Updated: Adventist, Sutter expand Central Coast reach
Some of the biggest names in San Luis Obispo County health care are switching owners as both Adventist Health and Sutter Health expand their presence in the region.
On Feb. 29, Adventist Health, a non-profit health group with 26 hospitals across the state, announced it has purchased two San Luis Obispo County hospitals from Tenet Healthcare for $550 million.
Just one day later on March 1, Sutter Health, which last year acquired Sansum Clinic in Santa Barbara, announced a move into radiation oncology in SLO county as it fills in its Central Coast presence.
ADVENTIST PURCHASE
In the Adventist acquisition, the two hospitals include Tenet Health’s flagship Sierra Vista Regional Medical Center in San Luis Obispo and the smaller Twin Cities Community Hospital in Templeton.
Adventist Health was founded in 1866 with a healthcare ministry with the Seventh-day Adventist Church, according to its website.
“We are excited to increase our footprint to the beautiful Central Coast of California,” Kerry L. Heinrich, president and CEO of Adventist Health, said in a press release.
“We are committed to partnering with Sierra Vista Regional Medical Center and Twin Cities Community Hospital to expand services, and we will work together to serve our mission of increasing the availability of care for communities in this region.”
The nonprofit declined to comment when asked by the Business Times about what it planned to do with the facilities and whether it included expanding services or hiring more people.
However, Adventist Health said the purchase will broaden its geographic diversification and noted large employers in the area such as California Poly, San Luis Obispo County and State Atascadero Hospital.
The agreement, according to the press release, includes related physician practices and imaging centers.
According to the release, the SLO County-based hospitals generated revenues of approximately $337 million in 2023, pre-tax income of approximately $25 million and adjusted EBITDA of approximately $38 million, excluding depreciation and amortization expense of approximately $13 million.
Tenet estimates recording a pre-tax book gain of approximately $275 million and the deal is expected to close late this spring, the release said.
Adventist already has a slight presence in the Central Coast region, with one primary care facility in Simi Valley and one specialty care also in Simi Valley.
Adventist Health currently operates 26 hospitals and over 400 clinics, according to its website.
It reported $5.4 billion of total revenue and a $557 million net loss during its 2022 fiscal year.
For Dallas-based Tenet Health, this is another sign of it dwindling its Central Coast presence.
Originally founded in 1969, Tenet Health was headquartered in Santa Barbara from 1996 through 2004, when it relocated its headquarters to Texas.
Tenet has also divested in other hospitals, as in its recent earnings on Feb. 1 noted how its $2.4 billion sale of three South Carolina hospitals to Novant Health had closed and how it plans to sell four other hospitals to UC Irvine Health for approximately $975 million.
Tenet Health did not respond to multiple requests for comment.
“Sierra Vista Regional Medical Center and Twin Cities Community Hospital have enhanced access to high-quality healthcare services for the greater San Luis Obispo community for over 60 years,” Saum Sutaria, CEO of Tenet Healthcare, said in a press release.
“Adventist Health’s innovative, patient-centered approach will enable these hospitals to be at the forefront of advancing compassionate, community-based medicine.”
SUTTER PURCHASE
Sutter Health expanded its Central Coast presence after the nonprofit purchased five GenesisCare radiation oncology centers, including two in San Luis Obispo County.
The Genesis Care centers are in San Luis Obispo and Templeton. The other three purchased by Sutter are located in Modesto, Santa Cruz and Stockton.
Sutter will keep the majority of existing GenesisCare team members at their facilities, according to the release.
Financial figures were not disclosed, but Sutter said the purchase will help it “keep high-quality cancer services rooted in California’s Central Coast, Central Valley and Silicon Valley.”
“Sutter Health is committed to providing the highest quality care throughout the communities we serve. We know how important it is for specialty services like cancer care to be offered close to home so patients can stay on track with their treatments. Keeping continued cancer care accessible in these communities was a driving force for Sutter to acquire these care centers. We are excited for the promise these centers hold for existing patients and for those who may need this type of care in the future,” Warner Thomas, president and CEO of Sutter Health, said in a press release.
Sutter acquired Santa Barbara-based Sansum and all its facilities in 2023 to develop a presence on the Central Coast.
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