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Tenet Corporation considers purchase of medical system

Jan. 28, 1997

By Sharon Mariotti

Lariat Staff Writer

Tenet Health Care Corp., the second largest hospital conglomerate in the United States, expressed interest in buying the Baylor Health Care System before the Jan. 17 University regents' meeting that announced the possible sale of the medical system. The sale could be worth some $1.2 billion, according to Saturday's Dallas Morning News.

Tenet Corp. is a for-profit hospital corporation based out of Santa Barbara , Calif.

Dr. Stan Madden, vice president for University marketing, said a consulting group hired by the University to investigate its options about what to do with the hospitals approached Tenet about the possible sale and Tenet then became 'the leading contender should the hospital be sold.'

'Up to this point we are still in the due diligence part of it, though, which means we are still trying to understand the consequences and procedures of a possible sale,' Madden said.

Despite Baylor Medical Center's protest of its sale to a for-profit corporation, Tenet representatives attended a press conference Jan. 17 at which the University discussed its options.

Madden said Tenet was not invited to the press conference, but corporation representatives were invited to campus in case there were any questions about a sale to a for-profit corporation.

Tenet Health Care spokesman Lance Ignon said that Tenet is interested in Baylor Health Care because it is a premier health care system, but Tenet does not want to interfere with the board of regents' and trustees' decision.

'There is typically a negative reaction because people mistakenly assume that a for-profit will damage a nonprofit system,' Ignon said.

'We are not a corporate raider; we do not buy up companies that do not want to be bought. We want to work in a partnership and be on good terms with the corporate parent.'

The Baylor Medical Center at Garland, a Dallas suburb, took out its first full-page advertisement in the Waco Tribune-Herald on Sunday as well as its second advertisement in The Dallas Morning News in an attempt to convince the University not to sell the hospital to a for-profit hospital chain, because it undermines the original purpose of the Garland hospital.

Ignon said that there have been no further negotiations, but he said he thinks that if Tenet acquired Baylor Medical Center, it probably would not affect Baylor's tradition of charity and community service.

According to the Baptist Standard's Jan. 22 edition, Baylor's Health Care System has 1,471 beds with 64,862 patients admitted last year, 'including 2,579 charity patients,' which accounts for less than 4 percent of hospital admissions. Another 19, 314 charity patients were treated on an outpatient basis.

'We are required by law to help by doing charity, but at the same time it is not good business to accept all patients that come to your door,' Ignon said. 'Charity care is a big part of our corporate mission and I can't think of a time that [Tenet] has not carried through with a former nonprofit's charity mission.'

Madden said maintaining charity in the Baylor Health Care System is a high priority.

'In the case that we sell to a for-profit, we plan to work into the deal a definition and provision for indigent care,' Madden said. 'It is a high priority in the event that we get to that point.'

Madden said Tenet has embraced charity care as part of its corporate mission and the University has looked at other health care facilities they have acquired, including several Baptist and Catholic hospitals around the country.

Madden also commented on the value of the Baylor name.

'The Baylor name is a valuable asset, but we have not even gotten to the point of discussing whether a name change will occur,' he said.

The university's administrators and regents announced at the original press conference that Baylor is considering the possible sale or consolidation of its health care system because it is becoming difficult to stay competitive with larger hospital systems.

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