Management layers between its hospitals and corporate offices are expected to dissolve in hopes of cutting expenses for the hospital chain amidst the growing volume of investors calling for reorganization after Tenet reported a $56 million operating loss in its second quarter following declining hospital admissions.
As the nation’s third largest, for profit hospital chain, Dallas-based Tenet has 77 hospitals and numerous divisions including Conifer Health Solutions and United Surgical Partners International. Analysts contend Tenet’s outpatient and data consulting subsidiaries remain profitable.
According to Crain’s Detroit Business, the cuts are expected to impact regional managers in Tenet’s East, Texas and Western regions who act as middlemen between individual markets and centralized support functions. According to Crain’s, Tenet executives leading four regional management offices between the company’s hospitals and corporate headquarters were Gary Gause, Birmingham, Ala., who oversaw DMC; Marsha Powers, Florida; Tim Adams, Texas; and Jeff Koury, western (Phoenix and California).
Arizona Tenet Hospitals
Abrazo Arizona Heart Center
Abrazo Arrowhead Campus
Abrazo Central Hospital
Abrazo Maryvale Campus
Abrazo Scottsdale Campus
Abrazo West Campus
Arizona Orthopedic and Surgical Specialty Hospital
Carondelet St. Mary’s Hospital
Carondelet St. Joseph’s Hospital
In September, Tenet made another move to tighten its margins by announcing it will sell eight U.S. hospitals, including two in Philadelphia, and nine hospitals and clinics in the United Kingdom for an expected $1 billion in net proceeds and lease cost reductions.
Earlier in the summer, CEO Trevor Fettor announced his resignation effective March or sooner after Tenet investors, Glenview Capital Management resigned its two seats in protest of the systems management operations. The seats held by Randy Simpson and Matt Ripperger were vacated after the two investors said they were leaving “due to irreconcilable differences regarding significant matters impacting Tenet and its stakeholders.”
At the start of 2017, Tenet announced it would sell hospitals and drop its home health and hospice business.
According to The Wall Street Journal, Tenet’s stock has fallen by about 30 percent in the past year. Its market value is about $1.6 billion, but it carries a debt of more than $15 billion making its enterprise value about $20 billion.
Modern Healthcare interviewed a Tenet spokesperson who reported that the company expects to have its restructuring complete by end of October.