TURLOCK — Tenet Healthcare Corp. and Emanuel Medical Center have taken another step toward closing their deal now that the Federal Trade Commission has completed an investigation.
Tenet, the Dallas-based hospital chain that owns Doctors Medical Center of Modesto and Doctors Hospital of Manteca, announced in February it had reached an agreement to acquire Emanuel, an independent church-owned hospital thats served the Turlock area since 1917. The $131 million purchase will give Tenet a third hospital in the Northern San Joaquin Valley.
Last month, the Federal Trade Commission notified attorneys for Emanuel and Tenet that the consumer protection agency had closed its investigation of the acquisition. The closing letters signed by FTC Secretary Donald S. Clark said no action was warranted.
The FTC, which often investigates whether health care mergers will stifle competition and increase costs for patients, looked at whether Tenets acquisition of Emanuel and certain related assets violated antitrust laws, the letters said.
They are allowing us to move forward, said John Sigsbury, chief executive officer of Emanuel. Their role is to protect consumers and make sure there is competition in areas where competition is supposed to occur. There are so many (hospital) mergers going on around the county, I think its a concern of the administration.
The state attorney general has been waiting for the FTC to complete its review before determining whether to approve the local hospital purchase. State approval is required before a for-profit company can absorb a nonprofit hospital. A spokesman said Thursday the attorney general is expected to issue a decision by Jan. 10.
Emanuel also is preparing the transition for employees. Sigsbury posted a notice under the Worker Adjustment and Retraining Notification Act that 1,166 employees will no longer be Emanuel employees on or about Jan. 27, which was identified as the scheduled closing date.
The Nov. 27 notice sent to the Stanislaus County Board of Supervisors said employees in good standing will be offered jobs with Tenet or its business services company, Conifer Health Solutions.
It is expected that most, if not all, of the affected employees will be offered employment by Tenet (and) will not experience any period of unemployment, Sigsbury wrote.
Tenets corporate office said Friday it expects the purchase to be concluded in the first quarter of 2014. Its statement said the transaction remains subject to approval by the California Attorney General and the parties satisfaction of other closing conditions.
A purchase agreement has called for Tenet to spend $30 million in the next five years on investments in expansion, improved services, equipment and medical staff development at the 209-bed Emanuel.
Tenet has agreed to maintain cardiac care, cancer treatment, the emergency room, birthing center, intensive care and others services for at least 10 years. The company also has promised to continue Emanuels religious orientation by preserving its Christian statuary and pastoral care activities.
Earlier this year, a consulting firm that analyzed the purchase for the state concluded that availability and access to health care services would continue in the community. Medical Development Specialists concluded that access to health care wont change for the uninsured, Medi-Cal recipients or Medicare patients, and that Tenets investments in the Turlock hospital are expected to improve health care delivery.