Benefits of Tenet's Purchase of Daniel Freeman Hospitals Outlined at Attorney General's Meeting.

Business Editors & Health/Medical Writers

INGLEWOOD, Calif.--(BUSINESS WIRE)--Oct. 18, 2001

Representatives of Tenet Healthcare Corp. (NYSE:THC) and Carondelet Health System today told a public meeting sponsored by California Attorney General Bill Lockyer that the community will reap significant benefits from the proposed sale to Tenet of the two Daniel Freeman Hospitals in Inglewood and Marina del Rey, Calif.

Tenet has offered $55 million to buy the facilities from Carondelet and has pledged to invest another $50 million over the next 10 years in capital improvements and service expansions to enhance quality of care and access to services in the southwest Los Angeles communities served by the hospitals. The Attorney General's office convened today's public meeting at Inglewood City Hall as part of a statutorily mandated review of the sale. If approved by the attorney general, the transaction is expected to be completed by the end of this year.

"Tenet's purchase will do much more than just maintain some vital but financially threatened health-care services in this community," said Eric A. Tuckman, Tenet's vice president of acquisition and development. "Tenet is committed to enhancing key services at the Freeman Memorial campus in Inglewood, so that people in this community may receive care closer to where they live. Approximately 40 percent of patients leave the community for hospital care, and that's unacceptable.

"Tenet has the resources, the track record and the know-how to build up our facilities and make them the hospitals of choice in their communities," Tuckman added.

The hospitals being acquired are 358-bed Daniel Freeman Memorial Hospital in Inglewood and 166-bed Daniel Freeman Marina Hospital in Marina del Rey. The Inglewood facility was founded by the Sisters of St. Joseph of Carondelet, an order of Catholic nuns, who later purchased the Marina del Rey hospital.

Together, the hospitals generated net patient revenues of about $175 million in the most recent year. But the Freeman facilities have been troubled in recent years, losing more than $20 million in the past 12 months alone. St. Louis-based Carondelet Health System, the hospital operator founded by the Sisters to manage their network of hospitals, decided last year, along with the Sisters and the board of Daniel Freeman, that the facilities had to be sold or they would be forced to close.

"Daniel Freeman Hospitals are in a severe financial crisis," said Cathy Fickes, interim chief executive officer of the hospitals. "Declining reimbursement rates from health plans and the government have led to continued losses over the past several years. Tenet brings the financial strength and hospital management expertise necessary to turn these facilities around and ensure that they continue to offer health services to the community."

Sister Regina Clare Salazar said, "For nearly 50 years, the Sisters of St. Joseph of Carondelet have served this community. We are committed to ensure our hospitals remain open to provide excellent care with compassion and respect to our community. The sale to Tenet is the only way we can maintain our mission to serve, and therefore we support the sale."

Tuckman told the meeting about the strong growth under Tenet ownership of three similar hospitals serving large, urban communities in Southern California: Queen of Angels-Hollywood Presbyterian Medical Center in Hollywood, Centinela Hospital Medical Center in Inglewood and Western Medical Center -- Santa Ana.

"These three hospitals today serve more patients, offer more services and give as much or more care to the disadvantaged than they did before Tenet bought them. We are very proud of that track record, and we pledge to do the same for Daniel Freeman," he said.

Tenet said it plans to enhance health care in Inglewood and southwest Los Angeles communities by linking hospitals in a regional "mini-network" that would include Daniel Freeman and several other Tenet facilities nearby, including Centinela Hospital Medical Center in Inglewood, Brotman Medical Center in Culver City and the Centinela Airport Clinic near Los Angeles International Airport.

"Linking Daniel Freeman with other Tenet facilities in the area and giving the hospitals access to Tenet's expertise and resources will assure that these important community health-care assets will not just survive but thrive in the future," Tuckman said.

Tenet is the largest hospital operator in Southern California. It owns 31 acute care facilities with more than 6,600 beds and almost 24,500 employees from Los Angeles to San Diego. Through its predecessor companies, Tenet hospitals have served Southern California for more than 30 years.

In 2000, Tenet's Southern California facilities admitted more than a quarter of a million patients; more than 1.2 million others were treated as outpatients. More than half a million Southern Californians were treated at Tenet emergency rooms last year.

Tenet Healthcare, through its subsidiaries, owns and operates 113 acute care hospitals with 28,053 beds and numerous related health-care services. The company employs approximately 111,000 people serving communities in 17 states and services its hospitals from a Dallas-based operations center. Tenet's name reflects its core business philosophy: the importance of shared values among partners -- including employees, physicians, insurers and communities -- in providing a full spectrum of health care. Tenet can be found on the World Wide Web at www.tenethealth.com.

Certain statements in this release may constitute forward-looking statements. They are based on management's current expectations and could be affected by numerous factors and are subject to various risks and uncertainties. Certain of those risks and uncertainties are discussed in the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K and quarterly reports on Form 10-Q. Do not rely on any forward-looking statement, as the company cannot predict or control many of the factors that ultimately may affect its ability to achieve the results estimated. The company makes no promise to update any forward-looking statement, whether as a result of changes in underlying factors, new information, future events or otherwise.

Note to Editors: The Attorney General's public meeting is scheduled to begin at 2:30 p.m. at Inglewood City Hall, One Manchester Blvd., Inglewood, CA 90301.