Dignity Health and Dallas-based Tenet Healthcare have signed a letter of intent to acquire the local Carondelet Health Network.
Officials with the non-profit Carondelet Health Network, which includes two Tucson hospitals and one in Nogales, Ariz., are calling the purchase a joint venture between Ascension, Dignity and Tenet.
Current owners from St. Louis-based Ascension would retain a minority interest in the chain of three Southern Arizona hospitals, a news release says. A period of due diligence will precede any definitive agreement and that's expected to take 90 days.
The Carondelet Health Network's local hospitals have endured serious operating losses in recent years.
Officials with both the Carondelet Health Network and Tenet declined comment and a spokesman from Ascension did not immediately return a phone call to clarify whether the joint venture would be for-profit or non-profit. A news release says the agreement would maintain Carondelet's identity, heritage and Catholic sponsorship.
Tenet, which is a for-profit publicly-traded company, would be the majority partner with management responsibility for all three of Carondelet's hospitals — Carondelet St. Joseph's and Carondelet St. Mary's in Tucson and Carondelet Holy Cross in Nogales, the news statement says.
Tenet is one of the country's largest health systems. The company's website says it operates hospitals in 14 states, including six in the Phoenix area — the Arizona Heart Hospital in Phoenix; Arrowhead Hospital in Glendale; Maryvale Hospital in Phoenix; Paradise Valley Hospital in Phoenix; Phoenix Baptist Hospital in Phoenix and West Valley Hospital in Goodyear.
In a memo to employees and board members sent today, Carondelet chief executive officer James K. Beckmann writes that healthcare is changing and, "as such, we must evolve to meet community needs in a sustainable way and provide long-term stability for our associates and physician partners."
In addition to operating all of Carondelet's hospitals, Tenet would have operating responsibility for the Carondelet Medical Group, Carondelet Specialist Group, as well as all of Carondelet’s ancillary businesses, according to Beckmann.
"We are excited to pursue this relationship with Tenet and Dignity Health. Like Carondelet, these organizations are committed to providing high quality, low cost, person-centered care," Beckmann writes.
"While you may have many questions right now, this is all of the detail that we can provide to you at this time. Much due diligence will be required by all parties over the next 90 days."
California-based Dignity Health already operates hospitals in Arizona — Chandler Regional Medical Center, Mercy Gilbert Medical Center, St. Joseph’s Hospital and Medical Center, which includes Barrow Neurological Institute, and St. Joseph's Westgate Hospital.
Dignity Health in Arizona also includes imaging centers, clinics, specialty hospitals, urgent cares, an insurance provider, an accountable care organization and other clinical partnerships.