Tenet Healthcare reported second-quarter results that included a $65 million revenue impact tied to declining admissions from the Affordable Care Act exchanges. Despite that headwind, the company raised its full-year 2026 adjusted EBITDA guidance to a range of $4.8 billion to $5.0 billion, up from a prior outlook of $4.5 billion to $4.8 billion.
The system posted net income of $826 million for the quarter, compared with $288 million in the same period a year earlier, on total revenue of $5.6 billion. On an earnings call, CEO Saum Sutaria said, “We are optimistic about the rest of the year.”
Tenet described material enrollment and revenue effects from turmoil on the ACA exchanges following the expiration of enhanced premium tax credits. The company said revenue from marketplace admissions declined about 17% in Q2, while ACA patient volume fell approximately 13.5%.
Executives noted that in many cases patients formerly covered by exchange plans appear to be becoming uninsured: CFO Sun Park characterized the trend as “roughly a pretty consistent conversion from exchange patient volume into uninsured on a pretty much one to one basis.” The revenue hit was more pronounced in certain states, including Florida, Arizona, Michigan, South Carolina and Texas.
Adjusted earnings for Tenet’s hospital segment increased by more than 22%, a rise the company attributed to higher commercial patient revenue and increased Medicaid state supplemental payments. Those gains were partially offset by the decline in ACA admissions.
Tenet highlighted that overall revenue growth and targeted operational controls helped the hospital segment expand margins despite the marketplace disruption.
United Surgical Partners International (USPI), Tenet’s ambulatory care arm that operates over 500 surgery centers and 26 surgical hospitals across 37 states, outperformed company expectations in the quarter. USPI’s adjusted earnings grew by about 9%, driven by increased patient-service revenue, cost-management initiatives and contributions from acquisitions.
The ambulatory unit’s stronger performance helped mitigate pressures in the inpatient business and supported the company’s improved outlook.
Tenet credited several cost containment and operational strategies with helping preserve margins amid exchange-related volume declines. These included contract renegotiations for purchased services, focused length-of-stay management and adoption of artificial intelligence tools to drive efficiency.
Executives emphasized that these initiatives, combined with revenue growth and supplemental Medicaid payments, were central to the company’s ability to absorb the ACA-related revenue loss and still improve profitability.
Mergers and acquisitions remain a strategic priority for Tenet’s ambulatory business. The company expects to exceed $300 million in M&A spend this year based on previously completed ambulatory surgical acquisitions and a robust pipeline of deals.
Tenet has already closed purchases of seven ambulatory surgical centers so far this year. Management said continued acquisitions will support USPI’s growth and contribute to consolidated results going forward.
Tenet framed its Q2 performance against a backdrop of sector-wide pressure from the lapse of enhanced ACA subsidies. The expiration of those subsidies has raised premiums for many enrollees, increasing the uninsured rate and pushing up uncompensated care for providers.
Peers have reported more severe impacts: Community Health Systems disclosed Q2 results below expectations tied to the trend, and HCA Healthcare said coverage volatility reduced earnings more than planned. Tenet’s combination of revenue growth, supplemental payments and cost controls helped it avoid the worst of those outcomes so far.
Tenet absorbed a $65 million ACA-exchange-related revenue hit in Q2 but raised full-year adjusted EBITDA guidance to $4.8–$5.0 billion.
The company’s Q2 net income rose to $826 million on $5.6 billion of revenue; hospital adjusted earnings increased more than 22% and USPI adjusted earnings grew about 9%.
Marketplace admissions and revenue declines (about 13.5% volume and 17% revenue for ACA patients) were concentrated in several states, and management reported many exchange patients are converting to uninsured status.
Tenet pointed to contract renegotiations, length-of-stay initiatives and AI adoption as key margin-preserving actions, and it expects robust ambulatory M&A spending above $300 million this year.
These reported results and management comments are drawn from Tenet’s Q2 disclosures and the company’s earnings call as summarized in the source article.