Tenet Healthcare Corp. announced an agreement to shed its North Carolina hospitals, one of several deals that will generate $1 billion for the Dallas-based hospital company as it looks toward beefing up its ambulatory portfolio.
Tenet will sell its two hospitals and 19 physician practices in North Carolina to Duke LifePoint Healthcare. The sale will give Brentwood, Tenn.-based Duke LifePoint nine hospitals in North Carolina and 14 hospitals total.
The deal bolsters Duke LifePoint's presence in its largest market with the addition of 137-bed Central Carolina Hospital in Sanford and 355-bed Frye Regional Medical Center in Hickory.
Duke LifePoint, a joint venture of LifePoint Health and Durham, N.C.-based Duke University Health System, said the expansion will allow the system to serve more patients closer to home, which is better for patients and more attractive for health plans and employers.
LifePoint CEO William Carpenter said the acquisition is consistent with the joint venture's strategy of assembling regional networks. Duke LifePoint has expanded beyond North Carolina to Michigan and Virginia, and more recently Pennsylvania.
Tenet Senior Vice President Trip Pilgrim said the company's decision to get out of North Carolina was driven by a similar recognition that health systems increasingly need regional scale to thrive.
The North Carolina deal and others in the pipeline in Dallas and Atlanta will generate $1 billion in proceeds as the system shuffles its hospital portfolio and targets upcoming investments in ambulatory surgery centers through its joint venture, United Surgical Partners International, Tenet CEO Trevor Fetter said on a conference call.
In Dallas, Tenet plans to sell not-for-profit Baylor Scott & White Health the majority stake in four Tenet hospitals. Tenet has identified not-for-profit healthcare as a growth market where it can capitalize on its ambulatory and revenue-cycle businesses. The system is entering joint ventures to develop integrated delivery networks with not-for-profits.
The system is looking to sell five hospitals in its Atlanta market.
Separately, Tenet is investing $300 million to acquire a California hospital and for joint ventures in Alabama and Arizona. The system is the majority owner in a joint venture in Arizona, which includes Dignity Health and Ascension Health. Tenet acquired hospitals around Phoenix under its deal for Vanguard Health Systems. Tenet also announced in June it would enter a joint venture with four-hospital Baptist Health System, which is based in Birmingham, Ala.