This article has been updated to incorporate additional reporting.
Providence Health’s plan to hand over hospice and home health services affecting thousands of patients to private equity-backed Compassus Health will undergo state review following questions raised by the Oregon Nurses Association, workers and members of the public.
On Oct 22, the Renton, Washington-based Catholic hospital giant announced its plans to establish a joint venture that would place Tennessee-backed Compassus, a for-profit firm that is part-owned by Towerbrook Capital Partners, in charge of operating dozens of Providence-owned locations offering hospice, home health, community-based palliative care services and private duty caregiving.
While both corporations publicly stressed their commitment to high-quality care, Calli Ross says she has proof that’s not true. Her son has been receiving services from Providence Home Health including physical therapy, occupational therapy and assistance from a speech language pathologist.
On Dec. 5 Providence sent her an email “notifying me of the immediate termination of these services with no ability for me to appeal this decision,” Ross wrote in a recent message to the Oregon Health Authority. “There was no proper continuation plan in place.”
Now, after the Oregon Nurses Association sent a letter to the health authority’s director, Sejal Hathi, and members of the public weighed in with public comment, the Oregon Health Authority has decided to review the joint venture to see if it will hurt costs of care, access or employment and working conditions.
The health authority’s decision to wade in on the latest deal is significant because the merger affects thousands of patients across multiple states, and yet Oregon has stronger legal authority than most states to stop it. The decision by the health authority represents the highest-profile known instance in which the agency has stepped in to require companies to formally apply for approval after they’d previously opted not to.
The deal represents the latest cost-cutting effort by Providence. Its decision to sell its laboratory services to a controversial North Carolina for-profit company, Labcorp, sparked concerns before the deal and after it, when Willamette Week reported on problems and layoffs in its aftermath. Earlier this year, InvestigateWest reported on parents’ concerns that the health system is cutting back its commitment to medically fragile children in Portland.
Based on information provided by the companies, the agency has determined “the two entities’ proposed transaction meets criteria for review,” a health authority spokesperson wrote to The Lund Report.
Care concerns cited
Though the union last week accused the health system of trying to avoid state review, Providence spokesperson said there was no such attempt. The companies filed a form on Nov. 21 asking whether they needed to formally apply for state approval.
According to the Providence statement, “We took great care to select an organization that shares our values, as well as our commitment to caregivers and patients.”
Now the joint venture will be scrutinized by the state Health Care Market Oversight program, set up by lawmakers to address concerns around large health care transactions. The companies had hoped the deal would go into effect Dec. 27, but now it will be delayed.
Kara Hayden, an alternative communication speech language pathologist who works for Providence Home Health, told The Lund Report she and her colleagues are very worried that staff will be cut and quality of care and access will suffer.
Adding to those fears are reports that Compassus pays on a per-visit basis rather than hourly, which Hayden said hurts timeliness, continuity of care and communication between providers.
“Currently in Oregon, pay-per-visit is only illegal for nurses, but therapists are regularly paid per visit at other agencies,” Hayden said, adding that the compensation structure creates a “perverse incentive for caregivers to prioritize maximizing the number of patients that they rush around to see in a day, instead of focusing on, ‘Oh, hey sir, you're having this extra issue today that I wasn't anticipating on you having; let me spend an extra 20 minutes and get you sorted out on that’ ... there's more of an incentive to say, ‘You know what, we'll just take care of that next week.”
She added, “We would rather be able to focus on our patient care — rather than worrying about our paychecks.”
As a result of the deal, Hayden said, about 50 of her colleagues will be kicked out of their student-loan forgiveness programs because their new employer won’t be non-profit.
Complicated transaction draws questions
Under Oregon rules, health care transactions must undergo review when they involve one company with at least $25 million in revenue and another with $10 million. That includes mergers, acquisitions or corporate affiliations, as well as joint ventures that reduce services or combine providers for purposes of contracting for reimbursement.
The nurses' union Dec. 10 letter to Hathi described the joint venture as a complicated series of transactions, with Providence shifting ownership of its agencies to limited liability corporations, which then would be merged to be a statewide holding company, which then would be transferred to a shared- ownership multistate company.
The nurses union said the deal indicates that “Providence is seeking to sidestep (the state) approval process or to create a sense of urgency by filing at the last minute for approval.”
The announcement of the proposed joint venture happened on the heels of proposed layoffs. On Oct. 8, Providence Health announced plans to lay off Hayden and other workers in its Home Health Augmentative and Alternative Speech Language Pathology program, a unit that helps treat and train patients, families, and caregivers on communication systems for people who cannot speak verbally or require supplementation due to severely unintelligible speech.
The unit offers services to vulnerable youths and adults that help address problems, ensure care and housing, and improve health and happiness — whether their challenges stem from conditions they've had from birth or ones developed later in life, such as ALS or Lou Gehrig's disease.
After controversy arose over the Catholic hospital giant’s plans, Providence put the layoffs on hold — but soon announced the joint venture, sparking concerns that the earlier job cuts signaled where Compassus wants to go.
Workers help patients at home and in hospitals
Across the Providence programs slated to change hands, the workers affected help patients make good spending decisiosn and navigate complicated programs, Hayden said.
“We're helping them be able to communicate their wishes and their end of life care decisions and participate in care planning with their medical teams ... they can actually participate in their care because they can communicate.” As a result, she added, “people don't end up in the emergency room because of medication interactions that they didn't understand.”
According to the two corporations, the deal affects 24 home health locations located across Alaska, California, Oregon and Washington, as well as 17 hospice and palliative care locations in those states and Texas. It also includes private duty services in southern California.
The Providence spokesperson’s statement added that the system is confident in its partner. “While it is accurate that Compassus is partially supported by private equity funding, it’s important to note that it is primarily owned by other faith-based health systems and has developed similar joint ventures with Ascension Health and Bon Secours Mercy Health, to name a few.”
In Ross' comment on the deal, she wrote that Providence Health has ignored her requests that it take steps to ensure her son's care continues.
“The timing of this discharge and the hurried manner in which it was performed and the strange reasons and lack of explanations and vague wording coincide directly with Providence's preparation for this joint venture,” she added. “I strongly urge OHA to put this proposed transaction under full comprehensive review so that Medicaid patients, like my son, are protected and will continue to have equitable access to quality care.”