Tenet Subsidiary Inks Service Deal - Analyst Blog


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Conifer Health Solutions Inc., a wholly-owned subsidiary of Tenet Healthcare Corp. ( THC ), announced a 10-year deal with Catholic Health Initiatives, a non-profit health organization based in Colorado, to provide revenue cycle services. Per the deal, the company will provide various services like patient access, revenue integrity and patient financial services to 56 hospitals owned by Catholic Health.

The financial terms of the deal were not revealed. However, Catholic Health will get a minority ownership stake in Conifer as a part of the agreement. Additionally, Conifer will take over and train all the revenue cycle employees of Catholic Health. The integration of the employees is expected to be completed by the next 2 years.

Conifer is a healthcare business process management service provider that specializes in providing revenue cycle services. The company has over 30 years of experience in providing business process management services to hospitals.

Catholic Health is expected benefit from Conifer's expertise in this field, which will help in improving its patient care and revenue cycle functions. Meanwhile, Conifer will likely get a substantial boost in revenues as Catholic Health generates over $6 billion annually in patient revenue.

Tenet competes with HCA Inc. ( HCA ) and Community Health Systems Inc. ( CYH ). The Zacks Consensus Estimate for Tenet's second-quarter 2012 earnings is pegged at 6 cents per share, down about 39% from the year-ago quarter. For 2012, Tenet's earnings are expected to be around 54 cents per share, down 0.28% year over year.

Tenet currently carries a Zacks #3 Rank, which translates into a short-term Hold rating. We maintain a long-term Neutral' recommendation on the stock.

COMMNTY HLTH SY (CYH): Free Stock Analysis Report
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TENET HEALTH (THC): Free Stock Analysis Report
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