The new regional healthcare network being created by Hoag Memorial Hospital Presbyterian and St. Joseph Health plans to start with a familiar face at the helm.
Richard Afable, who’s been Newport Beach-based Hoag’s chief executive since 2005, is set to serve as president and chief executive of the company that will operate the network.
The new operation has the working title of Covenant Health Network, according to documents filed last week with California Attorney General Kamala Harris’ office. The Attorney General’s approval is required for Hoag and Orange-based St. Joseph to create the new network, and a decision is expected by early February.
“I will continue to be the president and chief executive officer here at Hoag until which time we hear from the attorney general,” Afable said. “Assuming the attorney general gives us a favorable decision and will allow the relationship to go forward, it has been decided at this point by both organizations that I will take the initial role of president and chief executive.”
Hoag’s board is “making plans at this point for a transition to a new president and CEO,” Afable said.
Transition plans include “assessments as to what it should be doing as far as internal candidates, external candidates [and if] there be discussions further with St. Joseph about my role,” he added.
The filing shows that Afable would be an employee of St. Joseph Health, which will appoint four of seven seats on the new company’s board. The other three directors will be selected jointly by the Hoag Family Foundation and the Association of Presbyterian Members.
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 is a Roman Catholic hospital operator with about $4.4 billion in annual revenue. Its Southern California facilities include St. Joseph Hospital-Orange, Fullerton’s St. Jude Medical Center, Mission Hospital, with campuses in Mission Viejo and Laguna Beach, and St. Mary Medical Center in the High Desert community of Apple Valley.
Afable said St. Joseph will be the employer, because the new network wants an “orderly organizational structure.”
He added: “You don’t want to have disparate employment and disparate reporting relationships. So we decided to use the St. Joseph structure that already exists to include Hoag and (the new network).”
Proctor and Afable stressed St. Joseph isn’t taking over Hoag’s operations.
“Absolutely not,” Proctor said. “As Rick and I have said from the very beginning, this is a very different (business) model from what people have seen before.”
Afable noted that California regulations require that one of the two participants appoints a majority of directors for the sort of healthcare network that St. Joseph Health and Hoag plan to establish.
“Obviously, with St. Joseph Health being the larger partner between the two, it was appropriate that they would also have the greater number of board members,” Afable said.
Certain board decisions will require a super-majority vote, including the appointment of a chief executive for Hoag. The minimum for a super majority would be two of the three Hoag-connected directors along with three of the four appointed by St. Joseph.
Hoag and St. Joseph have said they will retain their own cultures and operations independent of the new company.
St. Joseph Health and Hoag will maintain their respective identities and the new network’s identity will “not be Catholic or Presbyterian,” according to the filing.
Women’s reproductive services offered by Hoag will be “separated out and governed by a special committee,” said Robert Braithwaite, Hoag’s senior vice president and chief operating officer, in a copy of board minutes included in the filing.
Having a women’s health oversight board satisfies the requirements of the Roman Catholic Church, which opposes abortion and contraception in general. The St. Joseph facilities will continue to comply with directives of the United States Conference of Catholic Bishops.
“There are some elements of women’s health services that Hoag provides that are contrary to some elements of the Catholic ethical and religious directives, so there are some slight differences, and I stress slight,” Afable said. “We need to make that separation, so that those traditions can be honored.”
The filing also spelled out some of the goals of the new network, including developing “centers of excellence” for conditions such as cancer, orthopedic surgery, heart surgery and neurosciences.
Support for CHOC
Hoag directors also expect the affiliation with St. Joseph to “enhance our relationship” with Orange pediatric facility Children’s Hospital of Orange County, among other things. St. Joseph and Hoag said in the filing that the new company “will give the consistent support CHOC needs to remain strong and independent.”
CHOC is currently building a new patient tower that will feature a pediatric emergency room when it opens early next year. The emergency room is expected to handle about 50,000 patients a year.
CHOC currently contracts with adjacent St. Joseph Hospital-Orange for pediatric emergency services. CHOC’s new emergency room is expected to free up capacity at St. Joseph-Orange.