John O. Chesley

Chesley, a Ropes & Gray partner, is a specialist in health care finance and restructuring, tax-exempt organizations and regulatory enforcement. Much of his recent work for clients, he said, has come in response to political proposals, such as the one by Sen. Elizabeth Warren, for universal health care.

“We’re very much motivated by the need to prove to politicians and employers that we’re doing something about the affordability issue,” he said.

Chesley represented Los Angeles’ top-rated non-profit Cedars-Sinai Medical Center in the negotiation of a whole-hospital joint venture with Providence St. Joseph Health, a non-profit Catholic hospital system, to own and operate Providence Tarzana Medical Center. The deal, announced in March 2019, is intended to expand Cedars-Sinai’s services to the San Fernando Valley.

“This is a high-quality, high-performance delivery model, and the need is great to find community partners like Providence to take these skills into communities in lower-cost locations like Tarzana,” Chesley said.

The two systems plan to work together to complete redevelopment of the Tarzana campus and enhance access to primary and specialty care and grow the heart, cancer and women’s services programs. The venture includes a new patient care building and an expanded emergency department.

“The Tarzana area gets Cedars-Sinai-level care at a lower cost in time and money than it would take to develop a competing facility,” he said. That outcome is welcome at a time when plans like Warren’s may be gaining public traction. “Under the pressures that all large health care systems feel now, it’s smart for organizations to join forces,” Chesley said. “It’s about cost and access. There’s tremendous pressure to bend the cost curve. The government isn’t addressing fast enough the affordability issue.”

He noted Attorney General Xavier Becerra’s opposition to federal proposals that would arguably undermine the Affordable Care Act with inadequate, short-term health plans.

“This is a well-intended effort to keep the health safety net intact. Financial viability is key, and we haven’t entirely figured out how to deal with it,” Chesley said.

The forces plaguing health care providers were evident when client Parkview Community Hospital Medical Center in Riverside was forced to put itself out to bid as a distressed asset after a bankruptcy, a union battle and state investigations. Chesley conducted a sale auction process involving dozens of potential buyers. The $100 million transaction closed in July 2019.

“I have the privilege of mentoring new health care lawyers,” Chesley said. “I tell them that this is an exciting time to be in this business. It is an intellectually stimulating effort to contribute to the public good.”

— John Roemer