California DOJ rejects proposed merger between Adventist Health and St. Joseph Health Systems

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California Department of Justice--Office of the Attorney General

The California Department of Justice (DOJ) announced its decision denying the proposed partnership between Adventist Health System/West and St. Joseph Health System.

In June 2018, Adventist Health and St. Joseph Health requested the California DOJ to approve their proposal to create a joint operating company called ST Network.

Under the proposal, ST Network will have the authority to manage both health systems’ facilities in Humboldt, Lake, Mendocino, Napa, Solano, and Sonoma Counties.

Adventist Health and St. Joseph Health claimed that the proposed merger will help improve access to quality healthcare across Northern California particularly for those vulnerable and underserved populations.

California DOJ believes proposed merger is not in the public interest

The California DOJ considered the state’s law and regulations as well as the feedback of the public in reviewing the proposal. The department rejected the transaction due to concerns that it is not in the public interest and the possibility that it will increase health care costs. People are also concerned that the proposed merger will likely limit the access and availability of health care services.

In a statement, the Chief Deputy to Attorney General Xavier Becerra, Sean McCluskie, explained, “The California Department of Justice is responsible for ensuring that any proposed sale or transfer of a non-profit health facility protects the health and safety interests of the surrounding community. After careful review we found this proposal falls short of protecting consumers.”

In response to the California DOJ’s decision, both Adventist Health and St. Joseph Health expressed disappointment.

The organizations stated that they are “very disappointed in the outcome of this decision. Our intent has always been to better serve our communities, increase access to services, and create a stronger safety net for families in Northern California.

“At this time, our organizations will need to take a step back and determine implications of this decision. The well-being of our communities remains our top priority,” added Adventist Health and St. Joseph Health in a statement.