Tenet paid overtime hours by math, not money
O.C. hospital owner to pay $85M to settle OT dispute
By Courtney Perkes
The Orange County Register
March 11, 2009
Tenet Healthcare, the owner of three Orange County hospitals, has agreed to pay $85 million to settle claims that nurses and other 12-hour-shift employees were denied extra pay after a change in California law entitled them to overtime.
At the time the law changed, Tenet was the county’s largest hospital owner with 10 facilities. In settling, the Texas-based company admitted no wrongdoing, but spokesman David Matthews said the California pay practice has stopped.
The case centered on Tenet’s “California differential” pay scale, according to court documents. The suit alleged that to avoid overtime costs, Tenet lowered the hourly pay rate for employees when they worked more than eight hours a day. That meant that while technically earning overtime, their net wages remained the same as before.
According to the suit, Tenet used as many as five hourly pay rates depending on the length of the work shift.
“It’s not enough for an employer to demonstrate that it pays overtime on paper,” said Frank Coughlin, a Santa Ana attorney representing Pagaduan. “They have to pay overtime in money, not math.”
http://www.ocregister.com/articles/tenet-overtime-pay-2332101-pagaduan-settlement
Comment:
By Don McCanne, MD
Although PNHP is most noted for its advocacy of a single payer national health program, we also oppose the perversities of for-profit health care corporations in which the primary responsibility of the board of directors is to their investors. Tenet Healthcare has provided us with innumerable examples of these perversities. A quick Google of the PNHP website, in a fraction of a second, produced these lines and many more:
“For-profit hospital chain Tenet, formerly National Medical Enterprises (NME), is the subject of four separate federal investigations…”
“Troubled Tenet Healthcare dominates the expensive list…”
“Overall Tenet’s hospitals averaged gross markups of 477% over costs…”
“Last week, the hospital’s owner, Tenet Healthcare, agreed to pay $54 million to the government to resolve accusations that Redding Medical doctors conducted unnecessary heart procedures and operations on hundreds of healthy patients…”
“Tenet, the second largest US hospital firm, paid more than half a billion dollars to settle…”
“Tenet’s CEO exercised stock options worth $111 million…”
“OrNda Healthcorp, a hospital chain recently acquired by Tenet, paid fines of $12.65 million to the government for kickbacks to physicians for referrals…”
And this was only the first page Googled, but you get the gist.
Regardless of the wisdom of the California requirement of paying 4 hours of overtime for a 12 hour shift, it is the law, and there are several options that Tenet had to comply with it. As a for-profit corporation, they chose a method that would protect their investors from higher labor costs, but a method that involved dishonest accounting.
The employees no longer knew what their hourly wages were because, for each paycheck, Tenet retroactively calculated the hourly wage base so that it would wipe out overtime payments, and that base wage would vary from paycheck to paycheck.
Would you feel secure in a Tenet hospital? What other ways are they cheating to improve their bottom line?
HR 676, the United States National Health Care Act or the Expanded and Improved Medicare for All Act introduced by Rep. John Conyers, would provide for comprehensive health insurance coverage for all United States residents, but that is not all. Recognizing the conflicted interests of for-profit corporations in health care, HR 676 also includes the provision that for-profit providers of care opting to participate shall be required to convert to not-for-profit status.
HR 676 was introduced only seven weeks ago, and already has 66 cosponsors, far more than any other health reform legislation. Yet the members of the House and Senate who are leading the reform process have refused to include it in the dialogue on reform, insisting that any reform include not only the perversities of the for-profit health care corporations, but also, even worse, the profound waste and injustices of a financing system patched together with private health plans.
(The remainder of this message has been deleted because it contained expletives, or would have had it been written.)