Tenet Healthcare Corp. last week completed a management overhaul that began with the revelation of its higher-than-average Medicare outlier payments in November 2002.
Tenet promoted Reynold Jennings, president of its eastern division, to chief operating officer. That position had been open for 15 months, since Thomas Mackey retired in the immediate wake of the outlier furor.
Tenet President and Chief Executive Officer Trevor Fetter cited Jennings' work on quality and nursing initiatives, his 32 years of experience and his skills as an "engaging, thoughtful, hands-on leader who knows how to motivate people to reach high goals."
W. Randolph Smith, Tenet's western division president, has been charged with overseeing the divestiture plan. Fetter said no plans have been made for Smith's role once the hospitals are sold.
The new management structure ensures that there are only two managers between Fetter and every hospital CEO in the company-namely, Jennings and one of five regional managers. In an interview, Jennings said a lot of the management layers were the result of the American Medical International-National Medical Enterprises merger, and the company's maturation nine years later allows some of those layers to disappear.
Company critics, especially shareholder M. Lee Pearce, have called for outsiders to be appointed to senior management positions. In his latest report, however, Pearce reserved his scorn for former CEO Jeffrey Barbakow and directors who joined the board during his tenure. "The last vestiges of the old regime, the holdover board members who should have gone long ago, should go now," Pearce said.