UnitedHealth’s exchange business will be absorbed: Tenet

May 03, 2016 | By Marlene Y. Satter

Tenet Healthcare Corp. has said that it believes the share of exchange business that UnitedHealth Group Inc. currently holds will be absorbed once the latter exits the market.

According to Reuters, UnitedHealth, which is one of the largest sellers of plans on the exchanges, plans to stop selling individual insurance coverage through the program next year in most states. Losses are the reason for its decision, the company said.

Tenet, for its part, has done well, picking up quite a bit of business at its hospitals — it’s the third-largest U.S. for-profit operator of hospitals — from patients who now have insurance thanks to Affordable Care Act exchanges. On May 2 the company said that, in the first quarter of the year, hospital admissions of patients covered through the exchanges increased more than 27 percent compared with the same period last year.

Tenet has gone out of its way to ensure that it benefits from newly insured patients buying coverage on the exchanges. Its chief executive, Trevor Fetter, said in the report that the company has employed a strategy of making sure its hospitals are included by insurers on the exchanges as in-network choices. That’s brought a steady stream of new patients through its hospitals’ doors.

2016 EPS guidance for the health insurer are now $7.90-$8.10. Analysts predicted $7.95.

While UnitedHealth’s departure from the exchanges is bound to have fallout, Tenet appears to be, if not optimistic, at least stoic about how the situation will play out. Tenet’s senior vice president of public affairs, Daniel Waldmann, said in the report, “You are going to see that [insurers making adjustments]. There are others who will be looking to pick up that UnitedHealth business.”

Waldmann pointed to the jockeying for position that occurred on the introduction of seniors’ Medicare Advantage managed care plans as an example of how the market shifts and adjusts.

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