Nearly a year after announcing their merger plans, Rady Children’s Hospital and Children’s HealthCare of California have taken a significant step forward. California Attorney General Rob Bonta has granted conditional approval for the merger, setting the stage for creating a new parent company, Rady Children’s Health.
Children’s HealthCare of California operates Children’s Hospital of Orange County (CHOC) and Mission, while Rady oversees Rady Children’s Hospital in San Diego. Under the merger plan, the two organizations aim to expand access to specialized pediatric care in Southern California.
Bonta’s conditional approval includes several key stipulations: continued participation in Medi-Cal, California’s Medicaid program; maintaining charity care and community benefits at historical levels; and preserving the existing workforce and medical services for at least 10 years.
“Our children deserve access to affordable specialized medical services that support their health and well-being,” Bonta stated. “These conditions ensure that Southern California families retain access to quality, affordable pediatric care during the most difficult times in a child’s life.”
While Bonta’s approval marks progress, the deal has not yet been finalized. CHOC released a statement saying both organizations’ governing boards must evaluate the potential impact of the conditions before making a final decision. The merger is unlikely to close before the end of the year.
Collaboration between Rady Children’s and CHOC is not new; the two organizations have worked together for years. When announcing the merger in December 2023, leaders expressed a shared commitment to improving pediatric outcomes and access to care. The plan includes appointing CHOC’s Kimberly Chavalas Cripe and Rady’s Patricio A. Frias, MD, as co-CEOs of the new parent company, with each hospital retaining its separate board and local focus.
To move forward, the organizations must adhere to additional conditions outlined by Bonta. These include maintaining acute hospitals, trauma centers, and emergency services in their respective counties for a decade, ensuring open staff privileges, and committing to labor protections. They must also agree to maintain competition in the pediatric specialty care market and submit to ongoing monitoring by the attorney general’s office.
Rady Children’s, the largest pediatric hospital in California with 444 beds, and CHOC, which operates 388 beds across two facilities, aim to finalize the merger while navigating these conditions. The move holds the potential to reshape pediatric healthcare in the region.
