Tenet Healthcare has reached an agreement with Baylor Scott & White Health to restructure their two-year-old joint venture involving five North Texas hospitals.
One facility (Baylor Scott & White Medical Center-Garland) will be closed on March 1, while another (the 218-bed Baylor White and Scott Medical Center-White Rock) will be sold to Manhattan Beach, California-based Pipeline Health.
The new arrangement concerned the three remaining facilities in the venture. For two hospitals (Baylor Scott & White–Centennial and Baylor Scott & White–Lake Pointe), Tenet’s minority interest will be acquired by Baylor Scott & White, which will also take operation of the facilities. Baylor Scott & White – Sunnyvale will be absorbed into a separate joint venture called Texas Health Ventures Group run by Baylor Scott & White along with Tenet’s United Surgical Partners International subsidiary.
The two companies expected the transactions to be completed in the spring of 2018.
The restructuring fits with Tenet’s moves to sell off assets and address its $15 billion in debt. At one point it considered selling itself off, but after the early departure of CEO and chairman Trevor Fetter, the company has focused on reducing costs. Tenet is aiming to cut $250 million over the next year and making additional divestments, such as publicly announcing its seeking a buyer for its Conifer Health Solutions business services subsidiary.
Before his departure, Fetter had said sales of eight U.S. hospitals and its nine United Kingdom hospitals and clinics would yield $1 billion for the company. The U.S. divesture has included a $170 million deal to sell two Philadelphia facilities to Paladin Healthcare, unloading MacNeal Hospital in Berywn, Illinois. and seeking a buyer for three more hospitals in the Chicago area.