Legacy Health and Oregon Health & Science University announced Wednesday that the two health care systems are combining.
The two systems disclosed that they’ve signed a nonbinding letter of intent as the first step in a transaction by which Legacy will become part of OHSU. Both systems’ board of directors voted unanimously on the merger.
According to a statement from Portland-based Legacy Health, Legacy Salmon Creek Medical Center and the system’s Southwest Washington medical offices are set to become “part of the combined organization, and we will continue to serve our patients in Oregon and SW Washington.”
A spokesperson wasn’t able to give additional details about staffing or what effects the merger will have on Clark County’s Legacy facilities.
The two systems combined will have more than 32,000 employees and more than 100 locations, including 10 hospitals. The merger will make the new combined health system the largest employer in the Portland metro area, according to Wednesday’s statement.
The announcement went on to say that leaders from both organizations “will participate in the strategy development of the combined system.”
“Our mission is to provide good health for our people, our patients, our communities and our world,” Kathryn Correia, president and chief executive at Legacy Health, said in the statement. “By combining with OHSU, we will expand our ability to deliver on our mission.”
As part of the agreement, OHSU intends to make a capital commitment of around $1 billion over 10 years to support primary and community-based services that will be part of the combined system.
According to a statement from the Oregon Nurses Association, the announcement comes a week after nurses “declared an impasse in their contract negotiations with OHSU.”
“While nurses at OHSU have been at the bargaining table looking for management to step up and do what is right for their nurses and their patients, OHSU’s management have been short-changing the nurses in their contract offers while also pledging more than $1 billion over 10 years to an acquisition,” read the statement.
It also went on to say the nurses union does not have “any faith in Legacy’s management,” given its recent attempt to close its family birth center at Legacy Mount Hood and the recent shooting at Legacy Good Samaritan.
“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,” it added.
“Having a union in a health care setting means better working conditions for staff and better outcomes for patients. (Oregon Nurses Association)-represented nurses at OHSU have a strong connection to their colleagues at Legacy facilities and are eager to work together in the future for the benefit of patients,” the statement said.
Deal to close in 2024
Legacy will direct its net cash on hand and investments at closing to a new independent foundation, according to the statement. This will be “to address critical community health care needs and disparities.”
Legacy and OHSU’s announcement added that both organizations are working toward a definitive agreement in the months ahead. The transaction is expected to close in 2024 and is subject to regulatory review and customary closing conditions.
The terms of the merger were not disclosed.
Legacy operates a hospital in Salmon Creek and several clinics in Clark County. And the health system partners with private practice physicians in the area.
Like other hospital systems in the Pacific Northwest, Legacy has struggled financially following the pandemic. The system announced last month that it would be moving forward with an agreement to sell its outreach laboratory business to Labcorp. The comprehensive lab services company is a publicly traded company based out of North Carolina.