment Performance:
- USPI generated $1.81 billion in adjusted EBITDA in 2024, representing 17% growth over 2023, with adjusted EBITDA margins of 4%.
- Growth was fueled by 7.8% increase in same-facility system-wide revenues, high acuity growth, and effective cost management.

Hospital Segment Growth:
- The hospital segment achieved $2.185 billion in adjusted EBITDA, reflecting 9% growth over the prior year, with same-store admissions up 4.7%.
- The segment benefited from strong utilization, acuity, and favorable payer mix.

Capital Allocation and Shareholder Returns:
- Tenet returned capital to shareholders by repurchasing approximately 14% of outstanding shares for $1.12 billion since the start of their repurchase program in Q4 2022.
- This initiative was supported by significant free cash flow, reflecting the company's strong financial position.

Guidance for 2025:
- Tenet projects full-year 2025 adjusted EBITDA of $3.975 billion to $4.175 billion, reflecting an 7% growth rate on a normalized basis.
- The outlook assumes continued growth in same-store volumes, effective pricing, and strong operational efficiencies.