California Hospitals Transition from For-Profit to Nonprofit Ownership: A Closer Look at Recent Acquisitions
California Hospitals Shift Ownership from For-Profit to Nonprofit Systems
In a significant move impacting healthcare in California, seven hospitals previously owned by two major for-profit health systems in the U.S. have now transitioned to nonprofit ownership.
Six of the hospitals were formerly owned by Dallas-based Tenet Healthcare, while the seventh was owned by Nashville, Tenn.-based HCA Healthcare. Five of the hospitals have been acquired by academic health systems, with UCI Health in Orange, Calif., purchasing four hospitals from Tenet and UCLA Health in Los Angeles acquiring one from HCA.
UCI Health’s $975 million deal with Tenet included the purchase of the Pacific Coast Network, which consists of four hospitals in Southern California along with their associated outpatient locations. The addition of these hospitals under the UCI Health umbrella is expected to bring nationally recognized advancements, medical knowledge, research, and community focus to local communities, according to Tenet CEO Saum Sutaria, MD.
Following the closure of the deal on March 27, UCI Health President and CEO Chad Lefteris expressed excitement about the opportunity to implement innovative initiatives in a new setting. He highlighted the potential for improved access to care and expanded services in the region, emphasizing the goal of providing high-quality care with the best outcomes for patients.
Meanwhile, HCA sold West Hills Hospital and Medical Center to UCLA Health, a move that will enhance inpatient hospital capacity within the UCLA Health system. UCLA Health President Johnese Spisso noted the acquisition’s importance in serving more patients requiring specialized care and treatments, with plans to optimize the property for future expansion.
Additionally, Roseville-based Adventist Health acquired two hospitals from Tenet in a $550 million deal, further reshaping the healthcare landscape in California. The acquisition of Sierra Vista Regional Medical Center and Twin Cities Community Hospital, along with related provider practices and imaging centers, is part of Adventist Health’s strategic growth plan.
These ownership changes reflect a broader trend in California’s healthcare sector, where 23.9% of hospitals were owned by for-profit systems as of 2022, according to data from KFF. The shift towards nonprofit ownership signals a commitment to enhancing patient care, expanding services, and driving innovation in the state’s healthcare industry.