In a letter dated Oct. 31, the California Department of Justice, located within the California Attorney General’s Office, denied the proposed partnership between Adventist Health System/West and St. Joseph Health System.
“Both Adventist Health and St. Joseph Health are 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,” according to a statement from both health systems issued to Lake County News.
Adventist Health and St. Joseph Health had announced their plans to form the new joint operating company in April 2018, as Lake County News has reported.
The new company was to be called ST Network LLC, with the “ST” standing for “Sacred Trust,” David Santos, president and chief executive officer of Adventist Health Clear Lake, told Lake County News in an interview last year.
ST Network LLC was to manage and have authority over each health system’s facilities in Humboldt, Lake, Mendocino, Napa, Solano and Sonoma counties, including Queen of the Valley Medical Center, Redwood Memorial Hospital, Santa Rosa Memorial Hospital, St. Joseph Hospital-Eureka, Petaluma Valley Hospital, Adventist Health Clear Lake Hospital, Adventist Health St. Helena, Adventist Health Ukiah Valley, Adventist Health Howard Memorial and St. Helena Hospital.
While the ST Network was to have operated the facilities, Santos said it was not the intention for the company to own them.
Santos said in the 2018 interview that there was a “natural connection” between the two health care companies, which have similar missions, and that it would not have been the largest network in California.
He said it also positioned the systems to be able to recruit providers and to be able to compete. “Health care is a business like everything else.”
Santos said the goal was to offer Lake County patients easier access to care, give providers better access to electronic medical records, increase standardization of care, offer more options for care through a larger network of doctors and better overall quality health care.
The California Department of Justice reported that is responsible for the general supervision of all charitable organizations in the state.
The two health systems had submitted notices to the California Department of Justice on June 7, 2018, that requested approval to form the new joint operating company.
The Department of Justice said the proposal “claimed that the merger of the two systems would help improve access to quality healthcare throughout the Northern California region, with an emphasis on vulnerable and underserved populations.”
After considering California law and regulations, as well as feedback from the public, The Department of Justice said it denied the transaction “due to concerns that it is not in the public interest, has the potential to increase health costs, and potentially limits access and availability of health care services.”
“The California Department of Justice is responsible for ensuring that any proposed sale or transfer of a non-profit health facility protects the health and safety interests of the surrounding community. After careful review we found this proposal falls short of protecting consumers,” said Chief Deputy to the Attorney General Sean McCluskie.
“At this time, our organizations will need to take a step back and determine implications of this decision,” Adventist Health and St. Joseph Health said in their joint statement. “The well-being
of our communities remains our top priority.”
Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow her on Twitter, @ERLarson, or Lake County News, @LakeCoNews.
103119 Denial of proposed transaction between Adventist Health and St. Joseph Health by LakeCoNews on Scribd