Tucson Heart Hospital will be 100 percent locally owned after a decision by parent company MedCath to sell its 59 percent ownership to Carondelet Health Network.
The sale, expected to be final by Sept. 1, will mean more patients for the hospital, which has struggled to gain market share since opening in October 1997. Terms will not be disclosed until the sale is completed.
The purchase will give Carondelet a 79 percent stake and allow it to include Tucson Heart in its contracts with HMOs and other payers, most of which have shied away from the smaller specialty hospital.
Local cardiologists and other physician-investors will retain their 21 percent ownership.
"We're very pleased," said Carondelet CEO Sally Jeffcoat. The new arrangement will give Carondelet and Tucson Heart 38 percent of the local market share for cardiovascular care, "and that will make us the market leader," she said.
People are also reading…
Tucson Heart Hospital opened with the goal of becoming Southern Arizona patients' top choice for open-heart surgery and other cardiac care.
But its current market share is only 13 percent, Jeffcoat said. And except for busy winter months, when most hospitals are jammed, Tucson Heart has operated at about half its capacity, she said.
Several physician groups resigned from Tucson Heart about five years ago, saying the hospital was not busy enough for them to spend time there.
The hospital recently hired its fifth CEO: Ed Myers, who came to Tucson from Beaumont, Texas, where he was president of the Christus Health hospital system. Jeffcoat came to Carondelet from Christus in Houston in 2003.
Selling Tucson Heart will give MedCath a chance to pursue other investment opportunities, said Ed French, president and CEO of the Charlotte, N.C., firm, which owns 11 heart hospitals in eight states. The chain had nine hospitals when it went public in July 2001.
Carondelet had to own at least 51 percent of Tucson Heart to include it in Carondelet's health-plan contracts, French said.
"It really got down to what's the best way for us to position that hospital for community growth," he said, "and finally we said, 'Sally, it just doesn't make sense for us to be a minority partner.' "
The Tucson Heart purchase is the latest in a series of Carondelet announcements about its plans "to grow with the community," Jeffcoat said.
Carondelet, which owns St. Joseph's and St. Mary's hospitals in Tucson, recently purchased 20 acres in Sahuarita, where it plans to open a 78-bed hospital in 2011.
Carondelet also recently announced plans to build a new Holy Cross Hospital near Rio Rico, to replace the 40-year-old hospital it owns in Nogales. And a new four-story women's pavilion is under construction at St. Joseph's Hospital, 350 N. Wilmot Road.
"Carondelet has been financially stable for the last five years and now is in a position to grow with the community," Jeffcoat said. "We feel very blessed to be in the position to do that."
Tucson Heart opened to a chorus of criticism from other local hospitals and heart specialists who said then that Tucson had too many open-heart surgery programs, with the heart hospital bringing the number to seven. The result was that only one or two programs were busy enough to maintain consistently good patient outcomes, experts said.
St. Joseph's and St. Mary's later stopped doing open-heart surgery, as did El Dorado Hospital.
Tucson Medical Center is upgrading its cardiovascular facilities and wants its heart program to be in the top 10 percent nationwide, said Linda Wojtowicz, TMC's director of cardiac services.
"We don't have an issue" with Tucson Heart becoming part of the Carondelet network, Wojtowicz said.
"The community is going to fare well from this because we're all going to try harder," she said.
Address: 4888 N. Stone Ave.
Opened: October 1997
Beds: 58
Doctors: 423 active physicians, 153 consulting
Employees: 350 full- and part-time
Source: Tucson Heart Hospital