When St. Joseph Health and Providence Health & Services came together in the summer of 2016 to create Providence St. Joseph Health (PSJH), the new legal affairs department was faced with a truly daunting task. It was one of the largest healthcare transactions the California Attorney General’s office had ever reviewed. It included 50 hospitals, 829 clinics, and a comprehensive range of additional services across seven states. Complicating matters further, technically speaking, the parties weren’t calling it a “merger.” Instead, they regarded it as a combination of two equal and highly successful organizations.
According to Jim Watson, senior vice president and deputy general counsel, that created both challenges and opportunities. To begin with, the legal team had to help develop an explanation for why the transaction was taking place at all. That led to developing a list of more than twenty aspirational goals that were incorporated into the formal regulatory process, and which had to be duplicated for each of the thirteen California-based hospitals and additional facilities in the other six states. The goals were also added to 385 pages of conditions that the Attorney General’s office placed on the transaction.
“Developing the aspirational goals was a huge undertaking, but once they became part of the official public record, they gave us tangible markers against which to measure and share our accomplishments in the future,” Watson says. “They also helped clarify our vision for the new organization.”
The sheer scope and volume of complying with the various regulatory processes also created the opportunity for—or, perhaps, demanded that—the three legacy legal offices in Irvine, California; Renton, Washington; and Portland, Oregon cooperate and collaborate. The formerly discrete in-house teams varied in their numbers, areas of expertise, and depth of integration with functional and business strategy. However, they helped make the transaction successful by uniting to form a comprehensive unit that tapped the strengths they were each able to provide.
Once the consolidation was officially approved, legal affairs set about integrating its systems, but, otherwise, maintained the status quo. Watson describes it as tending to the needs of others before looking inward.
“Legal is one of those functions that people start calling immediately to make sure everything stays up and running,” he says. “Before we started establishing a new operating model and reorganizing the department, we needed to be sure we were able to help keep the lights on for everyone else.”
Now that the dust has settled, legal affairs has set about transforming the department into an integrated team, uniquely qualified to provide PSJH with high-quality, innovative legal services, strategic advice, and mission-focused leadership.
“We want our lawyers to be part of conversations right from the beginning to help craft strategy and to better understand all the elements that impact the mission,” Watson says. “That will ultimately help us more clearly define how we can contribute valued, strategic, and practical counsel in the traditional legal sense, but also as leaders within our ministry.”
To achieve those objectives, the legal department is adopting an approach of solve, shape, and strategize. Watson points out that this will enable staff to address day-to-day issues, contribute value at operational levels, and be part of conceptualizing longer-term goals.
“PSJH lawyers and legal professionals need to be able to look at every issue and feel empowered to ask the right questions and influence decisions,” he says. “That will help us to have a deeper knowledge of our needs, enable us to provide creative solutions, and anticipate future needs.”
Watson began as an administrative assistant with St. Joseph’s in 1996, so he has been part of the organization in many different functions and witnessed many different organizational perspectives. Leveraging that experience, he believes the new legal department can be most effective by ensuring that it is exceptionally knowledgeable of its ministry and industry, develops collaborative relationships with its leaders, and deepens comprehensive expertise in current and emerging areas of the law.
“From the many vantage points I’ve been able to experience, the legal department’s continuous improvement has helped us remain focused on providing high-quality services while expanding our strategic value to all the different aspects of the industry and our mission,” Watson says.
In one such instance, a senior attorney recently reviewed growth opportunity evaluation approaches that differed between the legacy organizations. This involved partnering with leadership and staff at operational levels to understand the desired new approach, how to best implement it, as well as analyzing how it fit within regulatory and mission frameworks. Ultimately, the appropriate legal advice helped clarify a fresh strategy that was understood and accepted by everyone involved. This has cleared the way for several opportunities to provide excellent service and value for PSJH patients and communities.
One of the benefits the new PSJH legal affairs department provides is an exponentially heightened degree of trust, experience, and expertise. Watson describes it as a whole that is greater than the sum of its parts.
For example, if an issue arises at a facility in Lubbock, Texas, there is a good chance that someone in California, Oregon, or Washington has seen it before and can offer their insight. As the former legacy offices continue to unify, leveraging that system-wide perspective is an ongoing priority.
In addition to seeing staff from across the organization turn to the legal department as a trusted resource, Watson has also seen the department itself become more cohesive. As PSJH began implementing its earliest strategies as a new ministry, lawyers marshaled their knowledge and insights to deliver strategic value while considering new growth opportunities in Los Angeles and Orange County. They brought in counterparts from labor and employment, regulatory, and transactional groups, as well as experts from other functional areas within the organization to provide additional perspectives on the most advantageous ways to proceed.
“In the past, we might have been more fragmented in our approach,” Watson says. “Now we’re able to start with our regional lead or specialist and then look across the entire system to coordinate and bring together internal services from a variety of legal areas.”
PSJH’s legal affairs department will be preparing for a great many new possibilities—everything from operational enhancements for delivering outstanding affordable healthcare, to an influx of innovations to transform care and improve health outcomes, to diversifying and growing in areas beyond acute care.
“No matter what changes come our way, we want the legal department to be part of the team anticipating needs and devising the creative solutions,” Watson says. “As long as we’re an active partner at every stage, we can offer better advice that benefits every corner of the ministry.”
