Tenet Changes Course

A doctor will soon oversee Tenet's (THC Quote) operations.

Stephen Newman, a physician who has led recovery efforts in Tenet's California division, will take over as the company's operating chief on Jan. 1. Newman replaces Reynold Jennings, who has struggled to mend the hospital chain for nearly three years.

Jennings will stay on as vice chairman through mid-2007, aiding Newman with the transition, and then leave the company altogether. Jennings is 60, four years older than his chosen successor.

Sheryl Skolnick, senior vice president of CRT Capital, feels that the change could signal one of two things. Either Jennings has run into problems with his turnaround plan, she says, or he has simply grown tired and wishes to retire.

Skolnick, who has no position in the stock, tends to believe the latter. Regardless, she seems relieved to see Jennings go.

"I have never been a huge Reynold Jennings fan," says Skolnick, who was critical of Jennings' early optimism about the company's turnaround. "So it's actually OK with me that he's retiring. ... Newman is a tough cookie, a go-getter -- and I like him."

Importantly, Newman is also a doctor. Before, Skolnick says, Tenet has fielded criticism for its lack of doctors in the executive suite. But now, she notes, Tenet has chosen a physician to oversee its entire operations and could win over more doctors -- who have been sending their patients elsewhere -- as a result.