Tenet May Announce Sale of as Many as 30 Hospitals, Including Several in California
Tenet Healthcare could announce the sale of as many as 30 hospitals in the next three weeks, including several in its "core California market," a health care analyst said yesterday, the Philadelphia Inquirer reports. Tenet, which owns 100 hospitals in 15 states, "may shortly announce another major round of asset sales, with as many as 20 to 30 hospitals potentially on the block," Darren Lehrich, a health care analyst for SunTrust Robinson Humphrey in New York, said (Goldstein, Philadelphia Inquirer, 1/27). Last year, Tenet announced plans to sell or divest 14 hospitals as part of an ongoing cost-cutting effort (California Healthline, 11/4/03). However, unlike last year's sales, which focused largely on noncore markets, the hospitals in the upcoming sales will likely include a number in larger markets like California, according to Lehrich, the Wall Street Journal reports. Lehrich said the latest round of sales seems to signal that "a return to normalcy" at the company is "quite remote," adding that the size of the sales has "the appearance of a de facto breakup" of Tenet. Lehrich said he has talked recently with senior executives at several hospital chains who independently said that Tenet is considering major asset sales (Rundle, Wall Street Journal, 1/27). Tenet spokesperson Steven Campanini said, "We don't as a matter of policy confirm or deny rumors," adding, "we regularly review our hospital operations for proper alignment with our business strategy with an eye toward future long-term growth" (Philadelphia Inquirer, 1/27). The Journal reports that Tenet said it is "engaged in a major analysis of its operations and is keeping all options open." Spokesperson Harry Anderson said, "We have completed a major budget process and we're in the process of making decisions" (Wall Street Journal, 1/27).
In related news, Tenet said that two doctors who refer patients to three Tenet hospitals in El Paso, Texas, have received subpoenas from federal investigators at the HHS Office of Inspector General for documents about their financial arrangements with the company, the Journal reports. It is unclear whether the subpoenas are related to an ongoing investigation into Tenet's financial relationships with doctors at some of its other hospitals, according to the Journal. Tenet did not identify the doctors. The company said it expects to receive a similar subpoena from federal officials (Rundle, Wall Street Journal, 1/26). Anderson said Tenet will cooperate with the inquiry (Bloomberg News/New York Times, 1/24). Tenet faces separate probes by the Senate Finance Committee, the state Department of Health Services, the Securities and Exchange Commission, the HHS OIG, the Justice Department and the Federal Trade Commission related to alleged Medicare fraud and other issues. The company also faces an investigation by the Florida Medicaid Fraud Control Unit and the U.S. attorney's office in Los Angeles (California Healthline, 11/4/03).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.