Tenet Healthcare History: Founding, Growth & Key Milestones

In 1981, Oral Roberts opened the City of Faith Medical Center in Tulsa, Oklahoma, a $80 million facility attached to his evangelical university, conceived as a place where prayer and medicine would operate together. The hospital struggled from the first year. Demand never matched the ambition. By 1987, Roberts' organization was selling assets to stay solvent, and a hospital company called National Medical Enterprises acquired parts of the City of Faith infrastructure for prices that reflected the financial desperation of the seller. National Medical Enterprises itself was not a clean acquirer. By the early 1990s, NME faced federal investigations into Medicare and Medicaid billing fraud at its psychiatric hospital chain, a scandal that produced criminal convictions and ultimately forced the company into settlement negotiations with the US Department of Justice. The liability that came with NME's history transferred directly to the successor entity. In 1995, NME merged with American Medical International to form Tenet Healthcare Corporation. The combined company inherited balance sheet stress, regulatory scrutiny, and operational challenges from both sides of the merger. Management spent the next decade navigating fraud settlements and trying to stabilize a hospital network built on acquisitions that had not always been executed with discipline. The 2006 Medicare fraud settlement cost $900 million and forced a reckoning about how the company was structured. The 2014 acquisition of controlling stakes in United Surgical Partners International, the USPI ambulatory surgery center business, marked the beginning of a different strategy: lower-cost outpatient settings, higher-acuity procedures, and the gradual reduction of dependence on inpatient hospital volumes that carry heavy fixed-cost structures.