Southern California community hospital seeks approval to join Keck Medicine by Q2 2022

Methodist Hospital of Southern California hopes to bring its 348-bed facility into the university-based medical system, which already runs two acute care hospitals, a community hospital and more than 40 outpatient facilities. (Ricardo Carrasco III)

Methodist Hospital of Southern California is moving forward with plans to join Keck Medicine of USC, the University of Southern California-based medical system, as the two organizations announced this week they have submitted formal written notice of the deal to California’s attorney general for review and approval.

The potential partners said they have been discussing a potential affiliation over the last 18 months, having signed a letter of intent regarding the deal in March.

Methodist Hospital’s board of directors had instructed its management to begin evaluating such arrangements in mid-2018 to ensure the hospital could sustain its services over the coming years, according to the notice. The providers expect their deal to close during the second quarter of 2022.

“We are delighted to take this significant step forward with our colleagues at Methodist Hospital,” Keck Medicine CEO Rod Hanners said in a statement. “We are eager to bring the strengths of our organizations together to better meet the evolving needs of our patients and the community for many years to come.”

Arcadia, California-based Methodist Hospital is a 348-bed community facility providing services across cardiovascular, obstetrics, gynecology, orthopedics, neurosurgery and other specialties.

The hospital admits over 16,000 patients and sees up to 50,000 emergency department patients each year. It staffs more than 700 physicians.

Should the deal receive the regulatory green light, Methodist Hospital would be rebranded as USC Arcadia Hospital.

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“Our discussions over the last 18 months have given us full confidence that we will operate more strongly together,” Dan Ausman, president and CEO of Methodist Hospital, said in a statement. “We remain wholly committed to the San Gabriel Valley community and plan to expand residents’ access to highly specialized care in the years to come.”

Keck Medicine of USC is a university-based medical system comprised of two acute care hospitals, a community hospital, over 40 outpatient facilities and a medical faculty practice. It serves patients across Los Angeles and other Southern California counties.

“We look forward to welcoming USC Arcadia Hospital to our health system,” said Carol L. Folt, president of USC, in a statement. “This new affiliation will bring our medical enterprise to the San Gabriel Valley while welcoming outstanding doctors, nurses and administrative staff to the Trojan family. As one united team, we will be able to deliver groundbreaking treatments and compassionate care more broadly in the region—and improve health and well-being for even more individuals.”

The organizations told California Attorney General Rob Bonta’s office that there are no plans to change current hospital staffing, medical staff composition, community benefit programs or clinical departments or services.

Nonprofit healthcare providers such as Methodist Hospital and Keck Medicine are required to provide notice and obtain the written consent of the state’s attorney general before entering any agreement that transfers control, responsibility or governance of one organization to another.

Bonta has recently demonstrated his concern over provider consolidation. Earlier this month, he led a coalition of 25 attorneys general across state lines to weigh in on an antitrust case centered around New Jersey’s Hackensack Meridian Health and Englewood Health.