Piecing together the OHSU and Legacy Health merger: What will it mean for Clark County?

One anonymous resident, who identifies as a transgender woman, shared concerns about access to gender-affirming care.

“The wait for these surgeries at OHSU is anywhere from two to five years, depending on the procedure. I switched to Legacy and have surgery consultations scheduled within the next month. This wouldn’t have been possible without the choice to seek care at a different hospital. I fear the merger will limit options and drive up wait times across multiple health care systems.”

Whose decision?

Diverse input has emerged from all corners of the region, but the final decision rests with OHA’s Health Care Market Oversight Program, which was established by the Oregon Legislature in 2021 to review health care business deals and address the potential negative impacts of health care consolidation, according to its website.

OHA has the authority to approve the merger, approve it with conditions or disapprove of it.

Since 2020, Washington law has required hospitals, hospital systems and large provider organizations to notify the Attorney General’s Office of mergers and acquisitions at least 60 days in advance.

The office has the authority to challenge mergers that reduce competition or create monopolies, but it has not taken a public position on the OHSU-Legacy transaction.

“We are aware of the OHSU-Legacy transaction, but we aren’t in a position to publicly speculate about its implications for patients,” Deputy Communications Director Mike Faulk said in an email.

More advocates of the merger, including the Oregon Nurses Association and Service Employees International Union Local 49, argue that it will expand access to quality care, protect reproductive and gender-affirming services, and improve coordination across facilities.

In a joint letter to OHA, four organizations — Oregon Nurses Association; SEIU Local 49; Basic Rights Oregon; and the American Federation of State, County and Municipal Employees — wrote that despite concerns about consolidation, Legacy Health is facing financial struggles, making the merger the right move for patients across the metro area.

Meanwhile, an opposition letter from scholars at Brown University and the American Economic Liberties Project expressed concerns that the merger could increase health care costs without improving quality.

The letter urges OHA to block the acquisition, warning it of the potential monopolistic consequences.

“Simply put, the math doesn’t add,” the letter said. “The parties claim, on the one hand, that Legacy is on the brink of collapse, while promising to deliver more of the services purportedly underlying Legacy’s financial distress: low-margin care for Medicaid patients, such as primary care and behavioral health.”

Billion-dollar merger

OHSU announced its acquisition of Legacy Health on Aug. 16, 2023, although discussions began in 2022.

The combined health system, to be known as OHSU Health, would encompass more than 32,000 employees across more than 100 locations, including 10 hospitals, and conduct more than 3 million patient visits annually, according to OHSU. The health system would be the metro area’s largest employer.

OHSU said it has committed $1 billion over the next decade to enhance primary and community-based services, primarily through bond financing.

On May 30, OHSU and Legacy announced the two parties signed a binding, definitive agreement to merge and become OHSU Health.

Then, on Oct. 4, OHA accepted a complete notice of the transaction. It is conducting a 180-day comprehensive review, which is scheduled to conclude in June.

“The time frame for the final decision will depend on several factors, including the work of the community review board and any additional requests for information,” Bacher said.

Nathan Selden, dean of the OHSU School of Medicine, serves as one of the two executive leaders for bringing the two health systems together. The other is Legacy Health’s chief executive officer, George Brown.

After the definitive agreement was signed, OHSU launched the Transition and Integration Management Office to further plan for the integration of OHSU and Legacy Health.

“On day one, there won’t be any change in delivery,” Selden said. “Going forward after day one as part of the ongoing integration, we will identify together and implement opportunities to improve patient care and fill gaps.”

But what will health services look like for Clark County patients receiving care at Legacy Salmon Creek Medical Center, one of the region’s largest hospitals?

At the time of the August 2023 announcement, officials could not immediately provide specifics about potential staffing changes or facility impacts in Clark County.

Since then, officials from both health systems have maintained that Clark County patients shouldn’t expect any changes in service that wouldn’t be positive and that there will be no immediate changes to employee roles.

OHSU and Legacy Health said they will provide periodic updates as the systems work through the process and answer questions.

“We’re not going to disrupt the current patient care relationships that exist currently,” Selden said. “We’re going to build from that. That’s the kind of energy, synergy and efficiency that Oregon needs from us. We’re focused on world class health care that meets the needs of our combined system.”

Legacy Health Foundation

In a separate but related transaction, Legacy has proposed to transfer its 50 percent ownership stake in the nonprofit PacificSource to the Legacy Health Foundation, transforming it into an independent entity. PacificSource offers health insurance plans to more than 600,000 people in Oregon with Medicare Advantage, Medicaid and commercial coverage. The proposed foundation intends to sell its share of PacificSource within the next five to 10 years.

But that proposal defies the very meaning of health equity, according to an Oregon-based public engagement campaign.

The Community First Campaign believes any new grant resources from the OHSU and Legacy merger should be led by and for the communities that face the worst health inequities.

Community First Campaign Manager Luz Reyna said the campaign is merger agnostic, meaning it is not for or against the acquisition.

However, it is advocating for community-led governance, accountability and a commitment to equity within Legacy’s proposed Health Foundation.

“Legacy is proposing a foundation with only its current board members in charge. I’m very focused on uplifting the community voice,” Reyna said. “We are running a community-based campaign to help support a public process that determines what community-led governance looks like.”

The campaign has been endorsed by more than 15 organizations across the Portland metro area, including two nonprofits in Clark County: the Community Foundation for Southwest Washington and the Southwest Washington Equity Coalition.

A Seattle-based nonprofit, the Inatai Foundation, has also expressed dismay after discovering its institutional practices were referenced in Legacy’s application for the foundation.

“At no time has Legacy, PacificSource or OHSU contacted us, and no conversations or dialogue have taken place with this institution related to the creation of a health foundation. This feels disingenuous and undermines our trusting relationships with organizations across Oregon,” Inatai President Nichole June Maher wrote on Nov. 15.

Legacy Health did not respond to questions regarding the Inatai Foundation’s letter by The Columbian’s print deadline.

Final say

As part of the review process, OHA has formed a community review board with health care professionals, community members, patients of OHSU and Legacy, a business owner and people from priority populations.

“The community review board will help OHA understand how a deal could affect people and communities in Oregon,” Bacher said. “The board will also create a public space to discuss the proposed transaction and may choose to hold a public hearing, where entities can be questioned on the record.”

OHA will also assess the impact of the transaction on four broad cost outcomes: market share, prices, spending and financial condition, Bacher said.

OHA’s Health Care Market Oversight regulatory program has faced legal challenges. The Oregon Association of Hospitals and Health Systems sued to dismantle it in 2022, claiming that the basis for dictating conditions on a proposed transaction was too vague and violated the due process clause of the Fourteenth Amendment.

The case was dismissed by a Federal District Court judge on May 16.

Scholars at Brown University has also expressed concern that the regulatory program’s ability to impose and enforce merger conditions may be undermined by political and industry pressures.

“Approval of the transaction by HCMO risks creating an unregulated monopoly. Crucially, this proposed acquisition is immune from review by state and federal antitrust authorities,” the scholars said in the letter. “As has happened too often in the antitrust context, monopolies approved by the state exercise their economic power in the political arena, repealing the entities meant to regulate them.”

Come June, two of the largest health systems in the region could become one. But whether that will be a positive or negative decision for the community rests on the health care authority.

OHSU said it will continue to post information about the review process, including responses to any requests for information from the Oregon Health Authority, to its webpage so the community can stay informed during the review process.

For now, patients are encouraged to stay informed, monitor potential changes to their health care plans, and provide feedback to OHSU, Legacy and regulatory bodies as the merger progresses, OHSU said.

“Both institutions have a deep, historic commitment to these communities,” Selden said. “It’s one of the reasons I’m so optimistic about this integration.”

Editor’s note: This article has been updated to clarify an opposition letter was authored by scholars at Brown University.