Dive Brief:
- Tenet Healthcare announced Wednesday that it has signed a definitive agreement under which it will become the majority owner and operator of struggling Tucson-based Catholic Carondelet Health Network.
- Current owner Ascension will maintain a minority stake, as will nonprofit Dignity Health. Carondelet includes 25-bed Carondelet Holy Cross in Nogales, Arizona and two Tuscon facilitiues: 486-bed Carondelet St. Joseph's and 400-bed Carondelet St. Mary's.
- The network will become a for-profit, according to Tenet officials. The deal is expected to close in October, subject to regulatory approval.
Dive Insight:
Variations of this deal have been in the works since last summer, when Ascension announced plans to sell a majority interest in Carondelet to a subsidiary of for-profit Tenet Healthcare Corp. and Dignity Health through the creation of a joint venture. Tenet and Dignity are already involved in the state—together they manage an accountable care organization called the Arizona Care Network.
Carondelet has been struggling, recording losses of $32 million in fiscal 2013. In 2012, its losses were over $100 million. In August of last year, it agreed to pay a $35-million settlement to resolve allegations of Medicare fraud. The penalty was the largest of its kind in the state's history.
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