Drexel Trustees Unanimously Approve Agreement with Tenet to Merge MCP Hahnemann University into Drexel

Business Wire, April 25, 2002

Business Editors/Health & Medical Writers

PHILADELPHIA--(BUSINESS WIRE)--April 25, 2002

Drexel University has reached agreement with Tenet HealthSystem Philadelphia, Inc., a subsidiary of Tenet Healthcare Corporation (NYSE:THC) that will result in the merger of MCP Hahnemann University (MCPHU) into Drexel University.

The Drexel board of trustees voted unanimously today at a special meeting to approve the merger, according to board chair C.R. "Chuck" Pennoni. Effective 2002, the amended 20-year affiliation agreement assures a continuation of the strong partnership between the college of medicine and Tenet's teaching hospitals in the Philadelphia area.

Drexel's trustees will appoint a new board to oversee the medical school. The medical school will continue to be affiliated with Tenet's Philadelphia hospitals where university faculty will teach and practice, and medical students will receive training.

Tenet acquired the medical university, which had been part of the bankrupt Allegheny Health Education and Research Foundation (AHERF), along with eight AHERF hospitals in 1998. The college of nursing and health professions and the school of public health, which formerly were part of the medical university, will become Drexel academic units.

The school of public health is one of only two schools of public health in the Commonwealth of Pennsylvania. After acquiring the medical school, Tenet transferred the assets to a new, non-profit organization and made an initial $90-million cash contribution to help the university get back on a sound financial basis.

"This is a day of celebration for Drexel, Tenet and our health sciences students and faculty," said Pennoni. "Drexel will provide the stability and technological resources needed to preserve and enhance the health sciences enterprise. In turn, the merger enriches Drexel's academic offerings and creates new opportunities through research synergies."

Drexel has been Tenet's academic partner since 1998, when Tenet invited Drexel to operate MCP Hahnemann University. Drexel has achieved a financial turnaround at the institution that was devastated by the $1.5-billion AHERF bankruptcy.

During its management tenure, Drexel also upgraded MCP Hahnemann's technological infrastructure, including the creation of a wireless campus, and introduced innovations such as a co-operative nursing education program and the use of handheld digital organizers in patient care.

"The affiliation agreement brings long-term stability to our already successful partnership," said Barry A. Wolfman, senior vice president, operations, for Tenet's Pennsylvania region. "With the support of physicians, employees and the community, we have been able to preserve 14,000 jobs and the education of 3,000 students. We look forward to continuing the medical college and hospitals' legacy of providing advanced medical technology and services to the community."

Said MCP Hahnemann University board chair Manuel Stamatakis, "The collaborative vision of Drexel and Tenet has ensured that these great educational institutions, with more than 150 years of tradition and a strong community of students, alumni, faculty and staff, will continue to thrive."

The institutions joining Drexel trace their roots to the Medical College of Pennsylvania and Hahnemann University, established in 1850 and 1848, respectively.

Drexel President Constantine Papadakis stressed the complementary missions of Drexel and its new units. "We are excited about bringing Drexel's technology focus to health sciences education and research. The combined University will fill a distinctive niche in higher education," he said. "We welcome the talented health sciences professionals joining us."

The post-merger Drexel will join the fewer than 50 private universities classified by the Carnegie Foundation as Doctoral/Research Universities-Extensive, which include Carnegie Mellon, MIT, Caltech and Penn. Drexel also joins the top 100 U.S. universities in federal research expenditures and market value of endowment.

Following the merger, Drexel University will consist of 11 schools and colleges offering 175 degree programs to 11,691 undergraduates and 4,164 graduate and professional students. Alumni will number 90,000, and the size of full-time faculty will exceed 1,000.

Drexel University focuses on technology-related and experiential learning. Founded in 1891 by banker Anthony J. Drexel, the University in 1983 became the first to require all students to have microcomputers. In 2000, Drexel became the first major university to operate a fully wireless campus.

Drexel ranked sixth nationally and number one for use of wireless access in the 2001 Yahoo! Internet Life list of America's "Most Wired Universities."

Tenet's Pennsylvania Region includes 280-bed Elkins Park Hospital, 303-bed Graduate Hospital, 618-bed Hahnemann University Hospital, 465-bed Medical College of Pennsylvania Hospital, 200-bed Parkview Hospital, 183-bed St. Christopher's Hospital for Children and 180-bed Warminster Hospital.