Tenet Adds to Hospital Capex Budget
Tenet Healthcare Corp. executives have added $150 million to their capital spending plans for the year as they look to take advantage of strong hospital demand trends.
Speaking to analysts late last month after Dallas-based Tenet reported its third-quarter results, Chairman and CEO Saum Sutaria said his team expects 2026 to deliver volume growth and a stable operating environment that will build on a 2025 that’s on pace to deliver adjusted admissions growth of 1.5 percent to 2.5 percent. Because of that, Tenet’s leaders now expect 2025 capex to be between $875 million and $975 million versus their mid-year outlook of $725 million to $825 million.
“We see opportunities and the efficiency with which we operate, our focus on service levels to the physician community, we see the opportunity for them to choose our sites as a location of care for their patients more and more,” Sutaria said on a conference call. “The way in which we tend to deploy this capital is focused more on our high-acuity strategy—so things that are relevant to the cardiac care unit, intensive care unit, cath labs, high-end imaging, et cetera.”
Tenet’s hospital segment comprises about 50 facilities and accounts for three-quarters of the company’s revenues, which are expected to top $21 billion this year, as well as 55 percent of its adjusted EBITDA. (The higher-margin United Surgical Partners International division is on pace to have 2025 operating revenues of about $5.1 billion.) Tenet’s hospitals also draw most of its capex: Through the first nine months of this year, $536 million of the $601 million of capex went to hospital operations and services.
Construction spending on healthcare facilities in the United States has leveled off over the past two years after surging in value from about $48 billion in early 2021 to nearly $70 billion in late 2023. Data compiled by the U.S. Census Bureau do, however, show that outlays have ticked up every month this year since April and are closing in again on $70 billion.
About the Author
Geert De Lombaerde
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post for more than a decade and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.