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John Muir Health to fully acquire California hospital from Tenet in $142.5 million deal

by John R. Fischer, Senior Reporter | January 16, 2023
Business Affairs
John Muir Health is to fully acquire San Ramon Regional Medical Center for approximately $142.5 million. (SRRMC pictured here, photo courtesy of JMH)
Already holding a 49% stake in California’s San Ramon Regional Medical Center, John Muir Health is set to acquire the remaining 51% interest from Tenet Healthcare for approximately $142.5 million.

JMH will make investments in SRRMC’s facilities and offer enhanced services to reduce the number of patients seeking care elsewhere. It also plans to extend its quality enhancement and population health programs and its nonprofit community benefit programs to the SRRMC area and surrounding communities.

"JMH would operate SRRMC as a nonprofit hospital, including a commitment to care for those with limited financial means. At the same time, we would ensure that the facility is run efficiently and effectively so it could serve as a critical community resource for years to come," Mike Thomas, president and CEO of John Muir Health, told HCB News.

A 123-bed hospital, SRRMC will be the fourth provider under JMH. Also based in California, JMH already runs the 554-bed John Muir Health Walnut Creek Medical Center, 244-bed John Muir Health Concord Medical Center, and a 73-bed psychiatric hospital in Concord.

One notable change it will make is integrating SRRMC onto its version of the Epic electronic health record platform, which is used in its inpatient and outpatient facilities by nearly 1,000 physicians and providers. The acquisition will also eliminate duplicative administrative expenses.

"The transaction will help JMH operate more efficiently because we could allocate certain fixed overhead costs (electronic health record, corporate and administrative services) over a broader scope of operation, thereby reducing our costs to the consumer and payers," said Thomas.

JMH acquired its stake in SRRMC in 2013. Until the acquisition is completed, SRRMC will continue to operate under the current joint venture structure shared between JMH and Tenet.

Thomas says JMH will continue to invest in its current people, programs and services, adding that if the acquisition is approved, it expects that Tenet employees at SRRMC who wish to remain there and complete the onboarding process in a timely manner would be employed by an entity controlled by JMH.

"This entity would be managed in the same way as John Muir Health’s Behavioral Health Center (BHC) and Physician Network," he said. "Though separate entities, we consider BHC and Physician Network employees as John Muir Health employees."

The transaction is subject to a review by the Federal Trade Commission and various other closing conditions.

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