LOS ANGELES (AP) - A rapidly growing Inland Empire company that specializes
in buying financially struggling hospitals has deals to buy three more Los
Angeles-area facilities, which would give it a dozen properties in Southern
California.
Prime Healthcare Services Inc. announced Monday that it has bought the
151-bed Encino campus of Encino-Tarzana Regional Medical Center and has
agreements to purchase 167-bed Garden Grove Hospital and Medical Center and
64-bed San Dimas Community Hospital.
The seller of all three is Dallas-based Tenet Healthcare Corp. Neither
company disclosed any information on the financial terms of the sales.
If all three receive regulatory approval, Prime will have the same number of
hospitals as Kaiser Permanente, the leader in Southern California with 12. Prime
would have acquired all but one of its properties in the past four years.
"We are pleased that Tenet selected Prime Healthcare to acquire these three
underperforming hospitals," said Prime's chairman, Dr. Prem Reddy. He said Prime
will continue to operate all three hospitals as acute care facilities.
The Los Angeles Times reported that when Prime takes over a hospital, it
often cancels insurance contracts, allowing it to charge insurers higher rates.
It also has previously suspended some less-lucrative patient services, including
chemotherapy treatments and birthing centers.
But Prime executives contend they are rescuing hospitals from closure and
giving communities continued access to medical care.
As Prime grows, Tenet continues to reduce its California presence. Tenet
once had 41 hospitals statewide; it will have 13 facilities in California once
these sales are closed.
Chief operating officer Dr. Stephen Newman said California remains "an
important state for Tenet."
The Garden Grove and San Dimas facilities, he said, "were only marginally
profitable in 2007, and neither had positive cash flow."
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