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Happy Thursday, Hospitalogists,

I’m hitting your inboxes a bit later today but that’s alright because I’ve got some fun hospital analysis for you.

My full hospital Q2 update will be shared with community members later this month!

Tenet Q2 Earnings Breakdown

Today I’m continuing my dive on hospital earnings with a couple one-pagers on Tenet. The main themes continue to be the main themes: utilization is up, acuity is up, exchange volumes are providing material boosts to hospital margins, and contract labor has hit a trough.

Here’s everything else you need to know:

One callout on the outlook for ASCs (and hospitals of course) during the rest of 2024 and beyond is input costs associated with anesthesia coverage. The costs are out of whack and it tends to be a huge bottleneck for capacity management. Adding fuel to this fire, Anthem just announced significant reimbursement cuts to cRNAs to 85% of the physician fee schedule. I'd heard of payors reducing reimbursement for services rendered by APPs or cRNAs, but this cut seems pretty draconian and will likely backfire on Anthem. Just a datapoint for you guys to think about and keep an eye on.

Bonus USPI One-Pager

Bonus one-pager for USPI. As Tenet continues to strategically prioritize ASC development, USPI will continue to drive the narrative for Tenet’s enterprise at large, and nearly comprises 50% of adjusted EBITDA margin despite being one fourth as large revenue-wise:

3. Check out my community

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MISCELLANEOUS MADDENINGS

This Saturday marks the official beginning of college football and man, it feels like we're shaping up to have a heck of a year. For anyone who's a Michigan fan, I'm on the hunt for 3 tickets as me and 2 of my buddies are headed up Week 2 for the Texas-Michigan game. Hey, it's worth a shot right?

Thanks for the read! Let me know what you thought by replying back to this email.

— Blake