The Argonaut -- 12/20/01

Marina del Rey:
$57 million sale of Daniel Freeman Hospitals to Tenet Healthcare finalized Monday
BY RAHNE PISTOR

Daniel Freeman Marina Hospital and Daniel Freeman Memorial Hospital in Inglewood officially made their transition from nonprofit healthcare facilities to for-profit healthcare facilities at 12:01 p.m. Monday, December 17th, as Southern California’s largest private hospital operator — Tenet Healthcare Corporation — completed purchase of the two Daniel Freeman Hospitals from nonprofit Carondelet Health Systems.
The final sale price was $57 million.
Attorney General Bill Lockyer had earlier decided not to oppose the sale, the last obstacle to the purchase.
Service at the Daniel Freeman Marina and Daniel Freeman Memorial facilities will remain the same for the immediate future, according to Tenet spokesman Gary Hopkins.
But major changes — including rumored plans to close Daniel Freeman Marina Hospital — have been suggested in the past.

"We are in a transitional period right now," says Hopkins. "We have new management and a new CEO in place as of today [Monday, December 17]. "We will be evaluating procedures at the hospitals and acting on areas which need improvement." Named chief executive officer of both hospitals is Harris Koenig, a 23-year veteran Tenet executive.

Presently, patients at the Daniel Freeman Hospitals can expect care and service mirroring that provided when the hospitals were owned and run by Carondelet, Hopkins says."I doubt any patients who walk in to the hospital today could tell that the facilities are under different ownership unless they were told," he added.

But not everyone welcomed the sale.

Lark Galloway-Gilliam is with the nonprofit community activist group Community Health Councils, Inc.
She said doctors at Daniel Freeman Memorial Hospital have expressed concern about allegations that Tenet will merge the cardiac care center at Daniel Freeman Memorial into a cardiac care center at the Tenet-owned Centinela Hospital in Inglewood.
"Merging the cardiac care facilities into one would have negative repercussions for the community," Galloway-Gilliam said. "When someone is having a heart attack, they need to have care facilities available in the closest proximity possible."
Galloway-Gilliam is representative of community groups and citizens that believe the commercialization of the Daniel Freeman Hospitals could have adverse effects on the quality of care available to the community. Galloway-Gilliam described the community’s failure to oppose the sale of the hospitals as "disappointing." "We never received the public outcry we had hoped for over the acquisition," she said. "When Tenet begins to take steps to close the doors of the Marina facility is probably when people will finally start becoming concerned and get active."

Galloway-Gilliam says that her group and its supporters need to make the best of an unfavorable situation.
"We need to work with Tenet now to make sure the needs of the community are met," she said. "We need to hold them to the fire and hopefully get them to commit to more moves beneficial to the community than they would agree to on paper."

This week, hospital employees were scheduled to meet with new Tenet human resources personnel and begin to adjust to working under the new ownership, Hopkins said. No major changes are planned immediately, Hopkins added.

Administrators at the Daniel Freeman Hospitals were not available for comment on hospital policy changes.

Sale of the Daniel Freeman Hospitals followed concerns that the hospitals were in dismal financial shape and losing money annually.
Carondelet officials had made public the possibility that if Tenet — whom the Carondelet officials called the only financially-adequate bidder — declined to purchase the hospitals, then the hospitals would most likely be closed. "These are failing hospitals in desperate shape," said Tenet spokesman Harry Anderson. But a recent press release distributed by Tenet said the hospitals generated "net revenues of about $181 million" in the fiscal year ended June 30th. "Net revenues does not mean net profits," Hopkins explained about the apparent discrepancy. "Other monies are subtracted from the net revenues," he said.

According to summary individual disclosure reports issued by Carondelet to the Office of Statewide Health Planning and Development, Daniel Freeman Marina operated at a net loss of nearly $3.5 million while Daniel Freeman Memorial operated at a net loss of nearly $10 million in the hospitals’ fiscal year 2000.

"The fact that we were always given conflicting numbers made it hard to argue for an alternative to the commercialization of the Daniel Freeman Hospitals," says Galloway-Gilliam.

Regardless of past fiscal performance, Tenet officials emphasize that they intend to make Daniel Freeman Hospitals profitable soon.
Information on the purchase of Daniel Freeman Hospitals, Tenet Healthcare Corporation, (805) 563-6816 or (805) 563-6885.