Not so many years ago when Alan Yordy was still the CEO of PeaceHealth, he told employees that due diligence and negotiations were underway to merge with Providence Health & Services.
If the deal happens, “it means that Southwest and PeaceHealth will come together as a single organization,” he wrote. “PeaceHealth would not be ‘buying Providence – Providence would become part of PeaceHealth.”
At that time, leaders of the two health systems said they shared common values, mission and heritage. Both were founded more than 100 years ago by pioneering Catholic nuns.
Fast forward six years. Yordy was forced out as CEO, and since then his replacement, Liz Dunne, has announced plans to collaborate with Providence on a health and wellness center located in Vancouver and other services.
But inquiring minds want to know if anything else is going on between the Catholic enterprises, and whether merger talks have resumed.
Absolutely not, according to Kevin Snyder, system vice president responsible for strategic communications and engagement who responded within minutes to a request from The Lund Report. “This information is not true,” he wrote. “There are no merger talks between our two organizations.”
Gary Walker, director of communications for the Oregon Region at Providence also responded, saying there’s no truth to a merger.
Meanwhile, insiders at PeaceHealth lost no time in telling us that PeaceHealth executives have been talking quite a bit to Providence lately given the recently announced partnership. “Everyone keeps saying the same thing, that it’s nothing more than a partnership and that we’re going to remain an independent organization,” our sources said. “But, given our current financial performance, I find that hard to believe. Alan Yordy had a plan to join forces with another healthcare system after the CHI merger fell apart, but the Sisters refused to listen to him, he got canned and they brought in Beth O’Brien, who’s determined to keep us independent.”
The Lund Report also learned that more layoffs are imminent at PeaceHealth with more jobs being outsourced to Southwest Medical Center while the quality of patient care at St. John’s Medical Center in Longview is going downhill.
O’Brien Runs the Show
Although Dunne is officially the CEO and president, Beth O’Brien, its chief operating officer, is really in charge of the major decision.
“The board has determined that the affairs of the company can best be managed by creating a new senior executive position to be called the chief operating officer,” according to the board minutes obtained by The Lund Report. All management operations were given to O’Brien, "having all PeaceHealth executives who formally reported to the president and CMO now report exclusively and directly to the COO.”
Since O’Brien joined PeaceHealth, nearly two years ago, the health system has witnessed declining profit margins while many top-level executives have lost their jobs under her leadership despite attempts by PeaceHealth’s board to turn management decisions over to CEO Elizabeth Dunne.
“PeaceHealth is not a force in the Northwest and arguably the most pathetic health system in Alaska, Washington, Oregon, and California,” according to a confidential source inside the organization. “The system is poorly run and makes nearly no money.”
The profit margins at PeaceHealth aren’t nearly as healthy as shown in the latest The Lund Report article, which analyzed its fiscal 2014 revenues, which were the latest filings available. Charity care also plummeted at PeaceHealth that fiscal year, along with the percentage of patients with commercial insurance and the amount of write-offs associated with health insurers.
Wellness Center Agreement
According to a joint press release, Providence and PeaceHealth announced they had signed a letter of intent to “jointly develop innovative ways to provide health and wellness services in communities they serve,” they announced today.
The two are developing a health and wellness center, with rehab, fitness, primary care and other services, on Padden Parkway in Vancouver.
“The collaboration reflects the fact that we’re two strong organizations in the Pacific Northwest and we were looking at how best to serve our communities,” said Dave Underriner, CEO of Providence in Oregon.
Last October the two Catholic health systems – each with a long history of committed service to the Pacific Northwest – announced a letter of intent to collaborate on new projects. The strategic alliance agreement was signed Dec. 17.
Diane can be reached at [email protected].
