UCI Health buying 4 Tenet hospitals, 3 in Orange County, for $975 million

UCI Health is expanding again, agreeing to buy four hospitals that make up Tenet Healthcare Corp.‘s Pacific Coast Network for $975 million.

The facilities include Fountain Valley Regional Hospital, Los Alamitos Medical Center, Placentia-Linda Hospital and Lakewood Regional Medical Center.

Pending regulatory approvals, the hospitals and their associated clinics will become part of UC Irvine’s healthcare system. The deal was approved by the UC Board of Regents and is expected to close later this spring.

Also see: Hospital building spree could turn Irvine into nation’s next big health brand

Tenet’s Chief Executive Officer Saum Sutaria in a statement said the company’s Pacific Coast Network “will be in good hands under the new ownership.”

A sign for the new medical center campus of UCI Health currently under construction at the intersection of Jamboree and Campus in Irvine on Friday April 21, 2023. The buildings include: the Joe C. Wen & Family UCI Health Center for Advanced Care; the Chao Family Comprehensive Cancer Center and Ambulatory Care; a 144-bed acute care hospital with an emergency room; two multi-story parking garages. The new medical center will be the first all-electric hospital in the nation with electric and solar power supplying all energy needs. (Photo by Mark Rightmire, Orange County Register/SCNG)

El hospital de cuidados intensivos con sala de emergencias es uno de los tres edificios del nuevo campus del centro médico de UCI Health actualmente en construcción en la intersección de Jamboree y Campus en Irvine el viernes 21 de abril de 2023. El nuevo centro médico será el primero en todo -Hospital eléctrico de la Nación con energía eléctrica y solar que suple todas las necesidades energéticas. (Foto de Mark Rightmire, Registro del Condado de Orange/SCNG)

The acute care hospital with an emergency room is one of three buildings of the new medical center campus of UCI Health currently under construction at the intersection of Jamboree and Campus in Irvine on Friday April 21, 2023. The new medical center will be the first all-electric hospital in the nation with electric and solar power supplying all energy needs. (Photo by Mark Rightmire, Orange County Register/SCNG)

The Joe C. Wen & Family UCI Health Center for Advanced Care is one of three buildings of the new medical center campus of UCI Health currently under construction at the intersection of Jamboree and Campus in Irvine on Friday April 21, 2023. The new medical center will be the first all-electric hospital in the nation with electric and solar power supplying all energy needs. (Photo by Mark Rightmire, Orange County Register/SCNG)

One of two parking garages at left, and the acute care hospital with an emergency room, at right, is one of three buildings of the new medical center campus of UCI Health currently under construction at the intersection of Jamboree and Campus in Irvine on Friday April 21, 2023. The new medical center will be the first all-electric hospital in the nation with electric and solar power supplying all energy needs. (Photo by Mark Rightmire, Orange County Register/SCNG)

UCI Health celebrates an important milestone in the construction of its new Irvine medical campus with a “topping off” ceremony for its newest hospital in Irvine on Thursday, July 13, 2023. (Photo by Drew A. Kelley, Contributing Photographer)

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UCI expands again

The deal marks another significant expansion for UCI Health, which includes a medical center in Orange and a network of specialty care centers.

In 2021, UCI Health CEO Chad Lefteris said UCI Medical Center was “essentially full all the time” and had limited space for inpatients.

More on UCI: Samuelis give university $50 million for health, society and environmental research

To further its reach, the university launched work on a $1 billion medical complex next to its main campus, approved by UC Regents in 2021. UC Irvine Medical Center Irvine-Newport, a multi-building complex on 202 acres with a 144-bed hospital and emergency room, will offer specialty care in oncology, neurosciences, children’s health and other areas. It’s expected to open in 2025.

UCI also added the Susan Samueli Integrative Health Institute, which debuted in 2022. The institute was made possible by Orange County philanthropists Henry Samueli and his wife, the building namesake, who donated $200 million to create the school.

UCI nurses hold a candlelight vigil during the shift-change outside UCI Medical Center in Orange on Monday, April 20, 2020 to protest over concerns about having enough personal protective equipment for health care workers treating COVID-19 patients. The vigil also to honored health care workers who have contracted COVID-19. (Photo by Leonard Ortiz, Orange County Register/SCNG)

Employee unrest

The acquisition comes amid ongoing labor disputes by union employees at many hospitals across Southern California. Most of the protests center on wage and staffing issues, a common theme since the pandemic.

The Pacific Coast Network has seen its share of unrest as nurses and technicians protest what they call understaffed facilities.

Employees picketed in Tenet’s Fountain Valley, Los Alamitos and Lakewood hospitals in June 2021, alleging the facilities had left some workers without health insurance while the company received billions in federal COVID-19 relief funds and spent $1.1 billion to buy 45 surgery centers.

In a statement issued late Thursday, NUHW President Sal Rosselli said Tenet still has “chronically understaffed” hospitals in Orange County while employees have struggled to provide adequate patient care.

“We’re hopeful that the sale to UC Irvine Health will benefit patients and caregivers,” he said. “But we still need the university to explain how it plans to operate the hospitals and protect the critical jobs and services they provide.”

The UC health system also faced temporary layoffs during the pandemic. Hundreds of employees protested the move, which affected Southern California hospitals in Riverside and San Diego.

Tenet’s workers are represented by the National Union of Healthcare Workers. UCI Health employees are represented by the California Nurses Association and American Federation of State, County and Municipal Employees, among others.

The two hospital systems didn’t address how the acquisition would affect union employees.

Expanded services

The university said the Tenet acquisition would give patients access to advanced therapies and clinical trials related to cancer, neurosciences, digestive diseases, orthopedics and internal medicine.

UCI Health operates the only Level I trauma center in Orange County. It also operates the region’s largest burn center in addition to a National Cancer Institute-designated cancer center and high-risk perinatal-neonatal service, hospital officials said.

Patients at UCI Health and Tenet facilities can continue receiving care as they normally would, officials said.

The UC system, a $14 billion enterprise, includes six academic health centers, 20 medical schools, four children’s hospitals and the Global Health Institute.

UCI Chancellor Howard Gillman said the acquisition would help the university deepen its “healthcare commitment to the future of Orange County, our region and California.”

Tenet operates 67 hospitals and medical facilities throughout California, including the Coast Surgery Center of South Bay in Torrance, Desert Regional Medical Center in Palm Springs and Providence Holy Cross Surgery Center in Mission Hills, among others.

Dallas-based Tenet Healthcare said the four hospitals and related operations generated revenues of about $1 billion in 2024, Tenet said. The Dallas-based company estimates the transaction will generate a pre-tax gain of approximately $500 million.

Late last year, another academic health system, UC San Diego Health, finalized a $200 million deal to acquire Alvarado Hospital Medical Center from Ontario-based Prime Healthcare.

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