A huge medical merger is taking place. It involves Portland’s two largest healthcare systems – Legacy Health and Oregon Health & Science University (OHSU). Last week, they announced plans to merge. Rising costs and workforce shortages contributed to OHSU’s multimillion-dollar operating loss last year. Both Legacy and OHSU, which is partially state-funded, have struggled financially coming out of the COVID-19 pandemic. A breakeven budget saved OHSU. The questions now concerns the future of healthcare services.
There is a total of about 32,000 employees between the two health care organizations. This combined system would become the largest employer in the region. There will be over 100 locations after the merger. OHSU said it plans to spend $1 billion over the next decade “to support primary and community-based services that will be part of the combined system,” according to a press release.
The mega merger requires regulatory approval under Oregon’s year-old oversight program of health care industry mergers. The way it will work is Legacy Health will fold its seven-hospital system into OHSU’s network of clinics, medical centers, research facilities and hospitals, as well as its medical and dental schools. In its 2023 fiscal year, Legacy Health lost $172 million and sold off its lab operations as an effort to get out of the red.
Leaders at Oregon Health & Science University and Legacy Health announced last Wednesday that they have signed a non-binding letter of intent to make the mergerhappen. This will lead to Legacy’s hospitals and care centers becoming part of OHSU, a state-affiliated hospital system and medical school. A study from the Harvard Medical School in 2020 concluded that “quality of care at hospitals acquired during a recent wave of consolidations has gotten worse or stayed the same,” after reviewing close to 250 such mergers over a four-year period a decade ago.
“OHSU and Legacy have a strong history of collaboration, and because of that, we know that together we can vastly improve and expand access to health care and preventative medicine,” Kathryn Correia, Legacy’s president and chief executive officer, said in a video statement. “This next step will enable us to anchor Oregon and Southwest Washington as a national and global leader in patient and community-focused health care, health and science education and innovative research.”
