Napa’s OLE Health plans to merge with CommuniCare and expand services into Yolo County
OLE Health and CommuniCare Health on Tuesday announced plans to merge, creating one regional nonprofit community health center network serving low-income residents in Napa, Solano and Yolo counties.
The boards of both health care systems on Aug. 10 backed the merger, but final approval will come from the Health Resources and Services Administration, the government agency that oversees federally qualified health centers (FQHCs), according to the announcement. That final legal approval is expected by Jan. 1, 2023.
Alicia Hardy, CEO of OLE Health, told the Business Journal Tuesday she anticipates the combined organization will be able to avoid duplication of some administrative functions, but there will be no job cuts.
“One of our commitments is that we are retaining all of our employees,” she said. “We really want to build on the skills and expertise of both organizations.”
Hardy said she anticipates about $2 million in costs savings over the first couple of years but didn’t go into detail about cost-reduction strategies.
She did say that because the two federally qualified health centers will combine, that will qualify them for higher reimbursements rates, resulting in more revenue.
By merging, OLE and CommuniCare will have 17 sites and serve more than 71,000 patients across Napa, Solano and Yolo counties, according to the organizations. CommuniCare is based in Davis, located mostly in Yolo County but with a portion in Solano County.
OLE Health, founded in 1972, currently serves 40,000 patients each year. OLE has campuses in south and north Napa, and clinics in St. Helena and Calistoga. In Solano County, OLE operates clinics in east and west Fairfield.
CommuniCare offers services at 11 locations across Yolo County, the release stated.
The merger will also broaden the scope of available health care services among the two primary care providers. OLE also offers dental, optometry, behavioral health and clinical pharmacy services. And CommuniCare offers substance-use disorder treatment and runs behavioral health services for Yolo County. Both organizations offer bilingual services.
A new name has not yet been decided, but it will be cobranded because it is a true merger, Hardy said. Legally, however, there can only be one surviving entity, and that will be OLE Health.
Once the merger of the two charitable organizations, known as a 501(c)(3), is approved, Hardy will become CEO of the new organization. Since 2018, she has overseen the Napa-based health care center that also serves Solano County.
Melissa Marshall, CEO of CommuniCare, will become chief strategic adviser to the new organization, the announcement said.
As FQHCs, most patients served by both organizations are on Medi-Cal and live at or below 200% of the federal poverty line. OLE and CommuniCare offer a sliding-fee scale and accept all patients regardless of ability to pay.
“Health care has become so complex (with) the demands and regulatory requirements and all the workforce shortages and all of the challenges that we're facing,” Hardy said. “We just wanted to be strategic and proactive about how we're positioning ourselves for the future. I think we're going to be in a better position for advocacy, to influence policy and to get additional resources.”
OLE employs 333 people and has a current budget of $41.5 million, according to the health care system.
This story has been updated with comments from OLE Health CEO Alicia Hardy, and the health care system’s annual budget and number of employees.
