California Attorney General Approves Merger of Rady Children’s Hospital and Children’s Hospital of Orange County
California Attorney General Rob Bonta has approved the merger of Rady Children’s Hospital and Children’s Hospital of Orange County, clearing the way for the pair to operate jointly under the name Rady Children’s Health.
Conditions of the Merger
The merger requires approval from the state’s top lawyer and law enforcement official, and that sign-off comes with 24 conditions whose details and specifications fill a 24-page document released in final form by the AG this week.
Many of those conditions nail down technical details, requiring continued pursuit of matters — such as hospital licensure and Medi-Cal participation — that both organizations could not reasonably change without significant turmoil. But others, such as specifying the minimum amount of charity care that must be provided to the communities that the hospitals serve over the 10 years, appear designed to make sure that the merged organization remains true to the mission of serving all residents in San Diego and Orange counties, not just those with excellent medical coverage.
Community Benefits and Charity Care
The joint organization is required to spend at least $147 million in “community benefit services” per year with annual increases of that baseline set at 3.55 percent for Rady and 4 percent for CHOC’s hospitals in Orange and Mission Viejo. That amount includes a total of $20 million in annual charity care, defined as medical care costs for which the organizations were not reimbursed.
All organizations are required to maintain financial assistance policies that are “no less favorable” than those currently employed at Rady Children’s for the next 10 years.
Long-term Investments and Services
Long-term investments in both organizations’ physical plants is also spelled out, including $711 million and $571 million expenditures for new medical towers at CHOC hospitals and $1.6 billion for a new tower and “enabling projects,” now breaking ground on the northern edge of Rady’s Serra Mesa campus. An additional $175 million is specified for a new Rady mental health services building.
The agreement also specifies how many beds must continue to exist at each of the three hospitals involved in the merger, including intensive care, intensive care newborn nursery, general acute care, and acute psychiatry and skilled nursing. The language services that must be made available to patients and their families are also spelled out, specifying a language hotline with financial assistance program documents required to be made available in “English, Spanish, Arabic, Vietnamese, Tagalog, Somali, Farsi, Korean and Mandarin.”
Medical Specialties and More
A list of 36 medical specialties, from allergy and immunology to urology, are also listed as existing services that must be maintained for the next 10 years. Any “suspension, relocation or diversion” of this core set requires prior attorney general approval.
Conclusion
The merger of Rady Children’s Hospital and Children’s Hospital of Orange County is a significant step forward for the two organizations, allowing them to operate jointly under the name Rady Children’s Health. The conditions of the merger ensure that the merged organization remains true to its mission of serving all residents in San Diego and Orange counties, not just those with excellent medical coverage.
FAQs
Q: What is the name of the merged organization?
A: The merged organization will operate under the name Rady Children’s Health.
Q: What are the conditions of the merger?
A: The merger requires approval from the state’s top lawyer and law enforcement official, and that sign-off comes with 24 conditions whose details and specifications fill a 24-page document released in final form by the AG this week.
Q: What is the minimum amount of charity care that must be provided to the communities that the hospitals serve?
A: The joint organization is required to spend at least $20 million in annual charity care, defined as medical care costs for which the organizations were not reimbursed.
Q: What is the total amount of community benefit services that must be provided per year?
A: The joint organization is required to spend at least $147 million in “community benefit services” per year with annual increases of that baseline set at 3.55 percent for Rady and 4 percent for CHOC’s hospitals in Orange and Mission Viejo.
Q: What are the long-term investments specified in the agreement?
A: The agreement specifies long-term investments in both organizations’ physical plants, including $711 million and $571 million expenditures for new medical towers at CHOC hospitals and $1.6 billion for a new tower and “enabling projects,” now breaking ground on the northern edge of Rady’s Serra Mesa campus. An additional $175 million is specified for a new Rady mental health services building.
