Providence Health & Services announced today it is joining forces with the Facey Medical Foundation to create an integrated health system, delivering coordinated care from primary care to in-patient services to tens of thousands of patients in the Valley region.

The agreement took effect July 1.

The parties said last week’s Supreme Court decision was not a factor, but the forces driving change under the Affordable Care Act helped bring the two together.

Providence Health & Services, Southern California operates five hospitals in the region, including three in the Valley. Facey Medical Foundation is a multi-specialty medical group that serves 170,000 patients in the Valley region. With 10 medical offices, the Facey affiliation greatly expands the Providence physician network.

“This helps us achieve a vertical integration of our health delivery system,” said Michael Hunn, CEO of Providence in Southern California.

The move also makes Providence a much stronger partner to health insurance plans who want to contract with fewer, larger health care providers, who can offer not only expansive inpatient services, but access to primary care physicians.

Under the terms, Providence will hold six seats on Facey’s 11-member board of directors while Facey doctors will maintain five seats, giving Providence a controlling stake.

Bill Gil, CEO of the Facey Medical Foundation, will retain leadership of the Facey Medical Foundation and will also lead the current Providence Medical Institute, a physician foundation whose doctors serve the South Bay area and includes the physicians of the Providence Medical Group, Axminster Medical Group and the Affiliates in Medical Specialties group, which includes doctors that joined Providence in the West Hills in the past six months.

In exchange for ceding final control to Providence—which will now be the Facey board’s corporate sponsor—Providence will help Facey expand with critical access to capital.

“It will help us add more medical facilities,” said Gil. “As we expand in the San Fernando and Santa Clarita Valleys, we will be doing it in collaboration with Providence,” he said.

The two organizations will share resources and expertise, positioning both to meet the needs of the region as the Accountable Care Act brings more paying patients into the health care system.

The ACA also makes coordinated and less costly care delivery a top priority for health care providers. Although last week’s Supreme Court decision was not a factor in the decision, by joining forces, the two organizations should be better able to reduce the cost of care, and deliver better, more coordinated care, both parties said.

“The national spotlight is on health care – how it is delivered and how quality and patient satisfaction can be improved,” Hunn said. “For Providence Southern California there is no better way to meet these challenges than by teaming with a top physician organization like Facey to expand our brands of quality and compassionate care in the communities we both serve.”

Facey doctors will be able to refer patients to any hospital of their choice, but Providence will be installing its electronic medical record at Facey practices at some point in the near future, which will make it easier for Facey doctors to follow their patients in Providence hospitals than in other, unaffiliated hospitals.