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Providence SoCal CEO Surprised by Hoag Lawsuit

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Amid the myriad challenges of operating a hospital system during the coronavirus, Providence finds itself in another battle, a legal one with affiliate Hoag Memorial Hospital Presbyterian.

The lawsuit, filed May 4 and aimed at giving Hoag control over its local operations, “was a surprise,” said Providence’s Erik Wexler, the health system’s top Southern California executive.

“An adjustment in how our affiliation works would have been less of a surprise, but to completely disaffiliate given the progress we’ve made is a disappointment and surprising.”

During a 50-minute telephone interview with the Business Journal, Wexler discussed, in addition to Hoag, the pandemic and its effects on the future of patient care.

Wexler, who works out of an Irvine office, joined Renton, Wash.-based Providence in 2016 after spending five years with Tenet Health’s northeast region overseeing operations for Massachusetts, Pennsylvania, and Illinois.

Prior to Tenet, he was senior vice president of LifeBridge Health, as well as president of its Northwest Hospital.

Wexler oversees all of Providence’s Orange County and Los Angeles medical facilities, which encompasses 13 hospitals, 90 outpatient centers and even Providence High School. The system has 35,000 employees in Southern California, including 5,000 physicians. It’s the largest healthcare organization in the southland.

The Lawsuit

The organization would get smaller, if Hoag’s efforts come to pass.

Early last month, Hoag filed a lawsuit against Providence to dissolve its affiliation known as the Covenant Health Network.

In 2012, Hoag and St. Joseph Health entered an affiliation designed to boost the combined purchasing power and costs savings of two of Orange County’s largest healthcare systems. St. Joseph Health was a nonprofit healthcare group then based in Irvine.

“However, those plans did not materialize, and St. Joseph has since been acquired by Providence Health, a large national health system based in Seattle,” Hoag said in its May 4 statement.

That 2016 acquisition of St. Joseph included not only its hospital in Orange, but also Mission Viejo-based Mission Hospital and Fullerton-based St. Jude Medical Center. These three hospitals combined have about 7,800 OC employees and generated approximately $2.1 billion in revenue for the year ended Sept. 30, according to the Business Journal’s most recent list in February.

Last month, Hoag Chief Executive Robert Braithwaite said the two entities spent a year negotiating a new deal and “made no progress.”

“Hoag must be able to keep local resources and decision making in Orange County to address all the health needs of community members for years to come,” Braithwaite said last month.

According to Wexler, the two entities have spent years negotiating and have signed “many” amendments that included Hoag agreeing its affiliation would “be in perpetuity.”

The adjustments made for Hoag were done in the hopes that it would further enhance the relationship between the two health systems, according to Wexler.

“We believe we are better together than we are separately. We have proven together the accomplishments are significant enough to continue on as partners,” Wexler said.

“I hope that we can convince them that it is better to coordinate services across all of Orange County so that we don’t have fragmentation and duplication of our services.”

Providence’s website still contains links to Hoag hospitals in Orange County.

On the website, Wexler also posted a letter of almost 2,000 words saying the initial 2012 agreement occurred at “a time of immense struggle for Hoag with the departure of the largest physician network (IPA) and management services affiliated with the hospital.”

Hoag’s stated feeling that it was being swallowed up by Providence “is hard to explain,” Wexler said in the letter.

Experimental Trial

Wexler’s website letter also noted that Providence made it possible for Hoag patients to participate in “promising treatment” in the experimental drug remdesivir clinical trial for those with the coronavirus.

Like UCI Medical Center, Providence has been investigating remdesivir along with other drug combinations as treatment for the coronavirus.

About 20% of patients need a combination of drugs to effectively fight the coronavirus, said Dr. Steven O’Day, M.D., Executive Director of the John Wayne Cancer Institute at Providence Saint John’s Health Center in Santa Monica.

Remdesivir reduced sick days by four—and found that five days of taking remdesivir has the same effect as taking it for 10 days, according to O’Day.

“Research is very much what we do at Providence,” Wexler said.

A New Approach

In Orange County, the coronavirus caused a massive decline in employment among healthcare workers in April, according to the state’s Employment Development Department.

Countywide, ambulatory services (also known as outpatient care) lost 18,000 jobs, or 21% of the total jobs, records indicate. Hospitals dropped 1,300 jobs, or 3.9% of their worker base, while nursing facilities declined by 800 jobs, a 9% drop, the EDD said.

Providence wasn’t immune as the coronavirus hit the system particularly hard in the early weeks of the lockdown, Wexler said. Surgeries were postponed and patients with only mild symptoms of the virus were sent home.

“More than 50% of our normal case volume declined almost immediately after the pandemic hit Southern California,” Wexler said. “And part of that was our effort—based on the governor’s request—to only care for those who were absolutely essential within hospital.”

The pandemic affected the views of potential patients.

Wexler recalled a woman who suffered a stroke and then waited 48 hours before seeking help because she feared catching the coronavirus at the emergency room. She suffered permanent impairment due to waiting, he said.

There isn’t any reason for patients to risk avoiding care out of fear of the virus, Wexler said.

“We segregate patients who are suspected to have COVID-19 away from other patients so that we do not put anybody at risk,” he said.

“There is this silent epidemic in our communities where people are delaying care and ultimately causing themselves more harm.”

Virtual, Remote Offerings

About 10% to 15% of Providence’s employees shifted to working from home. Still, most physicians are reporting for duty and are meeting their patients digitally from the office.

“Virtual visits have been widely embraced by our community and it’s more convenient—you still see the physicians,” Wexler said.

Doctors are also again visiting patients in their homes—but in different ways than the old days.

The hospital chain is piloting a “Hospital at Home” program where patients “can be admitted into their own home.”

“Let’s say you’re a patient that’s suspected of pneumonia. We can come to your home, we can do a chest X-ray, and we can begin to administer the medical treatment at home,” Wexler said.

“What COVID-19 has done is probably advanced us by three to five years from the technology and virtual integration perspective—and it’s forced people to embrace certain ways of seeking treatment that they would not have before COVID-19.

“I think we are going to see more healthcare services provided at home and in the workplace.”

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