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Emanuel sale still under AG review

CovenantCare to take over hospice

Emanuel sale still under AG review

Tenet agreed to purchase Emanuel Medical Center in February for $131 million, but the sale is still under review by the Attorney General's Office.


POSTED November 15, 2013 11:58 p.m.

The pending sale of Emanuel Medical Center to Tenet Healthcare Corporation is continuing to make progress, but when the deal might be finalized remains an unknown.

At last report, the deal was under review by the California Attorney General’s Office and the Federal Trade Commission. Neither agency will provide specific details as to how far the reviews have to proceed.

“The leadership teams at both Tenet Healthcare and Emanuel Medical Center are working diligently to complete Tenet’s acquisition of the hospital, including continuing to work through the required regulatory review,” Tenet’s public affairs office wrote in an emailed statement. “Tenet remains fully committed to building a strong, high-quality healthcare network for the Central Valley, with Doctors Medical Center of Modesto and Emanuel Medical Center at its heart. A vital part of this commitment is maintaining Emanuel’s unique identity and culture, as well as its integral role in the Turlock community.”

Tenet agreed to purchase the 209-bed licensed general acute care hospital in Turlock in February for $131 million. Because EMC is a nonprofit hospital and Tenet is a for-profit organization, the deal has to be reviewed and approved by the state attorney general’s office. The attorney general’s review process includes a public hearing and, if needed, preparation of expert reports.

The attorney general’s office in its impact report on the pending sale states that if the sale were to be approved, it would recommend that Tenet continue the same services and programs EMC maintains for at least five years after the purchase is finalized.

The attorney general’s office held a public hearing addressing the sale of EMC on May 31 and the public consensus was largely in favor of the sale. Tenet is the owner of Doctors Medical Centers in both Modesto and Manteca.

It was expected that the sale would be approved in July and the delay may have to do with the for-profit status of Tenet, because other deals reviewed by the attorney general’s office have been approved in far less time. For example, the sale of Verdugo Hills Hospital in Glendale to USC Verdugo Hills Hospital LLC, a wholly owned subsidiary of University of Southern California, a California nonprofit public benefit corporation, was given a conditional consent after 37 days, according to information on the attorney general’s website. A consolidation between two nonprofit healthcare organizations was given a conditional consent after 29 days.

The FTC reviews hospital mergers and acquisitions to verify they don’t violate antitrust laws and to ensure consumers continue to get the benefit of competitive services, according to their website.

As a religious organization EMC operated several faith-based services, which will continue to operate under the scope of EMC Health, Inc., a nonprofit agency affiliated with the Covenant Church, once a sale is finalized. It will also implement the Legacy Health Endowment, which will distribute proceeds generated by the sale of the hospital. CovenantCare at Home, which has been a part of EMC, will take over operations of Hospice of Emanuel by the year’s end.

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