August 15, 2012: St. Joseph Health and Hoag Hospital announced Wednesday they will create a new company that will result in their six local hospitals, networks of doctors, and outpatient clinics providing roughly one-third of healthcare in Orange County.
The two nonprofits are not merging, but they are forming a so-called “affiliation,” which must be approved by the state attorney general’s office. The company, which has yet to be named, could be in operation in early 2013, said Deborah Proctor, CEO of St. Joseph Health.
With federal health reform calling for better medical outcomes at lower costs, the partnership will focus on preventive care and wellness, as well as developing more specialized care not offered in Orange County.
“What’s most important here is what we can do for the community,” Proctor said. “It’s so critical that we do something so people have access and the best quality of care, and we do so at a better cost than we are today.”
Proctor and Dr. Richard Afable, CEO of Hoag, made the announcement at a press conference in Irvine after telling their respective employees.
“Just like a marriage, we can come together and create something new and different that neither could create on its own,” Afable said. “Hoag will continue to be Hoag. The name won’t change. The organization will be led by the same people.”
Hoag owns hospitals in Newport Beach and Irvine. St. Joseph Health owns four hospitals: St. Joseph Hospital in Orange, St. Jude Medical Center in Fullerton, Mission Hospital in Mission Viejo and Mission Hospital in Laguna Beach. Combined, they will account for more than 2,000 beds in Orange County.
The partnership will include a St. Joseph’s hospital in Apple Valley. The hospitals will continue to maintain their respective faith missions; Hoag is Presbyterian and St. Joseph Health is Catholic.
The executives said patients will have greater access to care as well as seamless coordination of services.
“If I have a chart at Hoag and I happen to be in the St. Joseph area and end up in the emergency department, the clinicians would be able to access my chart because we are one organization,” Proctor said.
Hoag and St. Joseph will determine which services are unnecessarily duplicated, creating waste, and what services they can work to expand. For instance, the two might jointly create a program to offer in-home intensive care services. They also envision providing more care in the workplace and at outpatient clinics.
Labor and delivery is one area that wouldn’t change.
“Women need to have obstetrics care close to home,” Afable said. “You don’t want women travelling from Fullerton to Newport Beach to have their baby.”
James Lott, executive vice president of the Hospital Association of Southern California, called the affiliation a smart move.
“They’re not going to be competing in the marketplace, they’re going to be cooperating and collaborating in the marketplace and sharing patient information,” Lott said. “That should lead to positive outcomes for consumers. It moves us away from duplicative and costly healthcare being developed to serve the same market.”
Lott said the two are on the cusp of what will be a national trend.
“You’re going to see providers of all stripes and types coming together and forming these collaborative arrangements,” he said. “That is the new model. That is tomorrow.”
Hoag is a $1 billion network that treats nearly 30,000 hospital patients and sees 350,000 outpatient visits each year.
In Orange County, St. Joseph Health is a $2 billion system that treats 57,000 hospital patients and sees 2.2 million outpatient visits each year.
Source: John & Rusty Report via Choice Admin