After Tenet Healthcare Corp., completes its acquisition this summer of a Roman Catholic hospital in Florida, Tenet, as a condition of the sale, will continue to operate the hospital as if it were Catholic, abiding by church rules on healthcare services.
What may seem like an incongruous deal is business as usual for Tenet, the second-largest publicly traded hospital company.
The 111-hospital chain has in its stable of facilities six hospitals that follow the Ethical and Religious Directives for Catholic Health Care Services, a set of rules for implementing the moral teachings of the Catholic Church in healthcare. The directives, as they are commonly called, address everything from providing pastoral care to prohibiting euthanasia and banning abortions and other reproductive services, such as sterilization.
But following the rules isn't what makes you Catholic, critics charge, and the company may be parlaying religion into increased market share.
For Tenet, a secular company, agreeing to follow the restrictive religious rules is part of a broader acquisition strategy that promises to preserve the local identity of the hospitals the company buys. Owning hospitals that follow the directives also makes Tenet a welcome suitor to struggling Catholic hospitals looking for a savior.
"We're starting to develop a track record that people can check," said Tenet spokesman Harry Anderson.
That was the case in Florida last month when Tenet signed a letter of intent to buy Intracoastal Health Systems' two West Palm Beach hospitals, one of which is Catholic. Intracoastal required prospective buyers to pledge to continue following the directives at 460-bed St. Mary's Hospital.
Intracoastal eventually chose Tenet over HCA-The Healthcare Co., which also pledged to follow the directives. HCA spokesman Jeff Prescott said he knew of one Catholic hospital in West Virginia, with which HCA has a joint venture that follows the directives. HCA is selling its interest in another joint venture it has with a Roman Catholic system in South Carolina.
"Tenet maintaining organizations that continue the Ethical and Religious Directives was a factor," said Bob Stanek, Intracoastal's acting president and chief executive officer.
Intracoastal's sale to Tenet is expected to close June 30.
St. Mary's will join the other hospitals Tenet owns, or jointly owns, that adhere to the directives. They are 303-bed Saint Louis University Hospital in St. Louis and 278-bed Saint Joseph Hospital, Omaha, Neb., the primary teaching hospitals for two of the nation's five Catholic medical schools. The other hospitals are 409-bed Queen of Angels-Hollywood Presbyterian Medical Center, Los Angeles; 389-bed Memorial Medical Center, New Orleans; 503-bed Saint Francis Hospital, Memphis, Tenn.; and 369-bed Saint Vincent Hospital/Worcester (Mass.) Medical Center.
As part of its strategy to preserve local identity, Tenet keeps the hospitals' names. Changing a hospital's name would "be taking away some of its intrinsic value" in the local market, Anderson said.
In an informational packet detailing its faith-based hospital holdings, Tenet points out that it maintains "extensive" pastoral- care programs and provides "significant amounts" of charity care at the hospitals that maintain their Catholic mission. Tenet owns 11 faith-based hospitals, including ones founded by the Presbyterian, Baptist, United Church of Christ and Lutheran churches.
Though Tenet has hospitals that follow the Catholic directives, that doesn't make them Catholic, said Sister Peggy Ann Martin, vice president for sponsorship and governance at Denver-based Catholic Health Initiatives. She said choosing to follow the moral guidelines of the Catholic directives "just says you are good people."
The official recognition of a hospital as Catholic comes from a local diocese or archdiocese. It's recognition the Tenet hospitals don't have.
For example, three years ago when Tenet acquired Queen of Angels in Los Angeles, Cardinal Roger Mahony of the Archdiocese of Los Angeles issued a press release declaring the hospital "to no longer be a Catholic healthcare facility."
At the time, Mahony said takeovers by large for-profit chains that sell healthcare as a commodity "goes totally against what Catholic healthcare ministry has meant to the Catholic Church over the centuries."
But patients who enter Queen of Angels see the trappings of a Catholic facility, including a saint's statue and a large crucifix on the wall in the main lobby, said the Rev. Stephen Ryan, the hospital's director of chaplaincy. There also are more than a half-dozen priests and nuns who are part of the hospital's chaplain program.
"We believe we are indeed a Catholic hospital," Ryan said. "We are continuing the original mission."
When St. Mary's in Florida is sold to Tenet, it too will lose its official Catholic recognition.
"I don't believe the diocese will view them as a Catholic hospital," said Deacon Sam Barbaro of the Diocese of Palm Beach.
Because the Tenet hospitals aren't recognized as officially Catholic and are investor-owned, they also aren't allowed to be members of the St. Louis-based Catholic Health Association, an influential group that represents more than 2,000 Catholic healthcare providers.
"They're not being in the (Catholic Health Association) is not a judgment on the hospital or the individuals of the hospital," said the Rev. Michael Place, president and CEO of the CHA. "They're wonderful folks doing good work but they're not doing it in the name of Jesus."
To Phillip Schaengold, CEO of Saint Louis University Hospital, which Tenet acquired in 1998, the lack of official Catholic recognition doesn't affect the hospital in a practical sense. He also is vice president of operations for Tenet's healthcare operations in St. Louis, which includes four hospitals.
"It matters from a pride standpoint, because we are doing all the things, if not more, than were done from before the conversion," he said.
For example, in 1997, the last fiscal year Saint Louis University owned the hospital, it provided $10.3 million in charity care. Under Tenet's ownership, the hospital provided $14.8 million in charity care in the fiscal year ended May 31, 2000. The hospital expects to exceed last year's charity-care numbers in the current fiscal year, according to data provided by the hospital.
The Rev. Lawrence Biondi, president of Saint Louis University, sits on Tenet's board of directors.
Biondi challenged the difference between Tenet hospitals and not-for-profit facilities.
"I'd like to see one Catholic hospital that is not (in favor of) profit because it won't be in existence long if it doesn't meet the bottom line," he said.