Florida Heart Surgery Law Bugs Tenet Healthcare

Old infection concerns -- possibly tied to flying insects inside a Florida surgery unit -- aren't the only threat to Tenet's (THC) lucrative cardiac business in the state.

Last week, Gov. Jeb Bush signed a new law that could allow four nonprofit hospitals to begin competing with Tenet for open-heart surgeries in southern Florida. Tenet-owned Delray Medical Center promptly responded by filing a lawsuit contesting the legality of the new law just two hours after it was enacted last week, according to the Palm Beach Post. The company's second open-heart unit in the region, operated by Palm Beach Gardens Medical Center, has already weathered a huge dive in profits following publicity about an alleged infection-control problem at the facility.

Palm Beach Gardens faces more than 100 patient lawsuits that could start going to trial next year.

In the meantime, Tenet is fighting to protect its remaining heart business in the rapidly growing region. The company's Delray hospital told the Palm Beach Post last week that "the provision of healthcare services should be determined by demonstrated need and careful planning through uniform laws and rules" instead of the new measure.

But Bush described the current system as a broken one that has already failed, for years, to address growing patient needs. And HCA (HCA) -- which has joined forces with Tenet to block new open-heart units in the past -- told the newspaper that it has no plans to enter the fight this time around.

The Tenet Shareholder Committee, a group long critical of the company, compared Tenet's latest action to a legal maneuver carried out last month by former CEO Jeffrey Barbakow. Barbakow -- who cashed out $111 million worth of Tenet stock options before scandal engulfed the company -- scored headlines after filing a lawsuit seeking to recoup losses from his investment in bankrupt WorldCom.