St. Joseph Health has a new location, new partnerships and a new goal—providing “great hospital and community care.”
“For years, we’ve been known in all of our communities as an excellent provider of acute care hospitals—hospital services and some outpatient services,” said Deborah Proctor, chief executive of the $6 billion, 24,000-worker nonprofit health system that moved its headquarters to Park Place in Irvine in April after years in Orange.
Community care differs from just operating hospitals in the community, according to Proctor.
It is a broader duty and involves efforts to improve health through education and various other programs outside the hospital, including wellness promotion, clinics and other outpatient service settings. It’s related to a concept called “population health management” that treats sectors of patients with chronic conditions by managing healthcare “explicitly in a way that tends to their specific needs,” Proctor said in an earlier Business Journal interview.
St. Joseph Health, a Roman Catholic organization, has a deep imprint locally.
Its St. Joseph Hospital-Orange is OC’s third-largest by patient revenue, trailing only top-ranked Hoag Memorial Hospital, which has campuses in Newport Beach and Irvine, and No. 2 UCI Medical Center in Orange.
St. Joseph Health’s portfolio also includes St. Jude Medical Center in Fullerton, No. 4 in the county; and Mission Hospital, which has campuses in Mission Viejo and Laguna Beach and ranks No. 5, according to the Business Journal’s annual hospital list.
Then there’s Covenant Health Network, its partnership with Hoag.
A lot of the community care St. Joseph Health provides comes through home health agencies, hospice care, outpatient services, skilled nursing facilities, community clinics and doctors’ groups that operate in Orange County.
NorCal, Texas
The system also has a wide reach in Northern California and Texas, with five hospitals in each of those areas.
Its business shift to elevate community care to a place alongside operating hospitals began in 2006 after executives spent some time “asking ourselves what [our business model is] going forward—is it to be a provider of hospital services?—and we decided that wasn’t what our goal was. Our goal was really to be the health partner in every community that we serve,” Proctor said.
The partnership that brings St. Joseph Health’s Orange County and High Desert operations alongside Hoag under the Covenant banner, which started operating earlier this year, grew out of the strategic focus.
“We don’t see ourselves having to be the big owner of everything but to be a partner … bringing people together,” Proctor said.
St. Joseph Health has long had “the ability to serve the northern county, the central county and the southern county,” Proctor said. “But Hoag was serving the west part of the county. Hoag had a similar picture in mind … so we envision Covenant as a way in which to come into partnership with each other to try and change this care delivery model” to cover all of OC.
Partnership is a concept that comes up frequently in St. Joseph Health executives’ conversations.
“There was a period of time where what we managed, we totally owned,” said Annette Walker, St. Joseph Health’s executive vice president for strategic services. Today, St. Joseph Health sees that changing to a model in which it will have some complete ownership, some partial ownership, and some “very strong relationships” with partners.
Proctor
St. Joseph Health started its strategic change two years after Proctor’s arrival as chief executive and roughly three years before the Obama administration launched work on federal healthcare reform.
“We’ve been big supporters of healthcare reform and believe that the healthcare system needs to be reformed, even though there are parts of reform that make our business harder,” Proctor said.
St. Joseph Health executives have taken their time to rework the organization.
“In the last two years, we really refined [what the transformation] meant to us,” Walker said, adding that St. Joseph Health seeks a balance between “illness and wellness models” of care.
“The good thing about healthcare reform is that it’s aiding that vision in a way that the financing mechanisms of healthcare did not previously aid,” Walker said. “The old mechanism, really, there was only compensation [to providers] if you got sick.
“The new compensation, if you’re the population health manager, you have the ability to move those funds and direct them to the points in an individual’s life where you can really change their health to prevent the sickness,” Walker said, although she noted that not all patients would fall under that model.
“The large majority of health, we believe, is going to be managed by the individual,” she said, adding that the health system is working on how to teach patients to connect and interact with it so “there’s a fluidity and effectiveness between [consumers and providers].”
Tailored
St. Joseph Health will tailor its strategies to its specific markets.
“Orange County is very metropolitan, big population in a relatively small space,” Proctor said.
Its Northern California region, by contrast, has hospitals that are more distant from each other and “are not as connected as Orange County … it’s not a natural corridor,” Proctor added.
And St. Joseph Health’s Covenant Medical Center and Covenant Children’s Hospital in Lubbock serve 60 counties in western Texas and eastern New Mexico within a 300-mile radius “with probably half the population of Orange County,” she said.
Executives do not see any Covenant-style situations cropping up in other regions.
Proctor said St. Joseph Health “could imagine we would look for partnerships” with its FirstCare Insurance Plans, which operates in its Texas markets.
“In Northern California, it’s a little less clear the way in which this is going to happen,” she said. “We have formed some partnerships in terms of developing insurance products, but we haven’t yet defined how we would achieve this kind of [healthcare delivery transformation].”
St. Joseph Health does have a plan for forming partnerships in Northern California, “but it will materialize much slower,” Walker said, because that market has a larger amount of smaller, independent players than Southern California, with the exception of Sacramento-based Sutter Health and Oakland-based Kaiser Permanente.
Physicians
System executives have reached out to others, including their roughly 5,800 affiliated doctors, in the transformation. They are making sure that doctors participate in change, including establishing a 30-member physician leadership council for advising on strategy development.
“There won’t be any change if it’s not done in partnership with physicians,” Proctor said. “We’re lucky because we have very good relationships with physicians across our system.”
St. Joseph Health dates back to 1912, when the Sisters of St. Joseph religious order arrived in Orange County from an earlier base in Eureka. What’s now known as St. Joseph Health was established in 1982.
