California health system completes acquisition of four hospitals

UCI Health has finalized the acquisition of four hospitals from Tenet Healthcare Corp.

The clinical enterprise of the University of California, Irvine, UCI Health announced the completion of the deal earlier this week. Tenet had previously said the hospitals were sold for $975 million.

With the deal, UCI Health acquires Fountain Valley Regional Hospital, Lakewood Regional Medical Center, Los Alamitos Medical, Placentia-Linda Hospital, and a host of associated clinics.

Howard Gillman, chairman of UC Irvine, called it a “historic” moment.

“We celebrate the transformation of UCI Health as a leader in the integration of academic and community-based health systems while promoting solutions to challenges facing healthcare,” Gillman said in a statement. “This visionary leap forward will bridge gaps in regional care and advance the University of California’s mission to serve our communities through academic excellence, cutting-edge research and dedicated public service.”

The deal substantially expands UCI Health’s footprint and the number of patients the system serves. UCI Medical Center in Orange has 459 licensed beds. The four hospitals joining the system bring an additional 858 inpatient beds.

Chad T. Lefteris, president and chief executive officer of UCI Health, said he hopes the system will become “the nation’s friendliest and most accessible academic health system,” he said.

“UCI Health has built a legacy as a nationally regarded academic health system that is fiercely dedicated to improving the health of our communities,” Lefteris said in a statement. “We are investing in building a healthier future for people that harnesses the power of advanced medicine with the convenience of care available close to home.”

UCI Health touted other advantages to patients, including greater access to clinical trials in cancer, internal medicine, neurosciences, and other specialties.

Lefteris said he has been encouraged by the enthusiasm surrounding UCI Health’s acquisition of the hospitals and the outpatient facilities.

“Now, we can begin strengthening the collaboration with local physicians and patients to expand healthcare services and provide unrestricted access for more people,” he said in a statement. “Together, we will be an innovative, powerful team that will transform to meet the health needs of our communities.”

Patients of the former Tenet hospitals and facilities and expect to continue to see the same physicians and care teams, UCI Health said.

Saum Sutaria, M.D., chairman and CEO of Tenet Healthcare, hailed UCI Health’s reputation in February.

“UCI Health is an innovative academic health system with a deep commitment to enabling accessibility to world-class, academic medicine closer to home,” Sutaria said in a Feb. 1 statement. “Integrating these hospitals into their system will meaningfully enhance access to the benefits of university medicine.”

The University of California has been expanding its healthcare footprint elsewhere. UCSF Health in San Francisco is buying two hospitals from CommonSpirit Health in a $100 million transaction. Under the deal, UCSF Health will acquire Saint Francis Memorial Hospital and St. Mary’s Medical Center from Dignity Health, which is part of CommonSpirit.

Tenet, the for-profit system based in Texas, has been selling some other facilities. Tenet recently completed a separate $2.4 billion deal to sell three South Carolina hospitals to Novant Health.

More hospital mergers and acquisitions have been announced in recent months. In 2023, there were 65 announced hospital mergers and acquisitions, up from 53 the year before, according to Kaufman Hall, the healthcare consulting firm. Analysts expect to see an uptick in deals in 2024

Already this year, Northwell Health and Nuvance Health announced their plans to merge. If regulators approve the deal, the combined system would operate 28 hospitals and more than 1,000 sites of care.

Earlier this week, MyMichigan Health announced the system has reached an agreement to acquire three hospitals and an ambulatory surgical center from Ascension Michigan.

In January, BJC HealthCare and Saint Luke’s Health System completed their merger of the Missouri hospital systems, forming the BJC Health System. The integrated academic health system boasts $10 billion in revenue and operates 24 hospitals and more than 250 clinics and healthcare locations.