In a setback for Tenet Healthcare Corp.'s not-for-profit joint venture strategy, the chain's deal with prestigious Cedars-Sinai Medical Center in Los Angeles has fallen through.
In a March 31 statement, Cedars and Santa Barbara, Calif.-based Tenet disclosed the end of plans for Cedars to lease Tenet's 135-bed Century City Hospital and 291-bed Midway Hospital Medical Center for 20 years.
Under the plans, announced last September, Cedars would have managed the facilities in a three-hospital network overseen by a joint operating company co-owned by Cedars and Tenet (Sept. 29, 1997, p. 20).
Tenet spokesman Lance Ignon said Tenet wasn't able to get approval for the deal from the company that owns the Century City Hospital building along with an adjacent medical office building. Tenet wouldn't give any details on its lease arrangement with the hospital's landlord, Century City Medical Plaza Land Co. Officials of the land company weren't available for comment.
Both Tenet and 754-bed Cedars said they would explore other ventures, but Ignon said facilities will not be swapped. He added that the systems are discussing jointly pursuing managed-care contracts.
Ignon also played down the collapse of the deal as a potential damper for other transactions elsewhere.
"We've been having very good success in forming various sorts of affiliations and see no reason why we won't do others," he said.
Cedars officials were not immediately available for comment.
Separately, Tenet did complete its joint venture with not-for-profit Morton Plant Mease Health Care last week. Tenet is leasing 122-bed North Bay Medical Center in New Port Richey, Fla., to a for-profit partnership formed by Tenet and Morton Plant. Dunedin, Fla.-based Morton Plant will manage North Bay.
The agreement will link North Bay with Morton Plant's existing and planned services in Pasco County, Fla., including Morton Plant's 82-bed skilled-nursing facility at Trinity Outpatient Center in New Port Richey.
-With Patricia B. Limbacher