Ten years ago, Renton, Wash.-based Providence Health & Services and Irvine, Calif.-based St. Joseph Health combined into a single Catholic health system spanning seven states. Today, Providence operates 51 hospitals and more than 1,000 clinics across Alaska, California, Montana, New Mexico, Oregon, Texas and Washington, with about 119,000 caregivers.
Ali Santore, external affairs officer at Providence, led government affairs for the legacy Providence system during the transaction and was responsible for securing regulatory approval from the California attorney general. She told Becker’s the organizations were not focused on building scale, but rather on what they could accomplish together in the communities they served.
Ms. Santore said Providence and St. Joseph described the deal as a coming together of ministries, even as they became a single organization financially.
“So, it wasn’t about getting bigger for size or scale’s sake,” she said. “It was truly looking at the complementary natures of Providence and St. Joseph Health, and the common cause and calling that we had as faith-based organizations to make a greater impact on the communities that we serve.”
The organizations began by asking how bringing together two faith-based, mission-driven organizations could advance a greater good for the communities they served, Ms. Santore said.
One area of focus was mental health. Across the community health needs assessments for their 51 combined hospitals, mental health ranked first or second in every market, regardless of whether the community was urban or rural, according to Ms. Santore.
The two ministries also had little competitive overlap to resolve. St. Joseph Health was based in California, with a smaller footprint through Covenant Health in Texas and New Mexico, while Providence operated in California and five other states. Ms. Santore said the organizations had complementary geographies and did not view the combination as a play for competitive advantage. Regulatory approval still required more than a dozen community hearings across California under then-Attorney General Kamala Harris.
The organizations did have duplicative or disparate structures to reconcile. They operated different EHRs and had separate management teams, boards and sponsors councils, the governance structure used in Catholic healthcare. Decisions about which EHR to invest in, how governance would be constituted and where the combined headquarters would sit were worked through as part of the integration.
Providence also spent about 18 months developing a mission statement and set of values for the combined organization. The health system held listening sessions with more than 90% of its employee population across seven states before rolling them out, Ms. Santore said. They have not changed since.
“We wanted to ensure that this organization coming together as Providence St. Joseph Health had a mission statement and a set of values that resonated with our caregivers,” Ms. Santore said. “In order to do that, we went to where they were and got their feedback about what is most important to them, and what they identify with from their heritage that we needed to incorporate.”
The work has had to carry forward as Providence’s workforce has changed. Ms. Santore said about 80% or more of the system’s caregivers were not with either organization when they came together.
She pointed to a term she first encountered through St. Joseph Health: sacred encounter. Rooted in the St. Joseph tradition, it refers to treating interactions between clinicians and patients, the ministry and its community, and colleagues as sacred.
“I bet if you ask people across our organization about the term ‘sacred encounter,’ they wouldn’t know that it is a St. Joseph term,” she said. “It is truly part of the shared culture and tradition now, and that has been one of the really exciting things I’ve seen evolve over the last 10 years.”
For health systems considering similar transactions, Ms. Santore said leaders should establish a clear reason for combining and keep it at the center of integration decisions.
“I think an important lesson learned, and something that we did right, is to anchor around the true common calling and understand the ‘why’ of why you are coming together,” she said. “That was really embedded in everything that we did as we had to bring together management teams, governance teams, IT systems and so on.”
She also said integration takes longer than leaders might expect, with complexities continuing to emerge as organizations bring together operations and cultures.
“As complementary as you think any two organizations are, once you start to actually go through the process to merge and affiliate, there are layers upon layers of complexity that need to be addressed with intentionality,” Ms. Santore said.
A decade later, Providence continues to encounter differences that need to be reconciled and nuances between the legacy organizations’ cultures that need to be navigated, she said.
“You can’t say we did the merger and take a victory lap in year one, or year five,” Ms. Santore said. “It is a living, thriving thing that you have built together, and it needs to be nurtured every day and every year going forward.”
The combination has also produced operational changes across the system. Providence completed a single Epic implementation across its 17 California hospitals, which Ms. Santore described as the largest single Epic implementation in the country. The health system also operates a Medicare Shared Savings Program.
“So we came together for this common cause to improve the health of the communities that we serve, and the byproduct is that we have been able to streamline access to care through a single EHR, and to build more efficient systems for delivery of care through our value-based care program,” she said. “I’m really proud of what we have been able to accomplish in 10 years, and we’re not done yet.”
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