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BUSINESSTenet announces major sell-offThe for-profit hospital chain gets dinged by critics as it moves to sell 27 facilities.By Katherine Vogt, AMNews staff. Feb. 16, 2004. Tenet Healthcare Corp. has plans to sell nearly one-third of its hospitals in a major restructuring effort aimed at resuscitating the company after a year of legal and financial woes. The for-profit chain said on Jan. 28 that it planned to sell 27 facilities, reducing its operations to focus on 69 acute care hospitals in 13 states. Nineteen of the hospitals up for sale are in California, with the others in Louisiana, Massachusetts, Missouri and Texas. The sales should be mostly complete by the end of the year. Tenet chief executive Trevor Fetter said in a written statement that the restructuring would create a company with the potential for stronger performance over the long term. The company is taking a $1.4 billion charge against earnings in its fiscal fourth quarter to cover the sale, which Tenet says will likely lead to losses throughout fiscal 2003 and 2004. "We have made a 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," he said. Wall Street didn't express great confidence in Tenet's plan, sending the company's stock down $3 on the day of the announcement, to $13.15. And some physician critics worried that fallout from the plan could harm access to care. Marcy Zwelling-Aamot, MD, Los Angeles County Medical Assn. president, said she is concerned that Tenet will be unable to find buyers for all of the hospitals, leading some of them to close and contributing to what she describes as a crisis in health care in Los Angeles. [...]Full text of AMNews content is available to AMA members and paid subscribers.
Copyright 2004 American Medical Association. All rights reserved.
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