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Owners of Doctors Hospital purchase Turlock’s Emmanuel Medical Center

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POSTED February 25, 2013 5:27 p.m.

TURLOCK - Emanuel Medical Center will become part of Tenet Healthcare.

Tenet is an investor-owned hospital operator that runs 49 hospitals nationwide including Doctors Medical Center in Modesto and Doctors Hospital in Manteca.

"This is a way we can insure we have healthcare in our community," said Jennifer Larson, chair of Emanuel Medical Center's Board of Directors. "It's a great thing for Turlock and all our surrounding communities."

Over the past three years, Emanuel Medical Center has been looking for a way to remain financially stable amid costly healthcare reform act mandates and dwindling revenues. Its financial obligations have outpaced any revenues coming in. In November, Emanuel laid off 24 employees due to "low census, decreasing reimbursements and increasing rates of uncompensated care," according to hospital spokesperson Pennie Rorex. During a phone interview on Thursday, Emanuel CEO John Sigsbury said the hospital has $89 million in tax-exempt bonds that are outstanding.

The agreement between Emanuel and Tenet includes the hospital and all healthcare services it currently offers. The only Emanuel assets excluded from the acquisition are the long-term care facility Brandel Manor, and assisted living facility Cypress of Emanuel. Those two facilities will remain under management of the Evangelical Covenant Church, of which Emanuel Medical Center is a ministry.

Jeff Koury, senior vice president for Tenet’s California region, said patients will likely see no change in services offered by the hospital. "We are committed to Emanuel Medical Center providing the services to the community that are being provided today. It's an opportunity to enhance services and enhance alignment in the medical community," he said.

Koury said Tenet will keep on staff all current Emanuel employees "in good standing." The hospital's medical staff already has a strong clinical relationship with Doctors Medical Center of Modesto, said Sigsbury.

"Joining with the already existing high quality work being done at Tenet hospitals ..is really an outstanding gift for us in the community," Sigsbury said.

The specific terms of the deal have not been released as it still needs to go through an approval process with the Attorney General's office that includes a public forum. Koury said he expects the deal to be finalized by June.

While becoming part of Tenet, Emanuel will retain its affiliation with the Evangelical Covenant Church and its faith-based culture and practices. Before the agreement was signed, members of Emanuel's Board of Directors visited another faith-based facility owned and operated by Tenet to insure that the values the hospital was founded on would be honored, said Sigsbury.

As Emanuel's nonprofit status will be changing with the sale, the future of the fundraising campaign Legacy Circle —which brought in $22 million in the last 15 years — is uncertain. The hospital's partnership with Jessica’s House, a grief support center for children and families that opened last year, will also end with the sale to Tenet.

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