Tenet dropping 14 hospitals, planning cost-cutting moves

The company faces falling revenues because of Medicare troubles.

By Katherine Vogt, AMNews staff. April 7, 2003.

Tenet Healthcare Corp., whose revenues have taken a hit since it changed its Medicare outlier policy in the wake of a billing investigation, has announced plans to sell, consolidate or pull out of 14 of its 114 hospitals.

In Arkansas, where four hospitals were put up for sale, the state's medical association said it was too early to predict how physicians would be affected by Tenet's move. "Our biggest concern ... is that the new owner would come in and have a different philosophy either about owning physician clinics or about how they treat their employed physicians,'' said David Wroten, assistant executive vice president of the Arkansas Medical Society.

The move was announced March 18 along with several other measures in an ongoing corporate overhaul.

Tenet plans to sell seven other hospitals: one in Florida, one in Nevada, one in Texas, two in Missouri and two in Tennessee. The company said two hospitals in Pennsylvania will be sold, consolidated or converted into facilities for nonacute care. Also, Tenet will cut ties with a California hospital it manages but does not own.

Most of the hospitals affected were in areas where Tenet does not have a large concentration of facilities.

The 14 hospitals are located in eight states and accounted for $933 million of Tenet's $14.7 billion in revenue for the 12-month period that ended Nov. 30, 2002.