Beyond the Tenet Crisis


A decade ago, for-profit hospital chains went on a buying spree, snapping up nonprofits and talking about “expanded market share” and “improved cost efficiencies.” Ironically, troubled Tenet Healthcare Corp. now hopes that nonprofits will come to the rescue as it tries to sell nearly a third of its hospitals nationwide. Of the 27 hospitals on the block, more than half are in L.A. County. Even if Tenet finds buyers, which is doubtful in many cases, the buying and selling of hospitals won’t solve the real problem plaguing the healthcare system: how to pay the bill.

Tenet’s retreat from Southern California shows that the problem is not confined to crisis-ridden county-owned hospitals. Public and private hospitals alike operate in an unforgiving business climate that includes managed-care cost-cutting, inadequate Medicare and Medi-Cal reimbursements and huge numbers of patients with no medical insurance at all. Tenet says it wants to unload these hospitals so it won’t have to pay $1.6 billion to retrofit them to state earthquake-safety standards.

The scandal-wracked corporation, of course, brought many of its problems on itself, paying $54 million to settle government allegations that doctors at a hospital in Northern California did unnecessary heart procedures on hundreds of patients. It is the subject of other state and federal probes for treatment and billing irregularities.


No matter what Tenet’s misdeeds, however, each hospital, public and private, is a strand in an unraveling safety net. The consequences of closing the hospitals would reach beyond Tenet patients and employees, just as public hospitals’ troubles hurt more than the poor who depend on them most.

Ten of the hospitals up for sale in L.A. County accounted for more than 256,000 emergency-room visits in 2002, the latest year for which numbers are available. If these hospitals are closed, there is no place to pick up the slack. Hospital emergency departments already turn away ambulances for lack of room or staff. Patients, insured and uninsured, wait hours for treatment.

Yet state and local governments have little say over whether private hospitals stay or go. California law requires that any hospital wanting to reduce or close its emergency department provide 90 days’ notice. Sure, the county health department must hold a public hearing and evaluate the closure’s effect on the community. But even if the effect is dire, it can’t make a hospital stay open.

Nor could the state stop Tenet from selling or closing hospitals if the for-profit corporation held to the letter of its pledge to keep two formerly nonprofit hospitals open at least five years. How hollow those promises of high-quality service in Inglewood and other lower-income areas sound today.

Politicians fret when private firms base closures on profit cycles, but they shy away from publicly financed healthcare systems. Consumers want fully staffed hospitals in every community but expect the miracle of the market to pay for them. Amid the waxing and waning of politics and profits, the need for healthcare is constant. Some Tenet hospitals may well find buyers. But that will only delay the next crisis.