Tenet Healthcare Finalizes Sale of Four Orange County Hospitals
Dallas-based Tenet Healthcare on Tuesday finalized the sale of four Orange County hospitals to Costa Mesa-based Integrated Healthcare Holdings for $70 million, "capping five months of public debate and scrutiny from elected officials," the Orange County Register reports. Tenet, the nation's second-largest hospital company, sold the facilities -- Western Medical Center-Santa Ana, Western Medical Center-Anaheim, Chapman Medical Center and Coastal Communities Hospital -- as part of its plan to divest 27 hospitals nationwide (Wolfson, Orange County Register, 3/9).
The staff at the hospitals had opposed the deal because the principal investor in IHHI, physician Kali Chaudhuri, purchased and then closed a chain of medical clinics in 2000, affecting the medical care of 56,000 Orange County patients and 300,000 patients statewide. He also invested in clinics that failed in 2001 and 2002.
Doctors, activists, government officials and citizens have said that health care in Orange County could be jeopardized if the deal was not carefully vetted. Medical staff members at the hospitals were concerned that the deal would siphon money from the facilities if Chaudhuri remained the principal investor.
In January, Chaudhuri agreed to a deal under which he will own as much as 49% of the land upon which the hospitals sit and will have an option to purchase as much as 25% of the business in two years. The Orange County Physicians Network will replace Chaudhuri as principal investor.
Under the agreement, IHHI will keep the hospital's trauma center open for at least two years with a one-year notice requirement if the company plans to close it (California Healthline, 1/27). Also, the agreement will give Chaudhuri's lawyer and business partner, William Thomas, an option to purchase 4.9% of the business.
The four hospitals will be IHHI's only holdings, but spokesperson Meg Waters said IHHI is interested in purchasing other facilities in the future.
Larry Anderson, the group's president, said, "We are committed to continuing to serve the Orange County community by making a substantial investment in each of these important acute-care hospitals" (Orange County Register, 3/9).