Prime Healthcare acquires Alvarado Hospital

Prime Healthcare Services, Ontario, Calif., announced that it has acquired 132-bed Alvarado Hospital in San Diego from a physician-owned company, Plymouth Health, Sherman Oaks, Calif. Terms were not disclosed in Prime's news release.

Alvarado Hospital is Prime’s 13th hospital, all in Southern California. Prime will maintain the services of the hospital and its health plan contracts. In some previous acquisitions, Prime has canceled existing managed care contracts, although it has moved away from that tactic more recently.

Two physician brothers, Pedram and Pejman Salimpour, formed Plymouth in late 2006 to purchase the hospital from Tenet Healthcare Corp., Dallas. Tenet had agreed to sell the hospital as part of a settlement of federal criminal charges related to some of Alvarado’s physician-relocation agreements. The case was tried twice, but both ended in mistrials. Tenet realized pretax proceeds of $22.5 million on the sale, which was completed in January 2007.

Despite the clinical, operational and financial improvements at Alvarado since then, the business model of a standalone hospital is not viable in the current healthcare environment, Pejman Salimpour said, according to Prime’s release.