Becker's Hospital Review

91 91 CEO/STRATEGY Tenet eliminates poison pill, adopts governance changes By Ayla Ellison D allas-based Tenet Healthcare announced March 5 that its board of directors approved several changes to the company's corporate governance. Here are five things to know about the changes. 1. e board approved changes to Tenet's bylaws that allow shareholders with a 25 percent stake in the company to request a special meeting. e move comes aer the board approved amendments to the company's bylaws in January that allowed majority shareholders to request special meetings. 2. Tenet approved a short-term shareholder rights plan in August 2017, which was designed to protect $1.7 billion in net operating loss carryforwards and ensure the board could protect all shareholder interests as it executed CEO and board changes. Under the poison pill, if any person or entity acquired 4.9 percent or more of Tenet stock, all holders of rights issued under the plan are entitled to acquire shares of common stock with a 50 percent discount. 3. Tenet terminated the poison pill March 5. "e board made this decision based upon the reduced value of the NOL shareholder rights plan following recent tax law changes and an increase in the company's stock price since the NOL shareholder rights plan was adopted, as well as shareholder feedback," Tenet said in a statement. e poison pill was originally slated to expire following Tenet's 2018 annual meeting of stockholders, which is typically held in May. 4. Tenet announced March 5 that it also eliminated the executive committee as a standing committee of the company's board of directors. 5. "e board of directors and management have spent considerable time in recent weeks engaging with shareholders representing a majority of our outstanding stock and we received constructive input regarding Tenet and our objective to lead with best corporate governance practices," said Ronald A. Rittenmeyer, executive chairman and CEO of Tenet. "We believe the actions which we are taking today demonstrate our continued commitment to being responsive in a timely manner to shareholder feedback and to implementing measures that increase transparency and accountability." n Former Dartmouth- Hitchcock Clinic CEO John Collins dies By Alia Paavola J ohn Collins, a former CEO of Lebanon, N.H.-based Dartmouth- Hitchcock Clinic, died March 2 at age 72 of complications from heart failure, according to the Valley News. Throughout his tenure as CEO at Dartmouth-Hitchcock, from the mid- 1970s to 2007, Mr. Collins helped move the clinic from its original home in Hanover, N.H., to its Lebanon location and helped bring physicians practicing in nearby cities to the clinic. In addition, his colleagues credited Mr. Collins for helping to shape the reputation of Dartmouth-Hitchcock with his strategy and vision. "He was a terrific strategic thinker," Stephen Plume, MD, who served as president of Dartmouth-Hitchcock Clinic from 1990 to 2000, told the Valley News. n Viewpoint: Why the healthcare job boom isn't all positive By Megan Knowles F or the first time in history, the healthcare industry surpassed manufacturing and retail to become the largest U.S. employer, but the industry's unchecked job boom has contributed to higher healthcare prices and has failed to translate into better patient outcomes, argued Nisarg Patel, a fourth-year student at Boston-based Harvard School of Dental Medicine and co-founder of Memora Health, in a STAT op-ed. Here are four takeaways from the article. 1. Although U.S. policymakers could help improve patient outcomes and healthcare prices, they are more likely to focus on the healthcare job booms in their own states as an "economic win" rather than considering whether these jobs equate to better health for Americans across the nation, Mr. Patel wrote. 2. Labor costs account for over half of the total cost of healthcare delivery, Mr. Patel noted. As a result, when healthcare employment rises, healthcare prices rise too. These costs are then distributed to employers and patients through health insurance premiums, which increase at a rate that outpaces inflation. 3. Additionally, Mr. Patel argued the job boom does not necessarily translate to better quality healthcare, since the rapid employment growth is largely attributed to the addition of administrative and management jobs as opposed to more clinicians. 4. The nation's administrative healthcare costs are the highest in the developed world, accounting for over one-fourth of the sector's spending, Mr. Patel wrote. Despite this surge in healthcare prices, Capitol Hill policymakers tend to support this growth, seeing it as a benefit for employment in their own district. "As job growth and industry consolidation leads many hospitals to become their district's largest employer, politicians will see less and less incentive to bend the cost curve of healthcare. n

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