The planned joint venture between hospital nonprofit Legacy Health and insurance company PacificSource, made public in a Lund Report exclusive story last week, has roots in internal discussions launched at Legacy well over a year ago, documents reveal. Across hundreds of pages of plans, presentations and internal reports leaked to The Lund Report, officials at both companies mapped out their concerns and considerations in a fast-changing healthcare marketplace.
This week, The Lund Report is drawing on those documents to show the path Legacy and PacificSource took to partnership, and the ways that the Affordable Care Act shaped their talks. Next week, we’ll look into what comes next, including financial forecasts included in the documents.
This story offers a quick look at the long analysis that led to this point. Lund Report Premium subscribers can read a detailed blow-by-blow account by clicking here.
Summer 2014: Legacy sees a need
In mid-2014, leaders at Legacy Health developed a new “strategic plan framework,” outlining how they wanted their network of hospitals and clinics to succeed in a world of “care transformation. Documents show that Legacy wanted to focus more on value-based care, but the Portland metro area’s fragmented insurance sector made it hard for the hospital chain to negotiate for a comprehensive overhaul of how physicians were paid.
Fall 2014: Legacy targets PacificSource
Officials at an Oct. 28, 2014, meeting seem to have felt a sense of urgency. A slide from a Power Point presentation, edited for clarity, reads: “The time has come to chart Legacy’s future. The market is moving, change is inevitable. And (the) window of opportunity is limited. Good news is, Legacy has a solid foundation to build on.”
Spring 2015: Getting to Know Each Other
Between October 2014 and May 2015, Legacy and its consultants learned everything they could about PacificSource, though conversations were kept top secret. On May 19, 2015, Legacy shared a presentation on the implications of such a partnership, and each page was marked “Strictly Confidential.”
Summer 2015: Number Crunching.
On June 24, 2015, Legacy Health and PacificSource signed a mutual exclusivity agreement, cementing the formal start to their negotiations. Three weeks later, they hired Alton Health Advisors to prepare a valuation estimate of PacificSource, which they could use to negotiate their transaction.
Fall 2015: Joint venture
By September 23, 2015, the two organizations seemed set on moving ahead with a joint venture. They were reviewing draft vision statements. Language up for discussion and revision included: “Together, Legacy and PacificSource will create a market leading integrated health plan that will become the affiliation partner of choice in the Portland metro region and all areas served.”
More to come
That leads to the present moment. On Oct. 24, The Lund Report broke the news that the Legacy and PacificSource were teaming up to create a new regional venture. Click here to read more about that plan. Next week, The Lund Report will examine what may come next for a PacificSource-Legacy partnership.
----- Courtney Sherwood can be reached at [email protected]. Follow her on Twitter at @csherwood.
