The Rebirth of Tenet Healthcare

Trevor_FetterIn the fall of 2003, not long after he was appointed CEO of Tenet Healthcare Corp., Trevor Fetter got a call from Fort Worth investor Richard Rainwater, who asked for a meeting in Los Angeles.

Tenet, based at that time in Santa Barbara, Calif., was reeling from a series of Medicare billing scandals. Among the most sensational allegations were claims that two doctors in one Tenet hospital were performing unnecessary heart surgeries, and that Tenet paid doctors illegal kickbacks for patient referrals.

Fetter took notice because Rainwater is a legend in the for-profit hospital business, having founded Columbia Hospital Corp. in 1988, then orchestrating the merger that created present-day Hospital Corp. of America, the nation’s largest hospital chain. Rainwater, also a major Tenet stockholder, hadn’t been clear about the purpose of the meeting. But Fetter figured he was about to propose a leveraged buyout or some other major move for the embattled hospital chain.

“So I show up at the Hotel Bel-Air, and there is Richard. He’s in gym shorts and a t-shirt,” Fetter recalls. “I’m in a business suit with a briefcase. He said, ‘No, I don’t want to talk business. I just want to talk.’”

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