California Attorney General Kamala Harris will decide by June 13 whether Irvine-based St. Joseph Health will be allowed to affiliate with Providence Health and Services.
St. Joseph is seeking to form a nonprofit corporation with Renton, Wash.-based Providence that’s referred to in filings with Harris’ office as Providence St. Joseph Health.
The new entity would be based in Renton and keep a regional office in Irvine. It would oversee a health system with 43 hospitals and 13,544 licensed beds ranging from Washington state down to southern Orange County and east into Texas, including St. Joseph Hospital-Orange; St. Jude Medical Center in Fullerton; and Mission Hospital, which has campuses in Mission Viejo and Laguna Beach.
St. Joseph Health officials have done everything they can regarding the request and are awaiting the attorney general’s decision.
“We have gotten through the public hearings that were requested by the attorney general for the purposes of discerning as she goes about the process of determining the appropriateness of the request we have made,” said Dr. Richard Afable, chief executive of St. Joseph Hoag Health, a regional delivery network that teams St. Joseph Health with Hoag Memorial Hospital Presbyterian.
Afable is part of this week’s OC50, the Business Journal’s annual inventory of the local business community’s most influential members (see entry in special section insert, related stories, pages 1, 3).
St. Joseph Health has said that a combination with Providence wouldn’t impact existing relationships, including St. Joseph Hoag Health. Former Chief Executive Deborah Proctor, who retired from her post in March, said last year that St. Joseph Hoag Health “is a regional corporation that was put together to serve the needs of the residents of Orange County.”
Harris’ office could ask for clarification or additional information, he added.
“Any next steps will be at the attorney general’s discretion,” Afable said. “From our perspective, we have done all of the required elements of the request we have made [to combine].”
Afable said he’s been in correspondence “on a personal level” with Erik Wexler, who started his job as senior vice president and chief executive of Providence’s Southern California region last week.
“His role will just be as his title states. He will be the senior vice president and chief executive of Providence Health Services, Southern California region,” Afable said. “As of today, there is no relationship between the Southern California region of Providence Health Services and St. Joseph Health.”
Annette Walker, St. Joseph Health’s executive vice president of strategic services, is also serving as its interim chief executive.
Attorney Explains Deal
A filing with Harris’ office shows that St. Joseph Health and Providence signed what’s known as a “health system combination agreement” that would establish joint system-level governance control over their operations through the creation of Providence St. Joseph Health, said James Schwartz, a partner with the Los Angeles office of law firm Manatt, Phelps and Phillips who’s representing St. Joseph Health.
“While changing governance control at the system level, the joinder of [Providence] and [St. Joseph] will not alter the makeup, membership, powers or duties of any local hospital board in California,” Schwartz said in his letter to Scott Chan, a deputy attorney general in the charitable trusts section.
Schwartz hammered that point home later in the letter to Chan, noting that there would be no asset transfers and that the creation of Providence St. Joseph Health wouldn’t “change the rights of any non-Catholic health facilities,” referring to Hoag, which has an extensive women’s healthcare program.
“… In fact, it expressly guarantees the continuation of key services for five years at both parties’ California hospitals and continues compliance with all prior AG conditions of consent and agreements, specifically including those related to Hoag Memorial Hospital Presbyterian,” Schwartz said, referring to community concerns about whether Hoag’s services would be affected by the affiliation.
Hoag is required to continue to provide a full range of women’s health services—with the exception of direct abortions—for 10 years after the affiliation agreement’s closing date as a condition of approval by Harris’ office.
There have been some objections to the proposed affiliation of St. Joseph Health and Providence, particularly from the California Nurses Association, a labor union that has unsuccessfully sought to organize nurses at St. Joseph Health properties.
