Orange County Hospital Seeks Divorce From Large Catholic Health System



In early 2013, Hoag Memorial Hospital Presbyterian in Orange County, California, joined with St. Joseph Well being, a neighborhood Catholic hospital chain, amid enthusiastic guarantees that their affiliation would broaden entry to care and enhance the well being of residents throughout the group.

Eight years later, Hoag says this imaginative and prescient of reaching “inhabitants well being” is useless, and it desires out. It’s embroiled in a authorized battle for independence from Providence, a Catholic well being system with 51 hospitals throughout seven states, which absorbed St. Joseph in 2016, bringing Hoag together with it.


Editors observe: This story was produced by KHN (Kaiser Well being Information), a nationwide newsroom that gives in-depth protection of well being points and that is likely one of the three main working applications at KFF (Kaiser Household Basis). KHN is the writer of California Healthline, an editorially impartial service of the California Health Care Foundation.


In a lawsuit filed in Orange County Superior Courtroom final Might, Hoag argues that remaining a “captive affiliate” of the nation’s 10th-largest well being system, headquartered almost 1,200 miles away in Washington state, constrains its means to satisfy the wants of the native inhabitants.

Hoag docs say that Windfall’s drive to standardize therapy choices throughout its chain — largely by means of a shared Epic digital information system — typically conflicts with their very own judgment of greatest medical practices. And so they recoil towards restrictions on reproductive care they are saying Windfall illegally imposes on them by means of its adherence to the Catholic health directives established by the US Convention of Catholic Bishops.

“Their massive widespread system could be very completely different than the laser focus Hoag has on caring for its group,” mentioned Hoag CEO Robert Braithwaite. “When Hoag wanted pace and agility, we obtained insufficient responses or insurance policies that had been simply mistaken for us. We discovered ourselves annoyed with an enormous well being system that had a generic strategy to well being care.”

Windfall insists it desires to stick with Hoag, a monetary powerhouse — whilst the 2 sides interact in secret settlement talks that might finish the wedding.

“We imagine we’re higher collectively,” mentioned Erik Wexler, president of Windfall South, which incorporates the group’s operations in California, Texas and New Mexico. “One of the simplest ways to try this is to collaborate,” He cited joint investments in Hoag Orthopedic Institute and in Be Well OC, a form of psychological well being collaborative, as fruits of the affiliation.

“If we’re separate,” Wexler added, “there’s a likelihood we could start to cannibalize one another and drive the price of care up.” 

Analysis over the previous a number of years, nonetheless, has proven that it’s the consolidation of hospitals into fewer and bigger teams, with larger bargaining clout, that tends to raise medical prices — typically with little improvement within the high quality of care.

“Mergers are a self-centered pursuit of stability by hospitals and hospital methods that hope to get so large that they’ll survive the anarchy of U.S. well being care,” mentioned Alan Sager, a professor at Boston College’s College of Public Well being.

Wexler argued that value will increase linked to consolidation are much less of a fear in Orange County, geographically small however densely populated with 3.2 million residents and 28 acute care hospitals. Given the proximity of so many hospitals, Wexler mentioned, counterproductive duplication of medical companies is extra of a priority. 



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