Federal Health Care Law Spurring Hospital Affiliation in California

The Los Angeles Times reports that the national consolidation of hospitals spurred by the Affordable Care Act is continuing in Southern California, as St. Joseph Health System and Hoag Memorial Hospital Presbyterian have agreed on an affiliation among seven of their hospitals, which ultimately requires the approval of the California Attorney General. The story announces not a merger, but the formation of a new holding company “to better integrate medical care and to eliminate duplicative services.” The Catholic St. Joseph hospitals and the Presbyterian Hoag Memorial hospitals reportedly “will retain their separate faith-based identities.” Implying that the cost-saving affiliation is in part a response to funding cuts under the new health care law, the Times cites the California Hospital Association’s estimate “that hospitals statewide face $17 billion in federal cuts over 10 years under the Affordable Care Act.”  

JRB