The impending sale of 19 Tenet hospitals in California speaks to the challenging environment faced by all hospitals in the state, for-profit and non-profit institutions alike, say local Catholic hospital administrators.

"The Tenet situation points out how difficult it is to operate a hospital, even if it's a for-profit entity," said Bruce Lamoureux, CEO of St. John's Hospital in Santa Monica. Tenet Healthcare Corp. said recently it would divest itself of 27 hospitals out of 96 nationwide, with the bulk of them in California, including Queen of Angels-Hollywood Presbyterian near downtown Los Angeles.

In California, hospitals are struggling with government mandates requiring billions of dollars in seismic upgrades and strict nurse-patient ratio requirements that went into effect Jan 1. Locally, Santa Teresita Hospital in Duarte shut down all its emergency services Jan. 9 due to an inability to hire enough nurses to satisfy the new state regulations for nurse-patient ratios.

"Government 'unfunded' mandates are the biggest threat to the hospital industry in California," said Robert Issai, interim president and CEO for the Daughters of Charity Health System, which runs Robert F. Kennedy Medical Center in Hawthorne, St. Vincent Medical Center in Los Angeles and, in conjunction with Catholic Healthcare West, St. Francis Medical Center in Lynwood.

Issai said hospitals in California are facing an estimated total of $34-$35 billion in seismic upgrades in addition to millions in increased operating costs related to mandated nursing staff ratios.

According to Robert J. Fraschetti, president and CEO of St. Jude Medical Center in Fullerton, Tenet's for-sale hospitals which require significant seismic repairs may have difficulty finding a buyer.

"It's a big unknown --- is Tenet truly selling or will its hospitals eventually close?" commented Fraschetti. If Tenet's nearby Whittier Medical Center with 181 beds closes, for example, surrounding hospitals such as St. Jude could be impacted, especially in their emergency and surgery departments.

"If Tenet hospitals close, our concern would be, do we have the capacity to pick up the patient load?" explained Fraschetti. St. Jude is already in the middle of a building program, which will add 38 beds in November.

As Fraschetti sees it, the challenges facing Catholic hospitals are no different than those faced by for-profit medical centers. "Sixty percent of hospitals are losing money in California," he declared, adding that the industry suffers from being "so overly regulated."

"We are a strong safety net in the community," said Fraschetti. "We take 10 percent of the bottom line and put it into services for the poor. One of the major challenges is maintaining a healthy bottom line. We're not going to compromise quality care for the poor."

On Los Angeles' Westside, sales of Tenet hospitals would not adversely affect surrounding hospitals, said Lamoureux. However, he cautioned, if Tenet is not successful in selling, resulting in hospital closures, "St. John's and any other Catholic healthcare provider will see an added volume of activity, probably for all services which may have a net adverse impact."

Patients would seek emergency services from surrounding facilities that are already "overwhelmed," said Lamoureux. Surrounding hospitals would have greater utilization of acute care beds and outpatient services. Also, Lamoureux pointed out, patients would have to drive greater distances to access healthcare.

In the San Fernando Valley, Arnold Schaffer, chief executive for the Providence Health System in the San Fernando Valley (which operates Holy Cross Medical Center in Mission Hills, and St. Joseph Medical Center in Burbank), doesn't think that the sales of local Tenet hospitals will negatively impact area hospitals.

"The probability of Tenet's Encino-Tarzana Regional Medical Center closing is remote," said Schaffer. "There's a lower probability that others will be bought."

Still, according to Schaffer, there's an "informal consensus" among area hospital administrators that three Tenet hospitals in Los Angeles "may not be bought," adding to the demands placed on surrounding Catholic hospitals.

"Our mission is not only the healing ministry of Jesus, but also providing for the poor and vulnerable," said Schaffer. "And there's no shortage of the poor and vulnerable in L.A."