Tenet Opens Hospital in Texas, Enhances Acute Care Portfolio - Analyst Blog

Tenet Healthcare Corporation THC has added a new hospital to its portfolio. The hospital, named Resolute Health Hospital has been opened in Texas and it marks the 19th hospital opened by Tenet in the state. The hospital, located nearly 30 miles northeast of the city of San Antonio in New Braunfels, will serve as the foundation for Resolute Health – a healthcare network in the region.  

Time and again, Tenet has chosen Texas to open hospitals due to its population growth rate and the immense opportunities in the state. This time too, while choosing the location of the hospital, management kept in mind the population growth rate of New Braunfels. The region has an annual population growth rate of 2.5% which is almost four times the national rate. This rising population will be in need of healthcare and hospital services. Identifying this opportunity, Tenet selected this region for the new hospital.

The hospital, with a capacity of 128 beds, will provide specialty care services like cardiovascular, orthopedics, oncology, imaging, wound care, rehabilitation and obstetrics. However, it is the level III neonatal intensive care unit (NICU), which sets the hospital apart from its counterparts in the region.

Apart from acute care, the services that community members can avail include a fitness center, health-oriented restaurants, walking trails, nutrition counseling, fitness instruction and lifestyle coaching. Additional provisions that are pending commencement are retail shops and a women's health center.

Tenet has an extensive network of healthcare services and this hospital marks the 79th hospital opened by the company. Over the last two months, Tenet has undertaken a couple of initiatives to boost operations, particularly in Texas. These include the collaboration with Texas Tech University Health Sciences last month to build a teaching hospital in El Paso by 2016 and the acquisition of Texas Regional Medical Center in Sunnyvale.

As per the Census Bureau reports, seven of the rapidly growing cities in the U.S. were in Texas in 2013. With the spurt in population growth, a number of healthcare issues have arisen that demand attention. As per reports published by the State Government, the difficulties include increase in the ageing population, high healthcare costs and prevalence of chronic diseases. At this point, the establishment of the 19^th hospital will allow Tenet to get more patients and attract community members for its basket of services, which should enhance revenues going forward.

Currently, Tenet carries a Zacks Rank #3 (Hold). However, better-ranked stocks in the healthcare services space that look attractive at current levels include Universal Health Services Inc. UHS, Almost Family Inc. AFAM and Amedisys Inc. AMED. All these stocks have a Zacks Rank #2 (Buy). 

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