Tenet Healthcare at BofA Conference: Strategic Growth and Stability

On Tuesday, 13 May 2025, Tenet Healthcare Corporation (NYSE:THC) executives shared insights at the BofA Securities 2025 Healthcare Conference. The company’s leadership outlined strategies focusing on growth, cost control, and mergers and acquisitions, while acknowledging challenges such as policy changes. Tenet’s emphasis on ambulatory surgery centers (ASCs) and hospital operations highlights its growth potential and operational stability.

Key Takeaways

• Tenet Healthcare is focusing on growth, cost control, and M&A activities, particularly within its USPI segment.
• The company is capitalizing on the shift towards high acuity procedures in ASCs, reporting strong Q1 results.
• Tenet is experiencing stable labor conditions with contract labor costs at pre-COVID levels.
• Commercial rate increases of 3% to 5% are being realized, with strong visibility into future contracted rates.
• Tenet remains optimistic despite policy uncertainties, focusing on stable payer relationships and strategic capital deployment.

Financial Results

• USPI Q1 Performance:

- Volumes remained flat on a same-store basis, but high acuity procedures saw double-digit growth.

- Revenue growth has consistently exceeded guidance, maintaining a historical growth rate of 6%.

• Hospital Segment:

- Margins improved steadily, with a 2.9% increase in admissions during Q1.

- Contract labor costs are at 2% of salaries, wages, and benefits, reflecting pre-COVID rates.

• Pricing and Revenue:

- Realized commercial rate increases of 3% to 5%.

- Nearly full contracted rates for 2025 and 70% for 2026.

- Net revenue per adjusted admission increased by 2.8% in Q1.

Operational Updates

• Ambulatory Surgery Centers (ASCs):

- Focus on higher acuity procedures, including orthopedics and bariatrics.

- Expansion in robotic surgery and vascular capabilities.

• Hospital Operations:

- Reopening capacity in constrained markets.

- Emphasis on high acuity services and emergent care.

- "Do not say no" policy for emergent care in rural areas.

• Labor Management:

- Stable labor environment with effective retention and hiring strategies.

- Contract labor usage at low pre-COVID levels.

Future Outlook

• ASCs Growth:

- Continued expansion driven by demographics and innovation.

- Focus on partnerships for higher acuity procedures.

• Hospital Operations:

- Continued specialization in high acuity services.

• Payer Relationships:

- Long-term contracts with health plans to ensure stability and predictability.

• Capital Deployment:

- Strategic reinvestment through share repurchases, capital expenditures, and M&A.

Q&A Highlights

• Reconciliation Bill:

- Seen as less severe than expected, with room for negotiation.

- Positive outlook on existing state-directed payment programs.

• Volume Trends:

- Consumer demand remains stable.

- Labor is not a growth constraint.

• ASC Competition:

- No significant increase in competition for assets or physician partnerships.

In conclusion, Tenet Healthcare’s strategic focus on growth and operational stability was evident at the BofA Securities 2025 Healthcare Conference. For more details, refer to the full transcript below.

Full transcript - BofA Securities 2025 Healthcare Conference:

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: Everyone, thanks so much for joining our BOA Healthcare Conference. My name is Joanna Gajuk, I cover healthcare facilities and managed care at BOA. And now it’s my pleasure to host this session with Tenet Healthcare, who is one of the largest healthcare system operators with a growing and pretty big ASC platform. So we’re going to talk about that. And today with us, we have Will, who’s going to introduce the speakers and have some introductory remarks, I guess, first.

Will McDowell, Vice President of Investor Relations, Tenet Healthcare: Sure. Thanks, Joanna. And today, obviously, from Tenet, my

Will McDowell, Vice President of Investor Relations, Tenet Healthcare: name is Will

Will McDowell, Vice President of Investor Relations, Tenet Healthcare: McDowell, Vice President of Investor Relations here with Saum Satoria, our Chairman and CEO and Sun Park, Executive Vice President and CFO. And just in the course of our conversation today, we’ll be making some forward looking statements. In the context of those statements, suggest you refer back to our cautionary statement within our most recent earnings release as well as SEC filings. And with that, I’ll turn it over to Song for some opening comments.

Saum Satoria, Chairman and CEO, Tenet Healthcare: Yeah. Thank you, Will. And Joanna, thank you, of course, for having us and hosting us. Happy to be here. Just a few comments to kick the session off, and I think probably more importantly than anything else, just want to reiterate, we’re in a period of time with strong momentum in many of the things that we’re doing in the organization.

I want to reiterate, even with the news from yesterday, which I’m sure we’ll get into, our priorities right now in the organization are focused on growth, capital deployment, expansion opportunities in accretive service lines, cost control across the board, as I indicated on our last earnings call, and obviously our m and a agenda at USPI in particular, where we continue to see a healthy pipeline of ASC opportunities in the marketplace, no differently than we have have seen before. We remain very constructively engaged in the discussions in Washington, as you can imagine, and increasingly at the local level and at the state level, as many of the issues begin to filter out into the more local environments. But I’d reiterate again that our priorities are very much running the business as opposed to spending our time circling about or flailing about on various sorts of contingency plans or opportunities that we may need to search for. We just don’t think we’re there yet. And there’s so much opportunity in running the business right now that that’s our focus.

So hopefully that’s helpful context as well.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: No, thank you. And that was my intention to start on the core because, yeah, there’s a lot of uncertainty. We can talk about that a little bit, but yes, so let’s start with the ambulatory surgery center platform to your point, you know, lot of M and A, but maybe let’s talk about first the core, right? Like what’s the growth outlook for this industry? Kind of how do you see it, I guess, this year and into kind of next couple of years?

And what are the main drivers there?

Saum Satoria, Chairman and CEO, Tenet Healthcare: Yeah, I mean, the ambulatory surgery business has a tremendous amount of growth opportunity, as you’re aware. I mean, this is a long generational, almost tailwind that this industry has in terms of the ability to innovate and move things into a lower cost care setting, better service levels and very, very safe and effective surgery. So the most fundamental driver, when you think about legacy ASCs, where there’s still a lot of tailwind of growth from just demographics, you know, gastroenterology, ENT, ophthalmology, all of those sorts of areas where you continue to have innovation that drives and expands what you can do there, sometimes even in acuity. But the real innovation in the ASC sector right now is all about taking riskier, higher acuity surgeries and building the protocols to do them in an ambulatory surgery environment from an HOPD or even in a hospital inpatient environment, right? And so broad range of orthopedics, the broad range of, over time spine work, as we’ve talked about, you know, bringing bariatrics into an environment where the cost of doing that surgery in an ASC makes it highly competitive, and in fact, in many people’s math, much more affordable and with a better return than some of the pharmaceutical therapies that are available right now.

Robotics, we’re north of 150, non orthopedic, general surgical type of robotic opportunities that we have in our ASCs, and we continue to build and expand on those opportunities, growing our vascular footprint, vascular meaning peripheral vascular, as well as cardiac, and over time beginning to pilot protocols in electrophysiology. So, you know, there’s a lot going on with respect to creating capacity and also the right protocols to do these kinds of things in an ambulatory environment. As you get into higher acuity stuff in the ambulatory environment, the risk goes up, the patient risk goes up and other things. You’ve got to do it in the right way. The risk of things like medical malpractice and other things when you have higher acuity cases can be much more substantial than if you’re simply doing a colonoscopy or whatever the case may be.

So we’re very deliberate about these things, but, very active in migrating as much as we can all of our partnerships to be considering higher acuity procedures in the ASCs where the sustainability will be in this industry.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: Right. And maybe, we can also reflect a little bit on Q1 results. And I always wonder, you know, is there something else that’s happening? Because I guess we’re seeing some, you know, different commentaries from payers and providers and an inpatient versus outpatient. So can you kind of give us a sense of how you’re thinking about an inpatient versus outpatient growth?

Is there also something to be said about, I don’t know, whether people defer because they think there’s things changing in terms of macro and such, or they actually pull forward some volumes? So is there something to be said about those implications for your volumes too in the near term?

Saum Satoria, Chairman and CEO, Tenet Healthcare: Yeah, well, there’s a couple of things to address in that. Let’s start with Q1 and then we can talk about kind of consumer consumption patterns and things. Q1 was a great quarter for USPI. Mean, we’re continuing to do what we’ve reliably done, which is grow the acuity, reflect that in the revenue growth that we’re showing. Volumes were essentially on a same store basis flat.

We went through some of the numbers of double digit growth in our high acuity things. Obviously, we talked a little bit about some of the low acuity stuff that we continue to appropriately and gently in the partnerships, as they’re joint venture partners with the doctors, look to move into other settings or at least create some capacity by moving some of that business into other settings to allow higher acuity work to come on board. And that strategy is working. I mean, if you notice the revenue growth has been consistently ahead of our guidance for the last couple of years. The growth algorithm that we have out there of kind of 3% to 6% top line growth.

I mean, if you look back at the history of USPI on a same store growth basis, well over a decade, we’re just north of six percent. And that, by the way, it’s a testament a bit to our strategies and a bit to your first question around the fact that there is just a cyclical and generational tailwind that is gonna move things into a lower cost setting from a surgical procedure standpoint. Because of the high acuity work that we’re doing in the ambulatory setting, we’re realizing success in our payer contracting strategies, right? Because there’s a value equation there that’s beneficial to the insurer, whether government or private, by getting expensive things into a lower cost setting. So the more we do that, the more successful we are at working with our payer partners at having better escalators and things of that nature that play into the future in what we can do.

And of course, that for us is the flywheel, right? That’s how we present a differentiated value proposition to physician partners, that if you partner with USPI versus others, you’re going to get more immediate benefit in the types of things that we can bring, but also ongoing benefit based upon our ability to do these procedures safely and negotiate, better rate structures over time than perhaps other organizations may be able to do. So that’s kind of how the ecosystem fits together from that perspective. Look, the short answer on the consumer side is that we’re not seeing any changes yet. Know, we were joking a few minutes ago about, I don’t know, for every year that I come here, the casino looks slow compared to and but, you know, I don’t know, maybe the discretionary income that affects casinos is different than affects ASCs so far.

So we’re not seeing any impact of that right now in the business, not that we can discern anyway.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: And you alluded to this changes you’re making in your ASC business, deemphasizing the lower acuity, making space for the higher acuity. So I guess that was one of the items you called out in terms of the impact to volumes, but also to rate, rate that’s positive to rate, right? And I guess, you know, it was 9% growth in Q1, right? So is this kind of sustainable growth rate when we’re thinking about rate in ASCs or is there some dynamics we should consider going forward?

Saum Satoria, Chairman and CEO, Tenet Healthcare: Well, I mean, obviously our guidance is our guidance, but we’ve been performing ahead of guidance and we have a lot of confidence that this strategy has more runway.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: And then I guess with this shift, lower acuity to higher acuity, is there a way I know you don’t give volume guidance, but you only talk about revenues for that particular reason. But is there a way to think about this being like a headwind to volumes, then benefit to pricing? Is there a way to quantify it or you don’t want to go that route?

Saum Satoria, Chairman and CEO, Tenet Healthcare: Yeah, mean, when we talk about pricing, we’re obviously talking about case acuity and pricing, right? And that the pricing obviously is a government and a commercial piece. And the volumes obviously are heavily dependent on the type of volume, right? I mean, one of the things that people don’t spend a lot of time looking at externally, because I think probably none of us provide this type of information, but we certainly look at it internally as how are we doing in terms of revenue and profitability per minute of OR time. So, you know, am I really I’m not going to get into I mean, give our guidance the way we give our guidance for a reason because we’ve actually realized that it’s probably the most important driver of profitability, return on investment, and also, as I described, this kind of flywheel of having more attractive reimbursement and also therefore a more attractive value proposition to the physicians.

If we focus on the revenue, focus on the acuity and give new physicians a chance to come into the ambulatory environment that haven’t done so, it gives us more growth opportunities, which is what we’re really after. So we’re not going to change the way we break down that algorithm necessarily, but I appreciate the try. But it’s, you know, it’s that reason we do that because we’ve realized that that’s probably the more important metric to be focused on in the ASC industry.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: Right, and given the favorable backdrop for the entire industry, is it getting more competitive in ASCs in terms of either partnering physicians or buying out? Any kind of dynamics worth noting?

Saum Satoria, Chairman and CEO, Tenet Healthcare: I don’t know that it’s getting more competitive in any way. I don’t don’t I guess I’d have to understand what you mean by more competitive. I mean, if you look at it from the perspective of how we buy assets and at what prices we buy assets and those sorts of things, it’s not really changing that much. I think that as new specialties come online in the ASCs, obviously there’s always a lot of other entities that try to give attention to those MSOs and other things that are out there. If anything, some of the more traditional MSO space is consolidating, not expanding and becoming more competitive, right?

And if you look at GI, for example, that MSO environment is consolidating more than it is, you know, evolving new competitors. So, yeah, I don’t know that from our standpoint, from a transaction perspective, we see it as any more competitive, but the players in the industry are changing. I mean, the fact that a lot of these MSOs have been bought up by large medical distributors, that’s a change in the industry. And how will they dedicate capital to the environment, to continue to build and grow? That may change because their economic interests are different than standalone MSO businesses, and we’ll have to evolve along along with that.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: And maybe switching gears a little bit because at the beginning, right, we mentioned, the uncertainty, you know, in DC, there’s a lot of different topics we can talk about, but maybe first, the other day, reconciliation bill, I guess the proposed version from House came out. So any high level thoughts about what’s included, what’s not included and how this could, I guess, translate kind of in terms of the impact?

Saum Satoria, Chairman and CEO, Tenet Healthcare: Yeah. Well, the most important reaction that we have to what was put out there is at least based upon, you know, what one might call market wisdom of it being a lot worse, it wasn’t as bad as I think the market was expecting. We we, by the way, have the same reaction when we think about ourselves. We look at what was released as a starting point to negotiate back from rather than have it become more aggressive. I mean, that’s the reality of of where we are.

And there’s, you know, multiple stopping points here. Look, there’s a lot of sophisticated polling that’s being done in the industry right now. And the results from all of the pollsters, no matter what side they’re on, could not be clear that with a wide margin, twenty, thirty plus points, voters for the current administration do not favor Medicaid cuts and even more strongly do not favor cuts to the exchanges in terms of the tax subsidies as a mechanism to pay for tax cuts writ large. And that’s largely because these voters understand their family’s p and l, and they understand that at, you know, modest levels above federal poverty, say, hundred and to 200%, the benefits to them and their family of these programs are multiples of what the tax benefit would be from an income tax standpoint. And they they’re very vocal about that.

So, you know, we think we have a very good position in terms of having important voter sentiment aligned with the notion that these programs are critical to basic healthcare access. And we just will keep reiterating that message to stakeholders that are contemplating what they do with the reconciliation bill. And as you know, you still got the Senate here to deal with this, right?

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: Right, right. So there could be still some pushback. But I guess the one thing we saw in that version at least was that, yeah, there was nothing specifically going after the state directed payment program. So that was good, right? And sort of kind of grandfathering the programs that are already in place.

So I guess that was good. Though one thing was work requirements, right? Which doesn’t sound like, you know, Medicaid is not really a big payer for you guys, especially on the ASC side, right? So that wouldn’t really be impactful if that was happening.

Saum Satoria, Chairman and CEO, Tenet Healthcare: Right. Well, I mean, it’s important to our hospital business, but obviously we see a lot of Medicaid demand in our ASC business and the relative exposure of the exchange business in the ASCs is also a lot lower than the hospital business. But it’s important to our hospital business, of course, in terms of the work we do there. You know, look, the grandfathering of existing programs was a very important message. You know, if you think about the message that I delivered at the beginning of this or even on the last earnings call around our priorities, if you get into the details of some of what was in the reconciliation bill, many of these policies that they’re talking about don’t take effect until 2829.

Right? I mean, our focus is on running the business, not providing 2029 guidance at this point. Right? I mean, see my meaning in that, and it’s a very important mindset to be thinking that way and not trying to predict where this is going go over that period of time. In 2029, you’re talking about a different administration by the time we get there.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: So maybe switching to the hospital business, I guess, that you guys operate. Can you talk about broadly speaking, you know, how would you characterize the volume backdrop today? And, you know, are you back to normal? Because I guess you guys been exiting a lot of services for, you know, the reasons we talk about, and now it seems like you were opening it. So, okay.

So the question is, obviously, like how much more there is, right, in terms of reopening the capacity to kind of return to maybe where you were before COVID?

Saum Satoria, Chairman and CEO, Tenet Healthcare: Yeah. And again, I’ve been very clear about this again and again. I’m not chasing the past and I’m certainly not chasing getting back to something. What we’re doing in terms of opening capacity in markets where we had constrained it significantly because of the contract labor environment that existed a few years back is bringing that capacity back online. But some of that capacity is being dedicated to our current service line priorities, not what they might have been five or six years ago.

And that is our strategy. High acuity, continue to build surgical specialty programs, ensure that we have open access for emergent care, be the receiver of choice for especially the rural environment today, which struggles to get recapitalized in the industry where they need access to higher level specialty care for emergencies. We have very much a do not say no policy on making sure that we’re accessible for those patients regardless of the payer mix as a way of continuing to build on our specialization and high acuity work. Obviously, it’s working both in terms of our capital discipline, ability to utilize capacity, and as you’ve seen steadily, the hospital segment’s margins continue to improve even beyond what one might attribute to some of the expansion in state directed payment programs over the last few years. So that’s good.

You know, with the hospital business having strong demand right now, we’ll continue down that path. And I think we’ve been relatively clear about this with respect to the portfolio changes we made, without giving necessarily a lot of deep statistics about it, but we find the markets that we remain in more investable for us in our business model than the ones that we divested. You know, we did not end up having to divest in the course of deleveraging markets that would negatively impact both our network contracting strategies, but they also ended up being the ones where we believe that our business model, we can invest more capital on a unit basis in order to grow the business. So that’s a good thing for us.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: Right. And I guess talking about volumes, Q1 was pretty good, right? I just said admissions 2.9%. Is there anything you can tell us about how this quarter is progressing? Whether there are trends?

Because obviously there are some headlines today in the morning from payers. So that’s why I figured I should ask you whether there’s anything, any comment on the

Saum Satoria, Chairman and CEO, Tenet Healthcare: comment on Q2. Look, we’re happy with the demand environment that we’re in. Our most important thing is to be able to service that demand environment with the discipline of doing it without seeing an excessive amount of costs that deteriorates the margins that we can earn. I mean, there is an importance to being able to manage costs when revenues are shrinking and like we saw during COVID did, and there’s an importance to managing our growth in a similarly disciplined way. This is for us, you have to understand this is all about what we’ve hardwired in the company now, right?

I mean, it’s one thing if we’re having to manage it all centrally. It’s a totally different thing when we can now do this in a mechanism that’s hardwired as part of what everybody should expect from Tenet from an operating perspective. And that’s why we’re really happy right now that we’re accommodating this growth and maintaining and growing our margins without having to do a bunch of, top corporate level cost cutting in order to do that.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: Wait to that end, maybe let’s talk about the margins in hospitals. I guess that was also a good result there. Guess SWE ratio improved. So maybe you can talk about the labor trends and kind of, you know, where you see the wage growth here, retention, you know, turnover metrics and such.

Will McDowell, Vice President of Investor Relations, Tenet Healthcare: Yeah, I would say in general, as we said in earnings call, labor environment is very stable, very manageable, whether we’re talking about our ability to retain and hire, whether we’re talking about base wage rate growth, or whether we’re talking about premium labor, contract labor. Mean, I think all those things number one, external environment is fairly stable number two, we’re able to manage it very effectively, as Assante said. So I think, you know, without any big change in kind of internal external environment, I mean, I think, you know, we feel pretty confident about, you know, what we’re seeing the trends we’re seeing right now versus what we think the rest of the year will be. You know, and then it becomes kind of what Saum mentioned. Mean, we have the opportunity to invest, again, a disciplined way into a little bit more, whether it’s contract labor, whether it’s a little bit more SWB overall, if it means, right, the the right return on EBITDA.

So, you know, whether do we stay at our current levels, do we, you float up a little bit because we’re investing into our markets and into positive EBITDA growth? You may see that, right, certainly. But I think overall, it’s a very it’s a quite stable and manageable environment.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: Because you mentioned the contract labor. It was interesting that you were talking about the fact that you are reopening the capacity, right? But sounds like you didn’t really have to rely on the contract labor as much. So is that also a reflection of stable market? You have access fully employed nurses that you don’t have to allow contract with.

That’s right.

Will McDowell, Vice President of Investor Relations, Tenet Healthcare: Or pension or hiring a full time labor. You know, that’s what you want to do. Then obviously, and then managing tightly. And then contract labor is sort of the additional lever on top. And, you know, at this point, we’re at 2% of SWB, which is even at the low end of even pre COVID rates.

You know, yeah, we’ll use contract labor when we need to, but obviously we want to leverage our full time staff.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: So is it fair to say that at this point, is no longer a constraint to volume? So that could be also another explanation where volumes are pretty good in the hospital setting because, you know, at some point there was a constraint, like you were saying, were almost forced to close out some services because of the labor availability.

Saum Satoria, Chairman and CEO, Tenet Healthcare: I guess I would say that I’m not sure that I can comment for the industry, if that’s your question. I mean, for us, we’re not viewing labor right now as a constraint to growth in our environment. Yeah. It’s a good question in the overall industry, but I’m not sure I can say that for everybody.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: Right, which is good to hear that. Okay. And now talking about the other part of the equation when we were talking about margins. So maybe let’s discuss pricing outlook. So first on commercial rate, where are these rate updates now?

Are you seeing any changes to when you negotiate with these managed care plans in terms of their response to giving you these rate updates? And can you maybe give us some stats? Like, are you still tracking, you know, mid single digits rate updates with commercial plans and how you’re thinking about, say, you know, ’26 and so on?

Will McDowell, Vice President of Investor Relations, Tenet Healthcare: Yeah, would say in terms of stats, I mean, I think we’re still seeing the same thing generally, you know, 3% to 5% rate increases, you know, for the most part. For ’twenty five, we’re virtually fully contracted. Even for ’twenty six, we’re about 70% at this point, so really good visibility. And then I think we’re making good progress in ’27. So I think from a baseline stats basis, we’re doing well.

It shows up in, I think, our net revenue per adjusted admission, know, we were at 2.8% in Q1, pretty solid. I think more broadly, you know, look, I think we always say this, these conversations are always tough. These are negotiations between, you know, payers who have, you know, things that need to consider versus, you know, tenant, we bring a lot of assets, service lines, important value to the table. So, you know, I don’t know that the details that you talk about may be different, but the overall theme of these negotiations are pretty consistent. And I think we remain confident in our ability to both get reasonable pricing as well as the network.

Again, we bring Tenet and USPI, the hospital and ambulatory, to these negotiations. And as Saum mentioned, it’s a big value driver when you’re able to move high priced procedures from acute into ambulatory environment. So I think all those things are tailwinds for us.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: But in terms of these details, that would be interesting to hear whether you’re seeing any you know, increase, I guess, of denials or changes to like pre authorizations or anything kind of in the back outside of the rate.

Will McDowell, Vice President of Investor Relations, Tenet Healthcare: I wouldn’t say there’s anything new incremental. I mean, there’s always a high level of activity that we have to push back and perform for those things. And that’s where Conifer adds a lot of value for Tenet.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: And would you say, maybe on the flip side, is there anything that you can do contractually to kind of improve these terms around denials of preterizations, or it is hard to fight with

Saum Satoria, Chairman and CEO, Tenet Healthcare: me answer your question this way, which is because rather than getting into the specifics of the negotiations with the different plans, I would say that in an environment with policy uncertainty, the mindset of providers who are willing to look and provide predictability long term and reduce friction with the health plans and some of the health plans who would like to have predictability over a three to four year period and also reduce the friction in their costs regardless of the policy uncertainty so that if there are changes in reimbursement that occur due to policy uncertainty, both sides can go into their own organizations, control what they can control, manage their expenses, but allow predictability in the relationship is a good way in our view to work with the health plans today. And so we’re not thinking about this from the perspective of we’re so worried about what’s gonna happen from a policy perspective that we’re unwilling to engage in long term relationships with the plans so that we can hold somebody up next week if we have a policy shock that comes from Washington. We’d rather have the predictability. We’d rather work with them on things that reduce friction.

And there are many of the plans that are coming around to that form of thinking right now as well. And that’s where we’re finding matches to think about a longer term multi year relationship despite the uncertainty coming out of the policy world. Because then we can control what we can control, but the relationship is solid over time. So for us, it’s required adjusting. Obviously, we could have thought about that and come to a different mindset, which is we’re so nervous about the policy uncertainty in our ability to manage the operation that we’re going only sign short term deals, for example, in this space.

We’re not thinking that way because our strategy from our perspective in what we’re doing in narrowed number of hospital markets, the ambulatory strategy, which has a nice growth runway and tailwind behind it, and what we’re doing to grow our services business at Conifer, we don’t think they change based upon those policy uncertainties. So we’re better off having stable relationships with our health plan partners. That’s how we’ve thought about it. I don’t know if that gives a little bit more strategic insight into how we’re progressing on these discussions than, you know, we’re working on certain terms and conditions, for example.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: I know we ran out of time, I have to ask you about free cash flow because it gets Yes.

Saum Satoria, Chairman and CEO, Tenet Healthcare: All happy to talk about that.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: And, you know, balance sheet and leverage is down, free cash flow up. So kind of walk us through your thought process around deploying the capital.

Will McDowell, Vice President of Investor Relations, Tenet Healthcare: MR. Yeah. I mean, and I think it’s a parallel to what Song just mentioned about despite the policy uncertainty, we feel our businesses, whether it’s share repurchases or our M and A and CapEx strategies, it’s still very investable. You know, we may have a little more discipline, a little more higher hurdle rates that we think hard about, but end of the day, we will invest back into our business, again, whether it’s through share repurchases or CapEx M and A. And that’s driven by our balance sheet right now, to your point, in a very strong leverage position, as well as our free cash flow generation.

I think we all saw in ’twenty three and ’twenty four really positive improvements in free cash flow generation after NCI even. And our guidance and our Q1 performance suggests that we’ll continue to do that. We’re very good about that.

Joanna Gajuk, Host, BOA Healthcare Conference, BOA: Great. Thank you so much, everyone. Thanks so much. Thank you.

Saum Satoria, Chairman and CEO, Tenet Healthcare: Thank Sarah. Thank for having us.

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