Shock, NOT: Tenet to sell or shut hospitals and cut jobs - page 2

new york times, march 19, 2003 tenet healthcare corp. says it will sell, close or shrink 14 of its 114 hospitals and cut jobs and expenses to help cope with an expected decline in payments... Read More

  1. by   pickledpepperRN
    Sorry, this is personal for me. Tenet has lowered the standard of nursing care at my former "home hospital"
    Corporate Health Watch
    Tenet Healthcare:
    The seamy side of a dysfunctional system

    In December, the nation's largest for-profit hospital corporation agreed to pay the federal
    government $900 million dollars to settle out of court on charges the company committed
    fraud against the Medicare system. Nobody at HCA is going to do time for cheating the
    feds and the settlement cost is quite low considering the scale of the fraud but the news
    once again focused public attention on the endemic corruption of the market-driven
    healthcare system.

    Nothing illustrated better this seamy side of the system than the virtual cascade of
    revelations concerning the county's second largest hospital corporation - Tenet
    Healthcare. The same week HCA settled, federal officials carried out a daytime raid of a
    Tenet hospital in San Diego. The evidence they sought was said to be related to physician
    recruitment and referrals - which usually in such situations means kickbacks.

    The San Diego raid was only the latest in a series of revelations concerning the operation
    of the giant healthcare corporations. The source most cited in the media for the supporting
    data was the groundbreaking analysis released by the Institute for Socio-Economic Policy
    (IHSP). The institute studies revealed that Tenet:

    * Received from the federal Medicare system payments or "outliers" nearly triple
    the national average. Outlier is the technical term for Medicare reimbursements for
    particularly costly medical procedures. Nationally, outlier payments comprise 10
    percent of all Medicare reimbursements to Tenet. The national average for all
    hospitals is just 3.5 percent. In California, where Tenet has recently been embroiled
    in accusations of charges for unneeded heart surgeries, outlier payments average
    14 percent of all of Tenet's Medicare reimbursements, compared to a statewide
    average of 5.4 percent. Such payments accounted for 16.56 percent of all Medicare
    reimbursements for Doctor's San Pablo and 13.58 percent for Doctor's Pinole.

    (On December 31, the Wall Street Journal noted that Tenet's outliers make up
    nearly a quarter of the company's projected income this year and are up $412
    million over two years ago. The paper's editorial noted that "Tenet's earnings growth
    and rocketing share price were driven by outlier payments that were bound to end
    sooner or later, yet shareholders weren't let in on the secret).

    * Set drug prices that were more than triple the national average - $44.8 million per
    Tenet hospital compared to a national average of $13.7 million for all U.S.
    hospitals. Tenet accounts for 6 percent of $76.2 million in drug revenues nationally,
    even though the company holds only 2 percent of U.S. hospitals. The charges are
    for billings to all payers, including Medicare and private HMOs, and include both
    in-patient and outpatient charges. Tenet's sticker price on drug charges is 736
    percent above its costs across the U.S. - and 1,037 percent above costs in
    California. California hospitals accounted for seven of the top 10 Tenet hospitals in
    drug charges that have nearly doubled over the past four years.

    * Assessed charges to employers on workers compensation claims for employees
    needing hospitalization in California at double the charge rate of other California
    hospital systems. Tenet's median bill per hospital patient discharge was just under
    $34,000 compared to a statewide median for all non-Tenet hospitals of about
    $17,000. In individual counties Tenet's workers compensation charges far
    surpassed other hospitals. The highest charges have been in Stanislaus County,
    home of Tenet's Doctor's Medical Center of Modesto, and Shasta County, home of
    Redding Medical Center. In both places, Tenet tripled the median for non-Tenet

    "There is an enormous human toll from the outrageous markup on drugs by Tenet and
    other hospital chains," said CNA President Kay McVay, RN. "It drives up health care
    costs forcing seniors to choose between life saving medications and other basic needs,
    encourages insurers to cut other patient services, and prompts employers to reduce or
    eliminate health benefits."

    CNA said that Congress must also take into account hospital drug charges in the current
    policy debate on expanding access to prescription drugs. "Unless this critical component
    of the drug cost issue is addressed, any reform on prescription drugs will fail," said

    "This data raises some critical questions," said CNA President Kay McVay, RN. "Have
    Tenet's aggressive pricing policies led to inappropriate qualification of some medical
    procedures as outlier cases to generate higher profits? Does Tenet limit other medical
    services to provide more staff and facility space for procedures that will generate outlier
    payments? In what other areas of financial charges and reimbursements is Tenet out of
    line with other hospitals?"

    CNA is calling for:

    * A full federal investigation into all Tenet's charges to and reimbursements for
    Medicare and other payers.
    * Stricter Medicare oversight of what has been extremely lax scrutiny
    * Tougher penalties, including prison time, for corporate healthcare fraud.

    Noting that Medicare's "outlier" payments to Tenet spiked dramatically after
    implementation of the federal Balanced Budget Act - mandated cuts to hospitals, CNA
    has warned of the consequences for patients if all complex hospital procedures are
    jeopardized as a result of apparent excesses by Tenet. The problem goes beyond
    Medicare, said CNA leaders. Many hospital's contracts with private insurers have clauses
    similar to Medicare outliers that boost reimbursements when charges exceed a threshold.

    As the year came to an end, the unfolding scandal involving Tenet Healthcare had
    prompted or given new impetus to a number of national and state legislative actions.

    The California State Senate Labor and Industrial Relations Committee has slated a
    hearing on the evidence that Tenet has been overbilling on workers' compensation
    charges. Responding to a call from Senate President pro Tem John Burton, the hearing,
    slated for January 15 will also look into Tenet's markup on drug prices.

    "The committee's decision to hold hearings into Tenet's practices is both timely and
    urgent," said CNA President Kay McVay, RN. "We fully agree with Senator Burton that it
    is important to get to heart of the matter.'

    "RNs from throughout California can be expected to attended the hearing, she said and
    are prepared to offer testimony on Tenet's policies "and their effect on patients and the

    Meanwhile, the State Assembly Health Committee announced its plan to conduct a
    hearing to probe charges that Tenet Healthcare and other hospital chains have
    dramatically overbilled on pharmaceuticals and other charges. Committee Chair Dario
    Frommer (D-Los Feliz) said the investigation would be conducted in consultation with the
    state Attorney General and Department of Health Services. The Assemblymember cited
    CNA/IHSP research and noted that allegations against Tenet and other hospital systems
    "are alarming to many of us who dealt with the energy crisis last year. It appears that
    some hospitals may have borrowed a page from the Enron playbook to game California's
    taxpayers, health plans, and patients."

    Welcoming the Assembly probe, McVay said, "The heartbreak of every Californian who
    feels the effects of rising health care costs, who must make choices on whether to spend
    limited resources on life saving medications, other needed health care services or other
    basic needs, demonstrates the importance of this investigation and hearing," McVay said.

    In a related development, Rep. Dennis Kucinich (D-OH) has called for the establishment of
    a federal pricing commission on pharmaceuticals that would gather and report significant
    pharmaceutical financial information from the nation's health care facilities. The proposed
    agency would report drug information from all health facilities, including hospitals, nursing
    homes and clinics. This would ensure that any patient would be able to find out how much
    their hospital, for instance, paid for a medication and be able to compare that with how
    much they are charged for that medication. Each facility would be responsible for returning
    an annual survey to the Commission of the costs, charges and reimbursements for the top
    30 most used medications.

    "There is no question that drug prices are unaffordably high," said Kucinich. "What we
    have learned from IHSP is that drug prices are a principal driver in fueling overall increases
    in hospital costs and health insurance premiums. Pharmaceutical costs are making the
    entire healthcare system more expensive and poorer quality for all patients. The promise
    of prescription drugs was to make hospital cost diminish, but prescription drugs have done
    exactly the opposite."

    "Ultimately the source of the present scandal is not just the behavior of one rogue
    corporation, Tenet Healthcare, but the inherent flaws of a market-driven healthcare
    industry," said McVay. "Private hospital chains and private managed care corporations
    squeeze each other to maximize profits, and both look for loopholes in Medicare or state
    funds to generate higher payments, regardless of patient need. What is needed is not just
    modifications in Medicare payment policies, but a new national dialogue, and overhaul, of
    our market-driven healthcare system."

    (More information on the IHSP findings, including charts, is available on the CNA
    website at
  2. by   pickledpepperRN
  3. by   pickledpepperRN
    Why ar Tenet execs not on "Most Wanted" or handcuffed as "bad boys"?
    Wall Street Journal
    May 5, 2003

    Tenet, Under Fire, Forms Labor Pact With 2 Unions


    Tenet Healthcare Corp., a target of bruising attacks by
    labor leaders in recent years, sought to quell that
    criticism through a sweeping agreement with two unions
    that have been organizing nurses and other workers in
    its hospitals, especially in its home state of

    The pact opens the door to the Service Employees
    International Union and the American Federation of
    State, County and Municipal Employees to organize
    bargaining units at Tenet's 40 hospitals in California
    and two in Florida. Hospital workers will be able to
    freely decide whether to join one of the unions. They
    in turn agreed to binding arbitration and a "no strike"
    provision to resolve contract disputes.

    For Tenet, based in Santa Barbara, Calif., the labor
    agreement is part of a larger strategy to settle issues
    with outside critics as it confronts serious challenges
    to its reputation and financial future. The federal
    government is pursuing criminal and civil
    investigations of many of its hospitals, and Tenet's
    profit will be sharply lower this year due to smaller
    payments from a Medicare program that is being revamped
    after revelations of outsize payments to the company.

    The labor accord is similar to those reached with other
    major hospital chains in recent years, but goes further
    by establishing upfront a standard package of benefits,
    including pay increases of as much as 29% over four
    years. The idea is to take the most contentious issues
    off the table to create a more cooperative bargaining
    environment over scheduling, work rules, and patient
    care-related matters.

    "This sets an example for the entire hospital industry
    in some ways, by letting everybody work together on the
    things that matter," such as improving the quality of
    care for patients by minimizing the risk of errors and
    infections, said Joyce Moscato, a spokeswoman for the
    SEIU in Washington.

    While the pact may soothe relations between Tenet and
    the two national unions, it ignited a war with the
    California Nurses Association, or CNA, a third union
    that didn't sign the deal and has been aggressively
    competing for members against SEIU and AFSCME.

    "It's a clear violation of labor law to be effectively
    bribing employees with the promise of increased pay
    solely on whether or not they will be joining SEIU or
    AFSCME," said Charles Idelson, a CNA spokesman. SEIU
    operatives, he noted, already were distributing
    leaflets to nurses in Tenet hospitals, saying if they
    voted for CNA they would be forfeiting 29% pay raises.
    CNA plans to file a complaint with the National Labor
    Relations Board, he said.

    By signing the union pact, Tenet is tacitly
    acknowledging the success of unions in organizing
    health-care workers in California in recent years.
    While only about 8% of the company's 115,000 workers
    belong to a union, and only 11 of its California
    hospitals have bargaining units, unions have been
    making steady headway in gaining members. They have
    also badmouthed Tenet to influential legislators in
    Sacramento and embarrassed its executives with picket
    lines and other disruptions at the annual meeting of

    The benefit package in the union deal calls for wage
    increases of 8% in the first year and 7% in each of the
    next two or three years, depending on timing of a new
    contract. While the increases are big, Tenet said they
    are comparable to annual increases paid to nurses and
    some other health-care professionals in recent years
    because of acute shortages.

    Write to Rhonda L. Rundle at rhonda.rundle@wsj.com1