Ascension, Dignity Health, Tenet consider joint venture for Arizona's Carondelet Health

August 1, 2014

Three of the nation's largest health care companies, Ascension, Dignity Health and Tenet Healthcare Corp., are pursuing  a proposed joint venture involving Ascension's three-hospital Carondelet Health Network based in Tucson, Ariz.

Carondelet Health Network and its parent company St. Louis-based Ascension announced in a release July 22 they had signed a nonbinding letter of intent with a subsidiary of Tenet Healthcare to create a three-way joint venture with Dignity Health that would own and operate Carondelet Health Network. Carondelet Health Network's Catholic identity and sponsorship would continue when the deal is finalized, according to the statement.

Under the proposal, Dallas-based Tenet would be the majority partner in the joint venture and manage Carondelet Health Network's assets and operations. Ascension expects to retain a minority interest in the joint venture, according to its statement. Dignity Health's proposed ownership stake was not disclosed.

The parties are in a period of due diligence and declined to provide additional details until they reach a definitive agreement.

Public financial records and published reports show Carondelet Health Network has struggled financially in recent fiscal years. Its assets in Arizona include Carondelet St. Joseph's Hospital and Carondelet St. Mary's Hospital in Tucson, Carondelet Holy Cross Hospital in Nogales, Carondelet Medical Group, Carondelet Specialist Group and ancillary businesses. Carondelet Medical Group includes more than 80 physicians, nurse practitioners and physician assistants, according to its website.

San Francisco-based Dignity Health, a not-for-profit that operates both Catholic and other-than-Catholic entities, and Tenet, a for-profit, publicly traded company, both own and operate hospitals in the Phoenix area. Tenet's Arizona subsidiary, Abrazo Health, and Dignity Health are partners in the Arizona Care Network, an accountable care organization.

The proposed Tucson-based joint venture would give Dignity Health and Tenet a foothold in Tucson, which is located about 115 miles southeast of Phoenix; its population is roughly one-third that of Phoenix. Ascension said the deal would connect Carondelet Health Network to a regional health care system that includes the Arizona Care Network. 

According to its website, the  Arizona Care Network's  2,000-plus physician participants operate more than half of the patient-centered medical homes style practices  in Arizona. The ACO's clinically integrated network includes nine acute care hospitals. The network coordinates care for Medicare fee-for-service patients, commercial payers, Medicare Advantage plans and self-insured employers.

Dignity Health has four hospitals in the Phoenix region. Abrazo Health owns six acute care hospitals in the metro Phoenix area.


Copyright © 2014 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.

Copyright © 2014 by the Catholic Health Association of the United States

For reprint permission, contact Betty Crosby or call (314) 253-3490.