On October 31, 2019, the California Department of Justice (“DOJ”) issued a denial letter rejecting a proposed merger between Adventist Health System/West and St. Joseph Health System. The parties had submitted notices to the DOJ requesting approval to form a joint operating company to manage the health systems’ nine health facilities in Northern California. According to the denial letter, the proposed transaction was rejected because the Attorney General concluded that it was not in the public interest due to concerns related to the potential for higher health costs and for reduced access and availability of health care services.
Next week, we will follow-up this notice with our analysis and commentary regarding the decision, including what the decision says about (i) the DOJ’s current appetite for healthcare mergers and other transformative healthcare transactions in California, and (ii) what lessons can be learned for other healthcare systems and entities who may find themselves in front of the DOJ in the future.