News Release

In Wake of COVID-19 Pandemic, New Study Highlights Benefits of Hospital, Health System Partnerships to Patients, Communities

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SACRAMENTO (October 27, 2021) — In the wake of the COVID-19 pandemic and other “transformative forces” reshaping the delivery of health care, a new report by the national consulting firm Kaufman Hall sheds light on the importance and value of hospital and health system partnerships in protecting access and improving the quality of patient care in communities across California.

The report features several California case studies highlighting the benefits of these partnerships to patients and communities — including the recent affiliation between Mendocino Coast District Hospital (a small hospital on the northern California coast) and Adventist Health, a multi-state health care system based in Roseville with expertise in operating small, rural hospitals. As the report states, the Mendocino facility was facing a “rocky financial future” until 92% of local voters approved the partnership with Adventist Health in March 2020. As a result, Mendocino residents now have access to 32 newly recruited physicians in such specialties as orthopedics, gastrointestinal care, and cardiac services. And they no longer must drive up to 70 miles on winding mountain roads to get the care they need.

According to the report, which was prepared by Kaufman Hall at the request of the California Hospital Association, partnerships will be “an essential tool” for many health care organizations as they attempt to survive the devastating, long-term financial and workforce impacts of the pandemic. California hospitals lost more than $8 billion in 2020 due to the pandemic, even after receiving federal financial support through the CARES Act. Additionally, hospitals in the Golden State are expected to lose up to $2 billion this year, with operating margins projected to decline between 19% and 65% in 2021, all because of COVID-19.

“In many parts of California — especially rural areas and low-income communities — access to health care services is at risk,” said Carmela Coyle, President & CEO of the California Hospital Association. “Partnering with others to deliver care can provide the financial stability many at-risk hospitals need to continue providing 24/7 patient care services to their communities. Many financially struggling hospitals are only open today because they have partnered with integrated health systems.”

The report notes that 72% of community hospitals in California have partnered with larger health care systems (nationally, 67% of community hospitals are part of integrated systems). In addition to the pandemic, the forces driving integration include changing demographics, innovations in care delivery, and the emergence of non-traditional providers that influence how and where consumers receive care.

The ability to manage scarce resources amid a public health crisis is another benefit of hospital system partnerships. Integrated systems have been able to seamlessly shift supplies and staffing to harder hit areas throughout the pandemic. And, in an example cited in the Kaufman Hall report, hospitals that integrated with academic medical centers have been able to participate in treatment and vaccine trials and have had access to the latest care protocols in caring for COVID-19 patients.

“Hospital partnerships can take many forms, but one thing is clear,” Coyle said. “The ability of hospitals and other providers to work together more closely brings many benefits to patients and communities. Patients who need specialized care can get it closer to home. Hospitals that might otherwise be forced to scale back or close altogether may be able to continue caring for their communities. And during a public health crisis, the support hospitals receive from being part of a larger system is saving lives.”