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Tenet Healthcare Corporation (THC - Analyst Report) is set to establish its foothold in Connecticut through its latest partnership with Yale New Haven Health System – a leading healthcare system in the region. Tenet is striving to extend its Northeast presence through a big push into Connecticut.

This collaboration aims at forming a comprehensive health care delivery network in Connecticut by integrating the attributes of the companies. The deal also intends to establish value-based contractual relationships with employers and other health care service entities to create a superior health care delivery platform.

Both the organizations plan to increase their efficiency to cater to the healthcare requirements of a larger part of the population in Connecticut. To deliver high-quality care to patients, the partnership will enhance the services provided by hospitals, ambulatory care centers and physician practices by introducing improved clinical technologies, increased economies of scale and capital resources.

Our Take

Connecticut faces a number of challenges in delivering health care to its residents like any other state. These include understanding patient needs, and coordination and provision of superior quality healthcare at an affordable price. Through the aforementioned deal, Tenet and Yale New Haven will be able to address these issues and bring in an accessible and patient-centric health care service on a large scale in Connecticut.

While Yale New Haven aims to tap the opportunities provided by the changing healthcare environment and expand its business, the entity lacks capital strength to do so. On the other hand, Tenet, which has a strong financial position to support this agenda, is new to the Connecticut market. Thus, combination of the strengths of the two organizations is likely to prove beneficial to both the companies in the long run. Not only will the deal help Tenet establish a strong foothold in the Connecticut market but also help the company to capitalize on its brand name. Going forward, this should help the company provide its business process solutions to more health care providers in Connecticut and thus succeed in its goal of geographical expansion.

Zacks Rank

Tenet currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the healthcare services space include Chemed Corp. (CHE - Snapshot Report), Brookdale Senior Living Inc. (BKD - Snapshot Report) and Almost Family Inc. (AFAM - Snapshot Report). All three stocks carry a Zacks Rank #1 (Strong Buy).

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