Lodi Memorial Hospital Will Receive $100M in Affiliation With Adventist Health

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Sacramento Business Journal has reported that Lodi Memorial Hospital in San Joaquin County, California, voted to complete an affiliation with Adventist Health, a Seventh-day Adventist, not-for-profit integrated health care system serving communities in California, Hawaii, Oregon and Washington. Members of the Lodi Memorial Hospital Association voted 189 to 14 to move forward with plans to affiliate with Roseville-based Adventist Health.

On August 28, Adventist Health and Lodi Memorial issued concurrent press releases announcing their intent to join together.

"We are excited about partnering with Adventist Health to maintain high quality, community-focused health care," said Lodi Memorial Hospital Association Board Chair Steven Crabtree in the release. "Adventist Health's mission-driven culture and values are very similar to ours and truly resonated with board, physicians and staff members. Adventist Health brings the financial and operational resources that will help ensure a strong local hospital for Lodi into the future."

Adventist Health owns and operates nineteen hospitals, more than 230 clinics (hospital-based, rural health and physician clinics), 14 home care agencies, seven hospice agencies and four joint-venture retirement centers.

Lodi Memorial Hospital (rebranded "Lodi Health" in 2013) is a private, nonprofit organization that operates fifteen medical practices, several outpatient services and centers, and adult day care center and a child care center.

The affiliation, a deal two years in the making, will expand Adventist Health's influence in San Joaquin County, and will provide needed cash to Lodi Memorial for medical technology and compliance with state regulations. Sacramento Business Journal reported that while the terms of the agreement have not been made public, Adventist Health has committed at least $100 million to help the hospital adapt to changes that have come with the Affordable Care Act, to implement leading edge electronic medical record system technology, and to bring the facility into compliance with California's stringent seismic safety regulations.

The San Andreas Fault, one of the longest and most active fault lines in the world, runs near San Joaquin County where Lodi Memorial Hospital is located. The San Joaquin County website states that the last major ground rupture of the San Andreas Fault in the Bay Area occurred in 1906 and induced strong seismic shaking in San Joaquin County.

In the California Office of Statewide Health Planning and Development (OSHPD) 2014 list of seismic compliance ratings for Acute Care Hospital Buildings, which provides Structural Performance Category (SPC) ratings of California hospitals, two buildings on the Lodi Memorial campus received an SPC 2 rating. OSHPD defines SPC 2 buildings this way:

Buildings in compliance with the pre-1973 California Building Standards Code or other applicable standards, but not in compliance with the structural provisions of the Alquist Hospital Facilities Seismic Safety Act. These buildings do not significantly jeopardize life, but may not be repairable or functional following strong ground motion. These buildings must be brought into compliance with the structural provisions of the Alquist Hospital Facilities Seismic Safety Act, its regulations or its retrofit provisions by January 1, 2030, or be removed from acute care service.

A Lodi Memorial Hospital West facility received an SPC 2 rating as well.

The pricetag for bringing the facilities into compliance with seismic regulation and other costs made the merger a necessity for Lodi Health. "After a lengthy review of our services, operating costs, debts and the mandates required by the Affordable Care Act, we recognized the need to join with a larger organization," Lodi Memorial Hospital Association chair Steve Crabtree said in a press release.

The affiliation could become official as early as Spring of 2015, pending approval from California Attorney General Kamala Harris. Adventist Health intends to retain senior leaders, existing medical staff and employees at Lodi Health, according to Adventist Health president and CEO Scott Reiner. All key clinical services will continue.

 

Jared Wright is managing editor for SpectrumMagazine.org.