OHSU and Legacy call off planned merger
By Alex Jensen, KGW
PORTLAND, Ore. (KGW) — Oregon Health and Science University and Legacy Health called off their planned merger on Monday morning, about 18 months after it was first announced. The merger would have combined two of Oregon's biggest health care systems.
"Today, the organizations have entered into a mutual agreement to terminate the transaction," OHSU and Legacy Health announced Monday morning in a joint statement. "After careful consideration of the evolving operating environment, the organizations have determined that the best way to meet the needs of the communities they serve is to move forward as individual organizations.
"OHSU and Legacy will remain focused on each health system's individual strategic objectives, with the goal of remaining well-positioned to continue supporting their people, patients and communities. OHSU and Legacy Health will continue to promote the health and well-being of people in Oregon, Southwest Washington and beyond."
OHSU and Legacy Health first announced plans to combine in August 2023, then signed a binding agreement to merge last spring. The combined system would have included 12 hospitals, more than 100 other locations and about 30,000 employees. It would have also been the largest employer in the Portland metro area.
The merger was structured so that OHSU essentially absorbed Legacy Health, with OHSU becoming the sole corporate parent of the combined system. OHSU has argued the deal would help both systems, alleviating a capacity crisis at OHSU and financial struggles at Legacy. The two systems argued they would be stronger as one.
In the months following the signed merger agreement, both systems appeared to be on rocky ground. Just a month after, OHSU announced plans to lay off at least 500 employees, with officials claiming the hospital's revenue had not kept pace with rising supply and labor costs. Then in December, Dr. Brian Druker, who built the OHSU Knight Cancer Institute into a world-class cancer-research center, resigned, saying that the institution had "lost sight of what is crucial and forgotten (its) mission." That same month, over 2,200 nurses from Legacy Health signaled their intent to join the Oregon Nurses Association, the largest organizing effort for nurses in ONA's history, the union said.
The planned merger hit a stumbling block last month, when a community review board unanimously voted to disapprove the transaction. The group, which doesn’t have decision-making authority, was set up to help OHA understand how the proposal could affect people and communities in Oregon. The board, which had met eight times since Feb. 10, voted 5-0 to recommend that the Oregon Health Authority disapprove the transaction.
ONA, in a statement released Monday morning, said it had supported the deal, saying that it ultimately believed the merger would lead to better working conditions for frontline caregivers and high standards for patient care.
"This [Monday] morning, we learned that OHSU and Legacy have mutually agreed to end their deal to merge," ONA said in a statement. "While we are disappointed with their decision to terminate the deal, this will not impact ONA's ongoing work to organize frontline caregivers and fight for fair contracts that prioritize workers and patients over profits."
Portland Business Journal, a KGW news partner, contributed reporting to this article. This is a developing story and will be updated with more details as they emerge.
