Tenet Healthcare Corp. plans to put up for sale nearly a third of its medical facilities, including 19 in California, a move that is expected to vastly alter the health-care landscape in the Los Angeles region.
The Santa Barbara-based company, which has been battered by scandal and steep financial losses, said a major reason for the sale was a state mandate to retrofit its buildings to meet earthquake safety standards. Tenet said it faced $1.6 billion in costs for seismic upgrades at the hospitals earmarked for sale. Many other hospital owners around California also are wrestling with how to pay for such improvements.
Tenet, the largest hospital chain in the state, said it hoped to find buyers for the facilities but couldn't guarantee that they all would remain open. In fact, some analysts and consultants predicted that a number of hospitals could close, further squeezing services in a region struggling to provide adequate emergency care.
Also uncertain is what Tenet's plans will mean for the 15,000 employees who work at the 19 California hospitals being put on the block. All but one of those facilities are in Los Angeles and Orange counties, and they include such major institutions as Queen of Angels/Hollywood Presbyterian Medical Center, Brotman Medical Center in Culver City and Western Medical Center in Santa Ana.
"This is not good news," said John Edelston, a health-care consultant in Westlake Village and former chairman of the Los Angeles County Emergency Medical Services Commission. "If hospitals close, it will mean less access and longer waits than there already are. And it will create more haves and have-nots" in the medical-care system.
State Sen. Sheila Kuehl (D-Santa Monica), a member of the Senate Health Committee, also expressed alarm.
"I assume that Tenet is selling because it feels it is not making enough money," she said. "If that's the case, then I am worried about who's going to buy and operate the hospitals.... Tenet may have already convinced people that these hospitals are not making money."
Tenet is to detail today its plans to shore up its finances by selling a total of 27 medical facilities nationwide, including eight in Louisiana, Massachusetts, Missouri and Texas. The proposed divestiture is expected to be completed by the end of the year, generating net proceeds of $600 million.
