Former Cambio CEO starts new company, buys two Tenet hospitals

Email | Print By Paige Orr

10-29-2004 3:19 PM — Tom Reardon, former chief executive of Brentwood-based health care turnaround company Cambio Health Solutions, recently started Argilla Healthcare Inc., which has agreed to purchase two St. Louis hospitals from Tenet Healthcare Corp.

The financially struggling hospitals are 450-bed Forest Park Hospital and St. Alexius Hospital, which includes the 203-bed Broadway Campus and 408-bed St. Alexius Hospital – Jefferson Campus. Reardon said both hospitals have a history of losing money, although St. Alexius has seen some recent improvement.

Tenet, which previously announced plans to sell the St. Louis hospitals as part of a 27-hospitals divestiture program, expects net after-tax proceeds, including the liquidation of working capital, to be about $42 million. Regarding Argilla’s financial backers, Reardon declined to comment other than to say Tenet has verified that all the necessary capital is in place. The sale is expected to be complete by Nov. 30.

Reardon, a Boston attorney, said the mission of St. Louis-based Argilla (pronounced Ar-jill-lah) is to try to increase the efficiency of community hospitals in urban areas by improving the back office with better managed care contracts, billing and collections. Urban community hospitals face huge challenges, he said, adding that he does not expect them to generate the same returns as hospitals in other areas. Reardon added that he does not have plans to take the company public.

Argilla plans to enter into a full-service management contract with Scottsdale, Ariz.-based Doctors Community Healthcare Corp. to operate the St. Louis hospitals.