|Traded as||NYSE: THC
S&P 500 Component
Dallas, Texas, U.S.
|Key people||Trevor Fetter
(President and CEO)
(Chief Financial Officer)
(President, Hospital Operations)
(SVP & General Counsel)
|Revenue||US$ 11.102 billion (2013)|
|Operating income||US$ 663 million (2013)|
|Net income||US$ (104) million (2013)|
|Total assets||US$ 16.130 billion (2013)|
|Total equity||US$ 878 million (2013)|
|Employees||103,711 (December 2013)|
Tenet Healthcare Corporation is an investor-owned healthcare services company based in Dallas, Texas. Tenet owns and operates 80 acute-care hospitals in 14 states and 193 outpatient centers, with a majority of the hospitals located in California, Florida, Michigan and Texas. Tenet also operates outpatient centers in 16 states, as well as six health plans, 12 accountable care networks, and Conifer Health Solutions, which provides business process solutions to clients nationwide. Headquartered in downtown Dallas, TX, Tenet has more than 20,000 licensed beds and more than 100,000 employees. The company’s hospitals offer acute, coronary and critical care; operating and recovery rooms; clinical laboratories and pharmacies; and radiology, respiratory, oncology, orthopedic, physical therapy and organ transplant services.
In 2008, Tenet launched Conifer Health Solutions, which serves more than 700 clients in the healthcare industry, including nearly 300 hospitals. Conifer processes $25 billion in net revenue annually and operates in 42 states.
In 2013, Tenet completed its acquisition of Vanguard Health Systems, Inc., an investor-owned hospital company whose operations complemented Tenet's existing business. The acquisition created the third-largest investor-owned hospital company in the U.S. in terms of revenue and the third-largest in number of hospitals owned. In 2014, Tenet ranked #229 in the annual Fortune 500 list of the largest American companies.
- 1 History
- 2 Operations
- 3 Recent acquisitions and developments
- 4 Awards and recognition
- 5 Philanthropy
- 6 Controversies
- 7 See also
- 8 References
- 9 External links
Tenet was founded in 1967 by attorneys Richard Eamer, Leonard Cohen and John Bedrosian as National Medical Enterprises (NME) and headquartered in Los Angeles, California. By 1975, NME owned, operated, and managed 23 hospitals and a home health care business. In the 1970s, NME expanded into hospital construction and bought five Florida hospitals. By 1981, NME owned or managed 193 hospitals and nursing homes, and became the third-largest healthcare company in the U.S. In the mid-1980s, NME shifted its focus to specialty hospitals. By 1990, the company had 200 hospitals in its network and was the second-largest hospital company in the U.S.
After some scandals in the early 1990s (see below), NME divested its specialty facilities. Tenet dominated the Southern California market at the time and sought a foothold in South Florida, Louisiana, Texas, and the Philadelphia, PA area. In 1994, NME bought American Medical Holdings for $3.35 billion, which strengthened its presence in Southern California and South Florida, and extended its reach into New Orleans, LA and Texas. Following completion of the acquisition, NME changed its name to Tenet Healthcare Corporation. In 1996, Tenet CEO Jeffrey Barbakow moved Tenet's headquarters from Santa Monica, CA to Santa Barbara, CA. In 1998, Tenet purchased eight Philadelphia hospitals owned by the bankrupt Allegheny Health, Education & Research Foundation for $345 million.
In 2002, one of Tenet's hospitals came under scrutiny for its surgical practices and another was investigated in a kickback scheme (see below). Federal investigations into the company's billing practices, particularly those related to Medicare, began late in 2002, leading to a decline in Tenet’s stock price of about 70%. In 2003, Trevor Fetter became CEO of Tenet and started Commitment to Quality, an initiative to improve the “quality, safety, service and outcomes of the care and services” provided by Tenet. To rebuild its ethics and compliance programs, Tenet hired a chief compliance officer who reports directly to the company’s board of directors
In 2003, Tenet sold or closed 14 hospitals and closed more than 20 facilities in 2004 to achieve its financial performance goals. Also in 2004, Tenet also moved its headquarters from Santa Barbara, CA to Dallas, TX. In 2006, Tenet agreed to pay $725 million to the Justice Dept. to settle allegations of unusually high Medicare payments to Tenet hospitals in 2000 to 2002. Tenet also entered into a 5-year corporate integrity agreement with the U.S. Department of Health & Human Services that required the company to provide detailed financial reports on its patient mix, collection rates and accounts receivables. In 2007, Tenet appointed former Florida governor Jeb Bush to its board of directors to improve its reputation.
In 2008, Tenet launched Conifer Health Solutions, a healthcare services company. Conifer currently serves nearly 300 hospitals throughout the U.S. and processes $25 billion in net revenue annually.
In early 2009, the price of Tenet stock briefly dipped below $4 per share after cresting above $200 per share in 2002. By the end of 2009, the company rebounded to become the S&P 500’s number 2 performer, with an operating revenue and net profit of $9 billion and $181 million, respectively. Through the end of 2013, Tenet’s stock price increased 816 percent, from $4.60 to $42.12, over the previous five years.
In April 2012, Tenet agreed to pay $42.75 million to resolve allegations that it improperly billed Medicare between 2005 and 2007. An internal investigation by Tenet revealed Medicare billing irregularities, and the company reported itself to the U.S. government. In May 2012, Tenet sold Diagnostic Imaging Services, Inc., its former diagnostic imaging center business in Louisiana. In August 2012, Tenet sold its Creighton University Medical Center in Nebraska.
In 2013, Tenet acquired Vanguard Health Systems, based in Nashville, TN, in a deal worth $4.3 billion. Through its acquisition of Vanguard, Tenet acquired 28 hospitals and 39 outpatient centers that serve communities in Arizona, California, Illinois, Massachusetts, Michigan and Texas. The acquisition created the third-largest for-profit hospital chain in the U.S. in terms of revenue and the third-largest in number of hospitals owned.
- Acquired from Vanguard Health Systems
- Abrazo Health Care
- Arizona Heart Hospital
- Arizona Heart Institute
- Arrowhead Hospital
- Baptist Health System
- Detroit Medical Center
- Louis A. Weiss Memorial Hospital
- Macneal Hospital
- Maryvale Hospital Medical Center
- Paradise Valley Hospital (Arizona)
- Phoenix Baptist Hospital & Medical Center
- Westlake Hospital
- West Suburban Medical Center
- West Valley Hospital
In May 2014, Tenet launched MedPost, a national network of urgent care centers. In June 2014, Tenet acquired a majority interest in Texas Regional Medical Center, a 70-bed community hospital in Sunnyvale, TX, east of downtown Dallas.
In June 2014, Tenet opened Resolute Health Hospital in New Braunfels, Texas. The 128-bed hospital is located on a 56-acre “wellness” campus near San Antonio, TX, and is Tenet's 79th hospital and 19th in Texas. Tenet acquired Emanuel Medical Center in Turlock, California on August 1, 2014, bringing the number of Tenet's hospitals to 80 nationwide.
As of July 14, 2014, Tenet has 193 outpatient centers. As of August 2014, Tenet operated 80 hospitals, six health plans, 12 accountable care networks, and Conifer Health Solutions. Tenet-operated hospitals include four academic medical centers, two children’s hospitals, three specialty hospitals and a critical access hospital, with a total of 20,491 licensed beds, serving primarily urban and suburban communities in 14 states.
In addition, Tenet subsidiaries own or lease and operate a number of medical office buildings, all located on or near Tenet hospital campuses. Tenet subsidiaries also operate free-standing and provider-based outpatient centers in 16 states, including diagnostic imaging centers, ambulatory surgery centers, satellite emergency departments and urgent care centers. Tenet owns over 500 physician practices as well.
Recent acquisitions and developments
In March 2014, Tenet formed a partnership with the Yale New Haven Health System to create a comprehensive healthcare delivery network in Connecticut. The partnership has letters of intent in place to acquire four hospitals in the state. In May 2014, Tenet announced plans to partner with the Texas Tech University Health Sciences Center in El Paso to develop a new 140-bed teaching hospital on the city’s west side.
In July 2014 Tenet announced that Saint Mary's Hospital in Waterbury, Connecticut would be acquired by a subsidiary of the company, with the hospital's religious directives and uncompensated care policies remaining intact. Tenet was chosen by the hospital after a four-year selection process. This continued a trend of Tenet allowing a model of common ownership, where each acquired hospital has its own agreement conditions. In late July Tenet signed a letter of intent to form a joint venture which would acquire and operate three hospitals in Tucson, Arizona. In the agreement Tenet would be the majority owner and sole operator of the hospitals.
Awards and recognition
Tenet Healthcare has received numerous honors for executive and hospital leadership, nursing excellence, clinical quality, and recognition from insurers. In 2013, the American Heart Association recognized Tenet as a “Platinum Fit-Friendly Company.” Tenet’s board of directors was named the Outstanding Board of Directors for a Public Company by the Dallas Business Journal in September of 2014.
A number of their staff have won award for their work at Tenet as well. The company's CEO Trevor Fetter has appeared several times on the “100 Most Influential People in Healthcare" list compiled by Modern Healthcare, ranking No. 13 in 2014. In 2011, Audrey Andrews, chief compliance officer at Tenet, was recognized as one of the “Top 25 Women in Healthcare" by Modern Healthcare. Likewise, in 2014 their SVP and chief clinical officer, Dr. Kelvin Baggett, was named on the magazine's list of “50 Most Influential Physician Executives & Leaders.” Tenet's CFO Dan Cancelmi was named CFO of the Year by the Dallas Business Journal in October 2014.
In 2014, Tenet Healthcare was a presenting sponsor of the third annual Clinton Foundation Health Matters Conference in La Quinta, California. In 2012, Tenet joined GE and Verizon in supporting the launch of the Clinton Health Matters Initiative, created by the William J. Clinton Foundation to build on its work on global health and childhood obesity. In 2004, Tenet Healthcare Foundation, Tenet’s charitable giving arm, awarded $2.78 million to support accelerated undergraduate and graduate nursing degree programs at five nursing colleges in Southern California, South Florida, Georgia and Texas. In 2002, the Tenet Healthcare Foundation awarded a $1 million grant to provide financial support to Latino nursing students.
In Tenet’s “2013 Sustainability Report: Tenet Cares,” the company stated that its support for local communities that year totaled $545 million in uncompensated care and $158 million in charity care.
In the early 1990s as National Medical Enterprises, the company was accused of committing fraud by admitting thousands of psychiatric patients who did not need hospitalization and then charging these patients inflated prices. In 1991, the federal government investigated the company for fraud and conspiracy. In 1993, law enforcement raided company offices in an attempt to show that the company was defrauding patients and insurance companies. In 1994, the company paid $2.5 million to settle lawsuits from 23 patients at its psychiatric hospitals. Again in 1994, National Medical Enterprises settled fraud charges with the United States and 28 states involving payments of a record $380 million at the time and federal guilty pleas on eight criminal counts by two of its units. The company also agreed to a 5-year corporate integrity agreement with the U.S. Department of Health and Human Services.
Unnecessary heart surgeries
In the late 1990s through the early 2000s, Redding Medical Center (at the time, a Tenet-owned hospital), was investigated for performing unnecessary heart surgeries on over 600 patients. To settle these allegations, Tenet agreed to pay a $54 million fine to the federal government and the state of California, without admitting wrongdoing. This settlement did not preclude civil or criminal charges against individuals of the company. In order for the hospital to continue receiving Medicare reimbursements, Tenet was compelled by federal regulators to sell the hospital which was subsequently renamed Shasta Regional Medical Center. In 2004, Tenet paid an additional $395 million to 769 patients to settle litigation for the unnecessary surgeries. The scandal and subsequent federal investigation are described in the book Coronary: A True Story of Medicine Gone Awry by author Stephen Klaidman.
In June 2006, Tenet agreed to pay $725 million in cash and give up $175 million of Medicare payments for a total of $900 million in fees to resolve claims it defrauded the federal government for over-billing Medicare claims during the 1990s. To finance the settlement, they sold 11 hospitals in four states including Memorial Medical Center (see below). In September of that year, Tenet entered into a 5-year corporate integrity agreement with the U.S. Department of Health and Human Services. That agreement expired on September 27, 2011.
In July 2006, in the aftermath of Hurricane Katrina in August 2005, Dr. Anna Pou and nurses Lori Budo and Cheri Landry, employees at Tenet-owned Memorial Medical Center in New Orleans, LA, were arrested after being charged by Louisiana Attorney General Charles Foti of second-degree murder in the deaths of four patients. In August 2007, a New Orleans grand jury declined to indict the three women and a New Orleans judge expunged their arrest records. In July 2007, Dr. Pou sued Foti for defamation and damage to her career. In June 2006, Tenet announced it planned to sell Memorial Medical Center and three other hospitals in the greater New Orleans area. In July 2009, Gov. Bobby Jindal approved by a bill passed by the Louisiana Legislature to reimburse Pou’s legal fees, which totaled more than $450,000.
Tax dodging and lobbying
In December 2011, the non-partisan organization Public Campaign criticized Tenet Healthcare for spending $3.43 million on lobbying and not paying any taxes during 2008–2010, instead getting $48 million in tax rebates, despite making a profit of $415 million, and increasing executive pay by 19% to $24 million in 2010 for its top 5 executives.
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