Beseiged Tenet says changes focus to quality
Reuters, 07.23.03, 4:54 PM ET

By William Borden and Deena Beasley

NEW YORK/LOS ANGELES, July 23 (Reuters) - Tenet Healthcare Corp. (nyse: THC - news - people), which has been grappling with several federal investigations, has been touting efforts to improve its health care quality.

The company issued two press releases this week focusing on health care quality and comments from top executives at Wednesday's annual shareholder meeting reiterated the point.

"We have implemented a very aggressive strategy for rebuilding the company centered around quality," Acting Chief Executive Officer Trevor Fetter said. "It's the right thing to do."

"In the hospital industry the only sustainable strategy is to emphasize quality," Fetter said at the annual meeting.

Two press releases that mention quality during the same week do not constitute a publicity onslaught. However, it appears to be a change in public relations strategy that focuses on quality of patient care.

A disproportionate number of Tenet's press releases since October have contained the words "subpoena," "investigation," or suggested that the company would cooperate with federal authorities.

Tenet has been mired in controversy after a self-described "aggressive" pricing strategy led to outsized Medicare payments for the sickest patients. Tenet's Alvarado Hospital Medical Center and its chief executive were indicted for illegal physician relocation.

QUALITY ISSUES
In quality matters, the operator of 114 hospitals had difficulties at Northern California's Redding Medical Center, where two doctors were accused of performing unnecessary heart surgeries, and its Palm Beach Gardens Medical Center in southern Florida last year had infection control problems.

John Souter, health care services analyst at Susquehanna Financial Group, said, "I think they are going to face some skepticism."

"The reputation in the communities has to be moved from 'they charge a lot' to 'they are the best in town,'" said Sheryl Skolnick, analyst at Fulcrum Global Partners. She views efforts to improve quality favorably.

Tenet said on Wednesday before its annual meeting that it named Dr. Jennifer Daley as senior vice president of clinical quality and named Lauren Arnold as vice president of nursing. Both positions are newly created.

Two days ago, the company announced plans to participate in The Leapfrog Group and a program set up by the American Hospital Association and the Centers for Medicare and Medicaid to report results in treating heart attacks, congestive heart failure and pneumonia.

Charles Idelson, a spokesman for the California Nurses Association, said "We are not at all reassured by Tenet's announcements today."

The California Nurses Association, a union that represents nurses that has engaged in a public relations battle with Tenet and held a press conference outside the annual meeting, said the company has poor staffing levels and scrimps on patient care.

"They are clearly trying to do everything they can to give the appearance that they are doing the right things," said Darren Lehrich, analyst at Suntrust Robinson Humphrey. "There is still a lot of opposition to the company and we have yet to see the true colors of where an SEC investigation or any other government investigation is headed. There are also malpractice issues in certain local markets