Ascension, Dignity, Tenet reach definitive deal on Carondelet

Ascension Health, Dignity Health and Tenet Healthcare Corp. have reached a definitive agreement in a joint venture that would make Tenet the majority owner of the Carondelet Health Network in Arizona.

St. Louis-based Ascension and San Francisco-based Dignity, both not-for-profit systems, would each have a minority stake in the joint venture, which would be operated by Tenet, a publicly traded chain based in Dallas.

Carondelet is a three-hospital subsidiary of Ascension, the nation's largest Catholic health system. Terms of the deal were not disclosed, but in bond documents released last October, Dignity said it would invest $30 million and Tenet would own 60% of the venture, with the remaining interest evenly split between Dignity and Ascension.

The Tucson-based Carondelet system has had a negative operating cash flow and is one of Ascension's recent strategic divestitures. Ascension is seeking to shed unprofitable operations and beef up its presence in more favorable markets, according to analysts with Moody's Investors Service. —Melanie Evans

California should consider merging its two insurance regulatory agencies in the wake of the Affordable Care Act, according to a study that renews a contentious debate over how the state should oversee health plans.

California is the only state in the nation to have two agencies overseeing health insurance. The California Department of Insurance covers traditional indemnity insurance and some PPOs, while the California Department of Managed Healthcare has traditionally regulated HMOs but recently picked up some types of PPOs.

“The regulatory framework of who's making decisions about the terms of engagement between plans and consumers is important, and it's shifted a lot with the Affordable Care Act,” said Marian Mulkey, chief learning officer at the California HealthCare Foundation. “In the long run, we need to think about whether having to do it twice (with two agencies) instead of doing it once is serving California and California consumers.”

The not-for-profit health policy think tank commissioned the study to update a 2011 report that examined how California would implement the ACA with two regulatory agencies. That report also questioned the wisdom of having two agencies with different mandates. —Barbara Feder Ostrov