Tenet Pact With Hi-Desert Hospital Will Requre Vote

JOSHUA TREE—(December 23) Voters in the Morongo Basin will exercise the ultimate word over whether Tenet Healthcare will move in as the operational and management partner within all of the Hi-Desert Memorial Healthcare District ‘s facilities, which include the Hi-Desert Medical Center and Continuing Care Center.
On December 3 the Hi-Desert Memorial Healthcare District Board voted to begin negotiations with regard to entering into an affiliate relationship with Dallas, Texas-based Tenet Healthcare. The board voted 5-0 in favor of Tenet, a $4.2 billion company, which has a working relationship with 81 hospitals nationwide, over 200 outpatient centers and 36,000 physicians.
Hi-Desert Medical Center and the Hi-Desert Memorial Healthcare District in general have experienced falling revenues and continuous budget shortfalls over the last several year. In response, the board hired Jon Spees, the senior vice president of the Camden Group to serve as a consultant to map out a strategy for achieving economic stability while continuing to provide adequate and comprehensive care for patients in Twentynine Palms, Joshua Tree, Yucca Valley and Morongo Valley, including the hiring of more medical care specialists. Spees’ recommendation was that the hospital enter into a partnership with a large corporation that possesses the resources to help Hi-Desert Memorial achieve its goals.
After soliciting letters of intent from health care provision entities with regard to a potential working relationship, the district received responses from Strategic Global Management and Tenet Healthcare.
A previous article in the Sentinel may have left readers with the impression that the deal with Tenet has been conclusively closed. In actuality, the board’s vote cleared the way for negotiations with Tenet to begin in earnest.
At the December 8 meeting of the Morongo Basin Municipal Advisory Council at the Joshua Tree Community Center, some basin residents expressed concern about the haste with which the district was moving in affiliating itself with Tenet. There were questions about reliability of the company, the amount of profit it would realize in its operation and questions about its corporate practices, including the provision of incentives, which were interpreted by the U.S. Justice Department to be kickbacks in 2003 when three Tenet employees were criminally charged with delivering illegal inducements to doctors. Ultimately, the government dropped that case.
Robert Tyk, the hospital’s chief operating officer, dismissed those questions as ones that were irrelevant to the hospital and district’s precarious financial state and long term solvency.
Financial problems are going to continue, Tyk said, and if an affiliation partner is not brought in, the hospital most likely will be forced to close in a few years. The district was $4,765,135 million in the red in the last fiscal year, he said, and does not have the wherewithal on its own to turn its bleak financial circumstance around.
Tyk said that Tenet Healthcare has guaranteed the payment of $2 million a year to the district for 30 years as part of a lease and operation arrangement, and the provision of $17 million toward capital improvements, another $10 million toward revamping the hospital’s computer and digital system and $5 million for physician recruitment, all within the first three years of its partnership.
The partnership with Tenet will further assist the medical center in garnering an infusion of up to $26.3 million in federal Quality Assurance Funds within two years.
Pursuant to the hospital board’s December 3 vote, Tyk said negotiations are now ongoing to put the partnership agreement terms into a draft form. That agreement ultimately will come before voters in the district in May or June as a mail-in ballot. A simple majority vote would actuate the partnership.

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