PeaceHealth merger would create larger regional hospital group

The new regional network will combine these seven Catholic Health Initiatives hospitals with nine PeaceHealth hospitals.

Catholic Health Initiatives

o Mercy Medical Center, Roseburg, Ore.

o Anthony Hospital, Pendleton, Ore.

o Franciscan Health System, including Franciscan Medical Group and Franciscan Hospice and Palliative Care, Tacoma.

o St. Joseph Medical Center, Tacoma.

o St. Francis Hospital, Federal Way.

o St. Clare Hospital, Lakewood.

o St. Anthony Hospital, Gig Harbor.

o St. Elizabeth Hospital, Enumclaw.

PeaceHealth

o PeaceHealth Cottage Grove Community Hospital, Cottage Grove, Ore.

o PeaceHealth Peace Harbor Hospital, Florence, Ore.

o PeaceHealth Sacred Heart Medical Center at RiverBend, Springfield, Ore.

o PeaceHealth Sacred Heart Medical Center, University District, Eugene, Ore.

o PeaceHealth St. Joseph Medical Center, Bellingham.

o PeaceHealth St. John Medical Center, Longview.

o PeaceHealth Southwest Medical Center, Vancouver.

o PeaceHealth Peace Island Medical Center (scheduled to open in November), Friday Harbor.

o PeaceHealth Ketchikan Medical Center, Ketchikan, Alaska.

Vancouver-based PeaceHealth has taken the first step toward an expected partnership with Englewood, Colo.,-based Catholic Health Initiatives that will create a regional health care system with operations based in Vancouver.

Leaders of the two health care organizations — both nonprofit, Catholic-based systems — announced Friday that they have signed a nonbinding letter of intent to create the integrated system. It will combine seven Catholic Health Initiatives hospitals in Washington and Oregon with nine PeaceHealth hospitals in Washington, Oregon and Alaska. Leaders expect to form the new system before June 30, 2013.

Kevin Lamb, spokesman for PeaceHealth, said the agreement will not immediately impact the organizations’ current employees, patients and hospitals, including PeaceHealth Southwest Medical Center in Vancouver.

“There won’t be any noticeable changes to the operations of our facilities,” he said. “And that goes for both sides, Catholic Health -Initiatives and PeaceHealth.”

The location of PeaceHealth’s headquarters will also remain the same, Lamb said. After merging with Vancouver-based Southwest Washington Medical Center in December 2010, PeaceHealth relocated its headquarters from -Bellevue to east Vancouver.

The new organization, with annual revenues of nearly $4 billion, will include nearly 26,000 employees and about 950 employed physicians serving in hospitals, physician clinics, outpatient care clinics, long-term care facilities, laboratories and private homes across the region, according to the release.

The nonbinding letter of intent is the first step in the partnership process, which should conclude between January and June 2013, Lamb said. Once complete, the two organizations will be equal partners in the venture.

The new system will benefit from economies of skill and scale to better manage health care resources to support additional investment in the local communities, Lamb said. Both sides see opportunity to reduce costs in areas such as supply chain, insurance, risk management and clinical engineering, he said.

“PeaceHealth and Catholic Health Initiatives have long traditions of serving communities throughout the Northwest and providing health services to all people,” Alan Yordy, PeaceHealth president and chief mission officer, said in the news release. “Our shared mission and combined strengths will allow us to better serve individuals with safe, high quality networks of care built upon more than a century of service in the Northwest.”

Lisa Nisenfeld, president of the Columbia River Economic Development Council, said she was talking to Yordy on Friday about a speech he’s scheduled to deliver at a CREDC luncheon on Sept. 11.

“He said ‘by the way,” Nisenfeld recalled, and then told her the news.

“It’s a big ‘by the way,'” she laughed. “It’s very exciting.”

Establishing the operational headquarters for the new network in Vancouver may mean more employment growth for Clark County.

“We think this is the type of growth we were looking for,” Nisenfeld said, adding that the health care industry will continue to evolve rapidly in the years ahead.

The new regional network will include Catholic Health Initiatives hospitals in the south Puget Sound and Oregon hospitals in Roseburg and Pendleton. Catholic Health Initiatives’ other hospitals and facilities — which span across 19 states — will not be part of the network, Lamb said.

All nine PeaceHealth hospitals — which include those in Longview, Eugene and Springfield — will be included in the network.

Columbian Business Editor Gordon Oliver contributed to this story.

Marissa Harshman: 360-735-4546; http://twitter.com/col_health; http://facebook.com/reporterharshman; marissa.harshman@columbian.com.