Catholic providers Providence Health & Services and St. Joseph Health System have moved closer to creating a new, single organization that will operate 43 hospitals in six states.
The not-for-profit systems announced Wednesday that they had signed a definitive agreement to create a new parent organization called Providence St. Joseph Health. As a part of the deal, the parent organization would oversee both systems, but neither organization will buy the other or have control over the other, and no money or assets will change hands, according to Providence spokeswoman Colleen Wadden.
The parent organization will be led by current Providence CEO Dr. Rod Hochman and will have a board of seven members appointed by each party to the deal. Additional leadership will be named closer to when the deal closes, Wadden said.
Renton, Wash.-based Providence, which owns 27 hospitals in Washington, Oregon, California, Alaska and Montana, is one of the largest not-for-profit systems in the country. St. Joseph's network includes 16 hospitals across California and Texas, including affiliates. The parent organization will have offices in both Renton and Irvine.
“A guiding principle has been to create a new system based upon equality of interest and shared values,” Wadden said. There are no immediate plans to alter the systems' individual brands after the merger, she said, and any of Providence and St. Joseph's affiliates would maintain their respective identities.
The partnership is still pending regulatory approval from the California attorney general's office, but officials hope that process will be complete next year.
Providence recently announced a deal to lease space from Deerfield, Ill.-based Walgreens Boots Alliance so that it can operate its own healthcare clinics in Walgreens drugstores in Oregon and Washington state. Earlier this month, the system reported better-than-expected operating results in the first nine months of the fiscal year, thanks to higher patient volume and increased Medicaid payments.
