Hoag Memorial Hospital Presbyterian and St. Joseph Health made a big splash last week when they announced they will form a new company to operate an integrated regional healthcare network stretching from Orange County to the High Desert.
Now comes the job of setting up a structure for the vision, with steps that will include:
• Picking management, a board and a name.
• Getting regulatory approval from the state.
• Explaining the nuts and bolts of the move to patients, employees, doctors, insurers and the Roman Catholic Diocese of Orange and other organizations with ties to the two hospitals.
• Figuring how Hoag’s and St. Joseph’s operations mesh to form the new company, and whether some jobs could be eliminated, others might be added, and how employees might transition to new duties.
“This is not a merger, there is no transfer of assets,” said Deborah Proctor, chief executive of St. Joseph Health. “This is a new kind of structure that you probably haven’t seen before. We have great faith that we can deliver something new and better to this county.”
The move comes as changes in employer-sponsored health insurance require providers to establish “networks of care” because businesses are starting to buy their care from those networks, said Hoag Chief Executive Richard Afable.
“Being a great hospital, a hospital system just is not enough for the future,” Afable said. “Healthcare is difficult—it’s complex. It lacks coordination.”
The new company will aim to coordinate services at Hoag and St. Joseph’s respective Southern California hospitals, a large doctors’ network, and numerous outpatient and urgent care facilities in Orange County and Apple Valley, according to a press release.
Hoag, a $1 billion not-for-profit hospital operator, is made up of its main Newport Beach hospital and a second campus in Irvine.
St. Joseph Health is a $4.4 billion hospital operator. Its Southern California facilities include: St. Joseph Hospital-Orange; St. Jude Medical Center in Fullerton; Mission Hospital, which has campuses in Mission Viejo and Laguna Beach; and St. Mary Medical Center in Apple Valley.
St. Joseph also has hospitals in New Mexico, Texas and Northern California, none of which are part of the affiliation with Hoag.
St. Joseph and Hoag plan to apply to the office of state Attorney General Kamala Harris for approval of the new affiliation in October, and a decision could take several months.
Afable said no changes to clinical staffing are expected once the network starts operating. He said there likely would be redundancies in back-office and non-clinical positions.
Information systems will be central to the effort, executives said.
The network will have technologies that link patients, doctors, pharmacies, medical laboratories and other providers to existing information systems for Hoag and St. Joseph.
It will feature what’s known as “population management,” which happens when a group of patients with chronic conditions have services managed “explicitly in a way that tends to their specific needs,” Proctor said.
Population management is intended to lead to lower costs by providing healthcare providers with timely information that’s expected to help cut down on unneeded care.
Names Remain
Executives said that each of the hospitals would maintain their respective identities, including their religious faiths.
“Hoag will continue to be Hoag,” Afable said. “The name won’t change; the organization will continue to be led by the same people.”
“St. Joe’s remains Catholic and Hoag Memorial Hospital remains Presbyterian,” Proctor said.
Proctor and Afable said the two hospitals started discussing possible collaboration about three years ago—prior to federal healthcare reform—and that those early discussions included other parties.
Talks heated up at the beginning of the year, they said, culminating with both participant’s board and sponsoring organizations approving a signed letter of intent on the new company back in late June.
