CHICAGO Former Florida Governor Jeb Bush, brother of U.S. President George W. Bush, will join the board of Tenet Healthcare Corp. (THC.N), the biggest publicly traded hospital company said on Thursday.
The move to appoint Bush, 54, comes as Dallas-based Tenet continues its struggle to recover from a slew of scandals and lawsuits. Last year, it settled with the U.S. Department of Justice for $900 million over allegations that it had bilked the Medicare insurance program for the elderly. Earlier this month it settled a securities probe over fraud charges.
Government lawsuits and several legal actions related to quality of care caused doctors to flee the company's hospitals, which has led to sinking patient admissions.
"Tenet is clearly trying to improve its reputation and overall governance, and went after a marque name," said Howard Sherman, chief executive of GovernanceMetrics.
His group gives Tenet a 5.5 out of 10 rating, which is considered below average.
"For companies with a series of problems in their financial reporting, we keep them on a watch list and their ratings stay rather low until a couple of years of clean reporting," he said.
Tenet has restated earnings as far back as 1999 and as recently as 2005.
A Tenet spokesman responded that the Institutional Shareholder Services's Corporate Governance Quotient is now nearly a 99 percent rating out of 100.
The turnaround at Tenet, which also restated several years of earnings, is taking longer than many on Wall Street had anticipated. In the company's most recent quarter, it posted a $386 million quarterly loss, worse than analysts had expected. It also cut long-term forecasts.
Tenet became the biggest investor-owned hospital chain when industry leader HCA Inc. went private in a leveraged buyout last year. Tenet now owns about 60 hospitals, about half as many as it did during its peak.
Bush was elected governor of Florida in 1998 and retired in January.