One-time Lion tamer now tackling health care beast
NAME: Jeffrey BarbakowDESCRIPTION: Chairman and CEO, Tenet Healthcare Corp. LAST SEEN: Exiting his post as chairman of MGM/UA after one of Kirk Kerkorian’s ownership shuffles in 1991. SANTA BARBARA — He had his finger on the Lion’s pulse for much of three years, but when Jeffrey Barbakow left MGM/UA’s chairmanship in early 1991, his next corporate doctoring was more open-heart surgery than first aid. At the time, National Medical Enterprises had 35 hospitals and $2.5 billion in revenues. But it had nearly flatlined from billing-fraud investigations and other woes. Eleven years later, the renamed Tenet Healthcare is in the pink of health as the nation’s No. 2 hospital operator, with $12 billion in revenues. And Barbakow is happy about his transplanted career. “It really is a life-or-death kind of job,” says Barbakow, 57. Tenet is, as Barbakow says, “big, strong and well positioned,” particularly in Southern California, where it controls 22% of the market. His big task the past year has been visiting all 116 Tenet hospitals and preaching improved customer service. His work has paid off: In January, he made $112 million when he cashed in 1993 stock options. Barbakow came to both health care and entertainment indirectly, after 20 years as an investment banker. While working for Merrill Lynch, he befriended Kirk Kerkorian and then, when Kerkorian bought back MGM/UA in 1988, became MGM’s chairman. His timing was nothing if not fortuitous. “The first two pictures we released were ‘Rain Man’ and ‘A Fish Called Wanda,’ ” Barbakow says. “A lot of cash was flowing in. So we straightened out the balance sheet, and the stock (price) tripled.” But five months after Kerkorian again sold MGM in late 1990, Barbakow left entertainment with few regrets, moving to Santa Barbara and back into investment banking. Then in 1993, fellow NME board members asked him to fix the ailing company. They wanted him to end NME’s billing scandals and find a merger partner. He did end the scandals with a then-record $379 million federal settlement. But Barbakow then began buying other chains, keeping only those facilities close enough to each other to dominate a market. Such geographic clusters allowed each Tenet facility to specialize, cutting costs while still offering the market a range of services. “The entertainment business is so tough, with what’s going on and what works and doesn’t work,” Barbakow says. “But health is really beyond business. You have to start with outcomes and work back.” He still has a few showbiz ties, such as the Entertainment Industry Council, whose other board members include former MGM chairman Frank Mancuso and current vice chairman Chris McGurk. He diplomatically declines to discuss MGM’s current situation (Kerkorian again has the company for sale). But he will talk about the Academy membership he kept. He wouldn’t say who’ll land his Oscar vote, but allows that he “loved” Russell Crowe and “A Beautiful Mind.”
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