California AG Rejects Adventist Health / St. Joseph JOC

The JOC would have extended to clinics and facilities owned by both religious nonprofit health systems in six Northern California counties.

A proposed joint operating company that would manage Adventist Health System/West and St. Joseph Health System facilities in Northern California has been rejected by the state's attorney general.

In a letter Thursday to leadership at the two health systems, Chief Assistant Attorney General Matthew Rodriquez said regulators had concluded "among other things, that the proposed transaction is not in the public interest, including, but not limited to the potential for increased health costs and concerns over access and availability of healthcare services."

Adventist Health and St. Joseph Health issued a joint statement saying they're "very disappointed in the outcome of this decision."

"Our intent has always been to better serve our communities, increase access to services, and create a stronger safety net for families in Northern California. At this time, our organizations will need to take a step back and determine implications of this decision. The well-being of our communities remains our top priority," the health systems said.

The JOC would have extended to clinics and facilities owned by both religious nonprofit health systems in Humboldt, Mendocino, Sonoma, Lake, Napa, and Solano counties.

Under the proposal put forward in April 2018, Adventist Health and St. Joseph Health would have retained 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.

In an interview last year with HealthLeaders, Jeff Eller, Adventist Health president of the Northern California region, said the JOC "really is about a population health strategy and securing and strengthening healthcare access in these smaller rural communities."

"We are coming together to form an organization that will manage the day-to-day operations, that will help develop strategies, and ultimately help us to create value back in the communities that we both serve," he said.