Skolnick said Tenet's results for the third quarter "were OK. They certainly weren't as impressive as HCA's."
"They did have volume decline on the inpatient side and flat-ish volume for outpatient," she says.
"The story there is that they have been growing their outpatient surgery center capacity and that has been helping them an awful lot. It has been the application, their capital spending discipline to get growth in markets that offset the natural attrition of patients and population changes as well."
Skolnick says other investor-owned hospital chains such as Community Health Systems and LifePoint Hospitals are also experiencing problems with operations in challenging markets. "They both suffered from markets where their populations are declining. Admission volumes grow in lockstep with population, so if you are in a declining market you really don't have a choice but to show these kinds of results," she says.
Skolnick says investor-owned hospital corporations such as HCA and Tenet are surviving if not thriving in a tough healthcare economy because "cost discipline remains a laser focus of every single publically traded company with the possible of exception of (Naples, FL-based Health Management Associates, Inc.) because they are in somewhat disarray right now."
"For Tenet and HCA it has certainly helped them in the quarter. I'd argue that for HCA, it probably helps them a little bit more and you see a little bit more because they have more heads in the beds."