LEADERSHIP ASSIGNMENT PART 2

COMPANY PROFILE

Tenet Healthcare Corporation

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Tenet Healthcare Corporation TABLE OF CONTENTS

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TABLE OF CONTENTS

Company Overview ........................................................................................................ 3 Key Facts ......................................................................................................................... 3 SWOT Analysis ............................................................................................................... 4

Tenet Healthcare Corporation Company Overview

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Company Overview

COMPANY OVERVIEW

Tenet Healthcare Corporation (THC or 'the company'), a health care services company, operates general hospitals, ambulatory surgery centers, diagnostic imaging centers and related health care facilities. The company through its subsidiaries offers healthcare services through several provider-based diagnostic imaging centers and free-standing, emergency department, ambulatory surgery centers and urgent care centers. The company is headquartered in Dallas, Texas, the US.

The company reported revenues of (US Dollars) US$18,313 million for the fiscal year ended December 2018 (FY2018), a decrease of 4.5% over FY2017. In FY2018, the company’s operating margin was 9%, compared to an operating margin of 4.9% in FY2017. The net profit of the company was US$111 million in FY2018, compared to a net loss of US$704 million in FY2017.

The company reported revenues of US$4,560.0 million for the second quarter ended June 2019, an increase of 0.3% over the previous quarter.

Key Facts

KEY FACTS

Head Office Tenet Healthcare Corporation 1445 Ross Ave., Suite 1400 Dallas Texas Dallas Texas USA

Phone 1 469 8932200 Fax Web Address www.tenethealth.com Revenue / turnover (USD Mn) 18,313.0 Financial Year End December Employees 90,090 New York Stock Exchange Ticker THC

Tenet Healthcare Corporation SWOT Analysis

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SWOT Analysis

SWOT ANALYSIS

Tenet Healthcare Corporation (THC or 'the company'), a health care services company, operates general hospitals and related healthcare facilities in the US. The company’s subsidiaries and affiliates own and operate acute care hospitals and related health care facilities. It also provides business process solutions to hospitals and other clients. The company's wide network of facilities helps it in addressing the needs of urban and suburban communities in the US. However, shortage of qualified nurses in the US may have a negative impact on its profitability.

Strength

Comprehensive health care services portfolio Wide network of facilities in urban and suburban communities

Weakness

Business Performance: Hospital operations and other segment

Opportunity

Business expansion initiatives Favorable trends in demography and health care spending will offer growth opportunities

Threat

Competition from not-for-profit organizations may reduce the company's patient volume level Shortage of qualified healthcare professionals likely to affect the company's profitability

Strength

Comprehensive health care services portfolio

THC has a comprehensive services portfolio catering to communities' diverse needs. Each of the company's general hospitals offers acute care services, operating and recovery rooms, radiology services, respiratory therapy services, clinical laboratories and pharmacies. In addition, most of them offer intensive care, critical care and/or coronary care units, physical therapy, and orthopedic, oncology and outpatient services. A number of the company's hospitals also offer tertiary care services such as open- heart surgery, neonatal intensive care and neuroscience, and some also offer quaternary care in areas such as heart, liver, kidney and bone marrow transplants. In addition, many of THC's hospitals offer a range of clinical research studies. Current clinical research programs of THC relate to an array of ailments, including cardiovascular disease, pulmonary disease, musculoskeletal disorders, neurological disorders, genitourinary disease and various cancers, as well as medical device studies. By supporting clinical research, THC's hospitals are actively involved in medical advancements that can lead to improvements in patient safety and clinical care. The company’s comprehensive portfolio of health care services helps it to provide solutions to various unmet medical needs.

Wide network of facilities in urban and suburban communities

THC is one of the largest investor-owned hospital companies in the US having a wide network of facilities

Tenet Healthcare Corporation SWOT Analysis

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in the US. During FY2017, the company operated a total of 76 hospitals with a combined total of 19,141 licensed beds, primarily serving urban and suburban communities in 12 states in the US. Hospital Operations and other segment of the company operates 167 outpatient centers, the majority of which are provider-based diagnostic imaging centers, freestanding urgent care centers, satellite emergency departments and provider-based ambulatory surgery centers; approximately 675 physician practices; and health plans. Wide network of facilities in the US helps THC enhance its geographic presence in the country.

Weakness

Business Performance: Hospital operations and other segment

Hospital operations and other segment of the company is the major contributor of the company's total revenue. THC under this segment operates 76 hospitals, including two children's hospital, two specialty hospitals and one critical access hospital, with a combined total of 19,141 licensed beds across 12 states in the US. It also operates 167 outpatient centers, 675 physician practices and health plans. In FY2017, the Hospital operations and other segment accounted for 82.1% of the company's revenue at an annual decline of 4% from US$16,904 million in FY2016 to US$16,260 million in FY2017. The decrease in the revenue of this segment was primarily due to lower inpatient and outpatient volumes.

Opportunity

Business expansion initiatives

Tenet entered into agreements to expand its business operations by geographical presence through various strategic initiatives. In line with this, In January 2018, the company’s subsidiary Tenet Hospital for Special Surgery (HSS) and United Surgical Partners International signed a definitive joint partnership agreement to open an orthopedic care center in West Palm Beach, Florida. By this agreement, the company plans to open a new orthopedic and musculoskeletal center. In March 2017, Tenet entered into an agreement with Blue Cross and Blue Shield of Texas (BCBSTX) to expand its market presence. This agreement helps the company to gain an opportunity to offer its patients with BCBSTX health insurance in-network access to outpatient centers, Tenet’s hospitals, and employed physicians in the state and also offers access to cost-effective care and quality for more than five million members.

Favorable trends in demography and health care spending will offer growth opportunities

Rapidly aging US population and the resultant increase in healthcare spending will throw significant growth opportunities for THC. Further, the Centers for Medicare and Medicaid Services (CMS), national health spending is projected to grow at an average rate of 5.5% per year for 2017-26 and is expected to reach US$5.7 trillion by 2026. The growth in healthcare spending is driven by fundamental economic and demographic factors such as increase in prices for medical goods and services, changes in projected income growth and enrollment shifts from private health insurance to Medicare related to the aging of the population. As hospitals remain the primary setting for healthcare delivery, CMS expects hospital services to remain the largest category of healthcare spending. THC could leverage its strong network-based

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health plans and other health care-related products to exploit the rise in healthcare spending coupled with favorable demographic trends in the US.

Threat

Competition from not-for-profit organizations may reduce the company's patient volume level

THC's hospitals, outpatient centers and other health care businesses face intense competition. Increases in patient volumes of THC have been constrained, in part, by competition for market share in high margin services and for quality physicians and personnel. Generally, other hospitals and outpatient centers in the local communities THC serves provide services similar to those the company offers, and, in some cases, competing facilities are more established than THC hospitals. The company also faces increased competition from specialty hospitals (some of which are physician-owned) and unaffiliated freestanding outpatient centers. Furthermore, some of the hospitals that compete with THC's hospitals are owned by government agencies or not-for-profit organizations. These tax-exempt competitors might have certain financial advantages not available to THC's facilities, such as endowments, charitable contributions, tax- exempt financing, and exemptions from sales, property and income taxes. In addition, in certain markets in which THC operates, large teaching hospitals provide highly specialized facilities, equipment and services that may not be available at its hospitals. If competing health care providers are better able to attract patients, recruit and retain physicians, expand services or obtain favorable managed care contracts at their facilities, the company's patient volume levels may suffer.

Shortage of qualified healthcare professionals likely to affect the company's profitability

Hospitals in the US have been facing shortage of qualified nurses. There are about 100,000 vacant positions throughout the country. By the year 2020, that number is expected to grow to 434,000 in the US itself. The shortage is expected to be about 800,000 by 2020 worldwide. Nearly one-third of a hospital's budget is spent on nursing staff salaries and that is the first place hospital administrators look to cut costs. This has resulted in a decline of people opting for the nursing profession. With the shortage of qualified nurses in the US, THC is bound to experience increased nursing personnel expenses. This poses a significant threat to the company's profitability.

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