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Tenet Healthcare Corp THC
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/26/2013

Operator: Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2012 Tenet Healthcare Earnings Conference Call. My name is Anne, and I will be your coordinator for today's call. As a reminder, this conference is being recorded for replay purposes. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session following the presentation.

At this time, I would now like to turn the presentation over to your host for today's call, Mr. Thomas Rice, Senior Vice President of Investor Relations. Please proceed, sir.

Thomas R. Rice - SVP, IR: Thank you, Anne, and good morning, everyone. Tenet's management will be making forward-looking statements on this call. These statements are qualified by the cautionary note on forward-looking statements contained in our Annual Report on Form 10-K. During the question-and-answer portion of the call, callers are requested to limit themselves to one question and one follow-up question.

At this time, I will turn the call over to Trevor Fetter, Tenet's President and CEO. Trevor?

Trevor Fetter - President and CEO: Great. Thanks, Tom, and good morning, everyone. Let me start by saying that we were pleased with our performance in the fourth quarter and the year. In fact, these results, both for the fourth quarter and the full year are the best that we've had in 10 years. Our fourth quarter performance represents growth of 17% and was slightly ahead of the midpoint of our outlook range, both for the quarter and for the year.

Looking to 2013, we are confirming our outlook range which extends our existing compound annual growth trend of 15% for a full decade.

Our performance was led by strong top line growth with solid pricing and significant in outpatient and surgical volumes. This marks another quarter where our volumes were among the strongest in the industry. By the way, the flu only contributed 30 basis points to our inpatient growth and 50 basis points to our outpatient growth.

Here are some volume highlights. Adjusted admissions increased by nearly 3%. This marks the ninth consecutive quarter that we've grown adjusted admissions and the 19th quarter out of the last 22 quarters. Outpatient visits, surgeries, and ER visits were all up between 7% and 9%. This is very strong performance.

Pricing remained solid with commercial growing within our expected range and acuity was stable to slightly up. With all the interest in how exchange pricing is developing I want to give you an update on our recent activity.

In the last few weeks, we signed the first of our contracts for insurance products to be sold under the exchanges. These contracts are with three large Blue's plans and cover 15 or roughly 30% of our hospitals. The first thing that you should know is that these contracts are all structured like commercial contracts, not managed government contracts. Our position is that the exchanges are a different distribution channel for insurers to sell commercial product to the individual market. We do not view them as distribution channels for selling managed Medicare or Medicaid product since those markets are very different.

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