Hoag CEO on Providence St. Joseph Lawsuit: "We Can Move a lot Faster"

Robert Braithwaite said Hoag wants to focus on independently serving their communities in Orange County through population health strategies.

Last month, Erik Wexler, president and CEO of Providence Southern California, spoke with HealthLeaders about the organization's perspective regarding Hoag's lawsuit against Providence.

Following publication of that interview, Robert Braithwaite, the president and CEO of Hoag Memorial Hospital Presbyterian, also spoke with HealthLeaders about their side of the story.

In 2012, Orange county-based Hoag joined Irvine-based St. Joseph Health.

"The simple nature of that relationship was based on the premise that we would bring together the two organizations and that we would basically serve Orange County through a population health strategy," Braithwaite told HealthLeaders. "The first couple of years were challenging, but nonetheless, everyone was very committed to working through those challenges, and serving Orange County."

Then in 2016, St. Joseph merged with Providence Health, based in Renton, Washington, to create Providence Saint Joseph Health.

"We were trying to focus on Orange County. That was who we serve and who we were serving with St. Joseph's. [Providence has] more of a western states, national-type vision and orientation,” he said. “And what we clearly saw was a lot more decision making started moving farther and farther away from Orange County, and so our challenges grew in many ways."

Since Hoag was not achieving the vision they had when they originally joined with St. Joseph Health, Braithwaite said they wondered if the relationship was the right thing for Hoag and Orange County.

"In June of 2019, we met with the senior officers at Providence and shared with them that after a few months of an analyzing this and assessing the relationship, we'd concluded that it wasn't working," Braithwaite said. "While we wanted to have a relationship with them, we wanted a different type of relationship because this structure was not working."

Braithwaite said this was the first formal conversation Hoag had with Providence about the partnership.

"We laid out three alternatives in that meeting to restructure the relationship with them. All of which did not have Hoag as a subsidiary organization of Providence,” he said. “We shared with them our rationale, and our reasons, and these alternative structures, and they asked for a little bit of time to think about the request."

Providence and Hoag met in October to discuss, but failed to come to an agreement. After a few more formal attempts and conversations, including a mediated discussion, the organizations couldn't come to an agreement.

"We've tried hard, we've suggested alternatives," Braithwaite said.

In May, Hoag filed a lawsuit to dissolve their affiliation with Providence Saint Joseph.

When asked if the two organizations have been in communication with each other, Braithwaite said they are collaborating where they can, but there's “no formal negotiation going on."

A remote demurrer hearing was originally scheduled for November 16 to see if there is sufficient evidence to move forward with Hoag's affiliation lawsuit, but it has been rescheduled to February 1 by the court.

WORKING THROUGH THE PANDEMIC

Through the ongoing lawsuit, the organizations have focused on serving their respective communities. There has been help offered and PPE shared, but Braithwaite said his organization found the pandemic to be "a good example for the community of why Hoag needs to be independent.”

"What we saw, and what we experienced for our community, [is] we can move a lot faster. Things at that time were changing almost daily as we were hearing new developments coming from the CDC and policymakers,” he said. “It brought home to all of the stakeholders and Hoag that we can move a lot faster for the community than we could [as part of Providence St. Joseph]."

Braithwaite continued: "When you're a part of a large system, governance structure, at least in this case, that is remote, it's far away. Policies are being made in many cases during that pandemic 2,000 miles away, and they're not necessarily conducive to what a local community might be experiencing or might be needing."

In times when Hoag could make decisions on their own, Braithwaite said the organization performed “really well during the pandemic, exceptionally well from a clinical perspective, but also from a community needs perspective."

PROVIDING POPULATION HEALTH IN ORANGE COUNTY

Hoag's mission statement is to “provide the highest quality health care services to the communities we serve."

"We've had many opportunities to go into neighboring counties, or in a couple cases, out of the state. And we have said 'no, that's not our mission.' Our mission and purpose for existence as a nonprofit is to take care of this community," Braithwaite said. "We've never had that ambition to be a national health system or a statewide health system."

Braithwaite said Hoag hopes to keep its focus on the 3.2 million people in Orange County, and to serve through population health strategies.

"Historically, people have said in the healthcare industry, 'we need good healthcare,' but they're usually referring to 'I need an emergency department, I need good cancer services, I need good cardiac services," he said. "And in the pandemic, people needed that … and we saw lots of evidence where they didn't have access to it."

Braithwaite continued: "The premise for population health came out loud and clear during the pandemic.”

ADVICE ON M&AS

Braithwaite said he agrees with Wexler’s comments to HealthLeaders about the importance of a culture fit during M&A discussions.

"That's really important culture assessments are important,” he said. “They need to be in depth, they need to be thoughtfully and carefully done."

He also said he agrees on the need for exit clauses in agreements. "I'll put a punctuation mark on that. Leaders need to be very thoughtful about those exit clauses," Braithwaite said.

"Those exit clauses need to be built around making sure that they are structured in a way when the community needs change or are different and they need something from their health care organization, you can move out, if it's for the need of the community,” he said. “That's a really important one from my perspective.