UCI Health buying 4 Tenet hospitals, 3 in Orange County, for $975 million

UCI Health is expanding again, agreeing to buy four hospitals that make up Tenet Healthcare Corp.‘s Pacific Coast Network for $975 million.

The facilities include Fountain Valley Regional Hospital, Los Alamitos Medical Center, Placentia-Linda Hospital and Lakewood Regional Medical Center.

Pending regulatory approvals, the hospitals and their associated clinics will become part of UC Irvine’s healthcare system. The deal was approved by the UC Board of Regents and is expected to close later this spring.

Also see: Hospital building spree could turn Irvine into nation’s next big health brand

Tenet’s Chief Executive Officer Saum Sutaria in a statement said the company’s Pacific Coast Network “will be in good hands under the new ownership.”

UCI expands again

The deal marks another significant expansion for UCI Health, which includes a medical center in Orange and a network of specialty care centers.

In 2021, UCI Health CEO Chad Lefteris said UCI Medical Center was “essentially full all the time” and had limited space for inpatients.

More on UCI: Samuelis give university $50 million for health, society and environmental research

To further its reach, UCI Health launched work on a $1 billion medical complex next to its main campus, approved by UC Regents in 2021. UC Irvine Medical Center Irvine-Newport, a multi-building complex on 202 acres with a 144-bed hospital and emergency room, will offer specialty care in oncology, neurosciences, children’s health and other areas. It’s expected to open in 2025.

UCI also added the Susan Samueli Integrative Health Institute, which was established in 2001. The institute was made possible by Orange County philanthropists Henry Samueli and his wife, the building namesake, who donated $200 million to create the school.

Employee unrest

The acquisition comes amid ongoing labor disputes by union employees at many hospitals across Southern California. Most of the protests center on wage and staffing issues, a common theme since the pandemic.

The Pacific Coast Network has seen its share of unrest as nurses and technicians protest what they call understaffed facilities.

Employees picketed in Tenet’s Fountain Valley, Los Alamitos and Lakewood hospitals in June 2021, alleging the facilities had left some workers without health insurance while the company received billions in federal COVID-19 relief funds and spent $1.1 billion to buy 45 surgery centers.

In a statement issued late Thursday, NUHW President Sal Rosselli said Tenet still has “chronically understaffed” hospitals in Orange County while employees have struggled to provide adequate patient care.

“We’re hopeful that the sale to UC Irvine Health will benefit patients and caregivers,” he said. “But we still need the university to explain how it plans to operate the hospitals and protect the critical jobs and services they provide.”

The UC health system also faced temporary layoffs during the pandemic. Hundreds of employees protested the move, which affected Southern California hospitals in Riverside and San Diego, though not UCI Health.

Tenet’s workers are represented by the National Union of Healthcare Workers and the United Nurses Associations of California/Union of Health Care Professionals. UCI Health employees are represented by the California Nurses Association and American Federation of State, County and Municipal Employees, among others.

The two hospital systems didn’t address how the acquisition would affect union employees.

Expanded services

The university said the Tenet acquisition would give patients access to advanced therapies and clinical trials related to cancer, neurosciences, digestive diseases, orthopedics and internal medicine.

UCI Health operates the only Level I trauma center in Orange County. It also operates the region’s largest burn center in addition to a National Cancer Institute-designated cancer center and high-risk perinatal-neonatal service, hospital officials said.

Patients at UCI Health and Tenet facilities can continue receiving care as they normally would, officials said.

The UC system, a $14 billion enterprise, includes six medical schools, along with other facilities, including four children’s hospitals and the Global Health Institute.

UCI Chancellor Howard Gillman said the acquisition would help the university deepen its “healthcare commitment to the future of Orange County, our region and California.”

Tenet operates 67 hospitals and medical facilities throughout California, including the Coast Surgery Center of South Bay in Torrance, Desert Regional Medical Center in Palm Springs and Providence Holy Cross Surgery Center in Mission Hills, among others.

Dallas-based Tenet Healthcare said the four hospitals and related operations generated revenues of about $1 billion in 2024, Tenet said. The Dallas-based company estimates the transaction will generate a pre-tax gain of approximately $500 million.

Late last year, another academic health system, UC San Diego Health, finalized a $200 million deal to acquire Alvarado Hospital Medical Center from Ontario-based Prime Healthcare.