Hoag Seeks Independence from Providence After Its Hospital Merger

Hoag Memorial Hospital Presbyterian is seeking to cut ties with Providence Health nearly four years after the Renton, Washington-based health system merged with an organization with which Hoag was affiliated.

Hoag, a two-hospital system based in Newport Beach, California, announced in the May 4 statement that it has filed litigation against Providence Health in order to reclaim its independence from an affiliation with St. Joseph Health dating back to 2012. Providence Health merged with Irvine, California-based St. Joseph Health in July 2016.

Providence Health currently has 51 hospitals and 829 physician clinics in seven Western states.

“Under the existing affiliation, Hoag's mission and legacy are at risk of being diluted within a large national hospital system,” Robert T. Braithwaite, president and chief executive officer of Hoag, said in the statement. “We must be able to maintain Hoag's unique character and role as Orange County's most trusted health care network, as well as keep local control of community assets.”

Hoag has been trying to collaborate with Providence Health on specific initiatives, but the health systems have made no process on “realigning the relationship” after nearly a year of attempted negotiations on Hoag’s part, Braithwaite stated.

“The current structure of our relationship with Providence, we believe, is not in the best interest of our patients, the community, our physicians and team members,” he explained. “As a result, Hoag's Founders took legal action, we had hoped to avoid, to dissolve the affiliation, which all parties have agreed did not fulfill the measure of its creation."

Hoag explained that its affiliation with St. Joseph Health in 2012 was meant to transform healthcare delivery in Orange County, California. However, the health system maintained in the statement that those plans never materialized and St. Joseph Health had since been acquired by Providence Health.

The health system is hoping that by dissolving the affiliation with Providence Health it can “restore local control of health care decisions in Orange County and free them of the current constraints on care arising out of the affiliation with Providence.”

But the timing of the lawsuit is coming at a bad time for the community, according to Providence Health.

“Now, at a time when all hospitals and health systems are battling the COVID-19 pandemic, the Hoag leaders took legal action to sever its relationship with Providence for reasons that remain unclear,” said a statement from the health system. “Our relationship has been strong since 2012. The Hoag leaders’ so-called ‘realignment’ plan would negatively impact patient care, diminish resources and medical expertise available to Orange County.”

“It could undo nearly a decade’s worth of enhanced access to high quality, dependable, affordable, and compassionate care to the communities we serve, especially to our most vulnerable members,” the statement continued.

But Hoag contended that the COVID-19 pandemic actually spurred system leaders to take legal action against Providence Health.

"While we have tried to negotiate a realignment of our affiliation with Providence Health for more than a year, the COVID-19 pandemic underscored our need for independence," George Wood, Hoag board of directors chair, said in the organization’s statement. "We are deeply grateful to Hoag's physicians and staff for their work over the last few months as they have been on the frontlines. Our community has counted on them during this time and we need to make sure we can fulfill our promise to Orange County."

Hoag concluded that the lawsuit would have no impact on patients, who will be able to access services as normal.