Tenet expects at best to break even this year

The for-profit hospital chain is still wincing from legal and financial woes.

By Katherine Vogt, AMNews staff. Jan. 3/10, 2005.

Tenet Healthcare Corp. has warned investors that it won't likely do better than break even in 2005, a sign that the for-profit hospital chain is still feeling the effects of a series of legal and financial troubles that spawned a major restructuring effort and management overhaul.

In a statement released Dec. 13, 2004, Tenet said that it did not expect results from continuing operations to exceed break-even in 2005 even though several cost-cutting measures will be phased in throughout the year.

The company also said that it expected to post a loss in the fourth quarter partly due to charges that could total more than $1 billion. Tenet posted a net loss of $70 million in the third quarter, which ended Sept. 30.

In a conference call with investors on Dec. 15, Tenet Chief Executive Trevor Fetter said the company had worked hard to improve itself in the wake of several major setbacks, including a failed pricing strategy, a settlement over alleged unnecessary cardiac procedures at a hospital in Redding, Calif., and a government investigation of its outlier payments.

"No company in this industry had ever faced these kinds of issues, so there was no clear roadmap for undoing the damage. The two years since then have been very difficult for the company," Fetter said.