Tenet Officials Say They Have No Plans To Close Hospitals Put Up for Sale in California
Santa Barbara-based Tenet Healthcare has no plans to close any of the 19 hospitals it has put up for sale in California, although the company would not "promise that the hospitals would remain open," Dr. Stephen Newman, CEO of Tenet California, said Wednesday, the Los Angeles Times reports (Buchanan, Los Angeles Times, 2/5). Last week, Tenet, the nation's second-largest for-profit hospital chain, announced plans to sell 27 of its 100 hospitals. The company began downsizing last year when it announced plans to sell or divest 14 facilities as part of an ongoing cost-cutting effort. However, unlike last year's sales, which focused largely on noncore markets, the hospitals in the upcoming sales will include several in larger markets, including 19 in California. Of those 19, all but one are located in Los Angeles or Orange counties (California Healthline, 1/29). At a public hearing of the Health Committee in Van Nuys, Newman said that more than 100 potential buyers had already made inquiries about the hospitals, and he assured those present at the hearing that buyers would be required to pledge to operate the hospitals as acute care centers as a condition of sale (Los Angeles Times, 2/5). He said buyers would have to retain a majority of current staff and honor contracts with the Service Employees International Union and the California Nurses Association (AP/Fresno Bee, 2/4). Tenet officials also said that if a facility does not sell by the December 2004 deadline, the company would work with local not-for-profit organizations to issue bonds and keep those hospitals operational (Pondel, Los Angeles Daily News, 2/4).
Despite Newman's assurances, public officials and community activists reiterated concerns that Tenet would be unable to find buyers and the hospitals would be forced to close, given the state of the economy and the short time-frame required for the sales. Assembly member Dario Frommer (D-Glendale) said that closing the hospitals would have a "catastrophic impact on California's health care system," according to the Times. Carol Gunter, director of the Los Angeles County Emergency Medical Services Agency, said that closure of the hospitals would eliminate emergency services for low-income patients and overwhelm remaining hospitals with patients. Los Angeles County Supervisor Yvonne Brathwaite Burke said that the state should "take steps to protect communities from the possibility of losing so many hospitals at once," according to the Times (Los Angeles Times, 2/5). Frommer said that antitrust issues should be considered before a prospective buyer is able to purchase any of the hospitals, adding, "Companies like Tenet have dominated certain areas, and when they leave, those communities are left without care." However, Attorney General Bill Lockyer (D) said that the state has no legal recourse to stop Tenet's sale of the hospitals, calling such efforts an example of "sublime futility" (Los Angeles Daily News, 2/4).
West Contra Costa Healthcare District is making preparations to run Doctors Medical Center San Pablo/Pinole if Tenet, which leases the facility from the district, cannot find an operator, district officials said Wednesday, the Contra Costa Times reports. Officials say they are "scrambl[ing] to find an operator to replace" Tenet before the company stops operating the hospital July 31. The district has hired an investment banking firm to help find an operator, and it is working to hire a management firm. In addition, district officials are conducting a comprehensive review of hospital operations and are working on a communications strategy to keep the community informed. Jim Beaver, the district's executive director, said the district is considering various funding possibilities for the hospital, including a parcel tax, but added that its "first goal is to make the hospital financially viable on our own" (Lochner, Contra Costa Times, 2/5).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.