Tenet Healthcare Corp. has been active on both coasts recently, announcing plans to shut down a poorly performing property in San Diego and quietly wooing a Rhode Island hospital.
The closing of 156-bed Harbor View Medical Center effective July 5 is part of what an industry observer thinks will be a continuing strategy elsewhere in the country. The facility was part of the former OrNda HealthCorp, which was acquired by Santa Barbara, Calif.-based Tenet in January.
"In terms of its facilities, appearance and access, (Harbor View) was not as market-competitive," said Steve Valentine, president of Camden Group, a Torrance, Calif.-based consulting firm.
Valentine expects Tenet to continue evaluating its properties with geographical overlap and eliminating the weaker ones.
"Consolidation of healthcare services is a reality in today's managed-care environment," said Tenet Regional Vice President Barry Wolfman.
Columbia/HCA Healthcare Corp. recently closed three hospitals it had acquired from Community Health Systems in the Tampa-St. Petersburg, Fla., area (See story, p. 26).
Harbor View is expected to stop admitting new patients soon. The hospital's services will be transferred to Tenet's Alvarado Hospital Medical Center in San Diego. The hospital's 290 employees have been given 60 days' notice, Tenet said.
Harbor View's average daily census was running at less than 30% and it was losing money, according to Tenet officials, making it unable to compete with two larger area hospitals, University of California San Diego Medical Center-Hillcrest, and Mercy Hospital of Scripps-Health in San Diego. Tenet declined to provide financials for Harbor View.
Meanwhile, officials of Landmark Medical Center in Woonsocket, R.I., confirmed Tenet has been seeking to buy the facility, a rare remaining independent hospital in a rapidly consolidating market.
"We've gone through due diligence, and we're having some serious discussions," confirmed Robert D. Walker, Landmark's president and chief executive officer. "But we have no definitive agreement."
Landmark has talked before with possible buyers without success. Operationally sound, the medical center is seeking a long-term strategic partner rather than a quick fix.
Early last year 233-bed Landmark and Columbia broke off a 1995 deal that stalled over unspecified difficulties. Landmark's Walker said talks with Life-span, a Providence, R.I.-based not-for-profit system, also had foundered.
Nevertheless, Landmark is seeking to complete a merger in the near future, Walker said, "because all the players (in the area) are taking one side or the other in network development."
A Tenet spokeswoman confirmed the Landmark discussions.
If Tenet buys Landmark it would offer an attractive link to its lone New England outpost: St. Vincent Hospital in Worcester, Mass., about a half-hour drive from Woonsocket.