Tenet Healthcare Corporation (NYSE:THC), Dignity Health and Ascension have signed a definitive agreement to create a partnership that will own and operate Carondelet Health Network based in Tucson, Arizona. Ascension currently owns 100 percent of Carondelet. Tenet will be the majority partner in the new joint venture and will manage the operations of three hospitals, related physician practices, outpatient and ambulatory services, and other affiliated businesses in Tucson and Nogales, Arizona. Dignity Health and Ascension will own minority interests in the partnership.
“We look forward to the opportunity to partner with two highly respected and dedicated healthcare organizations to improve healthcare delivery to the communities of Southern Arizona,” said Britt T. Reynolds, President of Hospital Operations at Tenet. “Through this innovative partnership, we will not only continue Carondelet’s 135-year healthcare mission to care for residents across Tucson and Southern Arizona, but will also connect Carondelet to a larger, growing statewide healthcare network, enhancing patient access to a wide range of healthcare resources throughout the state. This is consistent with Tenet’s strategy to create new, innovative models for patient care.”
Tenet and Dignity Health separately own and operate hospitals and clinics in the Phoenix area and together manage a growing accountable care organization, the Arizona Care Network (ACN). The organization currently includes more than 130 patient care facilities across Tenet’s and Dignity Health’s Phoenix-based healthcare systems, with more than 3,300 providers and more than 200,000 covered lives. A Tucson–based joint venture will connect Carondelet to ACN, which will provide increased access to care for patients, strengthen and grow Carondelet’s relationships with physicians, provide employee development opportunities for current and future employees, and fund strategic growth initiatives across Southern Arizona.
Linda Hunt, President and CEO of the Arizona Service Area for Dignity Health, said, “The partnership will continue the remarkable legacy of Carondelet in Arizona, while launching a new organization capable of maximizing the changing landscape of healthcare today and meeting the growing demands for quality care in Southern Arizona.”
“We are excited about this new relationship with Tenet and Dignity Health,” said Robert J. Henkel, FACHE, Executive Vice President of Ascension and President and CEO of Ascension Health. “Carondelet shares Tenet’s and Dignity Health’s commitment to provide high-quality, low-cost, patient-centered care. This relationship is an opportunity to strengthen those efforts and enhance healthcare across Arizona.”
The facilities in the new partnership will include:
- St. Joseph’s Hospital (486 beds) in Tucson
- St. Mary’s Hospital (400 beds) in Tucson
- Holy Cross Hospital (25 beds) in Nogales
- Carondelet Heart & Vascular Institute at St. Mary’s Hospital
- Carondelet Neurological Institute at St. Joseph’s Hospital
- Carondelet Medical Group
- Carondelet Specialist Group
Carondelet’s services also include imaging centers and other ambulatory services and ancillary businesses.
The joint venture will maintain Carondelet’s Roman Catholic heritage and identity through an agreement with the Diocese of Tucson. Additionally, Carondelet’s existing charity care policies will remain in place.
The transaction is subject to normal regulatory reviews and is expected to close in the third quarter of 2015. Financial terms are not being disclosed.
