By Nicole Gregory     7/13/2016

A merger between Providence Health and Services, based in Renton, Washington, and St. Joseph Health, based in Irvine, has been approved by the California State Attorney General’s office. The new partnership will now include hospitals in California, Texas, New Mexico, Alaska, Montana, Oregon and Washington; services also include education, housing, clinics and home health.

The goal is to pool resources and expertise in order to create advantages for the many communities the two systems serve.

Similar beginnings, shared values

The two nonprofit Catholic mega-health systems have long shared much in common, including their histories. Both have worked to “extend the healing ministry of Jesus,” for more than 100 years, says Sister Katherine “Kit” Gray, CSJ, director of Mission Integration and Ongoing Formation for Christ Cathedral. “The sponsors of each system—Sisters of Providence and Sisters of St. Joseph of Orange—have a history of pioneering healthcare on the West Coast,” she says.

Five Catholic nuns—Sisters of Providence—traveled from Montreal to the Vancouver area of the Pacific Northwest in 1856, before Washington became a state. Their goal was to help the vulnerable, and they soon opened a home for orphans and elderly people. Today Providence Health and Services serves patients in five states.

The Sisters of St. Joseph also began their work in the West, in 1912, by starting a school in Eureka, California. But they shifted their ministry to healthcare in response to the flu epidemic, and opened their first community hospital in 1920. Today St. Joseph Health encompasses large network of hospitals, freestanding clinics, and hospice care services.

As Catholic institutions, the two groups share similar goals. “We share a similar mission to provide care for all as way to ‘reveal God’s love for all’—Providence language—and a holistic approach to caring for the person and ‘improving the health and quality of life’ within communities—St. Joseph language,” says Sister Kit, who is the former Chair of St. Joseph Health Ministry.

“The two systems articulate values in a similar way,” she adds. “In our 14-month exploration of this combination, we found that we understand and express them in ways that are very similar.”


What will the partnership look like?

The new entity will be called Providence St. Joseph Health, serve in seven states, and employ 100,000 people.

“The relationship with Providence will result in one of the strongest and most influential Catholic healthcare systems in the United States,” says Annette M. Walker, interim president and CEO of St. Joseph Health, “and will allow us to do more for the communities we serve.”

A 385-page document from the California Attorney General’s office detailed requirements for the new partnership—one being that Providence St. Joseph Health will create a three-year, $30 million mental health initiative to address problems such as depression, addiction and homelessness, according to the Orange County Register.

“We want to proceed in the least disruptive way possible,” says Sister Kit. “We anticipate that the current St. Joseph Health facilities and Providence Health and Services organizations will operate as ‘divisions.’” On the other hand, she says, the two systems hope to implement best practices, streamline operations, and conserve resources. As a result, some changes will be necessary.

Since there is no overlap among the communities that the two health care systems serve, the partnership aims to strengthen all services, not reduce them.


Advantages of partnering

“Throughout our months of working together to make this combination a reality, we have talked in terms of one plus one equals three,” explains Sister Kit. “We are bringing together people with great commitment, education, expertise, and vision. These will be put at the service of the people and communities we serve.”

Not to mention that now both groups can pool their expertise. “The two systems have lots to learn from one another,” says Sister Kit. “They have strong reputations for excellent care and great community involvement. Our resources—people, finances, relationships, skills—will be maximized for better care for more people.”

This is already in the works. “During the months that we have been waiting for the Attorney General’s approval, teams of Providence and St. Joseph people have been working in functional teams to identify ways of moving forward as one, coordinated organization focused on meeting the needs of the people and communities we serve,” says Sister Kit. “These teams have fostered relationships, enhanced commitment to this endeavor, and have laid the groundwork for the inevitable change.”


A model for other mergers?

Other groups might do well to watch how the new partnership between St. Joseph Health and Providence Health unfolds. “It is a viable model for other organizations,” says Annette Walker. “Many organizations in the U.S. are combining their resources to address the needs of their communities and the changing healthcare environment. Advanced infrastructure, regulatory overhead and ever-expanding capital demands are taxing many organizations.”

Working together creates the possibility for a stronger, more effective health care system. “Sharing technology, talent, purchasing power, and expanding geographic coverage provide strategic advantages and enable organizations to increase access and affordability to the community,” she says.