Tenet completes purchase of Emanuel Medical Center of Turlock

Tenet Healthcare Corp. completed the acquisition of Turlock’s Emanuel Medical Center at 12:01 a.m. Friday, some 18 months after the $131 million purchase was announced.

Tenet also named Susan Micheletti as the hospital’s new chief executive officer. Micheletti has been chief operating officer since June 2000 at San Ramon Regional Medical Center in the Bay Area. She took the helm Friday after John Sigsbury served as CEO of Emanuel for 11 years.

“We are beginning a new chapter in (Emanuel’s) 97-year history, under new ownership and with a new leadership team,” Jeffrey Koury, chief executive officer of Tenet’s Western region, said in a press release.

Koury said it was the right team to take the hospital forward in a challenging health care environment while staying with Emanuel’s historic mission. The management departures include Sigsbury and Vice President and Chief Financial Officer David Neapolitan. “They are both talented and dedicated hospital executives and we wish them every success in their new endeavors,” Koury said in a message to local leaders.

Tenet, a for-profit hospital company based in Dallas, acquired the 209-bed hospital from Covenant Ministries of Benevolence, a family of Evangelical Covenant Church ministries.

Emanuel’s future has been in question since July 2012, when officials said they were seeking a partnership or other change.

“We selected Tenet to be the new owner of Emanuel Medical Center because we wanted to ensure that this vital community asset continues to serve Turlock for many decades to come,” said David Dwight, president of Covenant Ministries of Benevolence in Chicago. “We are confident that we are leaving Emanuel Medical Center in good hands and that Tenet will be a dedicated and responsible steward of the hospital.”

Emanuel has served Turlock since two ministers of the Swedish Mission Church raised funds to build a Canal Drive facility that admitted its first patients in 1917. A new 90-bed hospital opened on Delbon Avenue in 1966. The nonprofit hospital grew to 209 beds with expansions in the past decade, including a cancer treatment center that partners with Stanford University, a critical care center and heart surgery facilities.

Emanuel’s former owner started looking for a buyer or merger with a large organization because of the difficulties faced by independent hospitals. Information provided to the state attorney general, which needed to approve the sale, showed that Emanuel’s economic forecasts were poor after a contract with Kaiser Permanente ended in April 2013.

Koury said Tenet needed another facility in the Central Valley because of the Affordable Care Act and contracts with employers and medical groups. “We needed to expand our network and Emanuel was a strong hospital in a great community,” Koury said.

Tenet also owns Doctors Medical Center of Modesto and Doctors Hospital of Manteca. With the acquisition, Tenet has 80 hospitals in 14 states.

The purchase agreement includes a 10-year commitment for Tenet to maintain core medical services at Emanuel, which will operate under the same name. Koury assured that cancer treatment and cardiac services will continue at Emanuel. He said he has talked with Stanford officials about ways to expand cancer services in Turlock.

Emanuel’s employees were given jobs with the new owner or firms that provide information technology, business office and other services for Tenet hospitals. About 1,400 employees have worked at Emanuel; an exact count was not available Friday.

‘Employees are optimistic’

The change of ownership was celebrated Friday with a luncheon for physicians, receptions for employees, cake, and ice cream socials.

Regina Amador, who oversees volunteer services and the gift shop, said she was pleased to be working for Tenet and the new administration. “From what I have heard, the employees are happy it is concluded and looking forward to moving the hospital forward,” Amador said. “Tenet takes care of their employees and their resources.”

Amador said 686 volunteers donated more than 93,000 hours to the hospital last year and she doesn’t anticipate changes to the program.

Some employees had mixed feelings but said the deal puts the hospital on a stronger footing. “The employees are optimistic,” said Veronica Betts, a chemotherapy infusion nurse. “Change can be good or bad, but we are looking for this to be positive change.”

Sigsbury, the top executive since 2003, could not be reached to talk about his plans. Tracy Roman was named the interim chief operations and finance officer. Roman was chief finance officer for Tenet’s Doctors Medical Center for six years and is chief integration officer for Tenet’s Western region.

Micheletti, the new CEO, said she will work with medical staff, the hospital’s governing board, employees and community leaders to explore more opportunities to meet local health needs.

She said the hospital should benefit from the resources provided by a large corporation. “It’s still a community hospital,” Micheletti said. “We will work hard to maintain the culture and rich history that exists here.”

Proceeds from the sale are being used to form the nonprofit Legacy Health Endowment, which will award grants for health education and services and administer the Bill and Elsie Ahlem Cancer Endowment. How much money will be administered by the foundation has not been determined, said Lindsey Herrera, marketing and fund development manager for EMC Health Inc.

Jennifer Larson, a hospital board veteran, is interim CEO until the foundation is operational. The board of directors includes Larson, as chairwoman; treasurer Larry Anderson; secretary William Gibbs; Jim Ahlem; Dwight of Covenent Ministries; John Ferrari; Marlene Stante; Arlon Waterson; Jim Pallios; Bob Triebsch; and Jonnie York.

The hospital’s religious nonprofit entity will continue as EMC Health to handle post-acquisition business and oversee the Festival of Trees fundraiser for hospice service and Jessica’s House, a grief support program for children.

Also on Friday, Covenant Village of Turlock took over management of two facilities that were part of Emanuel: Brandel Manor, a 145-bed nursing care facility, and the Cypress of Emanuel assisted living center. Covenant Ministries of Benevolence approved a long-term lease for Covenant Village’s parent organization to operate the two facilities.

This story was originally published August 1, 2014 at 9:07 PM with the headline "Tenet completes purchase of Emanuel Medical Center of Turlock."