Nurses, Investors Assail Tenet at Its Annual Meeting

Disgruntled shareholders and protesting staff nurses dominated Tenet Healthcare Corp.’s annual shareholders meeting in Los Angeles on Wednesday, where new Chairman Edward A. Kangas vowed to quickly name a new chief executive and get the troubled hospital company back on track.

Tenet stock has plummeted more than 75% since Oct. 28, when a financial analyst first questioned the company’s Medicare billing practices. Since then, Tenet has faced several federal and state investigations, prompting some investors at the shareholders meeting to demand radical changes.

“Recent management decisions have been a disaster. Will you consider selling off or breaking up the company?” asked Jake Bennett of Los Angeles, a financial advisor who attended the meeting on behalf of a family that owns stock in the company.

Kangas, elected chairman on Tuesday, turned away the suggestion.

“This is a sound company with good potential for future growth,” Kangas said. “I don’t see the need for selling off major assets.”

The meeting at the Skirball Center in the Sepulveda Pass area was packed by nurses and supporters of the California Nurses Assn., the state’s largest nurses union. Nurses said the Santa Barbara-based company is cutting corners on patient care.

“We are running short staffed, trying to cover 20 patients with four registered nurses. How can you do that effectively when you don’t have the staff?” asked Tenet nurse Edie Rosario, who works at Doctors Hospital Center in Modesto.

“We are trying to address that,” said Tenet’s president and acting chief executive, Trevor Fetter. “Time running back and forth is not time spent at the bedside.”

Tenet signed a labor accord in May with two rival unions of the California Nurses Assn., whose members attacked the company’s management Wednesday, citing recent indictments of a Tenet hospital in San Diego, the hospital’s chief executive and a company subsidiary on charges that they paid millions of dollars in illegal kickbacks to doctors.

“We have to attend ethics classes every year and the company is dirty,” said Elida Huerta, a nurse at Tenet’s Doctors Medical Center in San Pablo, where nurses have been on strike since November. “Where was the board of directors? Did they not attend their ethics classes?”

The shareholders meeting in the relatively modest surroundings of an auditorium in the Skirball Center stood in sharp contrast to the more opulent venue at a Los Angeles hotel last year, when Tenet was one of the darlings of the health-care industry. Tenet executives found it easy to deflect criticism then, observers recalled. But the tone struck by Kangas and Fetter this year was conciliatory, even contrite.

“That’s the difference a couple of billion dollars in cash flow will make,” said Fulcrum Global Partners analyst Sheryl Skolnick after the meeting.

In his opening remarks, Kangas acknowledged that this is “a very difficult time for Tenet employees and shareholders. We have a lot of work to do.”

In an effort to ease concerns about the company’s future, Kangas said that the choice of a new chief executive to replace Jeffrey Barbakow, who resigned under fire in May, was down to a short list of candidates and that Fetter, the acting chief executive, was on that list.

Fetter also announced several appointments. They included Dr. Jennifer Daley to the newly created position of senior vice president, clinical quality and Lauren Arnold, who has a background as a nurse and health-care executive, to the new position of vice president, nursing.

Fetter said that Tenet, which operates 114 hospitals in 16 states, also was launching a companywide strategy designed to enhance the quality and productivity of care delivery at Tenet facilities.

Tenet stock barely budged in trading on the New York Stock Exchange, up a penny at $12.21.