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OHSU and Legacy Health merger plan taking longer than expected

The tentative plan would constitute a major reshaping of Oregon’s health care landscape if approved by regulators. The two sides are running a month or more behind as they work on details.
Oregon Health & Science University | MICHAEL MCDERMOTT/OHSU
December 5, 2023

Oregon Health & Science University and Legacy Health have missed their goal for completing a merger agreement and now hope to finalize their proposal to create a 10-hospital chain early next year. 

The two announced in August they hope to combine and issued a letter of intent setting a Nov. 30 goal of completing an agreement.

However, the Oregon Health Authority regulators who review proposed mergers have not received any submission from OHSU or Legacy. Asked about the status of the talks, OHSU Sara Hottman told The Lund Report in an email that both sides are still moving forward with the merger and that a definitive agreement is now expected some time in “early 2024.” 

“A tremendous amount of work has been happening during the due diligence process, including reviewing thousands of contracts and leases, conducting interviews with Legacy leaders and much more,” she said.  

If approved by regulators, the merger between OHSU, the state’s largest public hospital, and Legacy, a financially beleaguered nonprofit health system, would be a significant reordering of Oregon’s health care landscape. 

OHSU began as a state teaching hospital and in 1995 the Legislature established it as a semi-independent public corporation with a board appointed by the governor. The Port of Portland uses a similar public-agency structure. 

Since then, OHSU has embarked on a series of expansions and acquisitions, but not always successfully. Talks of a formal merger with Moda Health led only to an investment into the insurer by OHSU. More recently, Salem Health, which owns Salem Hospital, pulled out of a partnership with OHSU. A partnership with Mid-Columbia Medical Center fell apart in 2021 after the hospital in The Dalles terminated its contract with OHSU cardiology, according to the Columbia Community Connection. 

Hottman said the merger is “a complex process that requires careful planning and collaboration, and our objective is to be as thoughtful as possible as we consider the best ways to bring our organizations together.”

In a statement provided to The Lund Report, a Legacy spokesperson confirmed the timeline for reaching a comprehensive agreement with OHSU: “Oregon Health & Science University and Legacy Health are continuing to work collaboratively toward a definitive agreement to create a high-impact health care system driven by a mission of public service.”

Any merger of the hospital systems would need to be approved by the health authority’s Health Care Market Oversight program. The program takes public input as it reviews large transactions for how they will affect costs, access to and quality of care, as well as equity. 

Health authority interim Director Dave Baden told the Oregon Senate Health Committee in November that the Health Care Market Oversight has completed 11 preliminary reviews of proposed mergers. Of those, regulators approved four, approved another four with conditions and subjected two to a more comprehensive review. One transaction was withdrawn. 

The proposed merger would also likely face review by the Federal Trade Commission.

You can reach Jake Thomas at [email protected] or via at @jakethomas2009.