Vanguard Health Systems, which Tenet Healthcare will acquire later this year, reported fiscal fourth-quarter profits of $14.5 million, down from $19.3 million a year ago. Officials said the hospital chain's adjusted EBITDA ticked up a bit to $141.5 million.
Included in the Q4 numbers are a gain of more than $14 million on Vanguard's sale of part its of Chicago laboratory services business as well as $5.2 million in severance costs to account for the laying off of 300 people in Detroit during the year ended June 30. Those cuts accounted for about 2.5 percent of Vanguard's Detroit Medical Center staff and will cost another $2.6 million of severance and related expenses over the next 12 months.
Also worth noting from Vanguard's recently filed annual report is a quick mention of a side-effect of the company's plans to sell to Tenet. In assessing their relationship with employees, execs wrote: "In addition, since the announcement of the Merger, we have seen increased efforts by unions to organize certain of our employees, particularly in our San Antonio hospitals."
To be clear: Having some of the employees in Vanguard's San Antonio operations — which accounts for a sixth of Vanguard's revenues — join unions wouldn't be a material factor in the company's performance. But the mention of the rise in activity gives us a glimpse of how the hospital M&A wave could end up affecting day-to-day operations at a large number of hospitals around the country — particularly if that M&A comes with more pink slips.