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The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. Material contained here represents my views based on my study of the operation of the health care marketplace and the material available to me. It should not be assumed to represent the views of any other individual or organization.

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USA section    Series :- Tenet Healthcare and its Doctors

Introduction to Tenet Doctors

Introductory page
This corporate web site addresses the issues of corporate health care within a broad framework. A web page describing this broad context should be considered as an introduction to each page on the web site. If you have not yet read it then
CLICK HERE to open it in another tab or web page.

Content of this page
This is the first page in the series about Tenet and its doctors. It examines trends and behaviours in the medical profession that render doctors vulnerable. It looks at the impact of market and corporate pressures on them. It then goes on to document my personal impressions of a Tenet hospital in the late 1980s, the behaviour of doctors and Tenet in the 1990s scandal and then some events and concerns leading up to the scandal in 2002. It summarises and links to the other pages in the series that address the 2002 Redding hospital fiasco and other disturbing events in which doctors played a part.



The series:- Tenet and its doctors
In July 2003 I wrote a web page titled "Tenet Health Care and its doctors" which included the story of Tenet's relationship with its doctors going back into the 1990s. In 2007 I put the material about Redding hospital into a separate web page and wrote two more about this revealing scandal within a scandal. The kickback allegations too had become a major player in the wider scandal. This has also been moved to a separate web page and updated. More Tenet sagas which involve doctors have come to light and these throw additional light on the many problems in Tenet's operations. While they deal with more than just the doctors they all contribute to the story of doctors and form a saga. I have therefore arranged them as a series called "Tenet and its Doctors".

 The web pages are

About the Tenet Doctor's Series

Nov 2002 Pete Stark sums up Tenet
Just as Columbia/HCA drew the wrath of Congress, Tenet was slammed last week by a longtime critic of both for-profit companies, Rep. Pete Stark (D-Calif.). After noting the Redding probe and the outlier audit are separate issues thus far, Stark said in a statement, "I fear that Tenet's relentless corporate strategy to increase profits by providing and billing for more expensive medical services has improperly influenced the practice of medicine and resulted in unnecessary and harmful surgeries."
Stormy weather :: Echoes of Columbia/HCA heard as Tenet overhauls management amid scrutiny of outlier payments and investor protests Modern Healthcare November 11 2002

Nov 2002 Frustrated doctors have to cheat then its just normal business
"It's not the bad guys, the ones who are readily identifiable, where you find out and go, 'Ugh. Terrible,'" Eichenwald (investigative reporter at The New York Times) says. "The problem is the good guys, the guys who start cheating at the edges or those who start cheating and end up institutionalizing large-scale cheating.
That's the irony about health care fraud: criminals are only half the problem. The other half, experts say, is a medical community that has to exaggerate illness - to cheat - in order to get things done.
"Some doctors say, 'I hate to do it. It's not my ethics, but it's what I need to do to help my patient,'" said Mahon (National Health Care Fraud Association).
Health-care industry rife with fraud ::Government swamped by $1.5 trillion in paperwork MSNBCNews Nov 12, 2002

This series of web pages set out to document Tenet's arrangements with doctors and describe the link between Tenet's policies and the services they provide. I have not previously tried to explore the nature of the forces placed on doctors in the corporate marketplace and their responses in any depth. Tenet is as always the most revealing.

I have used the same theoretical framework I used to analyse
dysfunctional health care founders and corporate culture. I try to explain the why and how of doctors who enter into "partnerships" with a company like Tenet and behave like the reports indicate they have. One would expect them to turn their backs on a company like this and walk away with their patients. They have had several opportunities to do so (twice for Tenet) but unlike their Australian colleagues they have not done so. In my view the cultural and ideological frameworks induced by corporatisation are better established in the USA and corporate practicing are consequently less confronting. The concern is that in Australia we continue down the same path and our doctors come to think the same way.

To explore the issues using Tenet in this series of pages I have

drawn parallels with failures in care outside corporate health care to show that there are wider lessons to learn.

described my own personal contact with Tenet/NME doctors,

looked at evidence for earlier dysfunction in acute care hospitals,

summarised the issues from the 1990 scandal which are dealt with more fully on another page,

examined the way pressures are put on doctors,

examined in detail what happened in Redding Hospital and the role played by Tenet's policies, the administrators, doctors and the community in this very illuminating human tragedy, trying to pull it all together to draw some conclusions.

described how the Redding scandal worked itself out

tracked the career or one administrator involved in Redding

added new material showing where doctors cooperated with or challenged the company.

I have examined the recent allegations that Tenet hospitals paid kickbacks to doctors. The particular circumstances provide fundamental insights into basic contradictions between health care and the market system.

The press reports describing what happened in Redding illustrate what I am saying so well that I have included large numbers of them on the Redding hospital pages.

Introduction to Tenet Doctors


The Tenet Doctor Series

Unnecessary Procedures in Tenet Hospitals



Personal Experiences 1988-92

Problems in General Hospitals in the USA

National Medical Enterprise (NME) :: The 1990 scandal

Unnecessary Procedures 2002


Appointing Physicians to senior positions

Unnecessary Procedures in Tenet Hospitals

The most disturbing of all the allegations about Tenet Healthcare is that two doctors at its Redding Hospital in California carried our large numbers of unnecessary cardiac procedures including coronary bypass surgery on patients who did not have coronary disease or who did not need this treatment. These procedures all carry significant complication and death rates. One of Tenet's own hospitals in Florida almost lost its right to treat Medicare patients because of failures in infection control. One hundred and six malpractice suits were initiated because of infections following open heart surgery. Twenty of the patients allegedly died as a result. We do not know whether these operations were medically indicated or whether a similar situation to that in Redding existed. In another hospital surgeons were not advised when sterilizers were found to be misfunctioning.

How systemic?

My view is that although the matters were settled without admitting guilt the allegations about Redding hospital are valid. This problem in Tenet hospitals is unlikely to be restricted to Redding hospital, to cardiology, or entirely to Tenet hospitals. Successful cultures are infectious.

What happened is a reflection of the same business practices, and mirrors the same problems, that occurred in National Medical Enterprises' (NME-Tenet's previous name) psychiatric hospitals during the 1980's and early 1990's.

It is consequent on the same problems which I identified in an international general hospital providing care to travelers in 1989. Corporate policies create a context which favours this happening and Tenet/NME's culture rewards such practices.

My 1996 review addressed many of the issues in the 1990's scandal and I will only summarise them briefly here and provide links. I suggest opening this page in a second window. I will include paragraph numbers in green next to the links to this page so that the sections can be accessed without continuously loading and reloading. Additional information about this and quotes from a key Wall Street Journal article are on a recent page dealing with NME's founders and its culture.

It is important to understand that the vast majority of things which occurred in Tenet's hospitals in the 1980' and 1990's could not have happened without the active participation of doctors and the acquiescence of others - their failure to unite and attack what was happening.

Tenets more recent policy of treating older, sicker patients and targeting more complex procedures was only possible with the support of the doctors. The alleged over-servicing in Redding involved doctors who identified with Tenet's market mission and whose god like status in the hospital, in most of the medical community and in the wider community resulted from this identification and the credibility it created.

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Really an old problem

This is not a problem restricted to Tenet/NME, nor to corporate medicine. It is part of a broader problem which can result in poor or aberrant care, but this is by far the worst I have seen. It tends to occur when doctors are isolated from criticism and the views of their peers, either physically or mentally - even when isolated by status and high office. Unless peers are vigilant, doctors can put a barrier around themselves and so distance themselves from the critical views of these peers.

This tends to occur with doctors working in isolated communities, in specialists who have few or no peers in the same specialty in their hospital, and in doctors who use a reputation among patients and general practitioners (primary care doctors) to buffer the views of specialist colleagues. It can also be due to an intractable sociopathic personality problem. There are many variations on the theme.

While these doctors may experience inner doubts they do not acknowledge them to themselves and often the situation they are in makes it extremely difficult for them to do so. I have had intermittent personal experience of doctors who behave like this and have tried to deal with them for 30 years. The conduct is not deliberately malign. They sometimes relate well and confidently. At other times they create an aggressively defensive barrier which makes them prickly and prone to anger when challenged. These doctors simply do not recognise or accept that there is a problem. Because of their assertiveness and drive they can achieve senior positions or good reputations.

The Bristol scandal

A good example in my view is the scandal at a National Health Service centre of excellence for cardiac surgery in Bristol, UK. It was relatively isolated from similar centres in the rest of the UK. The doctors were the cardiac surgery experts in the hospital and were highly regarded. An excessive number of children died following open heart surgery and a number of explanations were offered for this by the surgeons. This was accepted by peers who were not cardiac surgeons and by the hospitals administration. The doctors accepted it themselves.

The problem was picked up by an anaesthetist, new to the hospital who had a wider experience. He identified the problem and blew the whistle. He was young and lacked credibility. He was subjected to the usual treatment meted out to whistle blowers and eventually emigrated to Australia.

An extensive investigation followed. This confirmed what had happened. It also revealed that the doctors had been genuine people and had about as little idea of what was really happening as Tenet's CEO Jeffery Barbakow had about the problems in Tenet's policies and Redding Hospital. They had rationalised and defended themselves against this threat to their lives. I suspect we are looking at the same sort of problem in Redding.

Professional restraints

Doctors face constant conflicts and uncertainties and there are many opportunities to adopt a one eyed or closed minded approach in contrast to a reflective or open minded one. This is particularly the case when treatment has gone wrong.

The problem is well recognised but perhaps by using different ideas to understand it. The specialist Royal Colleges in Australia have all had tightly integrated and cooperative structures controlling the profession. Every effort is made to bring all specialists into the group and have them relating cooperatively with peers. Peers monitor each other's conduct through a variety of clinical meetings and other processes. This is not to suggest that the process works perfectly or that there are no failures or problems.

Competition and health care

It is worth noting that 15 to 20 years ago the specialist colleges and the profession were aggressively attacked for training too many doctors. Convincing evidence was produced that more doctors simply generated more visits and more tests, pushing up costs. In response the numbers trained were reduced.

In spite of this costs continued to rise and specialist shortages appeared. A new market ideology sees the situation very differently and now the professional colleges in Australia are accused of being anti-competitive. They are claimed to be limiting training opportunities in order to create a monopoly enabling them to charge more and so boost their incomes! The ACCC has imposed oversight processes to stop them!

When professional cooperation is viewed by market theorists it is seen to be anti-competitive (in a commercial sense) and in a marketplace context it probably is. In Australia the profession has been subjected to enforced competition policy. This together with the ACCC's actions against the profession for anti-competitive behaviour disrupt the cooperative process on which this peer monitoring depends.

They seem unable to comprehend that health care is primarily a cooperative endeavour by trained members of society working closely with other members of that society and within structures specifically developed in that society for the benefit of members of that society. It cannot be successfully packaged and traded for the benefits of outsiders. Illness is not something we compete for.

Competition Policy

This is why Australian competition policy, the ACCC, and its new chairman Graeme Samuel, who has so aggressively attacked professionalism, are so dangerous for the Australian health system. It is why I expect we will see an increase in these problems in the future. The medical profession will be blamed for this. This will be in spite of all the regulation, accreditation and oversight procedures being set in place. The US experience tells us that these processes do not work.

The wider message is that inter-subjective relationships, bonds of trust, and interaction between cooperating individuals cannot be replaced by objective processes, although they are also important. Oversight and regulatory processes should "rest lightly" and seldom be necessary. We should not replace a civil society with a legalistic one. The US Health system shows that we cannot control the consequences of ideological blindness, and bad social policy with more laws and regulations, nor is it logical to do so. In her Boyer lectures entitled "A Civil Society" Eva Cox indicated that laws and regulations in a civil society should rest lightly and be seldom needed.

Marketplace thinking is incompatible with health and aged care. Its success depends on the law and regulatory enforcement rather than the restraints imposed by a civil society. Experience shows that this does not work.

Integrated services

These matters explain why I have been a long term advocate of integrating services rather than isolated practitioners; of working under the umbrella of "clinics" rather than in isolation; and very importantly a system of linked medical records employing the full potential of technology and ongoing evaluation to bring people together in examining outcomes.

Unfortunately in the corporate marketplace these processes open the system further to abuse and misuse. In 1990 NME
used this sort of computer based system (5.6) for its admission practices to ensure that almost everyone, coming for "evaluation", who was insured was admitted to hospital.

What Tenet does

What I have said so far seems to support Tenet's claim that the problems lie with the doctors rather than with the corporation. This is very far from the truth. What Tenet and NME's policies have done has been to create a context which fosters and supports the development of these problems, and obstructs the professional processes which normally control them.

Trying to understanding

The framework of interpretation I have used to understand corporate medicine is an attempt to develop a non-judgemental process which can be applied. This does not mean that there are no real criminals or that people should not be blamed or punished when they take advantage of a vulnerable system. It is simply that this does not help us to understand what is happening or help in dealing with systemic problems. When the problems are widespread then it is the system that needs review. It is also the system that fosters criminals.

I am trying to bridge the gap between broad social ideas of how communities behave and ideas about how individuals behave - how they interact and influence each other to create dysfunctional cultures and ideologies.

Individuals essentially have no choice but to build their lives in whatever situation they find themselves. They can do this as active participants, passive participants, opt outers, or as rebels. Most of us choose the first three. Groups develop and maintain the ideas they use to understand their situations and what they are required to do there. They interact to develop cultures and ideologies. The way they behave depends on the way they respond to conflicts in the situations in which they find themselves - and there are always conflicts of some sort.

This framework I use emerged while living and working with different cultural groups under apartheid and when dealing with doctors who were not practicing the sort of medicine they should have been. In both situations I was privy to their differing understandings and explanations. One could only understand these differences by looking at the context of these different lives and the conflicts there.

This is not to exonerate or excuse, but humans behave humanly in whatever context they find themselves. Market culture is not an exception and I have applied these ideas to market leaders and market cultures. I am going to apply them to Tenet's doctors.

I have written a page about this
theoretical approach and used it to analyse corporate conduct. I based the paper I gave in 1996 about Tenet/NME on these ideas (1) and on a US paper by Annas which used the similar idea of "metaphors" (1.1) to explore issues in the USA. I have examined Sun Healthcare in this way and most recently HealthSouth. These illustrate the psychology of the sort of leaders who emerge well. Tenet is a better illustration of the ongoing cultural behaviour which I discussed there. I will not repeat the theoretical arguments and ideas here.

Wider applicability

Doctors are not immune to the sort of forces to which senior executives respond in the marketplace. They develop groups and subcultures with explanatory systems to support the things which they do - often in response to a wider culture. If they are required to do unsavoury things by the wider culture then it is likely that a proportion of them will do so and find ways to make this legitimate.

This is well illustrated by the human experimentation on Jews in the Nazi concentration camps and by the way sections of the medical profession cooperated with and supported apartheid medicine in South Africa. In fairness the medical association officially opposed apartheid and doctors in some hospitals were among the first to openly rebel and abolish apartheid for patients.

There is at this time a great deal of public unhappiness about the medical profession, more so in the USA, and particularly its lack of openness and accountability in handling failures in care. There is certainly substance to this. I hypothesise that much of this is the hangover of a deeply entrenched paternalism in medical thinking and a culture which supports this - much as apartheid was a hangover from colonialism. I simply do not have the information needed to explore this idea further. It is not something I have been directly involved in.

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Corporate influence

Specialists working in corporate hospitals and in Tenet hospitals in particular have to develop their practices, and build their reputations there. This is a marketplace profit centred environment and this soon becomes the "self evident" way medicine is practiced. More importantly Tenet/NME and the hospital does exert a very considerable influence on the career of the doctor. Each hospital is likely to have fostered a hard core of senior medical staff who relate to management and identify with the corporate ideology. They act as role models and also have power in the hospital. I will use my own observations, the 1990's scandal, and the 2002 scandal to explore the problem of corporate doctors.

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Personal Experiences 1988-92

The situation

I am limited in the comments I can make of my experience of an international National Medical Enterprises hospital. I withdrew some of the allegations I had made and gave undertakings as part of a settlement. I stress that the comments made here relate entirely to the way the hospital operated and I make no allegations about care by the hospital or by its specialists in December 1988. I refused to give undertakings in regard to anything else. It is a matter of public record that two other doctors who provided services in the hospital were suspended from practice by the Medical Council in 1991 following a complaint.

I acted strongly because I believed I had identified the sort of dysfunctional situation which I have alluded to in the first section above, and that this was because medicine was being practiced primarily for profit.

I was concerned that a potentially dangerous situation existed. In my letter when I drew my concerns to the attention of the head of the country's health department in June 1989, and also in a subsequent complaint itself I stressed that the doctors in the hospital were kind, considerate, confident experts in their fields and related well. They were unaware of any problems in the hospital and identified fully with the way the hospital operated.

It is also worth noting that the equipment in this hospital was superb - the very best. The whole place was very impressive. They lacked for nothing that money could buy.

Relationships between doctors

Mar 1990 Experiencing Tenet/NME doctors
Most of them (doctors) related well. They were kind and empathic. Some offered real friendship.
One is forced to the conclusion that there is something wrong with the environment - - - - . Somehow a pathological medical social group has arisen which is able to isolate itself from its colleagues. It is able to build a set of ideas and presuppositions, a perceptual set unchallenged by outside norms.
There is evidence to suggest that the structure of medicine in this hospital is such as to isolate the group from other groups and to limit critical interaction among peers. This has enabled them to create the illusion - - - - - - and they seem to believe this themselves.

Complaint to Medical Council March 1990

One of the observations I made was that each specialist operated as an expert in his own narrow field and did not encroach on or dispute the expertise of that of others treating the same patient. It was almost as if this was an invasion of the others personal space.

I knew the hospital was run by an American group, but knew nothing of it, and had no real knowledge of corporate medicine. I thought that it was an aberrant group out of touch with the main company. The Australian Medical Association later became involved and wrote to NME's chairman and CEO, Richard Eamer. They did not receive a reply until NME entered Australia late in 1991 and were put under pressure. I only learned of NME's US scandal in October 1992, much of it similar to "rumours" I had heard.


The local government in this country put up a brick wall and it required intervention by the Australian Medical Association, the international airlines and the Australian Federal government before the issues I raised were addressed. During this period I spoke to many people who had had dealings with the country and the hospital. The information I received was all hearsay and unconfirmed but in June 1991 I wrote to the Medical Council and indicated that with so much smoke there was likely to be a large fire.

Among the hearsay stories which I dared not repeat at the time was that insured patients were needlessly flown in by air ambulance from neighbouring countries whose doctors were paid for referrals. These patients were admitted for prolonged periods and extensively investigated. One of the concerns was that these were sometimes invasive cardiac procedures which were not risk free. I understood that these matters were to be raised at a meeting of insurers in the UK but do not know if this happened.

I stress that there is no actual evidence that this happened in this country but in the light of what is now happening in California it is relevant. I also heard that in-transit patients were needlessly admitted from the local airport, sometimes pulled from their planes, and kept in hospital as large bills were generated.

I subsequently traced and spoke to some of these patients and from what they told me I believe this was so. Other stories were similar in nature to the allegations made by Dr Pearce. He wrote about the widely held perceptions in the medical community that Redding doctors were
"wild" and "cowboys" - pointers to real problems. Similar broad remarks about care in 1990 suggested that my concerns about systemic problems in this international hospital were well founded.

Note that this hospital was sold to a local company in 1995 and I am not aware of any unacceptable practices by that company.


Subsequently in 1993 allegations were made by a doctor at this hospital that during the 1980's the company's senior staff had pressured him into a contract trading monetary benefit for patient admissions. The hospital denied the allegations but declined the opportunity to give evidence and say what actually happened. The contract which the doctor claimed he was pressured to sign would have put pressure on him to operate on many more patients, including those who may not have needed surgery.

In 1992 the company was also found to have paid bounty for and then flown psychiatric patients from Canada to the USA (5.8) where their profit potential was exploited. NME was convicted of paying doctors and bounty hunters for patients in the USA. We need to consider whether some of the same things may have happened in 2002?

I feel that in this analysis I am now entitled to draw attention to these "rumours" to show that there may well be a continuity of business practices not only through its psychiatric hospitals but through its general hospitals in the 1980's. When the scandal in the USA broke these people were brought back from the international division into senior positions on the basis that they
were not tainted by these practices. The problems and the culture which gives rise to them appear to be deeply ingrained and go back a long way. In 2000 a Tenet university hospital in the USA was again trying to reward doctors for doing more procedures and this was legal.

Problems in General Hospitals in the USA

There were articles in the early 1990's describing problems in NME's general hospitals in the USA but these were never followed up by investigators. They feed concerns that the stories surrounding this international general hospital and my assessment had substance and I am justified in drawing attention to them. The problems were not isolated to an "infected appendage" - its psychiatric hospital - as the companies COO Michael Focht claimed in Australia in October 1994.

In the dispute described above the doctor, a surgeon was being pressured to enter into a contract to guarantee a specific number of admissions in return for reduced or even free rental. This was a surgeon and if he undertook to admit more than the patients he had referred then he would be under considerable pressure to perform unnecessary operations.

As is well illustrated in the 1993 extract below, this seemed to be standard company practice at the time.

Jan 1993 General hospitals ::::: Investigating Other Areas
Twice in two years the company's general hospital division has been slapped with cease-and-desist orders from the FTC, which charged some National Medical hospitals with making "false and misleading" claims in advertisements for patients.
Four former executives of the general hospital division say in interviews that national Medical has routinely offered inducements to doctors for patient referrals, and compensated for them by charging insurers at a higher rate than their not for profit competition for a broad range of treatments and services. The executives also say the company has forgiven big loans to doctors in exchange for patient referrals. - - - - government officials concede the law is weakly enforced and such practices are fairly widespread.
In the 1980s, so many of the rents in the dozens of medical buildings National Medical operated next to its hospitals were well under market value or altogether free that the buildings operated at a loss, says Mr Amaral, the former chief financial officer - - -.
Abiding Suspicion: Allegations Of Fraud, Malpractice Still Haunt Operator of Hospitals The Wall Street Journal January 8, 1993

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National Medical Enterprise (NME)
The 1990 scandal

Jan 1999 Bribes to doctors
For instance, Pete Alexis, who oversaw Tenet's operations in Texas, admitted to conspiring to pay between $20 to $40 million in bribes to psychiatrists, psychologists and others in exchange for patient referrals.
In 1997, Tenet agreed to pay about $100 million to approximately 700 former patients who contended that the company and some affiliated doctors wrongfully imprisoned them in psychiatric hospitals in order to obtain their insurance benefits.

Risky Business: The Tenet Story
* SEIU (Nurses Union) Research document Jan 1999

Controlling doctors

My 1996 analysis of the US market place, NME's business practices, the resulting scandal in psychiatry and substance abuse, and the way doctors were manipulated is on this web site. I will summarise matters affecting doctors here and provide links.

None of the misuse and exploitation of patients and little of the Medicare fraud could have been accomplished without the active participation of doctors in the hospitals. The company took control of the admission of patients by its marketing, its health assessment clinics, its help phone lines, its purchase of patients from doctors and other agencies, and the employment of bounty hunters.

The company set up a "programmatic" system of care designed to maximise length of stay and the amount of treatment given. The hospitals controlled doctors' incomes by allocating the patients to doctors who did what was asked of them. They were required to support its programmatic system and hand the patients over to often untrained hospital staff who provided the care. Those who complied were richly rewarded and given positions of power in the hospital. Those who did not starved. In effect the company bought the use of the doctors degrees.

Building the careers of team players

Doctors favoured by the hospitals received numerous perks - secretarial services, house loans, research grants. They were promoted as experts in particular fields and were sent on lecture tours. Many identified with their new expertise, even though much of this was illusionary. At the same time audit, clinical accreditation, critical clinical presentations, and collegial meetings were probably downgraded or subverted helping to isolate and secure (rather than challenge) each specialist in their claimed expertise. These review processes did not generate profits and would have provided a venue for "disruptive" physicians. Critical discussion and criticism creates uncertainty and self doubt. It destroys the self confidence of the isolated specialist - the sort of self confidence which is so successful in the marketplace.

Creating a supportive subculture

Like management and company executives many doctors must have adopted corporate thinking or at the very least went along with it. This was in spite of their training and primary responsibilities to patients. A medical subculture would have developed within the larger corporate culture in order to accommodate the conflicts. One way was to trivialise and joke about (5.14) what was happening by using terms like "howdy rounds", "wave therapy", and "charting parties". Whistle blowers (5.16) would have been a particular threat to all this and the response of Tenet and the profession to medical whistleblowers has been strong.

When local doctors would not cooperate the company sometimes brought in compliant
doctors from outside (5.15) and put them into controlling positions. Some were poorly qualified. An example was Dr Bowlan. He was the doctor who provided a medical certificate in 1991 in order to kidnap a teenager he had never seen. A policeman believed the boys family rather than the hospital and this led to exposure of the scandal.

Mar 1997 Tenet/NME doctor
Dr. Timothy Mark Bowlan, a psychiatrist at a Tenet hospital in San Antonio, pleaded guilty to making false claims, theft of public money and forgery. Bowlan admitted forging documents to obtain a Texas medical license. He was sentenced to five months in prison and three years of supervised release.

Risky Business: The Tenet Story* SEIU (Nurses Union) Research document Jan 1999 citing the Houston Chronicle March 24th, 1997

Note that the cardiologist in the 2002 Redding cardiology scandal where 769 patients had risky and unneeded coronary bypass operations was not a properly qualified and registered specialist. We now know that peer review at Redding was non-existent. Accreditation bodies knew this but did nothing about it. This extract from my 1996 critique is almost prophetic and I reproduce it here. Redding Hospital's administrators backed the doctors when they were told what was happening.

1996 Product differentiation
NME strategies for attracting doctors with large practices were highly regarded. It spent large sums of money to purchase the latest equipment which would attract doctors.
NME promoted a policy of product differentiation to attract referrals. Hospitals advertised highly specialised units in their hospitals to draw patients and increase profits. Doctors were promoted as experts and lecture tours were arranged for them. The possible consequences of turning doctors who have been in busy practices for several years into overnight superspecialists using the most sophisticated equipment in order to meet corporate business objectives must be considered. Would administrators tolerate interference by colleagues or quality assurance committees when these doctors who bring in the well insured patients are found to be deficient and out of date in the specialised area into which they have been pushed.
From 1996 paper (click here) . (3 )

With the introduction of corporate medicine the power of clinicians in the hospitals was eroded (2.1) and some of their clinical functions in the hospitals were appropriated.

Stock analyst's reports about NME describe corporate policies and often quote from corporate statements. Not only do they tell us NME's policies but also provide an insight into corporate thinking and how to
get doctors to comply with the corporate mission. (3)

Internal documents show how NME sold its
money first approach to staff (4.1) and the way its financial success and marketing created an illusion of quality. (4.2) Monthly reports to the CEO reveal the importance management attached to involving physicians (4.2) in the corporate agenda. NME's culture (5.4) was nurtured by its success.

No one seemed to question its startling
admission practices (5.6) where administrators and untrained staff replaced doctors, and where children were targeted (5.7) because they were more profitable.

Patients were kept for the full
duration of their insurance (5.9), exploited for profit (5.10), and Medicare defrauded (5.11). NME exerted tight control over all staff and a clinical focus was grounds for dismissal. (5.12) Evidence given in public inquiries graphically describes the way NME came to control doctors and secured their compliance. (5.14) Diagnosis and care were tailored to profit requirements with unfortunate consequences for patients. (5.15)

In 1997 after my paper was published Tenet settled a case brought on behalf of over 600 patients, mostly children for US $100 million. Although bound to secrecy by the settlement agreement some young adults were able, before the agreement became operative, to graphically describe how, as children in these hospitals, they were mistreated.

Tenet's response to the criminal conviction

Elsewhere on these recent pages I have looked at the lack of change in the company's board and senior staff and the persistence of NME's culture beneath a facade of caring and social responsibility. These people did not believe that they had done anything seriously wrong and made no attempt to examine the validity of their marketplace belief system. NME's statements when it changed its name (5.18) to Tenet Healthcare are particularly interesting.

Tenet's new policy of partnerships can be seen to be presenting its old policy of bringing everyone else on side and getting them to see things its way, but coated in icing. The commitments to integrity were as John Bedrosian had acknowledged in evidence given in 1992/3 simply "singing to the choir". Doctors were very much targets in its "partnership" policy. Note the absence of any mention of patients or citizens when referring to benefits below.

1994/5 Tenets new public face
Successful partnerships require that the parties share certain beliefs; that they hold philosophies, expectations and standards in common. And That's exactly what the word "tenet" conveys. Our new name says that we have strong values and beliefs and that we will seek out others with similar views for the benefit of both.
Company Release 1994/5

In hindsight there can be little doubt as to whose beliefs, philosophies, and standards partners were expected to adopt if they were to be successful.

Michael Focht was president of the international division at the time of the
un-confronted allegations of trading in patient admissions and involved in the misinformation given to Australian authorities. He was made COO of Tenet and placed in charge of its integrity program on the basis that he was far removed from the scandal. He was brought back from retirement by Barbakow to help sort out the 2002 scandal.

Michael Ford, his vice president who allegedly participated in dealings with the doctor was promoted to a senior position before returning to the international arena as an international health consultant and director (with other past NME staff) with
Vista Healthcare in Singapore. Soon after Tenet made noises about re-entering the international market and it is likely Ford was acting for them.

Dennis Brown, the senior administrator in the very successful international hospital referred to above had been given an excellence award by the company. He was allegedly a very active participant in promoting the contract trading patient admissions with a surgeon. He became CEO of the Australian company in 1991, then returned to the USA in 1996. He was put in charge of relationships with doctors. By 2002 he held a senior position in California where the cardiology scandal occurred. His documents were subpoenaed by a senate committee investigating the Redding cardiology scandal.
Something like this (6.8) had been predicted by a 1993 state investigation into the potential danger Tenet/NME posed for Australia. A 2007 book describes his involvement in this scandal.

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Unnecessary Procedures

1994/5 SEC secures injunctions
"Unless restrained and enjoined, Defendant will continue to engage in acts, practices and courses of business as set forth in this complaint or in acts, practices and courses of similar object and purpose."
Securities and Exchange Commission (SEC) vs NME. "Complaint for permanent injunction"1994/5


In 1994 the Securities and Exchange Commission (SEC) was well aware of the cultural continuity and the likelihood that Tenet would offend again. In spite of this authorities did not seek to change management, nor address the resilience of the culture. Injunctions, integrity agreements, ethics committees and public expressions of moral intent (5.19) do not change the way people think. (5.20) This is illustrated by an angry outburst by one of Tenet's lawyers because Tenet was being treated as a criminal organisation. This sort of change can only be accomplished by changing the context, and then dismembering the company by distributing its staff among those who find its practices abhorrent.

Tenet's naive new policy of pushing up prices, targeting complex and risky procedures, and cutting costs announced in 1999/2000 does not differ much from its earlier policies. It set out to equip its hospitals with the very best equipment to attract doctors and their patients - much as its policy of
product differentiation (3) had done earlier.

We do not know what its partnerships with doctors involved but in the marketplace these are going to be commercial partnerships. Tenet's new wealth since 2000 was obtained from outlier payments generated from complex cases and complex procedures. It was eager for doctors to perform more of these procedures and it obviously supported those who did so. Doctors who were eager to advance their careers and their standing in the hospitals would have been under pressure to do so. Administrators would have gone out of their way to encourage them and support them. One must ask about the extent to which pressures were put on doctors who did not have the required skills to perform this sort of complex and risky surgery.

There are also indications that Tenet has been targeting doctors incomes to encourage admissions. One hospital was raided and charged with paying
kickbacks. Other hospitals have been investigated.

It seems clear that the unneeded heart procedures scandal was simply the continuation of a long process of encouraging doctors who made money for the company and discouraging those who did not - with little regard for the consequences.

Orthopaedic surgery

It must be asked whether unnecessary procedures have also been encouraged in the other areas of complex care, neurosurgery, orthopaedic care, and more specifically lucrative spinal surgery. The SEIU union's 1999 research document "Risky Business The Tenet Story" describes some concern about a new spinal surgical procedure promoted by a doctor who had developed a large following in one of Tenet's hospitals by performing it. I do not have details but it sounds like a precursor to the 2002 scandal.

Jan 1999 Possible inappropriate surgery
But the legitimacy of this physician's new spinal procedure was challenged in a series of malpractice and fraud lawsuits filed in Los Angeles accusing Dr. AAA and another doctor, Dr. BBB, of conspiring to perform unnecessary spinal surgery that had no medical or scientific basis.
Risky Business: The Tenet Story* SEIU (Nurses Union) Research document Jan 1999

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The carrot and the stick :: Money for more procedures

It seems that NME's successful monitory rewards and penalties approach (5.14) to doctors was very much alive. It resurfaced in 2000. Particularly revealing is a report in 2000 from the university teaching hospital in St Louis in Illinois. This was soon after Tenet embarked on its new aggressive money making policies.

Physicians pay at St Louis university hospital was to be increased or decreased on the basis of their performance in seeing more patients and performing more procedures. For some strange reason this is not considered as paying kickbacks which are accepted as a threat to care. The term kickbacks is narrowly restricted to paying doctors for referrals. As the Redding scandal shows paying a doctor to do more procedures is much more dangerous. The Redding cardiologists contract and lucrative rewards it was claimed in 2007 were based on his meeting a target of performing 300 cardiac characterisations a week - a vastly excessive work load, and more than required by the community.

That this new strategy in St Louis came directly from Tenet's board is clear. The policy was introduced by the university's president, Lawrence Biondi, who was also a member of Tenet's board and who sold the university's hospital to Tenet.

I do not know how this eventually worked out but the consequence of this approach can be seen in the 2002 cardiac scandal. The extracts describe what was planned and speak for themselves. One wonders about the quality and skills of doctors who applied to replace those who left or resigned from senior positions in protest. Would these be less qualified or out of state doctors like those at Redding or those in Texas in 1991, appointed because of their willingness to meet corporate goals rather than their skills and responsibility to patients.

Oct 2000 Pressure on doctors for profits
Being a physician in America usually means you're well paid, drive a nice car, enjoy the respect of others and sometimes have power over life and death. At St. Louis University Hospital, it also means you could get a yearly 20 percent pay cut, every year, for as long as you don't meet your quota.

Of course, they don't call it a quota; rather, they refer to it as meeting the requirements of your "performance supplement." It works like this: A medical-faculty member's minimum "base" salary next fiscal year will be 80 percent of what his or her salary was last year. To recover that missing 20 percent, the faculty member must meet certain goals. Those goals usually involve seeing more patients, performing more procedures or both, thereby producing more revenue. The chairman of each department sets the goals; the medical-school dean approves them. If those goals are not met at the end of fiscal year 2001, the faculty member takes a 20 percent income hit. The same is repeated the next year.
- - -
(doctors says)- - "That destroys the principle of tenure. The idea behind tenure is to give professors freedom of expression, academic freedom, without fear of retaliation. That's lost now.
It's no wonder there is reluctance to speak up. The chairman of internal medicine no longer heads that department, the health-science center's largest, because of his opposition to the pay plan. The director of the physicians' University Medical Group stepped down as a result of the flap. Several other chairmen are leaving, and, for a variety of reasons, some top doctors -- including two renowned cancer specialists -- have left. That the new compensation plan includes incentive bonuses for faculty physicians who really crank out the patients and procedures seems to be overshadowed by the threat of a pay cut.
Thanks to St. Louis University president Lawrence Biondi, S.J., the university took in $309 million from Tenet by selling the hospital. The move was criticized by Archbishop Justin Rigali, who opposed the idea of selling the not-for-profit hospital to a for-profit chain. But Biondi and others were convinced that the hospital would eventually become a money pit.

Though the stock price and profits are up, a Tenet spokesman in April estimated that the company lost $100 million nationwide on physician practices. Perhaps Biondi, who serves on the Tenet board of directors, has picked up a few lessons on how to put a cap on physician costs.
Biondi, who is nicknamed "Father Capone" for his Italian and Chicago roots and for his, well, assertiveness, appears to think the medical faculty needs to pull its own weight.
It appears the archbishop was right to oppose the hospital sale, but it appears it's not the indigent getting screwed -- yet. Who'da thunk it that the first collateral damage from the sale would be SLU physicians?
Prescription for Resignation : Upset over a new pay policy, docs are checking out of St. Louis University Hospital Riverfront Times October 11, 2000

Pressure on doctors

A single press report suggests that Tenet may have been leaning on doctors to increase their bottom line by keeping patients in hospital longer than necessary. I do not know what evidence was given and how reliable this is. Tenet's business philosophy would have constantly challenged doctors Hippocratic traditions.

Dec 2002 The highest charges
Among hospital chains operating within California, Tenet Healthcare -- the nation's second-largest for-profit health system -- has the highest average charge for injuries and illnesses that most often bring elderly patients to hospitals, a recent Bee analysis of hospital financial data found.

The committee is expected to hear from doctors who say they were told to keep patients hospitalized longer than necessary. The committee also will explore whether the for-profit hospital chains tweaked rules to pad patients' bills.
Legislators to eye billings by hospitals The Sacramento Bee December 5, 2002
Aug 2003 Business philosophy
But critics have long accused Tenet of pumping up hospital volumes -- and cutting back on expenses such as infection control -- in order to fatten the bottom line. Indeed, they say that Tenet's very business model requires corporate profits to come ahead of patient care.
Untangling Tenet's Ties to Watchdog (Melissa Davis) The Street.Com Aug 7, 2003

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This page written in 2003 contained material on Redding Hospital, and on Kickbacks. By 2007 there was much more material and also additional instances where relationships with doctors played a part. These sections were therefore moved into new pages and updated. New instances went into new pages. I have linked these pages as a series "Tenet Healthcare and its Doctors". They all centre around the relationship between Tenet and its doctors as well as their different responses to Tenet. I give a brief summary of each here.


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Unnecessary Cardiac Procedures I (2003)

In October 2002 FBI agents raided Tenet's hospital in Redding and the offices of their heads of cardiology and cardiac surgery seizing large numbers of documents. It was soon revealed that many hundreds of patients had been needlessly operated on, many with normal hearts. Their sternums had been split to perform coronary artery bypass surgery. Some died and some were crippled.

In July 2003 I examined the vast amount of material available about these doctors describing how the scandal was exposed and what happened. I tried to analyse the forces at work and the way the individuals involved responded as they did. This is not a criticism of individuals but an examination of social forces and the way different individuals and different personalities responded to them. I made some predictions about the likely outcomes. These illustrate what I have said on this page. It is based on my experience of Tenet and other large corporations.

I have moved that material to a new page. I have made only minor changes to make statements clearer and have added a few additional illustrative extracts.

Click Here to go to "Unnecessary Cardiac Procedures I"

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Unnecessary Cardiac Procedures II (2007)

I returned in 2007 to update this web page with the vast amount of new material and the story of how it all worked out. I decided to leave the 2003 comments intact so that you could see whether I was correct. In fact I had no need to change this because subsequent information served only to amplify and affirm my assessment of what had happened. I have not changed my assessment.

This page includes extracts from later press reports that give more information about what happened as well as why and how it happened. It describes the many investigations and the settlements which resulted. Tenet paid US $60 million to government. It paid US $395 million to compensate 769 patients. In total about US $500 million was paid. The doctors and their insurers paid US $32 million. There were no criminal charges and all parties denied any wrongdoing. When Medicare planned to bar the hospital from Medicare payments Tenet sold it. The two doctors agreed not to continue practicing cardiology and cardiac surgery.

The web page also describes the way Tenet was repeatedly warned, the people who did so and the whistlebowers who battled each other for the Qui Tam reward.

Click Here to go to "Unnecessary Cardiac Procedures II"

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From Singapore to Redding : Dennis Brown : A Long Trail to Follow (2007)

Dennis Brown was the CEO of a Tenet hospital in Singapore during the 1980s. He became CEO of Tenet's Australian operations in 1991 and returned to the USA in 1996. He became Tenet's vice-president in the Redding region.

I was involved in dispute with the hospital in Singapore over a number of years and also blew the whistle on Tenet in Australia contributing to its being forced out in 1996. All in all we traded 5 lawsuits over a period of 6 years as I put pressure on them and tried to expose their practices. Two were defamation actions Brown and then the hospital launched against me in an attempt to silence and discredit me. Neither were prosecuted.

In 2007 Stephen Klaidman described Brown's involvement in the Redding hospital and with the doctors in some depth. I have therefore written a separate web page which sets what Klaidman has said into the context of my experience of Brown and his track record in Singapore and Australia. I believe it gives a useful insight into Tenet, its culture, and the people it employs.

Click Here to go to this page

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The fallout from the Redding Scandal (2007)

Unnecessary cardiac operations at Tenet's Redding hospital sparked concerns in cardiology across the USA. There were allegations and investigations of other Tenet hospitals. A doctor at a non-Tenet hospital was charged with doing unnecessary procedures.

The blanket Tenet fraud case was settled in 2006 for US $900 million. As far as I am aware the findings of these other investigations and the validity of allegations were never released or tested. Tenet denied them.

Click Here for information about these developments

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The misuse of patients and frauds related to the care of patients only occur when doctors are complicit or cooperate in what is happening. They ultimately sign off on treatment and these things cannot happen if they are vigilant, ethical and have the courage to stand together. Sadly this is never easy and it is very easy and very profitable to turn a blind eye, and to accept the glib rationalisations offered by the marketplace.

Corporate profit comes from the treatment provided by doctors and it is critical for corporate providers of care to secure the cooperation of doctors in their efforts. In the marketplace this means aligning doctors financial interests with those of the company. This is usually done by offering incentives in return for compliance with corporate plans or for strategies which increase corporate profit. In health care these are called kickbacks. They cause serious problems and are illegal.

It is a graphic illustration of the sort of thinking which pervades the corporate sector that it is seen as desirable and legitimate to find legal ways of aligning doctor's interests with those of the company. Many strategies have been employed and there is no clear understanding of where legitimate commercial arrangements end and where kickbacks begin.

While most of the large fraud settlements in health care include accusations of paying kickbacks most of these do not come to court.

In the Tenet scandal the government investigated all Tenet hospitals and ran a test case against the Alvarado hospital. This ran for eighteen months with two hung juries. It seems clear that the jury was unable to sort out the mess of conflicting laws. The final settlement with Tenet was delayed, the amount they paid was reduced and Tenet escaped a criminal conviction settling without admitting guilt.

In the end the government decided not to prosecute further and the legal confusion about kickbacks remains.

The story of the investigation of kickbacks and the case against the Alvarado hospital is described on a new page.

Click Here to go to the "Tenet and Kickbacks" web page.

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Tenet, its Doctors and Price Fixing

Tenet was accused of organising am illegal price fixing contract with a group of doctors for the purpose of negotiating with insurers in North Carolina. It was settled without penalty or guilty pleas by terminating the contract and accepting conditions.

Click Here to go to the price fixing case

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Operating in Unsafe Conditions (2007)

At Palm Beach Gardens Hospital in Florida, cardiac surgery continued over a period of 5 years even though the theatre was unsafe with a high risk of serious infections. One hundred and six patients of whom 20 died finally sued and won US$31 million.

What is concerning here is that the surgeons were aware of what was happening but seem to have done nothing about it. They continued to operate.

Click Here for the unsafe theatres story

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Keeping Doctors in the dark (2007)

At Garden Grove Hospital in California the senior surgeon resigned and spoke out when the hospital's administration instructed sterilisation staff not to inform the surgeons about problems with the sterilizers. They would have cancelled surgery and that would have cut into profits.

Click Here for the sterilizer story

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Tenet Has Problems With its Doctors

This page deals with medical whistle blowing and with the impact of the scandal on the doctors who referred patients to Tenet. Many became "splitter physicians". It examines the purchase of hospitals by physicians

Click Here to go to the problems with doctors

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 Appointing Physicians to senior positions

In 2004 Tenet's profits were falling and staff were speaking out about quality of care at the hospitals. In an effort to counter this Tenet appointed physicians to new senior positions charging them with building a network of doctors. This is what they said in the early 1990s after the last scandal and we should ask whether there is any difference in the ethos behind this to that behind the targeting of doctors as partners in the 1990s. What do they mean by networks.

We should not be deluded by this. This is a public relations exercise. If they were serious about standards of care they would have allowed an outside professional body to appoint the senior doctors. The doctors would have reported to the professional body and not to Tenet. They would build up a professional medical community separate from the hospitals. The doctors working in the hospitals would be accountable to this professional body ad the community for the quality of their work and their financial arrangements. They would not be accountable to Tenet administrators. The doctors at Redding hospital are good examples of the sort of medical staff that Tenet (and other corporate chains) seek out and promote. If they did this they would not pay the doctors those incentives as their return on the investment would be lower. They would also be unable to compete against other chains who did not do this. Doctors would not get as much money and they might not like this. We must not forget that the real problem is not Tenet but the provision of humanitarian services to vulnerable people using market mechanisms.

Apr 2004 Medical Appointments
Tenet Healthcare Corporation (NYSE: THC) announced today that the company has appointed physicians to serve in the newly created positions of chief medical officers for the company's five regions. Four physicians will serve as CMOs for the California, South Florida, Southern States and Texas regions, while two physicians will share the position of CMO for the Central-Northeast Region.

The new CMOs will work collaboratively with Tenet's regional and hospital administrative teams, and with individual hospital medical staffs, to promote quality medical care and patient safety at the company's hospitals. The CMOs, who report directly to Jennifer Daley, M.D., Tenet‚'s senior vice president, clinical quality, also will evaluate the clinical efficacy of new medical technologies and programs, and provide medical input, support, guidance and consultation. Additionally, they will assist in implementing Tenet‚'s comprehensive Commitment To Quality initiatives. Commitment To Quality is an innovative program that includes a series of targeted initiatives designed to bring about significant improvements in quality of care and patient safety, nursing practice, medical staff governance, and other important areas related to the delivery of quality care at Tenet's hospitals.
'Through these appointments, we are creating a network of physician leaders in our regions who are committed to clinical quality and who can communicate this passion for quality care and patient safety on a daily basis to physicians at our hospitals. The new CMOs will work alongside me to promote the practice of evidence-based medicine at our hospitals and help implement Tenet's Commitment To Quality.'
Tenet Appoints Regional Chief Medical Officers to Promote Quality Care and Patient Safety at its Hospitals April 15, 2004

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Web Page History
This page created July 2003 by
Michael Wynne
Split up into a series and revised in July 2007