The health care industry is abuzz with news that the owner of Doctors Medical Center of Modesto could be sold or it could shed some of its assets to lower the company’s debt..
Publications from the Wall Street Journal to USA Today reported this week that a major shareholder is pushing for changes at Tenet Healthcare Corp. Tenet has owned Doctors Medical Center for decades and completed an acquisition of Emanuel Medical Center in Turlock three years ago.
Tenet’s chain of hospitals also includes Doctors Hospital of Manteca.
The company has been under pressure from Glenview Capital Management to explore alternatives, such as selling divisions of the company or seeking a buyer for the entire company. Glenview is a hedge fund that owns almost 18 percent of Tenet’s stock.
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Tenet announced Aug. 31 that Chairman and Chief Executive Officer Trevor Fetter will step down in mid-March or earlier after 14 years at the helm. An executive firm was hired to search for a new CEO.
The company has said it will sell some lower-performing hospitals to bring down its $15 billion in debt. It reported a net loss of $56 million for the quarter ending June 30.
Last month, Tenet said it completed the sale of three Houston-area hospitals and a long-term acute care facility to HCA Healthcare Inc. The company also is selling two hospitals in Philadelphia.
Doctors Medical Center referred media inquiries to Tenet’s corporate headquarters, which had no comment Friday. Hospital industry spokespeople in Northern California didn’t want to speculate on the shakeup at Tenet.
The California Nurses Association has about 3,500 members working at seven Tenet-owned hospitals in the state. Negotiations over an initial contract are set to begin soon at Emanuel in Turlock, where a lopsided vote last month added 400 nurses to the union after a quick organizing campaign.
“We will be paying a lot of attention to what is going on at Tenet,” said Andrew Prediletto, the union’s division director for Tenet hospitals. “I am not in a position where I can comment or speculate on what might happen” with the company’s California hospitals.
The CNA is slated next year to negotiate on behalf of 3,000 nurses at the company’s other hospitals in California, including the 1,200 union-affiliated nurses at Doctors of Modesto.
Tenet operates 77 acute-care hospitals, as well as short-stay hospitals and hundreds of outpatient centers in the United States. It has an increasing ownership stake in United Surgical Partners International, the nation’s largest ambulatory surgery provider. Tenet’s Conifer Health Solutions subsidiary provides health management services to hospitals and physician groups.