MemorialCare, UCI Enter Affiliation

Two of the most influential hospital operators in Orange County have entered into an affiliation expected to expand services to medically underserved areas and expand the region's options for specialty care.

While the affiliation between UC Irvine Medical Center in Orange and Fountain Valley-based MemorialCare Health System is not a merger, officials noted it would enlarge both entity’s provider networks.

Although only two of MemorialCare's hospitals are in Orange County – Orange Coast Memorial Medical Center in Laguna Hills and Saddleback Memorial Medical Center San Clemente –they are far enough from UCI that they can bring it a significant geographic reach.

Officials said MemorialCare and UCI would work first on building several primary care centers located in areas that are medically underserved, with the hope of also keeping UCI's medical school graduates in the region. 

However, they also indicated that the provider networks of UCI and MemorialCare would be blended together and used to attract payers looking to offer both broad and tailored insurance products.

Eric Themm, senior vice president with MDS, a healthcare consulting firm with offices in both Los Angeles and Orange County, said the move was being made to counter a recent affiliation between Hoag Memorial Hospital in Newport Beach and St. Joseph Health System. According to Themm, Hoag and St. Joseph's now command about 30% of the region's market share. Their move has prompted UCI and MemorialCare to seek expansion opportunities without leaving the region.

“Strategic alliances of this kind are crucial for hospitals to respond to the imperatives of healthcare reform and remain financially viable,” Themm said.