The story
1969–1999
Tenet was first incorporated in 1969 by attorneys Richard Eamer, Leonard Cohen, and John Bedrosian, as National Medical Enterprises, (NME) and headquartered in Los Angeles. By 1975, NME owned, operated, and managed 23 hospitals and a home health care business. 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 possessed a dominant market share in Southern California at the time and envisaged the same prospects in South Florida, Louisiana, Texas, and the Philadelphia 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 operations into New Orleans, Louisiana, and Texas. After completing the acquisition, NME changed its name to Tenet Healthcare Corporation. In 1996, Tenet CEO Jeffrey Barbakow moved Tenet's headquarters from Santa Monica, California to Santa Barbara. Also in 1996, Tenet acquired OrNda, then the third-largest investor-owned hospital chain. In 1998, Tenet purchased eight Philadelphia hospitals owned by the bankrupt Allegheny Health, Education & Research Foundation for $345 million.
2000–2013
In 2002, one of Tenet's hospitals came under scrutiny for its surgical practices and another was investigated in a kickback scheme. 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 the 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 the company. Rebuilding its ethics and compliance programs, Tenet hired a chief compliance officer to report 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 moved its headquarters from Santa Barbara to Dallas. In 2006, Tenet agreed to pay $725 million to the Justice Department to settle allegations of unusually high Medicare payments to Tenet hospitals in 2000 to 2002. The company entered into a five-year corporate integrity agreement with the U.S. Department of Health and Human Services which required them 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. As of 2018, Conifer served approximately 800 clients in the U.S. and processed $30 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. On July 24, 2019, Tenet announced it intended to spin off Conifer Health Solutions into an independent publicly traded company.
In May 2011, Tenet's board rejected a $7.3 billion takeover bid from Community Health Systems, in a deal which would have created the largest hospital company in the United States. 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 Omaha, Nebraska. In 2013, Tenet acquired Vanguard Health Systems, based in Nashville in a deal worth $4.3 billion. Through its acquisition of Vanguard, Tenet acquired 28 hospitals and 39 outpatient centers that served 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. Through the end of 2013, Tenet's stock price increased 816 percent, from $4.60 to $42.12, over the previous five years.
2014
In 2014, Tenet ranked #229 in the annual Fortune 500 list of the largest American companies. In March 2014, Tenet formed a partnership with the Yale New Haven Health System to create a healthcare delivery network in Connecticut. Then in May 2014, Tenet announced plans to partner with the Texas Tech University Health Sciences Center in El Paso, Texas to develop a new 140-bed teaching hospital on the city's west side. Tenet launched MedPost Urgent Care in May 2014, which is a national network of urgent care centers. Previously, Tenet's urgent care locations often took on the names of nearby Tenet hospitals. At the time of the rebranding, MedPost had 23 facilities, with six in Texas, and others in Arizona, California, Florida, Georgia, Mississippi, Missouri, and Tennessee. In June 2014, Tenet acquired a majority interest in Texas Regional Medical Center, a 70-bed community hospital in Sunnyvale, Texas, east of Dallas. Also that month, Tenet opened Resolute Health Hospital in New Braunfels, Texas. The 128-bed hospital is located on a 56-acre "wellness" campus near San Antonio, Texas, and was Tenet's 79th hospital and 19th in Texas at the time.
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. That continued a trend of Tenet allowing a model of common ownership, where each acquired hospital has its own agreement conditions. The deal, and three others Tenet had planned in the Connecticut, unraveled when Tenet expressed concern with the conditions on the sale set by the state. The Waterbury hospital was ultimately purchased by Trinity Health of Livonia, Michigan.
On August 1, 2014, Tenet acquired Emanuel Medical Center, a 209-bed hospital operated by the Swedish Evangelical Covenant Church located in Turlock, California, bringing the number of Tenet's hospitals at the time to 80 nationwide. Tenet announced in December 2014 that they had signed a letter of intent with the Baptist hospital system in Birmingham, Alabama to form a joint venture to own and operate the four Baptist hospitals plus Brookwood Medical Center, already owned by Tenet. Tenet would be the joint venture's majority owner.
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As of the fourth quarter 2014, Tenet had turned a profit, explained by higher admissions and revenue (admissions through Medicaid increased by 20.5% after the Affordable Care Act). There was an increase in hospital admissions during the last quarter of 2014, while the company's bad debt expense ratio decreased. At the same time, its full year financial projections affirmed a price of $1.32 to $2.4 per share with revenue of $17.4 to $17.7 billion, with its earnings topping $1.95 billion. On May 7, 2015, the Tenet board of directors appointed Trevor Fetter, Tenet's then president and CEO, as chairman of the board. In 2015, the company moved from No. 229 to No. 170 on the Fortune 500.
2015–2016
In March 2015, Tenet announced an agreement to acquire a majority interest in United Surgical Partners International (USPI), which would make Tenet the largest operator of outpatient surgery centers in the United States. The June 2015 acquisition of USPI almost doubled Tenet's prior count of 210 outpatient centers. Tenet also announced an agreement to acquire Aspen Healthcare in Great Britain. On June 16, Tenet finalized their acquisition of Aspen Healthcare Ltd. and USPI. The USPI transaction raised the number of outpatient centers operated by Tenet to over 400, more than double what they had operated prior. It also again made Tenet a multinational company, as Tenet acquired nine British healthcare facilities. Bill Wilcox remained CEO of USPI, and Kyle Burtnett of Tenet joined USPI as chief integration officer, among other roles. Through the deal, USPI retained its independent branding.
Early in September 2015, Tenet acquired a majority interest in a three-hospital system in Tucson, Arizona, when Tenet, Dignity Health, and Ascension Health formed a joint venture to own and operate the Carondelet Health Network. The three hospitals' names remained unchanged, with close to 1,000 new beds added to the Tenet healthcare system as a result. The acquisition of Carondelet Health Network raised the total number of Tenet's general acute care hospitals to 83. On May 11, 2015, it was announced that the Tenet-operated Abrazo Health, acquired in 2013 as part of the Vanguard transaction, had been renamed Abrazo Community Health Network.
After first announcing the deal in March 2015, in January 2016 Tenet Healthcare closed a deal to form a joint venture with Baylor Scott & White Health, a non profit organizationwith plans for the joint venture to own and operate a number of hospitals in North Texas. The hospitals were all rebranded under the Baylor name over the coming months: Baylor Scott & White Medical Center — Centennial, Baylor Scott & White Medical Center – White Rock, Baylor Scott & White Medical Center – Lake Pointe, and Baylor Scott & White Medical Center – Sunnyvale.
On October 3, 2016, it was announced that Tenet had agreed to pay a $514 million settlement in an agreement with the Department of Justice. According to the lawsuit filed in 2014, four hospitals then owned by Tenet had collaborated in a "kickback" scheme with Clinica de la Mama to increase hospital referrals of Medicaid patients, with two of Tenet's former subsidiaries admitting to "conspiring to defraud Medicaid." According to Modern Healthcare, as part of the agreement, the "federal government acknowledged that individuals at the hospitals withheld information from Tenet about the agreements and circumvented Tenet's policies and procedures to prevent such illegal conduct."
In 2015, Tenet announced the acquisition of Baptist Health System of Birmingham, Alabama. Tenet's own Brookwood Medical Center in Birmingham would be included in the merger. The merger was finalized in 2016 and the new subsidiary was renamed Brookwood Baptist Health.
In September 2016, an agreement between Tenet and Humana Inc, a health insurance company based in Louisville, Kentucky came to an end, putting Tenet's facilities and physicians out-of-network for patients with Humana insurance, including those covered through commercial plans, Medicare Advantage, Healthcare Marketplace Exchange, Medicaid, and TRICARE. A new agreement was reached in May 2017 and hospital outpatient centers and physicians returned to Humana's network in June 2017.
2017–present
Tenet Healthcare announced that the sale of three Houston hospitals and other facilities to HCA Healthcare was finalized in August 2017. The transaction was reported at $750 million in proceeds. In August 2017, Glenview Capital Management removed two of its representatives from the Tenet board over strategy disagreements with the board. In September 2017 there were "speculative" press reports that Tenet was considering "strategic options" such as a sale. In October 2017, the press reported that a sale was no longer being considered. Trevor Fetter stepped down as CEO in October 2017, and Ron Rittenmeyer was named CEO in addition to his position of executive chairman. Tenet increased its ownership in USPI to 95 percent in April 2018.
In August 2018, Tenet divested entirely from the United Kingdom. In the United States in 2018, Tenet Healthcare sold the for-profit MacNeal Hospital in Berwyn, Illinois, to the non-profit regional Roman Catholic Loyola Medicine. In January 2019, Tenet Healthcare sold its three remaining Chicago-area for-profit hospitals to Los Angeles-based Pipeline Health, which is partially owned and operated by Eric E. Whitaker. The three hospitals in the sale were Louis A. Weiss Memorial Hospital, Chicago; Westlake Hospital, Melrose Park, Illinois; and West Suburban Medical Center, Oak Park, Illinois. Then, in February 2019 Whitaker announced that Pipeline Health would close Westlake Hospital within five months, keeping the other two open.
During the COVID-19 pandemic, Tenet made nearly $399 million in profit. At the same time, the company furloughed 11,000 workers. J. Roger Davis was appointed president and CEO of Conifer in 2020. In December 2020, Tenet acquired the controlling interest in 45 ambulatory surgery centers from SurgCenter Development.
In April 2021, the company sold its urgent care service run by subsidiary United Surgical Partners International. That August, Tenet sold five of its Florida hospitals to Steward Health Care: Coral Gables Hospital in Coral Gables; Florida Medical Center, Lauderdale Lakes; Hialeah Hospital; North Shore Medical Center, Miami; and Palmetto General Hospital, Hialeah.
From Wikipedia’s article on Tenet Healthcare, shared under CC BY-SA 4.0.8