Tenet Healthcare Reports Positive Financial Results amidst ACA Challenges

Tenet Healthcare concluded 2025 with substantial financial results, showcasing a positive fourth quarter driven by growth. The company reported net operating revenues of $5.53 billion and a net income of $371 million, marking an increase from the prior year's $5.07 billion and $318 million. This success was buoyed by robust demand for higher-acuity services and effective margin control across its hospital and ambulatory surgery operations.

However, Tenet's leadership warned of potential financial impact due to the discontinuation of enhanced Affordable Care Act (ACA) premium tax credits. The company anticipates a 20% decline in ACA enrollments, particularly in states like Arizona, Michigan, and California, where it has significant operations. Although a transition of 10% to 15% to other coverage is expected, ACA exchange admissions accounted for 7.5% of total admissions, contributing over 6.5% to revenue in the last quarter.

CFO Sun Park revealed that the lapse in subsidy support is projected to decrease Tenet's 2026 adjusted EBITDA by about $250 million, with the hospital segment bearing the brunt. This sentiment is echoed by other health systems, such as HCA Healthcare, which estimates a financial impact of $600 million to $900 million due to subsidy changes.

Looking ahead to 2026, Tenet forecasts net operating revenues between $21.5 billion and $22.3 billion, net income in the range of $2.61 billion to $2.84 billion, and adjusted EBITDA of $4.49 billion to $4.79 billion. "Clearly, there are a wide range of potential outcomes here, and we will continue to monitor enrollment levels and effectuation rates," stated Park.

Despite these challenges, CEO Saum Sutaria expressed confidence in the resilience offered by Tenet's diverse portfolio. The company’s ambulatory surgery branch, United Surgical Partners International (USPI), is expected to maintain growth in procedures and higher-acuity cases shifting to outpatient settings. USPI reported a 5.5% increase in same-facility revenue growth and a 1.6% rise in case volumes in the fourth quarter, remaining central to Tenet's 2026 strategy with a mergers and acquisitions target of approximately $250 million to expand its platform.

Tenet also highlighted its ongoing portfolio transformation, underscored by a recent transaction with CommonSpirit Health to regain full ownership of Conifer Health Solutions. Over the next three years, CommonSpirit will pay around $1.9 billion, while Conifer will reimburse approximately $540 million to reclaim CommonSpirit’s equity stake, beginning January 1, 2026, and continuing to provide services throughout the year. In 2025, Tenet posted net operating revenues of $21.31 billion, an increase from $20.67 billion in 2024, while net income decreased to $1.41 billion from $3.2 billion the previous year.