Hoag Hospital is joining with St. Joseph Health to coordinate care among patients.
Combined, they will provide about one-third of the county's health care, hospital officials said Wednesday.
As health costs continue to rise and the insurance industry changes, the two organizations sought ways to save costs and treat patients differently. Their affiliation is not a merger, the officials said, because there will be no transfers of assets. The say they came together because of a shared vision.
"We were both so dismayed at the lack of a coordinated care system in the county," said Deborah Proctor, St. Joseph president and chief executive.
She and Dr. Richard Afable, Hoag president and CEO, said that the two organizations would retain their own identities for now.
"Hoag will continue to be Hoag," said Afable, who compared the affiliation to a "marriage."
A Hoag patient would be able to access his or her chart at any St. Joseph facility. The executives said they would not likely build any new facilities, but would create new communications systems and other ways to align services.
They plan to focus on the new care model of "population health management." In that model, providers treat a specific population — such as people from a major employer. Employers, they said, are increasingly buying care from networks of providers, and this would position the combined organizations to appeal more to regional companies.
Other populations could be those who share a disease, Medicare recipients or patients from a certain zip code.
An example they gave is diabetes patients. Instead of staffing a hospital to treat serious outcomes like blindness, the two hospitals would staff training centers where patients could learn about how to deal with diabetes and prevent the worst consequences. Essentially, they are moving away from the hospital-based model.
They plan to coordinate in-workplace treatment, share outpatient facilities, and may develop a program to provide intensive care in patients' homes.
"Each of us could have created that program in the past, but we would be duplicating the program," Proctor said. "We can no longer afford that in the county."
To save costs, Afable said they may consolidate some back-office jobs, but not any clinical positions.
Hoag has two acute-care hospitals, seven health centers and five urgent care centers throughout Orange County, including its original hospital and headquarters in Newport Beach. St. Joseph Health's four Southern California hospitals are Mission Hospital in Mission Viejo and Laguna Beach, St. Mary Medical Center in Apple Valley, St. Joseph Hospital in Orange, andSt. Jude MedicalCenter in Fullerton.
The organizations would retain their religious affiliations — St. Joseph Catholic and Hoag Presbyterian.
They hope to close the deal in 2013. Already, their boards of directors have signed a letter of intent.
This new combined entity, the executives said, could also join with additional health care organizations.