Tenet Vows Improvements in Patient Care

pickledpepperRN · Jul 24, 2003

http://www.forbes.com/newswire/2003/07/23/rtr1035007.html

Beseiged Tenet says changes focus to quality

Reuters, 07.23.03, 4:54 PM ET

By William Borden and Deena Beasley

NEW YORK/LOS ANGELES, July 23 (Reuters) - Tenet Healthcare Corp. (nyse: THC - news - people), which has been grappling with several federal investigations, has been touting efforts to improve its health care quality.

The company issued two press releases this week focusing on health care quality and comments from top executives at Wednesday's annual shareholder meeting reiterated the point.

"We have implemented a very aggressive strategy for rebuilding the company centered around quality," Acting Chief Executive Officer Trevor Fetter said. "It's the right thing to do."

"In the hospital industry the only sustainable strategy is to emphasize quality," Fetter said at the annual meeting.

Two press releases that mention quality during the same week do not constitute a publicity onslaught. However, it appears to be a change in public relations strategy that focuses on quality of patient care.

A disproportionate number of Tenet's press releases since October have contained the words "subpoena," "investigation," or suggested that the company would cooperate with federal authorities.

Tenet has been mired in controversy after a self-described "aggressive" pricing strategy led to outsized Medicare payments for the sickest patients. Tenet's Alvarado Hospital Medical Center and its chief executive were indicted for illegal physician relocation.

QUALITY ISSUES

In quality matters, the operator of 114 hospitals had difficulties at Northern California's Redding Medical Center, where two doctors were accused of performing unnecessary heart surgeries, and its Palm Beach Gardens Medical Center in southern Florida last year had infection control problems.

John Souter, health care services analyst at Susquehanna Financial Group, said, "I think they are going to face some skepticism."

"The reputation in the communities has to be moved from 'they charge a lot' to 'they are the best in town,'" said Sheryl Skolnick, analyst at Fulcrum Global Partners. She views efforts to improve quality favorably.

Tenet said on Wednesday before its annual meeting that it named Dr. Jennifer Daley as senior vice president of clinical quality and named Lauren Arnold as vice president of nursing. Both positions are newly created.

Two days ago, the company announced plans to participate in The Leapfrog Group and a program set up by the American Hospital Association and the Centers for Medicare and Medicaid to report results in treating heart attacks, congestive heart failure and pneumonia.

Charles Idelson, a spokesman for the California Nurses Association, said "We are not at all reassured by Tenet's announcements today."

The California Nurses Association, a union that represents nurses that has engaged in a public relations battle with Tenet and held a press conference outside the annual meeting, said the company has poor staffing levels and scrimps on patient care.

"They are clearly trying to do everything they can to give the appearance that they are doing the right things," said Darren Lehrich, analyst at Suntrust Robinson Humphrey. "There is still a lot of opposition to the company and we have yet to see the true colors of where an SEC investigation or any other government investigation is headed. There are also malpractice issues in certain local markets." (Additional reporting by Deena Beasley in Los Angeles)

pickledpepperRN · Jul 24, 2003

Business Week

Tenet Healthcare Needs a Cure for Anger

JULY 24, 2003

REPORTER'S NOTEBOOK By Arlene Weintraub

Things got tense at its annual meeting, where nurses

protested about working conditions and shareholders

vented about lost value

Neither the blazing sun nor the rush-hour traffic

could deter the angry knot of nurses who gathered on

July 23 at the Skirball Cultural Center in Los Angeles,

site of Tenet Healthcare's (THC ) annual shareholder

meeting. The nurses -- some wearing black bandanas

across their mouths -- were protesting Tenet's efforts

to prevent the California Nurses Assn. from unionizing

some of its hospitals. "We're California nurses!" they

chanted. "Mighty, mighty nurses! We will not be

silenced!"

One speaker after another blasted Tenet for cutting

costs by understaffing hospital wards and not providing

adequate wages and benefits. Supportive motorists tooted

their horns as they passed the noisy demonstration.

If Tenet execs were hoping to take refuge inside the

meeting hall, they were out of luck. Shareholders of the

embattled hospital chain based in Santa Barbara, Calif.,

were just as vocal and unforgiving, as they questioned

whether executives are doing enough to regain their

trust in the face of a massive legal mess.

"UNACCEPTABLE." The Securities & Exchange Commission is

investigating Tenet for its Medicare billing practices.

The FBI is looking into allegations that two doctors who

practiced at a Tenet hospital in Redding, Calif.,

performed unnecessary heart surgeries. The U.S.

Attorney's office in Los Angeles has launched an

investigation of Tenet's physician-recruitment

practices. And on July 18, Tenet's Alvarado Hospital

Medical Center in San Diego was indicted for allegedly

awarding kickbacks to doctors who referred patients to

the hospital.

The sheer number of investigations "is unacceptable to

all of us," said President and interim CEO Trevor Fetter

in a speech to investors. He stepped into the chief

executive spot in May, when former CEO Jeffrey Barbakow

resigned.

Not that Tenet hasn't been trying to restore shareholder

confidence. On July 22, the board appointed a

nonexecutive chairman, Edward Kangas, former CEO of

Deloitte Touche Tohmatsu. And at the July 23 annual

meeting, the company elected three new directors and

declassified the board, so directors will serve terms of

just one year.

LOSING HOPE. A proposal by disgruntled shareholder Dr.

M. Lee Pearce to require even more independence by board

members was rejected, however. "I don't believe this

company has turned the corner," grumbled Pearce after

the meeting. He urged the board to make a "clean sweep"

and dismiss any top executive who was associated with

Barbakow's reign. "I'll know this company has changed

when the corrupt senior management is gone," declared

Pearce, who owns about 25,000 shares of Tenet's stock.

Pearce isn't the only shareholder with questions.

Tenet's stock has fallen 75%, to around $12, since

October, when the SEC investigation first came to light.

Barbakow's departure and multiple announcements

regarding restructuring and cost-cutting plans have done

little to move the stock. Some investors are losing

hope. "The best thing the board could do is sell the

company to someone who can run it right," says Jake

Bennett, who represents a group of private investors

holding 10,000 shares.

Part of the problem is that Tenet is suffering from more

than just legal woes. On June 23, it announced that

earnings for the year ending July, 2004, would come in

at least 30% lower than analysts expected -- and not

because of litigation expenses. It cited a host of

unexpected industry pressures, including increased labor

costs brought on by a nursing shortage and heat from

labor unions to increase salaries and benefits. What's

more, Tenet is facing protests from private health plans

and looming Medicare reform, which is causing it to lose

much of the pricing power it once enjoyed.

"LIP SERVICE"? During the meeting, Fetter reiterated

Tenet's plans for $200 million a year in cost-cutting,

including streamlining accounting systems and divesting

14 of its 114 hospitals. And he emphasized its newfound

focus on providing quality care.

After his speech, one of the many Tenet nurses who

wandered into the meeting from the protest outside

stepped up to the microphone, looked Fetter in the eye,

and said, "We have been unable to provide quality care

because we're constantly told we're facing budget cuts.

So many of your words sound good. But as I see it, it's

lip service."

Tenet may have to do even more major surgery before

employees -- and investors -- will be ready to give it a

healthy prognosis.

Weintraub is a correspondent for BusinessWeek in Los

Angeles Edited by Douglas Harbrecht

pickledpepperRN · Jul 24, 2003

http://www.calnurse.org/cna/press/72303.html

CNA: Tenet Has Spent Over $6 Million in Patient Care Dollars to Deny a Voice and Choice to Its RNs

Tenet Healthcare has squandered over $6 million just in the past seven weeks in an ongoing, heavy handed campaign to block its registered nurses from achieving representation with the California Nurses Association, CNA charged today.

In a press conference Wednesday morning prior to Tenet's annual shareholders meeting, CNA condemned Tenet's waste of patient care dollars. Tenet is attempting to interfere with its RNs' democratic rights - and RNs from several Tenet hospitals outlined the consequences for

patient safety, CNA charged.

"These practices make a mockery of Tenet's pledge to the public and its shareholders that it is taking steps to restore its tattered image, including establishing a cooperative, respectful relationship with its caregivers," said CNA's Southern California director David Johnson. "At a time of Tenet's mounting legal troubles and faltering reputation, such behavior is especially counter-productive."

CNA also raised questions about Tenet's announcement today of the appointment of Jennifer Daley as senior vice president, clinical quality. Daley held a similar position in the late 1990s at Beth Israel-Deaconess Medical Center in Boston during which time the hospital was engaged in substantial cost cutting and changes in its nursing care. "This appointment does not provide any reassurance of a change in direction by Tenet," said Johnson

Since April, CNA, California's largest organization of RNs, has filed for federal labor board elections in 19 Tenet hospitals, in addition to five other Tenet facilities where CNA already represents the RNs. "But rather than encourage its RNs to freely exercise their democratic rights to hold a fair representation election, Tenet has embarked on a coercive campaign to pressure RNs to oppose affiliation with CNA including costly legal maneuvers in federal Labor Board hearings in an effort to delay elections," said Johnson.

Tenet's $6 million campaign against RNs and CNA since June 1 (conservative estimate):

* The consultants: $5,088,000 dollars in salary, plus $240,000 in expenses.

* The lawyers: $244,000 in legal fees for federal hearings.

* Costs for forcing RNs to attend mandatory anti-CNA meetings: $ 550,000.

A "most chilling" feature of the campaign, Johnson noted, is forcing RNs to attend mandatory anti-CNA meetings, often pulling them away from their patient care responsibilities in hospitals that already are beset with inadequate staffing.

The consultants: A scorecard

Tenet Healthcare has hired approximately 40 anti-union consultants called "persuaders" who misinform and intimidate nurses in order to silence their voice for patient care and erode their support for the California Nurses Association.

These consultants, some of the most experienced and aggressive at their trade, have been assembled from throughout the U.S. Previous clients include such Fortune 500 firms as General Motors, K-Mart, Daimler-Chrysler and Abbott Laboratories.

In Southern California, many of the same consultants were hired to oppose CNA at Cedars Sinai Medical Center, Long Beach Memorial Medical Center, St. Mary Medical Center in Apple Valley and San Pedro Hospital. At every one of these hospitals, the RNs rejected the consultant's campaign and voted for CNA representation.

The consultants include:

* James G. Trivisonno, President and Senior Partner of IRI (Industrial Relations Inc.) of Detroit, MI., one of the firms retained by Cedars Sinai Medical Center. Other IRI "persuaders" include Chip Stevers, Greg Passant, Mary Yarborough, and her daughter Gabrielle Yarborough.

* Brent Yessin, of Yessin and Assoc. - a former Vice President of the Burke Group, another anti-union firm which campaigned unsuccessfully against CNA at Long Beach Memorial Medical Center.

* Jerry O'Brien and Jim Lauren of MGS Consulting. Lauren, formerly with American Consulting Group, also worked in the campaigns at Long Beach Memorial, Cedars Sinai Medical Center and San Pedro Hospital.

What the consultants do:

RNs are required to attend mandatory one-to-one and group meetings where they are lectured by consultants and supervisors with inaccurate and misleading information about CNA. Frequently RNs must leave bedside patient care or other responsibilities to attend the sessions. Numerous other tactics are also employed, included direct pressure on RNs by their supervisors.

How much are the consultants paid?

Based on invoices from the Burke Group and American Consulting, the hourly rate is at least between $180 and $215 per hour. The calculations here are based at $200 per hour multiplied by half of the 40 consultants working round the clock fulltime. From June 1, 2003 through July 23, 2003, that sum equals $5,088,000 dollars in salary, plus $240,000 in expenses - food, lodging, and transportation.

The Daley appointment

In a new book, Code Green. Money-Driven Hospitals and the Dismantling of Nursing, author Dana Beth Weinberg interviewed a number of RNs who voiced growing dismay with short staffing and their ability to assure quality patient care in the years Daley served as medical director of health care quality at Beth Israel-Deaconess. An excerpt from the book was recently published in a CNA-supported magazine, Revolution, the Journal for RNs and Patient Advocacy. As one RN told Weinberg, "I don't have any trust in the administration of this hospital now to do the right thing because they're too focused on cutting costs."

ainz · Jul 24, 2003

Terrible news!!

NURSES PLEASE WAKE UP!!!!!!

We simply must unite and overcome these obstacles and challenges or our profession will disappear. We must take a multi-pronged approach to resolving our challenges.

We need a strong, national, all-inclusive organization to represent us in mass. There is an organization that already exists but has done a terrible job in advancing our profession. However, they have several things in place that are advantageous. If all nurses would join this organization then we could get people in their that would go to work aggressively and effectively for us all.

That organization is the American Nurses Association. Less than 10% of nurses belong because it has been expensive and we have nothing to really show for it.

fab4fan · Jul 24, 2003

Joining ANA only benefits you if you belong to a collective bargaining unit.

It does offer a lot of discounts, etc., but for nurses not represented by unions, it's a lot of $$ just for discounts you may/may not use.

Home Health Columnist / Guide · Jul 25, 2003

Never been involved in a collective bargining unit in my 21 yrs as an RN. It was an ANA member at our PSNA 's District 23 meeting that asked me to consider homecare nursing in 1985 and I've found my niche from that encounter.

My activisim and dedication to professional nursing spawned from another ANA member and dean at Viallanova University Dr Louise Fitzpatrick who encouraged Neumann College to send me to NSNA convention in 1982 (my senior year) and took me to dinner to meet AJN editor Mary Mallon (? spelling).

Betsy Walls RN was our district president in the 80's and stuck me on a committee "Image of the Nurse" about 1984.

Been involved in ANA at district level ever since due to strong MENTORSHIP---sorely lacking over the past ten years in nursing. Travels across the country have all been nursing related (and tax deduction) over the years.

Without ANA involvement, I'd not be the nurse I am today and not affraid to speak-up and work with nursing administration for the betterment our profession.

pickledpepperRN · Jul 29, 2003

http://www.thestreet.com/_tscs/stocks/melissadavid/10103545.html

Tenet Feels the Heat From the Feds

By Melissa Davis

Staff Reporter

07/25/2003 07:19 AM EDT

URL: http://www.thestreet.com/stocks/melissadavid/10103545.html

Tenet (THC:NYSE - news - commentary) may soon be fighting the equivalent of a nasty autoimmune disease.

Like the crippling ailments that turn the body's protective immune system against itself, Tenet's top managers could soon be feeling pressure to assail their corporate host. Already, federal agents have indicted one Tenet hospital CEO and issued subpoenas that could trigger fresh criminal charges at seven other facilities. And experts doubt the probes will end there.

"The Department of Justice seems to be moving ahead relatively quickly with what is known as a 'twisting in the wind' strategy, where one or two charges are filed but many more are being considered," said Peter Young, a health care consultant with Florida-based HealthCare Strategic Issues. "And they use the threat of conspiracy while persons or companies twist in the wind."

Indeed, last week's indictment of Tenet's Alvarado Hospital Medical Center -- which followed an earlier indictment of Alvarado CEO Barry Weinbaum -- specifically accuses the hospital of conspiring to defraud the federal Medicare program by paying illegal kickbacks to physicians in exchange for patient referrals. The new probes at seven other Southern California hospitals also question perks for Tenet physicians.

Tenet, which has denied any wrongdoing, failed to grant an interview for this story. But the company's own actions speak loudly about the potential magnitude of the DoJ probe. In a speech this week at Tenet's annual meeting, CEO Trevor Fetter revealed that the company had secured industry hotshot D. McCarty Thornton -- the former inspector general chief counsel who led the big attack on HCA (HCA:NYSE - news - commentary) -- as a consultant. And Thornton himself has publicly warned of serious repercussions for physician kickbacks.

"Thornton identified antikickback violations as the hottest area of risk for health care providers," the American Health Lawyers Association reported earlier this month. And Thornton emphasized that "greed is not good."

Young, who aided the DoJ in another big Medicare fraud case, said he's unable to share details about his current discussions with the DoJ about Tenet. But he pointed to the DoJ's own manual for sweeping health care fraud probes as a roadmap for the current Tenet investigation. And he speculated that Tenet could soon face an investigation that's "national in scope," with penalties approaching the $1.3 billion HCA paid to settle its own Medicare fraud charges.

Michael Ruggio, a Washington, D.C., attorney who helped defend HCA against the government, believes Tenet could face a penalty even worse than HCA's record-breaking fine. But he still tends to doubt that Tenet is guilty of a corporatewide conspiracy to defraud the government.

Investigators "see shadows that don't really exist," Ruggio said. "But they're going to pursue those shadows. And there is some stuff there -- there's no question about it."

Ruggio said Tenet could be forced to pay triple damages for Medicare violations. For now, he said, Tenet's exposure is "incalculable."

But Prudential analyst David Shove has warned of a potentially devastating backlash.

"A companywide investigation may be in its genesis," wrote Shove, who recommends selling Tenet shares. "Should such an investigation gather steam, it could potentially jeopardize Tenet's participation in federal health plans such as Medicare and Medicaid.

"Overall, these investigations raise some serious questions regarding Tenet's oversight of its local hospitals."

20/20 Vision

For his part, Young believes that Tenet keeps a close eye on its individual hospitals -- and stands culpable for any local wrongdoing as a result.

"In the Alvarado instance," he said, "there will be a sizable paper trail of millions of dollars of book entries to the physicians, all of which would have needed to be approved at the corporate-level finance department."

The DoJ is currently asking Tenet to explain both its general policy on physician relocation payments and its specific relocation contracts at the Southern California hospitals now under fire. For its part, Tenet has fiercely defended its relocation agreements as "entirely appropriate under the law" and essential to quality health care in underserved communities. Despite skepticism from critics, Tenet also insists that Alvarado's home base of San Diego struggles to attract doctors because of poor reimbursement levels and high business and housing costs.

"Although San Diego is often thought of as a desirable place to live," Tenet said, "it is facing a severe shortage of physicians."

But prosecutors have accused Alvarado of rewarding established doctors and medical practices -- instead of just incoming ones -- with the relocation agreements. Since 1992, the government claims, Alvarado has paid San Diego physicians millions of dollars for referring patients instead of covering legitimate relocation contracts.

"Kickbacks to doctors can wear many disguises, including sham relocation agreements," said Carol Lam, the U.S. attorney in San Diego. "They are still kickbacks. They are still illegal. And they threaten the integrity of our medical system."

Funny Money

Tenet has settled federal kickback charges before. In documents obtained by TheStreet.com, a California physician illustrated how one of the old arrangements worked.

"Garfield Medical Center always ... will be the only referring hospital in my private practice," the doctor wrote to Patrick Petre, acting CEO of the Southern California hospital, in 1991. "I will be using the following equipment and instruments. Anything you can do in setting and/or helping me in purchasing those instruments will be highly appreciated."

A week later, the top administrator of the Tenet-owned hospital sent the doctor a letter showing that Garfield had purchased $25,000 worth of equipment for the doctor's office. By this time, the doctor had already been referring patients to Garfield for five years. But he was allegedly promised rewards for referring patients from a new office where he was expanding. And he signed a so-called relocation agreement to secure the bonus payments.

"He agree [d] to advertise for and hire an associate doctor," the doctor's attorney later noted. "The hospital would pay $25,000 for recruiting expenses and pay $3,916 per month salary for [his] new associate. But [he] was told ... that he need not really hire a new associate and that [he] could use the money for any purpose he chose."

The doctor, who reportedly assumed the arrangement was legal, later ended such dealings after Medicare cracked down on Tenet in 1994. But he told his attorney five years later that kickbacks to other doctors were continuing.

The attorney noted that his client "knows the names of numerous doctors receiving suspicious incentives or holding duplicative or fictitious paid posts or otherwise involved in various kickback and incentive schemes. ... [He] revealed that there were continuing kickback and incentive schemes similar to the one [he] personally experienced, which were still in existence in at least five hospitals."

One of those five hospitals -- Encino/Tarzana Regional Medical Center of Los Angeles -- has already been swept up in the new DoJ kickback probe.

Wheels of Justice

Young expects more Tenet hospitals to follow. Overall, he's forecasting a "huge" investigation that leaves Tenet a far different -- and weaker -- company than it is today. Of course, Tenet stock has lost more than three-quarters of its value over the last year.

Specifically, Young believes Tenet will shed a number of hospitals that cannot perform under tighter Medicare guidelines. He also predicts that Tenet's relationship with doctors will suffer under DoJ scrutiny. And he thinks that Tenet executives -- in addition to Tenet itself -- could pay a high price in the end.

"People have tended to expect 'checkbook justice' because very few people have been charged before," Young said. "But I think the climate -- post-Enron, WorldCom and ImClone (IMCL:Nasdaq - news - commentary) -- is entirely different today."

Ruggio has also felt a shift. And he warns that big health care probes will probably begin, rather than end, with Tenet.

"Tenet is the beginning of a whole new era," he said. "This is the next frontier."

pickledpepperRN · Aug 1, 2003

The Week in Healthcare >> Written by Vince Galloro

Easing the pain

Tenet avoids firestorm at shareholders' meeting

Story originally published July 28, 2003

Tenet Healthcare Corp. has made a concerted effort to turn adversaries into allies since the Santa Barbara, Calif., company's troubles began in November.

At its annual shareholders meeting last week in Los Angeles, Tenet's leadership took plenty of heat, but those efforts at winning friends and gaining influence may have dampened what could have been a firestorm of protest.

Fueled by a nearly 80% drop in the price of Tenet's stock since the last annual meeting in October 2002, a handful of investors pilloried the company, but the California Nurses Association was Tenet's most vocal and persistent critic last week. The union represents registered nurses at five Tenet hospitals and is seeking to represent them at 19 other Tenet hospitals, for a total of 6,700 registered nurses. About 35 nurses and union officials demonstrated and conducted a news conference outside the meeting. Then, as many as a dozen who are also shareholders attended the meeting.

"You would think that Tenet would be looking to repair its relationship with its caregivers," said David Johnson, the nurses association's director for Southern California. "Instead, Tenet has chosen to launch an attack on the registered nurses working in their hospitals."

But there could have been another heavyweight California union there-the Service Employees International Union-if Tenet hadn't come to a framework agreement with the SEIU and a division of the Association of Federal, State, County and Municipal Employees in May.

Mary Kay Henry, who runs healthcare organizing in Southern California for two SEIU locals, said she wasn't nostalgic for the days when the union would demonstrate outside the meeting and ask questions inside it. "We see our demonstration as having moved inside the hospitals because we have organized more (Tenet) workers," Henry said. "People feel like we actually have a much more direct mechanism to address worker issues."

The SEIU now represents workers at 10 additional Tenet hospitals, for a total of 17 hospitals and 7,000 workers, Henry said. The settlement with Tenet also frees up the union's resources to work on organizing workers at not-for-profit hospitals in Southern California, she added.

Trevor Fetter, Tenet's president and acting chief executive officer, noted the agreement in his remarks to shareholders, but he also expressed concern that Tenet's relationship with the nurses union is poor. After the meeting, Fetter said he didn't want to downplay the union's complaints about Tenet, but he added that many of the problems are related to a dispute over pension benefits that has sparked a nine-month strike at 131-bed Doctors Medical Center-San Pablo (Calif.) Campus.

Besides some partial peace on the labor front, Tenet also seems to be benefiting from its announcement in January of a "Compact with the Uninsured." The compact, at least for now, has quieted K.B. Forbes, executive director of Consejo de Latinos Unidos, a Latino advocacy group. Forbes was one of the first to criticize Tenet's gross charges, or list prices, in relation to the effect those rapidly increasing charges had on the bills of uninsured patients. Tenet later said that rapid increases in gross charges were a big factor in the high Medicare outlier payments the company received, which helped spark the collapse in the company's stock price and triggered an audit by HHS' inspector general's office.

Meanwhile, Tenet directors last week elected Edward Kangas as the company's nonexecutive chairman. Kangas, 59, is the former chairman and CEO of the accounting firm Deloitte Touche Tomatsu. Kangas' election was prompted in part by two olive branches Tenet extended to investors this spring-the splitting of the chairman and CEO positions and the resignation from both posts by Jeffrey Barbakow.

Tenet also announced that it will submit to two voluntary quality initiatives-one to collect and make public performance data for three medical conditions, the other to submit to surveys of its hospitals by the Leapfrog Group, the coalition of health insurance purchasers that pushes for higher quality. Tenet also said it promoted Jennifer Daley, a physician, to senior vice president, clinical quality; she had been a regional chief medical officer for Tenet. In that position, she will oversee nine regional chief medical officers who will focus on clinical quality. Similarly, a nursing executive council will be formed, led by Lauren Arnold, who was named vice president of nursing.

On the compliance front, Tenet hired the law firm of Sonnenschein, Nath & Rosenthal, which includes two former high-ranking officials in HHS' inspector general's office-Mac Thornton and Howard Young.

After the shareholders meeting, Kangas said the executive search firm Spencer Stuart has narrowed the list of potential CEO candidates to about "a half-dozen," including Fetter. The directors will review those candidates in "short order," Kangas said, adding that review could take "a few weeks to a couple of months, but we're not talking until Christmas."

"This is a company that fundamentally does good things," Kangas told shareholders in explaining why he agreed to join the board in April. "That's not to say that I, the board of directors and the management don't recognize that this is a difficult time for the company, its employees and, most importantly, its shareholders."

The selection of Kangas was applauded by a frequent Tenet critic, shareholder M. Lee Pearce. Pearce expressed faith in Kangas, but only, Pearce added, if the board adds more independent members to give Kangas a majority of new directors to work with.

Kangas doesn't share Pearce's concerns. He said the holdover directors are no trouble to work with. Although the search remains for the final board slot, there are no plans to add more directors, Kangas added.

As for Tenet's labor relations, Pearce said after the shareholders meeting, "It's pitiful. This is a cry for help." He noted that Tenet's labor costs are a little more than 40% of revenue-which is in line with other investor-owned hospital companies-while the Mayo Clinic, Rochester, Minn., spends more than 60% of revenue on labor costs. "You can't have quality without bedside nursing," he said.

-With Mark Taylor

http://www.modernhealthcare.com/article.cms?articleId=30038&TopicId=65

pickledpepperRN · Sep 9, 2003

http://www.nytimes.com/2003/09/06/business/06TENE.html?ex=1063512000&en=8b18c0de0e95e564&ei=5040&partner=MOREOVER

September 6, 2003

Senate Finance Committee Demands Tenet Documents

By KURT EICHENWALD

The Senate Finance Committee has opened an investigation into allegations of wrongdoing at Tenet Healthcare and requested yesterday that the company produce a large number of documents for the inquiry.

In a letter to Trevor Fetter, the acting chief executive of Tenet, Senator Charles E. Grassley, the committee's chairman, criticized Tenet as a company with a "sordid corporate history" that had repeatedly fallen into scandal.

Tenet "more than holds its own among the worst corporate wrongdoers," Mr. Grassley wrote in the letter. "Tenet appears to be a corporation that is ethically and morally bankrupt."

Mr. Grassley's letter accompanied the committee's request for documents and other information about Tenet's activities. Most of those requests-for documents, e-mail messages and other records dating back as far as 1990-pertain to Tenet's hospital in Redding, Calif.; its cardiology program has been accused of providing medically unnecessary tests and surgery.

Many of the requests from the committee are about events that were disclosed last month in an article in The New York Times. For example, the article disclosed that numerous doctors at Redding Medical Center had raised concerns to multiple administrators about possible unnecessary procedures at the hospital; the committee's request specifies that Tenet should turn over all records related to those reported contacts and discussions.

Other requests relate to allegations that Tenet manipulated its pricing to affect the formula the government uses to calculate payments from federal health programs for treating the sickest patients. It also sought documents relating to a neurosurgeon at the company's Western Medical Center in Santa Ana, Calif., who has been repeatedly sued in malpractice or wrongful-death complaints.

Harry Anderson, a spokesman for Tenet, said that the company planned to cooperate with the request of the committee, which has oversight of federal health programs. "This is the latest in a long series of requests for information from the government," Mr. Anderson said. "We are going to cooperate with this one as we are with the others."

Mr. Anderson added that Tenet hoped Mr. Grassley's committee would conclude from the information that the company has changed in the wake of the events that are being examined. Those scandals-which began to emerge last year-have resulted in the replacement of much of the company's senior management, including Jeffrey C. Barbakow, Tenet's former chief executive.

"We hope to demonstrate to the committee the effectiveness of the many steps that the company has taken under its new leadership to put these matters behind it," he said.

In his letter, however, Mr. Grassley signaled that he had grave doubts about the company's capacity for change. He criticized Tenet's retention of certain managers, including the general counsel, throughout a variety of scandals over the last decade.

redshiloh · Sep 9, 2003

These are the ones who got caught...what scares me are the ones that get away.