Less than six months after Tenet Healthcare Corp. joined the American Hospital Association, a top executive of the nation's second-largest for-profit hospital chain has landed a plum seat on a key AHA committee.
Richard Wade, the AHA's senior vice president for communications, said Tenet was not promised a seat on the AHA's strategic planning committee in exchange for Tenet's joining.
Wade said the appointment by the AHA board was based on a recommendation from the AHA's executive staff to increase for-profit representation in the association. He also said Tenet executives had expressed an interest in becoming involved in the AHA.
A Tenet executive confirmed that gaining entry into the AHA's traditionally not-for-profit inner circle was one of the chain's expectations for becoming a member for the first time.
In addition, the move may enhance the Santa Barbara, Calif.-based company's networking opportunities with not-for-profit hospitals, which the chain has targeted as future joint venture partners. However, the chain downplayed that as a factor.
"Certainly, that's not the reason we did it," said Christi Sulzbach, Tenet's associate general counsel and senior vice president for public affairs. She added, though, "If we were going to join, we did want to be able to earn our way into a board seat."
Tenet currently doesn't hold a seat on the AHA's 26-member board.
The AHA last week said Sulzbach had been appointed to a one-year term on its 15-member strategic planning committee. She's the committee's first-and only-for-profit representative, Wade said.
Tenet is one of only five for-profit hospital systems in the AHA.
Another recent addition was Community Health Systems, a Brentwood, Tenn.-based chain that joined the AHA last October. CHS executives said getting a seat on the AHA's board or committee wasn't a condition of their joining the association.
Besides the five for-profit systems, the AHA has 152 not-for-profit system members and 4,358 individual hospital members. Of those individual hospitals, 622 are investor-owned and 3,736 are not-for-profits.
Although Sulzbach's appointment was announced Jan. 16, the AHA board had approved it at its December meeting in Chicago.
Neither the AHA nor Tenet would disclose how much the hospital company is paying in annual dues.
The AHA's revenues from annual membership dues have been slipping, largely because of industry consolidation, and the addition of Tenet and CHS will give the association a needed revenue boost.
"We like to join these organizations not just for the sake of joining, but because we really want to participate," Sulzbach said.
The strategic planning committee is an important group within the AHA. As a subcommittee of the AHA's full board, it charts the organization's future direction.
For example, the work of the committee led to the AHA's adoption of a new vision and mission statement in 1995 that didn't include the word "hospital." That led to the AHA board's approval of a plan late last year to allow integrated delivery systems to join as full-fledged AHA members.
"It makes them part of a broad range of members," Wade said of Tenet's appointment to the committee.
MODERN HEALTHCARE requested an interview with AHA President Richard Davidson regarding Tenet's appointment, but Wade said he was unavailable for comment.
John King, this year's AHA board chairman and a member of the strategic planning committee, declined comment. He's president and chief executive officer of Legacy Health System in Portland, Ore.
Outgoing AHA Chairman Reginald Ballantyne III said he didn't know Sulzbach. But Ballantyne, who's also on the planning committee, said he hopes she will be a good contributor to the group. Ballantyne is president of PMH Health Resources, a not-for-profit system based in Phoenix.
"I would think that we are being careful to assure that we continue to have diversity of view on all our committees," he said.
MODERN HEALTHCARE disclosed in late July that Tenet was joining the AHA for the first time, and the AHA announced Tenet's decision to join on Aug. 4. The move came at a time when Tenet was making a public splash about partnering with the not-for-profit hospital sector rather than escalating the discord between for-profits and not-for-profits.
The chain has since followed through by entering joint ventures with several not-for-profit systems, the most recent deal being with Catholic Healthcare West (Jan. 19, p. 18).
In a speech last July to Tenet employees, CEO Jeffrey Barbakow said joining the AHA would put the company "side-by-side with our not-for-profit colleagues."