Dubroff: Hello Adventist, good-bye Tenet as healthcare entities cut deal
Doors open and doors close.
For the blockbuster deal that changed the face of health care in San Luis Obispo County, it was a kick-the-barn door open moment for Adventist Health and Tenet Health — the end of a decades-long presence.
Adventist Health’s acquisition of the Sierra Vista hospital in SLO and Twin Cities hospitals in Templeton will push the Roseville-based nonprofit into the top ranks of Central Coast healthcare organizations.
For Tenet Health, it is the final exit for a company that was once headquartered on Upper State Street in Santa Barbara.
Adventist Health is one of the largest healthcare systems on the West Coast with revenue of $5.4 billion and 26 hospitals operating under its umbrella.
Adventist Health is already well known in Ventura County, where it operates the only hospital in the Simi Valley area — a 122-bed facility.
The nonprofit organization is independent but affiliated with the Seventh Day Adventist Church.
In Southern California, it owns the well-known Loma Linda University Health Care Center as well as hospitals in Glendale and Los Angeles.
It seems to prefer smaller communities and the SLO county acquisitions appear to pair well with its operations in Bakersfield and elsewhere in the Central Valley.
The selection of Roseville as its headquarters was meant to demonstrate its commitment to rural and community health care, according to reports.
With the 122-bed Twin Cities and 166-bed Sierra Vista under its wing, Adventist Health will have an employment base of around 2300, and become the No. 5 healthcare system in the region behind Dignity Health, Cottage Health, Community Memorial and the Ventura County Health Care agency.
In SLO County it will set up a bit of faith-based competition between Adventist Health and Dignity Health, which operates French Hospital in SLO, Arroyo Grande Hospital and Marian Regional Medical Center in Santa Maria. Dignity Health, part of CommonSpirit is an independent nonprofit but it is Catholic-affiliated.
For Tenet Health, the profitable exit from SLO County turns a page on a company that for nearly a decade called an office building on upper State Street in Santa Barbara home.
It was run from the early 1990s until 2004 by Jeffrey Barbakow, a former investment banker and Hollywood Executive who joined the board of troubled National Medical Enterprises, helped merge it with a competitor and became CEO of the renamed Tenet Health.
In an era when it was popular to plant the company headquarters flag wherever the CEO wanted it planted, Barbakow, a longtime resident of Santa Barbara, found an upper State Street address for some 145 executive, administrative and financial staff.
Tenet thrived on the South Coast until reports surfaced about billing problems with Medicare.
Tenet eventually settled, paying hundreds of millions of dollars and with a much larger staff already in Dallas and new management coming in, Tenet moved to Texas which remains its headquarters.
After the move, The Twin Cities and Sierra Vista hospitals, acquired in one of Tenet’s many mergers, were the main legacy of the Tenet era on the Central Coast, where they were capably run by longtime executive Mark Lisa. Barbakow personally remains active in the area supporting UC Santa Barbara and the Santa Barbara International Film Festival.
As Business Times Co-Managing Editor Jorge Mercado reported, Tenet will book around $275 million in gains from the sale which fetched a price of $550 million.
That figure will have a lot of hospital executives, even in the nonprofit sector, recalibrating the intrinsic value of their operations.
Adventist Health’s expansion means a shift from a hybrid model to nonprofit ownership for SLO County hospitals.
Indeed, the only corporate-owned hospital on the Central Coast will be Los Robles Medical Center in Thousand Oaks, owned by Nashville-based HCA or Hospital Corp. of America.
When it comes to health care, we’ve seen a couple of big changes with Sutter Health merging with Sansum Clinic and then expanding its footprint in SLO.
And of course the Adventist Health-Tenet deal.
I have a feeling there may be a few doors swinging open before too long.
Henry Dubroff is the founder, owner and editor of the Pacific Coast Business Times. He can be reached at [email protected].
