A judge in San Diego declared a mistrial in the federal kickback trial of Alvarado Medical Center after 11 months, marking the second time the case has been thrown out. Prosecutors had argued that the Tenet-owned hospital and former CEO Barry Weinbaum violated federal law by paying lucrative relocation bonuses to doctors in exchange for referrals. The case is seen as a potential turning point for the Dallas-based Tenet, which has endured a three year long slide after federal authorities charged it with conducting unnecessary heart surgeries at Redding Medical Center in Northern California. Joseph Chiarelli of Chiarelli Research argues the decision "sets the stage for a settlement" between the provider and the government.
Even if that does happen, the company's problems may be far from over. Also on the near horizon for Tenet--an investigation into the circumstances surrounding the death of a group of elderly patients at the chain's Memorial Medical Center in New Orleans during Hurricane Katrina. Some investors may be tempted by share prices at record lows, with Tenet hovering at around the $7 mark, down from $50 in October of 2002. The boo-birds say be careful, but the stock was up roughly $1 on the news.
- read this Wall Street Journal article [1] (sub req.)
- see the report [2] from BizJournals
Links:
[1] http://online.wsj.com/article/SB114418911894517009.html?mod=health_home_stories
[2] http://biz.yahoo.com/bizj/060404/1268689.html?.v=1