Tenet Healthcare, a Dallas-based healthcare services company that operates 65 hospitals and 500 other healthcare facilities with 110,000 employees, will spin off its revenue cycle subsidiary, Conifer, into a separate entity. Conifer will become an independent, publicly traded company by the end of the second quarter of 2021, Tenet announced July 24.
The decision to spin off Conifer came out of a strategic review process Tenet undertook in December 2017. Tenet has been looking to offload Conifer for some time, which has been a profitable business for the healthcare company. Conifer manages more than 17 million unique patient interactions and about $25 billion in net patient revenue annually. It generated $1.5 billion in revenue in 2018.
A sale of the business was floated as part of broader cost-cutting measures as Tenet faced significant long-term debt and executive changes over the last few years.
“After an extensive review of Conifer’s strategic alternatives, in which we evaluated multiple options for the business while simultaneously driving significant and sustainable improvements in performance, we are pleased to announce plans to spin off Conifer into a separate, publicly traded company,” Ronald A. Rittenmeyer, executive chairman and CEO of Tenet, said in a statement. “This decision supports our longstanding objectives to maximize the value of Conifer, build on its strong growth potential and deliver the best outcome for Conifer and for Tenet shareholders.”
As part of the spinoff, Tenet will explore necessary executive leadership changes, according to the announcement. In addition, Kyle Burtnett, COO of Conifer Health Solutions, was named interim CEO of Conifer, effectively July 24. He replaces Conifer CEO Stephen Mooney, who stepped down from his position. A search for a permanent CEO is ongoing.
The spinoff will not require a vote from shareholders and will be subject to the finalization of a structure that will be tax-free to Tenet shareholders. The spinoff is supported by Common Spirit, which is a minority of Conifer.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."