Tenet Names Acting CEO Fetter as Permanent Head
Tenet Healthcare, the second-largest for-profit hospital chain in the nation, yesterday named acting CEO Trevor Fetter as CEO and a member of the board of directors, the Los Angeles Times reports. Fetter, a Tenet chief financial officer before he left the company in 2000, rejoined the company in 2002 and has served as acting CEO since former CEO Jeffrey Barbakow resigned in May (Vrana, Los Angeles Times, 9/17). Tenet faces a number of state and federal investigations (Abelson, New York Times, 9/17). In August, Tenet officials agreed to pay $54 million to settle allegations that two physicians at Tenet-owned Redding Medical Center in California performed unnecessary heart surgeries and defrauded Medicare. Tenet officials earlier this month announced that Senate Finance Committee Chair Charles Grassley (R-Iowa) has requested documents related to corporate governance practices at the company, such as those related to the Redding physicians and the formula used by the company to calculate Medicare outlier payments. In addition, the Securities and Exchange Commission, the HHS Officer of Inspector General and the Federal Trade Commission have launched investigations into Tenet since October 2002; the company also faces investigations by the Florida Medicaid Fraud Control Unit and the U.S. Attorney's office in Los Angeles (California Healthline, 9/8).
Some analysts expressed "disappointment" that Tenet did not name an outsider as CEO and raised concerns that Fetter "would be perceived as tainted by the firm's scandals" because he joined the company in 1995 and worked closely with Barbakow, the Los Angeles Times reports. However, Tenet Chair Edward Kangas said, "He was not there when the most difficult problems occurred. Trevor is a guy who is taking the lead in changing the culture and nature of this company" (Los Angeles Times, 9/17). CMS Administrator Tom Scully said, "It's none of my business who they pick as CEO. But it's my personal opinion that if he had been there all along they wouldn't have had the outlier explosion they had" (Rundle/Lublin, Wall Street Journal, 9/17).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.