Tenet Healthcare Sidebar:
Health-Care Reform
CEO Trevor Fetter says the new bill will be good for hospitals
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Courtesy Tenet Healthcare
Health-care reform isn’t popular among some of the companies it will touch — insurance and pharmaceutical companies, for instance, according to news reports. Hospitals, however, will likely benefit from the legislative changes, says Trevor Fetter, CEO of Tenet Healthcare, the third largest investor-owned hospital company in the U.S.
That is because the bill signed in March by President Obama will extend coverage to millions of Americans who currently don’t have health insurance. These are people who go to hospital emergency rooms when they become sick or get admitted to hospitals when illnesses they have neglected become life threatening, Fetter says. “The drugs used to treat the uninsured, the devices, the technology — each of these inputs is something that hospitals pay for,” he explains. Fetter adds that the uninsured typically pay Tenet only about 8¢ for every $1 the company bills.
This has a big impact on hospital economics, according to the CEO. In last year’s third quarter, Tenet — a $9 billion (2009 revenues) company that runs 49 hospitals in the U.S. — incurred a cost of about $1.4 million a day to treat uninsured patients, Fetter explains. “We just can’t afford to do this anymore.”
While Fetter concedes that “people can have honest disagreements” about the move toward a fully insured populace, he adds, “About the core principle — covering the uninsured — something had to be done.”
