Tenet Plans $1-Billion Expansion
Tenet Healthcare Corp. on Friday announced what it called its most ambitious capital investment program to date: about $1 billion by June 2003 on new facilities, hospital beds and improved services, much of it to meet the coming “age wave” of baby boomers requiring increased care.
The Santa Barbara-based hospital chain unveiled its fiscal 2003 capital plan in an atmosphere of growing unease over hospital mergers and acquisitions and their effect on patients.
The announcement also comes at a time when California officials are concerned about a shortage of beds from a new surge in demand.
Tenet has found increasing resistance to some of its acquisition efforts in other parts of the nation and has come under fire locally for trying to close the recently acquired Daniel Freeman Marina Hospital in Marina del Rey.
Some of those same critics questioned Tenet’s staying power in meeting its claims and its commitment to serving local communities.
“They have not kept their promises,” said Laurie Sobel, staff attorney for the San Francisco office of Consumers Union. “Some of this is probably to deflect criticism.”
Other critics questioned Tenet’s commitment to the Los Angeles area, saying that the company announced a $7-million plan to rebuild the pediatrics unit, upgrade the neurosciences program and expand the emergency room at the Daniel Freeman Memorial Hospital in Inglewood, while committing to spend much larger sums in other parts of the country.
Tenet spokesman Harry Anderson dismissed the criticisms, saying that Tenet was one of the few chains expanding capacity and services.
Some experts say that Tenet, as one of the nation’s dominant hospital chains, has no choice but to funnel more money into its facilities to keep them competitive.
“For hospital chains, it’s always like an arms race. They have to continually upgrade and improve their facilities,” said health-care expert Peter Boland.
Boland said increased capital spending is the price for trying to remain a top and innovative hospital chain where doctors want to bring their patients.
Added Wanda Jones, president of New Century Healthcare Institute, which specializes in redesigning health-care systems: “The technical base for hospitals change very quickly. There is a new wave of technology every five to seven years.
“Along with that have come new patient standards, such as single private rooms instead of semi-private rooms and neonatal facilities that are more private and allow for parents to interact with their newborn,” she said.
Tenet’s latest capital projects in California include a new $90-million, 10-story patient tower at USC University Hospital, including new acute-care space, operating rooms and inpatient beds; a $44-million construction project at Twin Cities Community Hospital in Templeton for expanded emergency room, obstetrics and intensive care facilities; and $16 million for operating rooms and a new medical office building at the Redding Medical Center.
Tenet shares fell 96 cents to $47.79 on the New York Stock Exchange. The stock is up 22% this year.
