Tenet CEO Apologizes for Firm's Behavior

Times Staff Writer

Tenet Healthcare Corp.'s new chief executive, Trevor Fetter, did some apologizing Tuesday for the company's past behavior.

"Something went very wrong at Tenet," Fetter said, adding that the Santa Barbara-based hospital chain had been an "arrogant company."

But he blamed Tenet's problems on its former executives, not the company's hospitals.

Fetter spoke to financial analysts a day after Tenet posted a $308-million third-quarter loss as it significantly increased its reserves for bad debts. Tenet, the nation's second-largest for-profit hospital chain, is the subject of several federal and state investigations.

In August Tenet agreed to pay $54 million to settle government allegations that two doctors at its Redding Medical Center conducted unnecessary heart procedures on hundreds of patients. "If unnecessary procedures were performed at any of our hospitals, that was wrong too," Fetter said Tuesday.

Last month Blue Cross of California, one of the state's biggest health insurers, canceled a contract with Tenet's Doctors Medical Center in Modesto after the health plan found that physicians had done unneeded coronary bypass operations. Blue Cross is a unit of WellPoint Health Networks Inc.

But Tenet executives Tuesday disputed methodology used by Blue Cross for claiming those procedures were unnecessary.

Fetter said Tenet would work to aggressively address past wrongdoing, but would also fight unfair charges. "We will also resist those who seek to use our current vulnerability to their advantage," he said.

In its latest regulatory filing Tenet devotes three pages to lawsuits and claims that the company faces. Some suits involve malpractice cases filed by Redding patients, and Tenet said Tuesday that 1,400 others have filed notices saying they intend to sue.

About a year ago Tenet disclosed that it had raised prices to bring in higher hospital revenue for treating very sick Medicare patients, touching off probes.

Since then, Tenet's shares have lost about 75% of their value.

On Tuesday, Tenet shares fell 22 cents to $13.03 on the New York Stock Exchange.

Times wire services were used in compiling this report.

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