New owner, new name for Allegheny

The foprofit company Tenet Healthcare completed its $345 million takeover of Allegheny. The background remains deep blue, and the lettering is still white, but the Allegheny name vanished yesterday from the signs of eight Philadelphia-area hospitals, taking the trademark red "A" with it. The new signs bear the mark of Tenet Healthcare -- a small yellow-and-white logo below the institution's name -- and with good reason: Yesterday, the California-based company completed its $345 million purchase of the bankrupt hospitals and the former Allegheny University for the Health Sciences from the Allegheny Health, Education and Research Foundation. Tenet, a for-profit hospital chain, finalized arrangements two weeks ago to buy the hospitals from the Pittsburgh-based nonprofit organization. "In the weeks and months ahead, the community served by these hospitals will begin to notice a lot of differences -- a fresh start," said Lee Domanico, the regional head of operations for Tenet. The formal transfer occurred at a midmorning ceremony in front of Hahnemann University Hospital -- one of the system's two local flagship hospitals -- at the corner of Broad and Race streets. Tenet has contracted with Drexel University to operate the medical school, which the company purchased as a condition of the bankruptcy court bid. Yesterday, Tenet placed its seal of ownership on the hospitals, renaming them to reflect their pre-Allegheny designations: Hahnemann University Hospital, Medical College of Pennsylvania Hospital, Graduate Hospital, City Avenue Hospital, Parkview Hospital, Elkins Park Hospital, Warminster Hospital and St. Christopher's Hospital for Children. All but two of the hospitals are in Philadelphia; Elkins Park and Warminster are located in the northern suburbs of the same names. The newly dubbed MCP Hahnemann University replaces "Allegheny University for the Health Sciences" with a combination of the names of the two institutions that merged under Allegheny ownership in the early 1990s to form the present medical school. The eight hospitals -- with a total of 2,484 beds and annual operating revenues of more than $1 billion -- are the first in the area operated on a for-profit basis. They had fallen into debt under the previous ownership and are currently operating on an emergency loan extended by the city and state. Yesterday, Tenet officials emphasized that they are committed to use investments in their new assets rather than job or service cuts to bring the financially troubled hospitals back into the black. "We do not underestimate the challenge ahead," said Tenet President Michael Focht. "But we are confident that Tenet has the experience and the financial strength to help this network." The company owns and operates 128 hospitals in 18 states, mostly concentrated in the South and West. In fiscal year 1998, revenues were $9.9 billion and profits were $261 million. And yesterday, a couple of smaller distinctions were added to that list: City Council President John Street declared the day "Tenet Day" in the company's honor, and Philadelphia Mayor Ed Rendell awarded the company a replica Liberty Bell, complete with the requisite crack. The previous evening, Peco Energy Co. ran a congratulatory message on the electronic zipper that runs around the top of its Center City building, visible for miles around. And Tenet is working to keep the love flowing. The company launched a print, radio and television campaign yesterday with the theme: "Tenet: Let the healing begin."

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