An outspoken doctor has issued a second, more favorable opinion of Tenet's ( THC) health. M. Lee Pearce, a Florida physician who diagnosed serious problems at Tenet two years ago, now believes the company has a shot at recovery. Showing a fresh burst of faith, Pearce revealed Monday that he will trust Tenet's new directors to cure the company instead of pursuing invasive treatment -- like another proxy fight -- on his own. "I was persuaded that ... the board is finally committed to serious reform of the company," explained Pearce, who represents other disgruntled shareholders through the Tenet Shareholder Committee. "Since the board now seems to be focusing on reform, we do not want a proxy contest to become a distraction." The doctor's comments turned down the heat just a notch at scandal-plagued Tenet. But Pearce didn't do a complete about-face: He continues to call for the dismissal of Tenet managers from CEO Jeffrey Barbakow on down, citing their performance and the stock's steep plunge over the last year. The market shrugged off Monday's developments, as Tenet shares slipped 12 cents to $15.96 in light trading. The stock, which traded above $50 last fall, has lost more than two-thirds of its value in the past year.
Pearce has long accused Tenet of practicing "Wall Street medicine" that places corporate profits ahead of patient care. Although his last proxy fight against Tenet failed two years ago, Pearce has since gained some vindication as his concerns have erupted into full-scale scandals. Today, Tenet stands accused of aggressively billing Medicare and performing high-risk procedures on patients who didn't really need them. Pearce said Monday that he will continue to monitor Tenet for signs of a turnaround. Although he has formally dropped any plans for a proxy fight, he has essentially placed the company under doctor's orders to recover.