File – Oregon Health & Science University. Ohsu abandoned his attempt to acquire inherited health.
With the kind permission of Michael McDermott / Ohsu
Ohsu and Legacy Health have mutually agreed to move away from an agreement that would have combined the two health systems.
Last August, the OHSU agreed to acquire the eight hospitals in Legacy and $ 3 billion in assets, with the promise to spend $ 1 billion for improvements in Legacy facilities.
“After a careful examination of the evolving operational environment, organizations have determined that the best way to meet the needs of the communities they serve is to go ahead as individual organizations,” a spokesman for the Ohsu in an email.
The declaration does not detail why the acquisition was canceled. Legacy and OHSU leaders refused an interview on the decision.
The unions had supported the inherited sale, which included an agreement of the OHSU so as not to reduce the union posts for two years after the agreement.
However, the proposed merger was faced with significant public opposition, mainly on the concerns that the combined system would hold a monopoly on high -level specialized care in the Portland metropolitan region.
OHSU leaders previously declared that the acquisition of inheritance would help the organization to resolve a lack of capacity and space which led to some longest waiting times for the specialized care in the country.
Last month, a community examination committee, responsible for weighing if the agreement was in the public interest, concluded that this would probably lead to higher prices for care And recommended that state regulators block it. Public comments were also strongly weighed against him.
The Oregon health care market monitoring program has the power to review all major health care transactions and may disapprove of agreements that it determines access to health care. The regulators were in the middle of a complete examination of the agreement when Ohsu and Legacy announced its disappearance.
Financial challenges
State hospitals face Significant financial contrary winds. The inheritance and the OHSU both pointed out significant operational losses in the last exercises and the imminent possibility of Medicaid cuts presents another challenge. Ohsu, the only university medical center in the state, also depends on federal funding that President Donald Trump is looking to reduce.
Ohsu had trouble containing his losses, despite the reduction of 500 positions last year. The organization provides for a loss of $ 95 million during the current financial year. Consequently, he delays certain Capitol investments, including a plan to extend high -risk pregnancy care, according to the financial documents presented to the Council last month.
Meanwhile, Legacy recently reported that cost containment efforts and cuts have led to improving performance. The health system lost $ 83 million during the year 2024, against a loss of $ 171 million the previous year.
During a public hearing in March, Legacy’s chief of the farm, Jonathan Avery, said that their financial situation had improved but was not yet stable.
The basic financial problem, said Avery, is a low reimbursement rate for government safety insurance patients: Medicaid and Medicare. Twenty-seven percent of admissions to patients hospitalized to the inheritance are paid by Medicaid, more than any other health system in the Metropolitan region of Portland.
Without the agreement of the OHSU, inheritance officials said they would work to obtain rate increases in the state Medicaid program to follow the increase in labor and supply costs.
“This is particularly critical for women’s services and Randall Children’s Hospital.” Anita Iyenger, director of Legacy’s strategy, said at the meeting. “Randall Children, as we understand it today, is less reimbursed than other national and regional hospitals for the same services.”
The health system would also plan to sell unused real estate and cutting services to improve its long -term perspectives.
In the long term, the inheritance must collect $ 300 to $ 700 million to provide improvements to the Capitol, said Iyengar. In a few years, the board of directors could again seek a strategic partner.