Oregon’s OHSU, Legacy Health Call Off Merger Plans
In August 2023, Oregon Health & Science University and Legacy Health announced their intent to combine and create an integrated health system. But on May 5, the organizations entered into a mutual agreement to terminate the transaction.
The combination of Portland-based OHSU and Legacy Health would have had 12 hospitals, 100-plus locations and about 30,000 employees and more than 3 million patient visits a year.
The merger would have included a capital commitment from OHSU of approximately $1 billion over 10 years, financed mostly through bond offerings, to allow the integrated system to make investments in care infrastructure to improve the quality of essential services and health outcomes for communities across the region.
OHSU is part of the State of Oregon, established in Oregon law as a public corporation. Legacy is a local, nonprofit health system that had been struggled financially. In fact, as Oregon Public Broadcasting reported, both Legacy and OHSU have reported significant operating losses in recent fiscal years and the looming possibility of cuts to Medicaid presents a further challenge.
OPB’s Amelia Templeton also wrote that “the proposed merger faced significant public opposition, primarily over concerns that the combined system would hold a monopoly over high-level specialty care in the Portland metro area. OHSU leaders previously said that acquiring Legacy would help the organization solve a lack of capacity and space that has led to some of the longest wait times for specialty care in the country.”
As Willamette Week reports, a community review board convened by the Oregon Health Authority to review the proposed acquisition voted unanimously to reject the transaction. Review board members had concerns about costs rising after the purchase.
The board’s decision wasn’t binding on the Oregon Health Authority’s Health Care Marketplace Oversight program. It was one input among many as HCMO sought to determine whether the merger could go forward.
