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Adventist, St. Joseph's Form Joint Operating Company

By John Commins  
   April 23, 2018

The deal is subject to state regulatory approval, and comes as California officials are taking a keen interest in health industry consolidation, especially in the northern regions of the state.

California's Adventist Health and St. Joseph Health have agreed to integrate clinical services under a joint operating company, the two health systems announced Monday.

The partnership will extend to clinics and facilities owned by both religious nonprofit health systems in Humboldt, Mendocino, Sonoma, Lake, Napa, and Solano counties, subject to regulatory review.

Adventist Health and St. Joseph Health will retain existing hospital names, licenses, capital assets and employees. The two systems hope to have the deal finalized by the end of the year. Financial terms were not disclosed.

“Adventist Health and St. Joseph Health believe this is the right thing to do for the communities we serve,” Jeff Eller, Adventist Health president of the Northern California region, said in a media release.

“Patients will benefit from more access points, better health outcomes and controlled costs by coordinating their care across the spectrum of their health needs,” Eller said.

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The affiliation applies to Adventist Health Howard Memorial, Adventist Health Ukiah Valley, Adventist Health Clear Lake, Adventist Health St. Helena and Adventist Health Vallejo and Home Health; and to St. Joseph Hospital Eureka, Redwood Memorial Hospital, Santa Rosa Memorial Hospital, Queen of the Valley Hospital and the St. Joseph Home Care Network.

The arrangement does not include the other 15 Adventist Health hospitals in the western United States or the other 50 Providence St. Joseph Health hospitals located throughout the western United States and Texas.

The deal is subject to state regulatory approval and comes as California prosecutors are taking a keen interest in health industry consolidation.

Last month, the California Attorney General’s Office filed suit against Sutter Health, alleging that the largest health system in Northern California is engaged in anticompetitive practices that are raising healthcare costs for consumers.

"Sutter Health is throwing its weight around in the healthcare market, engaging in illegal, anticompetitive pricing that hurts California families," California Attorney General Xavier Becerra said of the filing.

The AG’s complaint came shortly after a new report by University of California Berkeley’s Petris Center on Health Care Markets and Consumer Welfare that documents how the rapid consolidation of healthcare markets in California has led to rising healthcare costs for consumers throughout the state.

Sutter Health has called the attorney general's filing "factually inaccurate."

"It mischaracterizes the activities of our not-for-profit organization, and it fails to adequately account for Northern California’s robust and competitive health care environment," the health system said in prepared remarks.

John Commins is a senior editor at HealthLeaders.

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