Merger Of CareOregon Into Providence Off Over CareOregon’s Independence, Secular Status

CareOregon and Providence Health & Services have called off their planned merger after their months-long talks deadlocked and amid a groundswell of opposition from local health care advocates and state and county officials.

The two health care providers released coordinated statements saying the deal was off but declined to provide details on the record. 

“The organizations have identified significant opportunities for collaboration,” CareOregon said in its statement. “However, they have been unable to align on operating principles necessary to finalize their agreement.” 

The statements followed a report on the end of the deal in Willamette Week.  

Sources told The Lund Report that the talks broke down over resistance by Providence to “four or five niggling details” that would have ensured CareOregon’s independence and secular status. Providence was pushing for a deal earlier this year and wanted to iron out a few key details later but the CareOregon board rejected that approach.

CareOregon is a secular corporation based in Portland with about 850 employees, offering health insurance, mainly Medicaid, to about 375,000 members. 

Providence, based in Renton, Washington, is a nonprofit Catholic health care system that opposes abortion and some other reproductive and end-of-life services. It has more than 111,000 employees, 51 hospitals and nearly 1,000 clinics in six states, including in Oregon, where it has eight hospitals. Providence Health Plans insures about 650,000 people.

Health care advocates feared CareOregon would be gobbled up in the merger and end up like Swedish Health Services, based in Seattle. It stopped performing abortions after joining Providence, and its board came under the influence of Providence despite claims by Providence’s president and CEO, Rod Hochman, that Swedish would remain independent, advocates said.

Eric Hunter, CareOregon’s president and CEO, repeatedly said that CareOregon would remain independent and retain its secular status, a position that was echoed by board members. But without written guarantees and with the talks taking place in secret, advocates and officials who feared the outcome started applying pressure. 

On Feb. 24, Dr. Sharon Meieran, an emergency room doctor and Multnomah County commissioner, emailed Hunter after receiving an anonymous letter that appeared to be from insiders. The letter expressed concern about the talks. 

Two and a half weeks later, a coalition called Equal Access to Care that includes Planned Parenthood, the American Civil Liberties Union, Basic Rights Oregon, NARAL, SEIU Local 49, Compassion & Choices and Cascade AIDS Project met with the CareOregon board to express its opposition. The groups followed up on March 23 with a letter that said that Providence patients and plan members had been delayed or denied care and providers had been blocked from performing certain services. They called for open negotiations.

But the biggest push came at the end of April when four Oregon Democratic members of Congress -- Sens. Jeff Merkley and Ron Wyden, and Reps. Suzanne Bonamici and Earl Blumenauer -- wrote a letter to the CareOregon board calling for an open process and assurance of full health care services for CareOregon insurance members.

“We are concerned about CareOregon’s ability to ensure continued access to the full range of reproductive health care, trans-affirming and end-of-life services and providers to the individuals they serve within Oregon’s diverse Medicaid population,” the letter said.

The coalition followed up with another letter two days later, and last Thursday Meieran got her fellow Multnomah County commissioners to agree to co-sign a letter of opposition. Just as she was finishing the letter, the news came out that the talks were off.

A host of advocates applauded that decision.

“There is a general sense of relief all around, and from the advocate community particularly,” Meieran told The Lund Report. “At the very least people had been hoping that the conversations would be suspended during the COVID crisis because this doesn’t seem like the right time to move forward. But having a permanent suspension was actually the best outcome we could have hoped for.”

Felisa Hagins, political director for SEIU Local 49, said: “No Oregonian should be judged or shamed for their personal health care needs based on gender or sexual orientation. It’s time systems like Providence are held accountable for denying women, the LGBTQ+ community and persons at the end of their lives the care that patients deserve.”

Mary Lou Hennrich, the first CEO of CareOregon, also expressed relief. “We have to remember that all the funding of (the Oregon Health Plan and) CareOregon is either our federal or state tax dollars,” Hennrich said. “Thanks to the CareOregon board for realizing that they needed to back away from the path they appeared to be going down.” 

Merkley responded as well: “It is of utmost importance to ensure that Medicaid enrollees have access to the full range of reproductive health services, gender and trans-affirming care, and compassionate end-of-life care. I am pleased that, going forward, CareOregon will maintain that full range of coverage.”

Though the announcement appeared to mark the success of opposition to the deal, insiders told The Lund Report that CareOregon’s lawyers were satisfied that its independence would be guaranteed through an alignment with Providence’s foundation, which is not a religious organization. But there were other details that CareOregon wanted in place, like having equal representation on the board. Providence wanted one more member on the board overseeing CareOregon, sources said. 

Sources said Providence started pushing CareOregon for a deal at the beginning of the year, saying the two sides would sort things out afterwards. But the CareOregon board insisted on having everything spelled out in advance. 

Then the pandemic struck, turning officials focus elsewhere with mounting and increasingly public opposition to the merger.

Mike Cotton, president and CEO of Providence Health Plan, and Hunter mutually agreed that the two companies should go their own way.

But the companies will continue to work together as members of nonprofit Health Share, which serves Medicaid members in the Portland tri-county area.

“Both organizations have a rich history serving poor and underserved populations,” they said in their statements. “Although they have not been able to finalize an arrangement, they will continue to collaborate and serve their respective program members. Both organizations look forward to working together and continuing their relationships as founding members of HealthShare of Oregon.”

You can reach Lynne Terry at [email protected] or on Twitter @LynnePDX.

 

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