Tenet Healthcare

Tenet Healthcare Corporation

Company type	Public
Industry	Healthcare services
Founded	1969
Founder	Richard Eamer, Leonard Cohen, John Bedrosian
Headquarters	Dallas, Texas , United States
Area served	United States, United Kingdom
Key people	Trevor Fetter (CEO and Chairman as of 2015)
Products	Hospital management, outpatient surgery centers, healthcare support services
Website	www.tenethealth.com

Tenet Healthcare Corporation is an American multinational enterprise specializing in healthcare services, operating on a for-profit basis and headquartered in Dallas, Texas. The company manages 65 hospitals and more than 450 healthcare facilities through its subsidiaries, partnerships, and joint ventures, including United Surgical Partners International (USPI). Additionally, Tenet owns Conifer Health Solutions, which delivers healthcare support services to various health systems and clients.

Established in 1969, Tenet has expanded significantly through targeted acquisitions and growth initiatives. Notable developments include the creation of Conifer Health Solutions in 2008, the introduction of MedPost Urgent Care in 2014, and the 2013 acquisition of Vanguard Health Systems for $4.3 billion. This purchase elevated Tenet to become the third-largest investor-owned hospital operator in the United States by both revenue and number of hospitals. The 2015 acquisition of USPI further solidified its position as the leading operator of outpatient surgery centers nationwide. In 2021, Tenet was ranked 167th on the Fortune 500 list.

The company has encountered multiple multimillion-dollar settlements related to allegations of Medicare and Medicaid fraud, including claims involving inappropriate psychiatric admissions and inflated billing practices.

1967–1999

Incorporated in 1969 by attorneys Richard Eamer, Leonard Cohen, and John Bedrosian under the name National Medical Enterprises (NME), Tenet was initially based in Los Angeles, California. By 1975, NME operated 23 hospitals alongside a home health care division. The company's portfolio grew to include 193 hospitals and nursing homes by 1981, making it the third-largest healthcare organization in the country. During the mid-1980s, NME concentrated on specialty hospitals; by 1990, it managed 200 hospitals, ranking as the second-largest hospital company nationwide.

Following controversies in the early 1990s, NME divested many specialty facilities but retained a substantial market presence in Southern California, while planning expansions into South Florida, Louisiana, Texas, and Philadelphia. In 1994, NME strengthened its regional influence by acquiring American Medical Holdings for $3.35 billion, enhancing its operations in Southern California and South Florida and establishing a presence in New Orleans and Texas. Subsequent to this acquisition, NME rebranded itself as Tenet Healthcare Corporation. In 1996, CEO Jeffrey Barbakow moved the corporate headquarters from Santa Monica, California to Santa Barbara, acquiring OrNda—the third-largest investor-owned hospital chain at that time. Two years later, in 1998, Tenet purchased eight Philadelphia hospitals from the bankrupt Allegheny Health, Education & Research Foundation for $345 million.

2000–2013

In 2002, federal probes into surgical procedures and Medicare billing led to a roughly 70% decline in Tenet’s stock price. To address these challenges, CEO Trevor Fetter introduced the Commitment to Quality program in 2003 aimed at improving care standards and regulatory compliance; this included appointing a chief compliance officer who reported directly to the board. To enhance financial stability, Tenet divested or closed multiple hospitals between 2003 and 2004 and relocated its headquarters from Santa Barbara to Dallas in 2004. In 2006, Tenet resolved Medicare overpayment claims by agreeing to pay $725 million and entered into a five-year corporate integrity agreement mandating detailed financial disclosures. Former Florida governor Jeb Bush joined Tenet’s board in 2007 to support reputation management efforts.

Tenet launched Conifer Health Solutions in 2008 as a healthcare services provider which by 2018 served approximately 800 clients and managed $30 billion in net revenue annually. Despite experiencing stock fluctuations—falling below $4 per share early in 2009 after exceeding $200 in 2002—Tenet rebounded by year-end with $9 billion operating revenue and $181 million net income, ranking as the second-best performer on the S&P 500 that year. In July 2019, Tenet announced plans to spin off Conifer into an independent publicly traded entity.

In May 2011, Tenet’s board declined a $7.3 billion acquisition offer from Community Health Systems that would have created the largest hospital company in the U.S. The following year saw a $42.75 million settlement related to Medicare billing allegations spanning from 2005 to 2007 following an internal review. In 2012, Tenet divested Diagnostic Imaging Services operations in Louisiana as well as Creighton University Medical Center in Nebraska.

A significant strategic expansion occurred in 2013 when Tenet acquired Vanguard Health Systems for $4.3 billion; Vanguard was headquartered in Nashville and added 28 hospitals along with 39 outpatient centers across Arizona, California, Illinois, Massachusetts, Michigan, and Texas. This acquisition elevated Tenet to become the third-largest for-profit hospital operator nationwide by revenue and facility count. By year-end 2013, Tenet’s stock price had increased by 816% over five years reflecting robust business growth and enhanced financial results.

2014

In 2014, Tenet was positioned at number 229 on the Fortune 500 list of the largest American corporations. In March, Tenet collaborated with Yale New Haven Health System to establish a healthcare delivery network in Connecticut. By May, it revealed plans to partner with Texas Tech University Health Sciences Center to create a 140-bed teaching hospital located in El Paso, Texas. That same month, Tenet introduced MedPost Urgent Care, a nationwide initiative that rebranded its urgent care centers, which at that time consisted of 23 locations spread across several states.

June 2014 saw Tenet acquiring a controlling interest in Texas Regional Medical Center, a 70-bed facility near Dallas, while also inaugurating Resolute Health Hospital, a 128-bed institution near San Antonio—marking its 79th hospital overall and 19th in Texas. In July, Tenet intended to purchase Saint Mary's Hospital in Waterbury, Connecticut; however, due to concerns regarding state-imposed sale conditions, the transaction was abandoned and the hospital was ultimately acquired by Trinity Health.

On August 1, Tenet bought Emanuel Medical Center, a 209-bed hospital in Turlock, California operated by the Swedish Evangelical Covenant Church, increasing its total number of hospitals nationwide to 80. Later in December, Tenet entered into a letter of intent to establish a joint venture with the Baptist hospital system based in Birmingham, Alabama—merging four Baptist hospitals with Tenet’s own Brookwood Medical Center—with Tenet holding majority ownership.

By the fourth quarter of 2014, Tenet had returned to profitability fueled by increased admissions and revenue growth, including a notable 20.5% rise in Medicaid admissions following the Affordable Care Act. The company also experienced a reduction in its bad debt expense ratio alongside growing hospital admissions. Full-year projections forecasted revenues between $17.4 billion and $17.7 billion with earnings surpassing $1.95 billion. On May 7, 2015, Trevor Fetter was appointed chairman of the board while retaining his role as CEO. By 2015, Tenet had improved its Fortune 500 ranking from #229 to #170.

2015–2016

In March 2015, Tenet announced plans to acquire a majority interest in United Surgical Partners International (USPI), positioning itself as the leading operator of outpatient surgery centers across the United States. The acquisition completed in June 2015 almost doubled Tenet’s outpatient facilities from 210 to over 400, significantly increasing its market presence. Simultaneously, Tenet purchased Aspen Healthcare in Great Britain, marking its strategic entry into international markets via nine British healthcare facilities. Bill Wilcox continued as CEO of USPI while maintaining independent branding; Kyle Burtnett joined as chief integration officer.

In September 2015, Tenet entered into a joint venture with Dignity Health and Ascension Health to acquire majority ownership of the three-hospital Carondelet Health Network located in Tucson, Arizona. This acquisition added nearly 1,000 beds and raised Tenet’s total general acute care hospitals count to 83. Meanwhile, the Abrazo Health Network acquired through the Vanguard deal in 2013 was rebranded as Abrazo Community Health Network in May of that year.

January 2016 marked the closure of a joint venture between Tenet and non-profit Baylor Scott & White Health to co-own multiple hospitals in North Texas. These facilities were rebranded under the Baylor banner, enhancing Tenet’s regional market presence and brand alignment.

On October 3, 2016, Tenet agreed to pay $514 million to settle claims brought by the United States Department of Justice related to a Medicaid kickback scheme involving four hospitals and Clinica de la Mama. Two former subsidiaries pleaded guilty to conspiracy charges; however, federal officials acknowledged that some individuals within those hospitals had bypassed Tenet’s compliance measures.

Additionally in 2015, Tenet announced plans to acquire Birmingham’s Baptist Health System including Brookwood Medical Center. The transaction was finalized in 2016 with the combined entity renamed as Brookwood Baptist Health, strengthening Tenet’s position within Alabama.

In September 2016, Tenet’s contract with insurer Humana Inc expired, causing its facilities to become out-of-network for Humana patients under both commercial and government plans. A new agreement was reached by May 2017, restoring network access effective June.

2017–present

In August 2017, Tenet Healthcare completed the transaction selling three hospitals and associated facilities in Houston to HCA Healthcare for $750 million. Concurrently, Glenview Capital Management removed two members from Tenet’s board due to disagreements over corporate strategy. Rumors of a possible company sale emerged in September 2017 but were dispelled by October, around the time CEO Trevor Fetter stepped down and Ron Rittenmeyer took over as CEO while also serving as executive chairman.

By April 2018, Tenet had increased its ownership in United Surgical Partners International (USPI) to 95%. Later that year, in August, the company exited the United Kingdom market by divesting its Aspen Healthcare subsidiary. Within the U.S., Tenet sold MacNeal Hospital located in Berwyn, Illinois, to Loyola Medicine during 2018. In January 2019, it transferred its last three for-profit hospitals in the Chicago area—Louis A. Weiss Memorial, Westlake, and West Suburban—to Pipeline Health. Subsequently, Pipeline Health declared intentions to shut down Westlake Hospital within five months.

Throughout the COVID-19 crisis, Tenet posted profits nearing $399 million while furloughing approximately 11,000 staff members. In 2020, J. Roger Davis assumed the roles of president and CEO at Conifer Health Solutions. That December, Tenet secured a controlling interest in 45 ambulatory surgery centers from SurgCenter Development.

In April 2021, Tenet divested its urgent care operations managed through USPI. By August of the same year, it sold five hospitals in Florida—Coral Gables, Florida Medical Center, Hialeah, North Shore Medical Center, and Palmetto General—to Steward Health Care.

Psychiatric fraud

During the early 1990s, under the name National Medical Enterprises, the organization faced accusations of medicare fraud involving unnecessary admissions of thousands of psychiatric patients coupled with excessive billing. Federal authorities initiated investigations in 1991 and conducted raids in 1993 targeting fraudulent billing schemes. By 1994, the company reached settlements including $2.5 million paid to 23 patients and a landmark $380 million agreement resolving claims with the U.S. government and 28 states. This settlement involved guilty pleas from two subsidiaries and a five-year corporate integrity agreement with the U.S. Department of Health and Human Services.

Unnecessary heart surgeries

From the late 1990s through the early 2000s, Tenet’s Redding Medical Center was scrutinized for conducting unwarranted cardiac surgeries on more than 600 individuals. To settle these allegations without admitting liability, Tenet paid a $54 million penalty and agreed to sell the hospital, which was subsequently renamed Shasta Regional Medical Center. In 2004, an additional $395 million was paid to resolve lawsuits involving 769 patients. This controversy severely affected Tenet’s public image and regulatory responsibilities.

California Closures

During the mid-1990s, Tenet adopted a strategy focused on acquiring community hospitals in Southern California to benefit from increasing insurance reimbursements. However, under CEO Jeffrey Barbakow’s leadership, the company faced backlash for shuttering several community hospitals amid inconsistent financial justifications. The City of Pasadena, California openly criticized Tenet following its acquisition of Oronda Health group in 1996. St. Luke Medical Center, one of only two general acute care hospitals serving Pasadena at that time, became a focal point for complaints regarding neglect after renovations were completed. Despite these improvements, Tenet reported St. Luke as financially underperforming and closed it in January 2002, triggering strong opposition from Pasadena officials. Barbakow resigned three months later after receiving an undisclosed settlement payment.

Medicare fraud

In June 2006, Tenet agreed to a $900 million settlement, comprising $725 million in cash payments and the forfeiture of $175 million in Medicare reimbursements, to address claims of Medicare billing fraud during the 1990s. To finance this agreement, Tenet divested 11 hospitals located in four states, including Memorial Medical Center. Following the settlement, Tenet entered into a five-year corporate integrity agreement with the U.S. Department of Health and Human Services, which concluded in September 2011.

Bribery

Tenet Healthcare and two of its subsidiaries consented in October 2016 to pay $513 million to settle accusations related to defrauding the U.S. government via a kickback scheme aimed at securing patient referrals. The subsidiaries admitted guilt for conspiracy and using kickbacks to channel predominantly undocumented Hispanic female patients to Tenet’s labor and delivery services.

Hurricane Katrina

In August 2005, Hurricane Katrina severely affected Memorial Medical Center in New Orleans, which was owned by Tenet at the time. Flooding disabled the hospital's emergency generators, forcing staff to care for patients without electricity, sanitation, or sufficient supplies. During several days of evacuation efforts, 45 patients died within the facility. Allegations emerged that medical personnel accelerated deaths through sedative administration; in 2006, Dr. Anna Pou and two nurses faced second-degree murder charges but were ultimately exonerated and had their arrest records cleared. In 2007, Pou initiated a defamation lawsuit. After these events, Tenet announced intentions to sell Memorial Medical Center along with three other New Orleans hospitals. By 2009, Louisiana reimbursed Pou’s legal expenses exceeding $450,000.

Tax dodging and lobbying

The non-partisan group Public Campaign criticized Tenet Healthcare in December 2011 for spending $3.43 million on lobbying efforts while avoiding tax payments between 2008 and 2010. Despite generating $415 million in profits during this period, Tenet received $48 million in tax rebates. Additionally, compensation for the company’s top five executives rose by 19%, reaching $24 million in 2010.

Florida pediatric heart surgery standards

In 2015, CNN reported that Tenet lobbied Florida Governor Rick Scott and Republican lawmakers to eliminate pediatric heart surgery standards after one of its hospitals failed to meet those criteria. Both Tenet and state officials denied any misconduct; Tenet stated it never engaged with the governor’s office or elected representatives about opposing or altering the standards. Florida Health clarified that the legal foundation for these regulations had been revoked in 2001, and their formal removal in 2015 represented an administrative oversight.

Children's Hospital of Michigan physician barring

Toward the end of 2019, University Pediatricians—affiliated with Wayne State University School of Medicine—transitioned to Central Michigan University. In response, Wayne State established Wayne Pediatrics, mandating affiliated physicians to transfer within 30 days or lose privileges at Children’s Hospital of Michigan. Since University Pediatricians held an exclusive contract with Detroit Medical Center (owned by Tenet Healthcare), Tenet prohibited Wayne Pediatrics doctors from accessing hospital privileges. In April 2020, Wayne State announced it would pursue legal action against Tenet concerning this conflict.

2021 Strike at Saint Vincent Hospital

On March 8, 2021, employees at Saint Vincent Hospital in Worcester, Massachusetts—operated by Tenet Healthcare—commenced a labor strike. The Massachusetts Nurses Association indicated that Tenet expended over $60 million throughout the strike period, which included costs for hiring substitute nurses and compensating the Worcester Police Department more than $30,000 each day to monitor the picket lines. While the union argued that these expenses surpassed the financial demands of the nursing staff, hospital executives contested the accuracy of the $60 million estimate.

The union highlighted concerns about hazardous working environments and excessive nurse workloads that compromised patient care quality, issues exacerbated by the COVID-19 crisis. Additionally, they criticized Tenet for placing nurses on furlough despite receiving significant CARES Act financial support. Tenet proposed a contract in early July and engaged in negotiations on July 22–23, with further discussions scheduled for August 2–3, 2021.

Operations

As of 2021, Tenet Healthcare Corporation's workforce numbered around 110,000 employees. Through its various brands, subsidiaries, joint ventures, and alliances—including its partnership with United Surgical Partners International (USPI)—Tenet managed 65 hospitals along with approximately 500 additional healthcare facilities as of September 30, 2019. Its subsidiaries own or lease numerous medical office buildings adjacent to Tenet hospital campuses and operate independent outpatient centers such as diagnostic imaging facilities, ambulatory surgery centers, off-campus emergency departments, and urgent care clinics.

Awards and recognition

Tenet Healthcare has received numerous accolades for its operational excellence and leadership. In 2013, it was honored as a "Platinum Fit-Friendly Company" by the American Heart Association. The company's board of directors earned the Outstanding Board of Directors for a Public Company distinction from the Dallas Business Journal in both 2014 and 2021. Ron Rittenmeyer, Tenet’s executive chair and CEO, has been acknowledged as a "most admired CEO" by the Dallas Business Journal and was ranked fifty-ninth among the 100 Most Influential People in Healthcare by Modern Healthcare in 2019.

Philanthropy

The Tenet Healthcare Foundation has played an active role in promoting nursing education and supporting community health programs. In 2002, it granted $1 million to aid Latino nursing students. By 2004, the foundation had invested $2.78 million to expand nursing degree offerings at five colleges located in Southern California, South Florida, Georgia, and Texas. In 2012, Tenet collaborated with GE and Verizon to back the Clinton Health Matters Initiative, which targets global health challenges and childhood obesity prevention. According to Tenet’s 2013 Sustainability Report, the organization contributed $545 million in uncompensated care alongside $158 million in charity care during that year. In 2014, Tenet served as a presenting sponsor for the Clinton Foundation Health Matters Conference held in La Quinta, California.

See also

• Hospital Corporation of America

External links

• TenetHealth.com