Tenet Healthcare Corp. will sell 27 hospitals - including 19 facilities in California - as part of a major restructuring to foster long-term growth. Tenet then will concentrate its financial and management resources on 69 acute- care hospitals in 13 states.
The restructuring scheme comes after a three-month review of near-term and long-term prospects. The analysis includes Tenet's study of capital expenditures required to comply with California's seismic regulations for hospitals.
"We have made the strategic decision to concentrate our efforts on a core group of hospitals in order to produce tangible benefits in quality and service for the communities we serve and to create long-term sustainable growth for our shareholders," said Tenet President and CEO Trevor Fetter. "We recognized that the growth potential of our strongest hospitals was at risk because of the growing need to divert resources to subsidize hospitals that can no longer meet Tenet's financial objectives."
Even with the sale of 19 hospitals in California, Tenet still will own and operate 17 other facilities in the state, as California remains the healthcare provider's largest market with approximately $2.5 billion in revenues and some 17,000 employees. The eight other Tenet hospitals set for sale are in Louisiana, Massachusetts, Missouri and Texas. For a listing of hospitals on the block, go to www.tenethealth.com.
"We are optimistic about the prospects for our 69 remaining hospitals," added Fetter. Tenet plans to discuss its strategy for those facilities on March 16, when the Santa Barbara, Calif.-based healthcare provider releases its quarterly earnings report.
Tenet expects the restructuring and divestiture of its 27 facilities to be substantially complete by the end of this year. The company also anticipates receiving total net proceeds from the divestitures of approximately $600 million.