Tenet Healthcare Proposes 30-Year Lease Extension with Desert Regional Medical Center

Tenet Healthcare Proposes 30-Year Lease Extension with Desert Regional Medical Center

Tenet Healthcare, the private company that currently operates Desert Regional Medical Center, has proposed a 30-year lease extension with the hospital. The proposal was presented during a special meeting with the Desert Healthcare District, which owns Desert Regional. Under the new proposal, Tenet would have the option to purchase the hospital from the Desert Healthcare District at the end of the lease.

The Desert Healthcare District is a public agency that owns Desert Regional, and in 1997, the District leased the hospital to Tenet Systems for a 30-year period. This prepaid lease allowed the District to meet its outstanding debts and gave Desert Regional the opportunity to be part of a national healthcare company. Tenet currently runs the hospital while the District retains ownership of the lease and other assets.

The proposed lease extension includes several key points. Tenet would make an initial payment of $75 million to the District at the start of the new lease, followed by annual lease payments beginning in 2027. The total lease payments would amount to $602 million based on a recent assessment of the hospital’s fair market value. If Tenet decides to purchase Desert Regional at the end of the lease, it would make a final payment of $75 million, bringing the total to $677 million.

In addition to financial commitments, Tenet would also be responsible for maintaining state-mandated seismic retrofit upgrades at Desert Regional, which are estimated to cost $222 million. The company has expressed its intention to continue making strategic investments across the Desert Care Network, which includes Desert Regional, JFK Memorial in Indio, and Hi-Desert Medical Center in Joshua Tree.

During the meeting, Tenet’s CEO, Dr. Saum Sutaria, highlighted the company’s commitment to the community and its track record of investments and contributions. Under the current lease, Tenet has had an economic impact of approximately $1.4 billion annually, contributed over $43 million in state and local taxes annually, and supported around 7,000 jobs. The company has invested $339 million in capital improvements at Desert Regional and $117 million at JFK Memorial.

If the new lease is approved, Tenet plans to further expand service capabilities and increase capacity for patient care areas at Desert Regional. The company also aims to enhance emergency and trauma care at JFK Memorial and invest in outreach efforts in the eastern Coachella Valley.

While no decisions or votes were made during the meeting, directors from the Desert Healthcare District raised questions about future investments, oversight, and additional details on the lease transactions. Members of the public also expressed their support and concerns, with some urging Tenet to invest more in the community and address issues such as readmissions, infections, and patient injuries.

Ultimately, the proposed lease extension seeks to continue the partnership between Tenet Healthcare and Desert Regional Medical Center, with a focus on providing access to care, improving services, and supporting the local community.

Desert Sun
Tenet Healthcare

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