Emanuel hospital will remain independent under Tenet deal

Emanuel Medical Center is pictured on Monday afternoon (07-07-14) in Turlock, CA.
Emanuel Medical Center is pictured on Monday afternoon (07-07-14) in Turlock, CA. The Modesto Bee

Emanuel Medical Center will remain an independent hospital with its own medical staff and governing board after it is acquired by for-profit Tenet Healthcare Corp., a spokeswoman confirmed.

The hospital’s current owner and Tenet are working to complete the long-awaited acquisition by Aug. 1. Tenet announced an agreement to purchase the 209-bed hospital in February 2013, but the $131 million deal had to clear a Federal Trade Commission review last year and meet conditions set by the state attorney general in January.

A person who works at Emanuel said Tenet officials are holding meetings with the hospital’s employees this week.

Under previous terms of an agreement, Emanuel was going to become a campus of Tenet-owned Doctors Medical Center of Modesto. But the parties decided to have Emanuel remain a separate hospital and keep its name.

Spokeswoman Pennie Rorex did not fully explain the decision to maintain Emanuel as a separate facility. Citing the changing health care environment, Rorex said in an email that staying independent will better serve patients, the hospital’s physicians and the community.

Rorex said Emanuel will be part of a new health care network that Tenet is building in the Central Valley. Other key pieces of that network are Doctors Medical Center, Doctors Hospital of Manteca and Tenet’s outpatient centers in the region.

“We will have more information about the new network in the coming months,” Rorex wrote. She added that Tenet will operate Emanuel with its own Medicare license after purchasing the facility.

Emanuel Chief Executive Officer John Sigsbury was not available for an interview Monday. Owned by Evangelical Covenant Church, Emanuel has been a nonprofit hospital for decades, but the deal with Tenet will change its status to for-profit.

In a letter last month, Sigsbury informed the Stanislaus County Board of Supervisors that 1,130 workers at the Delbon Avenue facility no longer would be Emanuel employees on or about July 31. Tenet and a contractor are expected to offer jobs to most or all of those workers, the letter said.

Dr. Reza Vafadouste, a cardiologist who treats patients at Emanuel, said staying independent will mean he won’t have to drive to Modesto for meetings. But there may be a financial downside in that smaller facilities usually have weaker contracts with insurers than do larger hospitals, he said.

The physician added that there may have been regulatory issues with operating Emanuel and Doctors under one license.

Mayor John Lazar said the acquisition will benefit Turlock regardless of whether the hospital remains a separate facility. Emanuel’s owner looked for a buyer or partnership with a large organization because of the economic challenges faced by smaller standalone hospitals.

“The association with Tenet guarantees the hospital is retained by our community,” Lazar said. “It is in Turlock’s interest to have locals sit on the board and operate our hospital.”

When the deal is closed, Emanuel will be one of 80 hospitals operated by Dallas-based Tenet in 14 states.