Tenet Sells 2 TN Hospitals in Latest Healthcare Acquisition Deal
The most recent healthcare acquisition deal following Tenet’s divestiture plan involves the sale of Saint Francis Hospital-Memphis and Saint Francis Hospital-Bartlett to Methodist Le Bonheur for $350 million.
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By - Tenet Healthcare announced another healthcare acquisition deal this year, which will lead to the Dallas-based company’s divesture of hospitals and other operations in the Memphis area for $350 million.
According to the SEC filing from Tenet, Memphis-based Methodist Le Bonheur Healthcare will purchase Saint Francis Hospital – Memphis and Saint Francis Hospital – Bartlett for $350 million in cash. The sale will also include the practices associated with both hospitals, as well as six MedPost urgent care centers.
Leaders from Methodist Le Bonheur Healthcare expect the healthcare acquisition deal to bolster the systems the ability to serve more members of the community. The faith-based health system currently has six hospitals, as well as several ambulatory surgery centers, outpatient facilities, hospice residence, and physician practices serving communities across the Mid-South.
“Consistent with our mission, the addition of Saint Francis hospitals will increase access to high quality healthcare, expand services and enhance the delivery of care to improve the overall health of the communities we serve,” Michael Ugwueke, president and CEO of Methodist Le Bonheur Healthcare said in a statement.
The transaction is expected to bring significant benefits to Saint Francis and Methodist Le Bonheur’s patients and communities such as:
- Expanded clinical expertise across primary, acute, and specialty care, while increasing focus on patient experience, especially those with chronic conditions.
- Increased investment in medical technologies
- New policies that improve health outcomes
- Enhanced abilities to provide additional charity care, philanthropic support, and healthcare educational programs
“We have the highest respect for Methodist Le Bonheur, and we are pleased that our facilities will become part of this regional system,” said Sally Deitch, CEO of Saint Francis Healthcare. “Like Saint Francis and Tenet, Methodist Le Bonheur promotes a culture of compassion backed by strong core values and a clear commitment to patient-centered care. We believe this combination will provide the communities we serve an even greater impact on care delivered.”
Despite merging with Methodist Le Bonheur, Saint Francis Hospital – Memphis and Saint Francis Hospital – Bartlett will continue to use Tenet’s revenue cycle management services, according to Tenet’s agreement. The agreement mentioned that Tenet’s Conifer Health Solutions subsidiary would continue to provide revenue cycle management services to the hospitals after the transaction is completed in 2020.
Tenet has been divesting its operations in several markets across the country. For example, in September of 2017 Tenet Healthcare announced that they parted ways with hospitals in Philadelphia after they sold Hahnemann University Hospital and St. Christopher’s Hospital for Children for $170 million.
The organization sold the hospitals to the American Academic Health System, a recently formed Paladin affiliate. Paladin owns four hospitals in low-income areas in Los Angeles County and an organization in Washington DC.
Tenet reported a $230 million pre-tax impairment charge as part of the hospital sales, and they recorded a taxable loss of $200 million originating from the sales. In addition, the healthcare organization expected to see between $900 million and $1 billion in proceeds from the disinvestments.
Overall, the healthcare company made more than $1 billion in proceeds from divestitures of hospitals and health systems as of February 2019. The company had announced plans in 2017 to sell eight US hospitals and nine facilities in the United Kingdom.
