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State OKs Providence-Cedars Joint Venture

Providence St. Joseph Health System Southern California and Cedars-Sinai shook the Valley health care industry when they announced a joint venture to own and operate the Tarzana Medical Center in March, but details surrounding the venture have been kept confidential until recently. The two entities were waiting until the deal became final before laying out the details, but the Business Journal reported in April that Providence will retain controlling interest in the hospital with 51 percent ownership, and Cedars will own 49 percent. The partnership comes at a time when the Tarzana hospital is in the midst of a $542 million construction project called Tarzana Reimagined. Cedars will share the cost of construction, but would not specify on the exact amount. Approximately 40 to 45 percent of the project is paid, Dale Surowitz, chief executive of Providence Tarzana Medical Center, told the Business Journal. The joint venture deal was reviewed by California Attorney General Xavier Becerra in May. “They didn’t necessarily have to approve it, but they have to say if they have any issues with it,” said Surowitz. “They did not have any issues with it, so we could move forward.” Currently, the Providence Tarzana Medical Center Foundation has collected 15 percent of its original $75 million goal, which doubled to $150 million, toward Tarzana Reimagined – approximately $11 million. Providence has struggled with fundraising efforts since the project’s announcement in 2016, but now that people are able to see progress, an upswing in funding is set to come in. “It’s a lot more difficult to see something where you have a piece of open land versus now starting to see work being completed, a parking structure completed, lots of construction on site,” Surowitz explained. “There’s a lot of excitement that is engendered out there since the last time we talked (in April). We’ve been talking to a lot of people out there, a lot of opportunities out there programmatically, and now people are starting to get excited about it because they can start seeing that it’s happening.” Medical specialties As part of the joint venture, the hospital aims to expand specialty services, including complex cardiac surgeries and gynecological oncology. Clinical offices at the Tarzana Medical Atrium, 5411 Etiwanda Ave., and Ventana Medical Plaza, 18133 Ventura Blvd., will help Cedars specialists establish themselves in the Valley region. “The goal is not to usurp what our physicians are already doing, but to augment programs and services, which is why people leave the Valley for care,” added Surowitz. “We work with them for gynecological oncology, because that’s not an extensive service that we offer on the west end of the Valley. There exists an opportunity to grow that and offer that service so that people don’t have to leave the area for care.” The construction project, set for completion in 2022, includes a new six-story patient building, expanded emergency room, lobby enhancement and additional parking. It also includes technology updates, a conscious effort to make the new buildings sustainable and a “healing green space.” Enhancements to the current 21-bed neonatal intensive care unit and 33-bed women’s pavilion are also on the list. In addition, the hospital is undergoing a retrofit project to meet state seismic standards. Surowitz expects to break ground on the patient tower, the bulk of the project, by November. In the meantime, the site’s 600-space parking structure will open next month. The extended lobby has a completion date of January 2022, and the tower will have occupancy by January 2023. Coupled with bringing supplemental medical services to the Valley, the venture also helps a hospital that has consistently lost money between 2014 and 2017 – a nearly $11 million loss on $264 million in revenue for 2017 alone, according to state data. Data from the 2018 report, which is still pending an audit, shows a more than $18 million loss on $264 million in revenue. In addition to Cedars, Providence also partners with Children’s Hospital Los Angeles at Providence Saint John’s neonatal intensive care unit in Santa Monica, and Providence Tarzana’s pediatrics unit. City of Hope has a presence at Holy Cross Medical Center in Mission Hills and with Providence’s Torrance hospital.

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