News in brief - Oct. 23/30, 2006

Tenet sells 4 hospitals - Providence Health System and Oregon settle privacy breach investigation - Great Britain replaces IT vendor

Tenet sells 4 hospitals

Tenet Healthcare recently sold four hospitals in two separate transactions as part of ongoing efforts to streamline its operations.

The Dallas-based hospital chain announced on Oct. 2 that it had completed the sale of three hospitals in the New Orleans area to Ochsner Health System, which operates several hospitals and clinics in Southeast Louisiana. The hospitals were Kenner Regional Medical Center in Kenner, La.; Meadowcrest Hospital in Gretna, La.; and Memorial Medical Center in New Orleans.

Tenet expected pretax proceeds of $48.5 million, plus another $8 million that Ochsner agreed to pay for reconstruction of a Memorial Medical Center facility that was one of five Tenet hospitals damaged when Hurricane Katrina struck the Gulf Coast in August 2005.

In a separate deal, Tenet said it sold its 51% ownership stake in The Cleveland Clinic Hospital in Weston, Fla., to The Cleveland Clinic. That makes the Ohio-based academic medical center the hospital's sole owner. Tenet estimated pretax proceeds from the transaction at about $90 million.

The sales were part of a larger plan to divest 11 hospitals announced by Tenet last June. Company executives said they were in discussions with potential bidders for the remaining seven hospitals, and for two of its other hospitals that have been up for sale since early 2004.

Providence Health System and Oregon settle privacy breach investigation

Providence Health System will pay about $95,000 to the Oregon Dept. of Justice as part of a settlement with the state after a privacy breach involving the theft of a laptop, backup tapes and discs containing personal and medical information of more than 365,000 home health patients in Oregon and Washington.

The settlement also requires the health system, which previously had committed to provide a year of free credit monitoring services to the affected patients, to pay patient claims for direct financial losses resulting from the theft of their data. So far, the state Dept. of Justice has not confirmed any cases of identity theft related to the case.

Providence Health System did not admit any wrongdoing under the settlement with Oregon State Attorney General Hardy Myers. The agreement ends a nine-month state investigation of the largest data breach ever reported in Oregon. The incident occurred at the end of December 2005 when the computer, tapes and discs containing patient data were stolen from a Providence employee's parked car in Portland, Ore.

Great Britain replaces IT vendor

The United Kingdom's National Health Service announced Sept. 28 that it awarded a nine-year, $3.7 billion contract to build part of its $11 billion national health information network to Computer Sciences Corp., which will replace Accenture Ltd.

New York-based Accenture and El Segundo, Calif.-based CSC, are two of four companies the British government hired in 2003 to design and implement a national network for Great Britain. The four companies were awarded multiyear contracts to automate five regions of Britain, with Accenture holding contracts covering two regions and the other vendors one region each. With Britain turning over Accenture's part of the project to CSC, the CSC now will automate three regions.

Although Britain's project has made progress, it also has experienced several delays since its inception because vendors have had trouble meeting project deadlines. Last year, for example, Accenture announced that it would post a $450 million loss on its two contracts, which only pay vendors when they deliver systems that work.