USC Moves To Push Hospital Sale
The University of Southern California on Tuesday filed a lawsuit in State Superior Court in Los Angeles seeking to terminate Dallas-based Tenet Healthcare's lease and operating agreements at USC University Hospital, Bloomberg/New York Times reports (Bloomberg/New York Times, 8/23).
USC medical personnel staff the hospital in Boyle Heights, and the university uses it as a teaching hospital. USC owns the land, while Tenet manages the hospital and owns the hospital buildings and equipment.
The lawsuit does not fault Tenet's management of the hospital but questions the company's ability to continue investing in the facility, according to the Los Angeles Times (Yi, Los Angeles Times, 8/23).
The Wall Street Journal reports that the lawsuit "effectively claims" that government investigations of Tenet have compromised USC's ability to recruit top physicians (Rundle, Wall Street Journal, 8/23).
Marshall Grossman, the attorney representing USC in the case, said that since 2003 Tenet has invested $100 million less in USC University Hospital than the amount called for in the company's agreement with the university (Los Angeles Times, 8/23).
Tenet spokesperson Harry Anderson said that the company has invested $130 million in the facility over the past three years and that an additional $46.7 million in investments is projected for 2006 (Wall Street Journal, 8/23).
Tenet in the next few months will open a 10-story patient tower at the facility, according to company spokesperson Steve Campanini (Bloomberg/New York Times, 8/23).
Grossman said the suit is intended to force Tenet to sell USC University Hospital.
Tenet's lease on the land runs through 2063.
Grossman said that the university has not considered how the facility would be managed if Tenet is forced to sell it and added that the suit would not disrupt operations at the hospital.
Tenet officials described the lawsuit as a negotiating tactic (Los Angeles Times, 8/23).