Los Angeles Times Examines Tenet’s ‘Aggressive Corporate Culture’
The Los Angeles Times today examines Tenet Healthcare's business model, which may have encouraged its hospitals to "practice more aggressive medicine," leading to federal investigations into the company's practices. A "prime example" of Tenet's "aggressive corporate culture" is the way the company paid top executives. According to the Times, CEOs at Tenet's 113 hospitals nationwide were paid $200,000 annually on average, but collectively doubled their salaries with cash bonuses, "mostly for boosting their hospital's earnings." According to an anonymous former executive, Tenet's expectations to grow earnings were "intense," and meeting financial goals was "how you were judged, paid and evaluated." Legg Mason health care analyst Clifford Hewitt said, "We can't calculate it, but this kind of excess [with CEOs' pay] ... gets reflected somewhere in the behavior of the organization." According to some doctors and analysts, officials at Tenet hospitals were more likely to order additional tests and procedures because they knew their hospitals would receive larger reimbursements for each procedure that qualified for outlier payments, special Medicare reimbursements that cover unusually costly procedures, or stop-loss payments, similar reimbursements from private insurers (Lee, Los Angeles Times, 12/12). The HHS Office of Inspector General announced in early November that it will audit Tenet's hospitals in an attempt to determine whether the company properly billed Medicare for outlier payments (California Healthline, 11/7). In response to allegations that Tenet "went too far" in its business practices, Tenet CEO Jeffrey Barbakow earlier this month ordered a freeze on hospital rate changes and announced his company would "move away" from relying on payments based on hospital charges (Los Angeles Times, 12/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.