The proposed absorption of Legacy Health into OHSU would make OHSU the largest employer in the Portland metro area.
The Oregon Nurses Association says OHSU management should step up its efforts to reach a contract agreement with its 3,000 nurses before merging with Legacy Health.
“It’s important Oregonians to keep in mind that yesterday’s announcement of a $1 billion commitment from Oregon Health and Science University to fund a merger with Legacy Health comes exactly one week after nurses declared an impasse in their ongoing contract negotiations with OHSU,” says a press release issued Thursday, one day after the two hospital systems confirmed plans to merge. “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 ten years to an acquisition.”
But the nurses’ union also expressed optimism that the merger, if approved, would improve conditions for staff and patients at its facilities. The organization said it had lost confidence in Legacy Health’s leadership team.
“Over the past few years, we have seen significant failures on the part of the Legacy Health System, including, most recently, the attempted closure of the Family Birth Center at Legacy Mt. Hood, and horrific acts of violence in the workplace at Legacy Good Samaritan. 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,” according to the statement.
OHSU announced Thursday that it had submitted its final contract offer to state that morning, and that it included wage increases and enhanced staffing, both of which were included in ONA’s demands.
The ONA’s statement follows a Wednesday announcement from OHSU and Legacy Health that they have signed a nonbinding letter of intent to merge, confirming reporting from The Oregonian earlier that day. OHSU employed more than 19,000 people as of 2022 and Legacy had 13,000 staff the same year; barring any staffing changes, the deal if approved would make OHSU the largest employer in the Portland metro area, with 32,000 employees at 100 locations.
Both institutions’ boards of directors approved the letter of intent unanimously, and both parties expect the deal to be finalized by the end of 2024.
The Oregon Health Authority’s market oversight program will need to approve the merger in order for it to go through. The OHA didn’t respond to a request for a comment on the merger ; a spokesperson for the agency told The Oregonian Wednesday she was not aware of the transaction.
In the press release, OHSU president Danny Jacobs referred to a “decades-long relationship” between the two health systems, presumably referring to a staffing partnership at OHSU’s Knight Cancer Institute on the Legacy Good Samaritan campus.
“Now, we have an opportunity to join together and take a decisive next step that will help deliver on our promise to ensure the best access and care for all who need us, today and in the future,” Jacobs said in the release. “We look forward to our next chapter with Legacy and the exciting potential of our combined strengths and vision.”
“Our mission is to provide good health for our people, our patients, our communities, and our world. By combining with OHSU, we will expand our ability to deliver on our mission,” Kathryn Correia, president and chief executive officer of Legacy Health, said in the release. “In addition to ensuring access to high-quality essential health care for patients, the combined system will continue to be the region’s most exceptional place to work and learn, while supporting research and education for the next generation of health care professionals.”
Both Legacy and OHSU face financial headwinds, and their struggles reflect larger trends in the health care sector. More than half of Oregon’s 27 biggest regional hospitals reported losses totaling $114 million in 2022.
Though Legacy recorded a $172 million operating loss in 2023, in 2022 it was one of few hospitals in the state running black ink, with $31 million overall operating profit. OHSU suffered $90 million in losses in 2022, which the teaching hospital blamed on the “tripledemic’” of COVID-19, RSV and the flu. In January OHSU reported a 14% revenue increase and an operating income $58 million above its seasonal budget this year.
As part of the arrangement, OHSU intends to commit approximately $1 billion in capital to over 10 years, financed mostly through bond offerings, to support primary- and community-based services in the new combined hospital system.
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