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Emanuel explores partnership with Tenet

POSTED September 28, 2012 12:43 p.m.

Over the past three years, Emanuel Medical Center has been looking for a way to remain financially stable amid costly healthcare reform act mandates and dwindling revenues.

Tenet Healthcare Corporation may be the answer to Emanuel’s problems.

Emanuel is in discussions with Tenet — an investor-owned hospital operator, which runs 49 hospitals nationwide including Doctors Medical Center in Modesto and Doctors Hospital in Manteca — for a possible partnership, Emanuel President and CEO John Sigsbury announced Thursday.

“As health care delivery becomes more expensive and complex, and with the onset of the Affordable Care Act provisions, it is becoming even more challenging for independent hospitals to thrive,” Sigsbury said.  “An affiliation with a large healthcare system would enable Emanuel access to enhanced clinical integration and advanced information technology and operating systems, contracting relationships, capital resources, and nationwide purchasing programs that could sharply reduce our cost of care and allow wider access to hospital services for our local residents.”

Tenet’s local presence in Modesto and Manteca was the strongest reason Emanuel’s board of directors decided to move forward with discussions, according to Sigsbury.

“Having two adjacent facilities will allow us to grow services here that are not offered in Modesto (such as outpatient radiation treatment at Emanuel’s Cancer Center) and for Modesto to grow services not offered here. There are many opportunities,” Sigsbury said.

The discussions between Emanuel and Tenet include the hospital and all healthcare services it currently offers. The only Emanuel assets excluded from the negotiations are the long-term care facility Brandel Manor, and assisted living facility Cypress of Emanuel.

Those two facilities will remain under management of the Evangelical Covenant Church, of which Emanuel Medical Center is a ministry, said Sigsbury.

The deal isn’t done yet, however, as Emanuel and Tenet are still in the due diligence process and no final agreements have been reached. This process is expected to take two to three months, according to Sigsbury.

In the meantime, Emanuel has decided to postpone its annual Legacy Circle pledge campaign. Previously, that fundraising effort has seen community volunteers and Emanuel staff come together to raise nearly $2 million toward a $5 million five year goal to expand cardiac care services at Emanuel.

 “We don’t think it’s appropriate to ask our employees and community members to pledge money without knowing what it will look like (in the future),” said Sigsbury.

Sigsbury said the annual Festival of Trees fundraising event — which will support both Hospice of Emanuel and Jessica’s House this year — will continue as planned. Donations to Festival of Trees are collected immediately and used to help the organizations designated, differing from Legacy Circle’s pledges for future donations.

If the partnership between Emanuel and Tenet moves forward, Sigsbury said there could be a not-for-profit foundation created to continue community fundraising to support local services, following the model of Legacy Circle.

Though a partnership with Tenet Healthcare Corporation may change some aspects of Emanuel Medical Center’s operations, the hospital expects to continue with its historically faith-based care.

“It’s an absolute for the board of directors to maintain the hospital as a faith-based hospital, which isn’t entirely without precedence,” Sigsbury said.

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