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New Orleans hospital operator has checkered past

By Drew Griffin and Kathleen Johnston

Airboats evacuated staff and patients from Memorial Hospital in New Orleans after Hurricane Katrina.


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New Orleans (Louisiana)
Tenet Healthcare Corporation
Hospitals and Clinics

NEW ORLEANS, Louisiana (CNN) -- The nation's second-largest health care company -- besieged for years by allegations of Medicare fraud and overbilling taxpayers -- now finds itself as the operator of a New Orleans hospital where some doctors and staff are under investigation for deliberately killing patients in the aftermath of Hurricane Katrina.

Louisiana Attorney General Charles Foti is investigating what he calls "credible" allegations that patients at Memorial Medical Center were euthanized in the frantic days following the storm. Foti has told CNN he has "a very good case."

Tenet Healthcare, based in Dallas, Texas, sent a letter to CNN on Wednesday stating that it understands from the Louisiana Attorney General's Office that it is not a target of the investigation and insists that all of its Gulf Coast hospitals, including Memorial, were prepared in advance for Hurricane Katrina. But those familiar with the company's checkered history say they aren't surprised it is a Tenet hospital that is under scrutiny. (Watch how Tenet Healthcare's corporate history is riddled with problems -- 7:21)

Arthur Caplan, director of the Center for Bioethics at the University of Pennsylvania in Philadelphia and who studies health policies and ethics, said Tenet has a history of promoting profits over patient care.

"I think at the end of the day, if you look at over the past 15 to 20 years of the company, you'd have to say the management has been pushing the bottom line, telling doctors to cut corners, basically saying we are going to evaluate you and promote you based on how well you make money, not on how well you take care of the patients," Caplan said.

Tenet itself was born in 1995 after a scandal over medical insurance fraud by its predecessor, National Medical Enterprises. Recently Tenet Healthcare facilities around the country have come under investigation and faced lawsuits.

In just the past four years, Tenet has spent hundreds of millions of dollars to settle lawsuits while denying any wrongdoing. That amount includes $7 million just last month to the state of Florida to settle a billing dispute.

Many of the lawsuits alleged the company overbilled Medicare, cheating taxpayers. But there have also been allegations that some Tenet hospitals practiced bad medicine, harming patients in the process.

The company has denied all those allegations. And according to the letter it sent to CNN, Tenet says it brought in new management in 2003 and developed a new strategy to resolve all of its legal problems from the past, to resolve all pending federal investigations, and to put transparency, honesty and integrity at the forefront of everything it does.

Tenet also wrote that since new management came on board, the quality of care at its hospitals has greatly improved.

The company again denied our request for any on-camera interview by CNN.

Last year Tenet paid out $31 million in settlements to people who sued when cardiac patients at a Florida hospital claimed they suffered from post-surgical infections because of unclean conditions. Twenty cardiac patients died at this hospital.

In 2002, the FBI raided a Tenet hospital in Redding, California, in connection with its investigation into whether doctors were performing unnecessary open-heart surgery. Tenet admitted no wrongdoing but paid $60 million to settle federal and state claims and another $395 million to the 750 patients who claimed they were victims of the heart-surgery center.

Attorney Gary Cripe said things got so bad that locals joked "you didn't dare drive by Redding Hospital with a complaint of chest pains because they would pull you in and you would get surgery."

Five years ago, Cripe was hired by a doctor and minority shareholder to try to change the company's direction. Cripe even wrote a book, "Greed, Scandal and Wrongful Deaths at Tenet Healthcare Corporation," detailing the various investigations and accusing Tenet of cutting costs, cutting care and breaking rules to increase profits.

"The evidence suggests that the corporate culture is so pervasive that they may well be incapable until there is a total housecleaning of those in management that are a part that corporate culture," Cripe said.

Cripe's book came out five months before Katrina hit New Orleans. Nurses, doctors, families of patients and others have told CNN that Tenet's Memorial Medical Center was ill-equipped to handle the hurricane and its aftermath, especially when it came to evacuating patients.

Cripe and Caplan say it has been Tenet's practice over the years to deny knowledge by management of allegations of wrongdoing by hospital doctors and staff. That, they say, appears to be the case in New Orleans.

Allegations of euthanasia at Memorial first surfaced a week after the hurricane. A week later, on September 13, Memorial CEO Rene Goux sat down with CNN and denied any knowledge of the allegations even though he was inside the hospital and coordinating the evacuation.

"I was not in the health care or nursing side of it,'' Goux said. "I was in the evacuation side of it. "I'm trying to answer as honestly as I can," Goux said. "I'm not in health care. I wasn't up in those areas. If there is something that needs to be investigated I'm sure it will get done."

Since then Tenet has repeatedly refused requests for interviews. They have only issued statements saying they are cooperating with the attorney general's investigation.

An attorney for one doctor, Anna Pou, who worked inside Memorial during the hurricane, has said in court records his client is under investigation for allegations of euthanasia. But attorney Rick Simmons has told CNN Pou was not involved in any criminal misconduct.

Caplan said while he doesn't know what happened at Memorial he believes doctors can be driven to kill but only under the extreme stress of a hopeless situation.

The staff at Memorial Hospital have said that after the storm they felt abandoned, that they worried about the sporadic evacuations and that they feared looters, some of whom they watched break into a nearby credit union.

"If you get in a situation where doctors are saying under oath that I felt I couldn't save myself unless somehow I had been able to take care of my patients one way or another, then that's poor management," Caplan said. "That's culpable management. That's not responsible management."

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