The Desert Healthcare District’s board of directors will consider a revised lease proposal for Desert Regional Medical Center during its meeting Tuesday, potentially setting a long-term course for the Palm Springs facility after several months of public outreach and discussions with its operator, Tenet Healthcare.
The new lease proposal from Tenet Healthcare, which has an existing 30-year lease to run the hospital that expires in 2027, would run for another 30 years — through May 2057. The Desert Healthcare District is a public agency that owns Desert Regional, one of three major hospitals serving the Coachella Valley.
The proposal on Tuesday’s agenda also would allow Dallas-based Tenet Healthcare to take ownership of the hospital at the end of the next 30-year lease. Tenet initially proposed the new lease, including the opportunity to purchase the facility, during a special meeting with the district in September 2023.
Tenet’s proposal has been updated since then, after several board discussions and some public outreach, including a voter opinion survey that found a majority of respondents supported renewing the 30-year lease, even if it means selling the hospital.
Among the changes in Tuesday's proposal are Tenet offering to pay an initial payment of $100 million in 2027 — up from $75 million in their original plan — as well as adjustments to the annual lease payments that mean the district will get more money earlier in the lifespan of the lease. (In 2028, Tenet would begin annual payments to the district of more than $19.5 million, and these payments would increase each year subject to an annual escalator. Between May 2047 and May 2056, Tenet would not make any payments.)
Tenet would make a final payment of $100 million to the district on May 31, 2057, at which time total ownership of Desert Regional would transfer to Tenet. Payments to the district would total approximately $650 million over the 30-year span.
The proposal also includes more commitments to renovate the emergency department and admitting areas at JFK Memorial Hospital in Indio, with an estimated cost of roughly $60 million, as well as obligations to maintain the current capacity at Desert Regional during any renovations.
If the board approves the proposal Tuesday, the move would then be put on the November 2024 ballot for the district’s voters to weigh in. If publicly approved, the new lease would commence on May 31, 2027, and end May 21, 2057. Under the setup, Desert Regional would still be subject to the oversight of a local governing board, as well as local, state and federal licensing and regulatory organizations, according to a statement from Tenet.
Earlier this year, the board also hired Gibbins Advisors to examine the feasibility of another option: The district taking back ownership of the hospital. The group found such a maneuver would require “substantial upfront capital” — with an estimate of at least $219 million — and determined the conversion to a district-owned hospital would likely have a “material impact” on its profitability.
The advising group also found the potential for “significant operational and strategic disruption” if the district took over operations in 2027.
Proposal draws opposition from DRMC nurses
While opinion surveys have shown public support for the move, the proposal up for consideration has drawn opposition from many nurses at Desert Regional Medical Center, who have planned a rally with the California Nurses Association shortly before the board’s meeting Tuesday.
Registered nurses at Desert Regional Medical Center have been pushing back on the proposal for several months, rolling out a billboard campaign and sharing videos online earlier this year that urged the board to “Keep Desert a Public Hospital!”
The nurses also have attended Desert Healthcare District meetings to share frustrations they have with Tenet Healthcare and its operations of the facility. Their criticisms have focused on alleged unsafe staffing levels, supply shortages and unhygienic workspaces.
“We are calling on the district to maintain Desert Regional as a public asset and to create an oversight mechanism that would allow the board to demand Tenet, or any future lessee, remedy safety violations when they arise in the hospital,” Cyd Greenhorn, a registered nurse at Desert Regional, said in a release announcing Tuesday’s rally.
Caroline Ng’ang’a, a registered nurse at Desert Regional, added: “It is imperative that we retain community control over our public hospital and not allow our public asset to be swallowed up by a multi-billion dollar health care giant that is willing to sacrifice high-quality patient care in pursuit of exorbitant profits.”
The Desert Care Network — made up of Tenet-operated hospitals Desert Regional, JFK Memorial in Indio and Hi-Desert Medical Center in Joshua Tree — has pushed back on the past allegations made by the nurses union, saying it has “spread misleading information” about Desert Regional.
“These claims are unwarranted, and these tactics will not change Desert Regional’s unwavering commitment to the Coachella Valley," the network said in February. “Our hospital takes maintenance and cleanliness standards seriously.”
The board meeting will begin at 5:30 p.m. Tuesday at the University of California-Riverside’s Palm Desert campus in Rooms B114 and B1117 of Building B.
The meeting can also be attended virtually via Zoom at: https://us02web.zoom.us/j/88671987917?pwd=T29iRktDZlRDM3lTbmJDWkFiMnVMdz09. The password is 355860.
This report includes prior reporting by staff writer Ema Sasic.
Tom Coulter covers the cities of Palm Desert, La Quinta, Rancho Mirage and Indian Wells. Reach him at thomas.coulter@desertsun.com.
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