The Oregon Health Authority is facing its first major challenge to a decision on a potential merger or sale of a healthcare facility following its tentative approval of a joint venture between the state’s biggest provider of home health and hospice services and a for-profit company backed by private equity.
Providence wants to spin off its home health, hospice and community care services into a joint venture with Compassus, a Tennessee-based company with services in 30 states. Compassus is partly owned by TowerBrook, a private equity firm headquartered in New York and London that also manages home health and hospice operations across the country.
The health authority’s Health Care Market Oversight program, created to scrutinize potential sales and mergers to protect the public, tentatively approved the deal in mid-May, provided the joint venture invests $30 million in home health and hospice operations over the next five years.
The oversight team said it would monitor the joint venture over that period but its long list of conditions include some loopholes that would appear to allow for closures and staff cuts under certain conditions.
That possibility has ignited a firestorm of opposition.
The health authority gave the public until the end of May to respond to its decision before making a final determination, and hundreds of people responded. They include many members of the powerful Oregon Nurses Association, which represents 500 workers at Providence Home Health and Hospice, the largest such provider in Oregon.
Providence’s home health division has locations in Portland, Hood River, Medford, Gearhart, Newberg and Milwaukie, with nearly 16,000 patients in 2025. Its hospice operations served an additional 3,000 people in Oregon.
Residents, patients and other providers also criticized the deal, saying it would undermine patient health, lead to caregiver burnout and curtail patient services across the state.
A health authority spokesperson said state officials followed the law in making its determination.
“Because various groups often have different perspectives and concerns about proposed healthcare business deals, interested parties often do not agree on what the outcome should be,” the health authority said in a statement. “Some compromise is often necessary, and it’s not unheard of for some parties to be dissatisfied with a HCMO review’s outcome.”
Apart from the comments submitted online, the Oregon Nurses Association and its members wrote two letters to the Health Care Market Oversight program opposing the conditions. One, from two top union officials, called them “exceptionally inadequate.” The other, from home health and hospice bargaining leaders, said the conditions “do not provide any reasonable assurance” that the deal will protect healthcare access and quality care for Oregonians.
In its tentative approval, the health authority requires the joint venture to use “commercially reasonable and good faith efforts” to keep its current locations open “unless there is reasonable cause or an emergency circumstance” to close or change them. It also states that the joint venture does not have to operate at a financial loss for more than six months. In pursuing the joint venture, Providence said it has cut programs and services in recent years due to financial losses and has faced steep challenges maintaining its home health and hospice services.
Another condition states that the joint venture should maintain enough staff to meet patient demand but only requires it to keep the existing level of clinical staff for six months after the deal is closed.
The provisions outlined by the Oregon Health Marketplace Oversight team also state that if Providence or Compassus sells 50% of its stake in the joint venture, it shall notify the health authority within 30 days.
If the Oregon Health Authority’s decision becomes final, the joint venture between Providence and Compassus would be complete. It’s already moving forward in Washington, Alaska, Texas and California.
Letters object to several conditions
In their letters, the union officials and workers objected to several conditions.
“These conditions are inadequate and do not meet the mandate of HCMO to promote health equity, lower healthcare costs, increase access and increase healthcare quality,” union members and healthcare workers wrote in their May 27 letter to the health authority.
They said giving the joint venture six months to make a profit was a low bar, considering that the services had been struggling financially.
“HCMO’s comprehensive review report and proposed order reveal some extremely disconcerting information about how the joint venture plans to become profitable,” they said.
The caregivers are worried about an increased workload if the deal goes forward, saying it would lead to higher patient numbers. Compassus pays some workers on a per-visit basis, but a law passed in 2025 in Oregon bans that practice.
Nevertheless, they said the joint venture would try to get around the Oregon law.
They also object to the venture’s plan to use AI tools in making some decisions, saying that could undermine care as well.
“To our knowledge, these tools have not been independently tested before being implemented in the patient care setting, and there are no third-party studies on the impact or efficacy of these tools,” they said.
The union officials expressed similar concerns. They want the health authority to revisit its conditions and tighten them. They want the Health Care Marketplace Oversight program to require the joint venture to maintain the status quo for five years, ensure that providers are responsible for all clinical decisions and ban another sale or merger for five years.
“These proposed conditions are the necessary prerequisites to prevent this transition to a for-profit model from harming patient access, affordability and health equity,” the union officials wrote. “Unfortunately, as described below, HCMO has only required a mere shadow of the robust oversight that it could exercise in this transaction.”
The health authority now will consider the objections, saying in a statement it is “taking the time needed to fully consider” all of the comments.
