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OHSU, Legacy Health announce plans to merge Portland metro area’s two largest health systems


PORTLAND, Ore. (KGW/KTVZ) — Oregon Health and Science University (OHSU) and Legacy Health, the two largest health systems in the Portland area, announced Wednesday that they have signed a nonbinding letter of intent to combine their respective organizations, the first step in a merger expected to close in 2024, KGW reported.

The two organizations said they plan to join to "create a comprehensive, integrated health system that will offer high-quality, essential health care service to patients throughout Oregon, the Pacific Northwest and beyond," according to a joint news release. The two organizations said they hope to agree on final terms in the coming months.

According to the Portland Business Journal (PBJ), OHSU is currently the Portland metro area's largest health system, with more than 19,000 local employees in 2022, and the area's third-largest employer overall. Legacy currently employees 13,000 workers, making it the second-largest health system and the fifth-largest overall employer.

Together, OHSU and Legacy would have more than 32,000 employees and more than 100 locations, including 10 hospitals. Once the merger is complete, it would be the largest employer in the area, according to the joint news release.

"By joining forces, OHSU and Legacy are committed to attracting, engaging and supporting the region’s best health care workforce through investments in the tools, technologies, and education and development initiatives that are essential for the growth of our team members," the two organizations said in Wednesday's joint news release. "We will continue to support our valued employees and learners, all of whom play an important role in delivering exceptional care and service."

As part of the agreement, once the merger is complete, OHSU has agreed to a capital commitment of about $1 billion over 10 years to "help the combined organization expand services," while Legacy has agreed to direct its net cash on hand and investments (above the organization's outstanding debt) to a new independent foundation that will "address critical community health care needs and disparities." The specific amount Legacy will dedicate to the new foundation was not reported.

PBJ reports that Legacy Health has struggled financially since the COVID-19 pandemic. "Legacy had an operating margin of negative 6% for fiscal year 2023 and a $172 million loss. OHSU's current budget is break even," PBJ reported.

The Oregon Nurses Association (ONA), a union that represents more than 16,000 nurses and health care workers in the state, released a statement Thursday afternoon in response to the planned merger.

ONA said the announcement comes a week after nurses declared an impasse in ongoing contract negotiations with OHSU. In their statement, the union called on OHSU leadership to come up with a fair contract "before undertaking one of the largest health care mergers in Oregon’s history."

The union also pointed to the recent, three-month closure of Legacy Health Mount Hood Family Birth Center in Gresham, and the shooting and killing of a security guard at Legacy Good Samaritan Medical Center in Northwest Portland in late July.

"ONA does not have any faith in Legacy’s management, so a merger with a public institution like OHSU – which will come with more requirements related to transparency and accountability – is likely to be in the best interests of Legacy’s patients and their 13,000 staff members," ONA's statement says, in part.

Article Topic Follows: Business

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