OHSU/Legacy merger could spur tectonic shift in Oregon health

August 31, 2023 5:30 am
OHSU Hospital is located on Marquam Hill in southwest Portland.

A merger of Legacy Health and Oregon Health & Science University would include more than 32,000 employees and 100-plus locations, including 10 hospitals and more than 3 million patient visits a year. (Lynne Terry/Oregon Capital Chronicle)

I’ll admit to a bias about news of a corporate merger or takeover: It’s often a good thing for a small group of insiders and poor news for employees, customers, vendors and other people. 

How that bias relates to the case of a semi-public organization like the Oregon Health & Science University taking over the nonprofit Legacy Health is a little more difficult to say. 

But if it goes through, with regulatory approval, it will have a big impact on Oregon. 

The context for thinking about this has partly to do with size, which no one is questioning. OHSU said in a statement that, “the combined system – with more than 32,000 employees and 100-plus locations, including 10 hospitals and more than 3 million patient visits a year — will be the largest employer in the Portland metro area.” Though it has seven hospitals, Legacy is by most measures somewhat more than half of OHSU’s size. Nevertheless, Legacy is Portland’s second-largest health system, the acquisition would be a billion-dollar deal and the two together would be a massive organization. 

That becomes all the more impressive when you consider that OHSU, which has Oregon’s largest hospital and 18,000 employees, is one of the top employers in Portland. 

Up to this point, the Portland area’s health provider community has split among a number of organizations. Providence is also among the largest health providers in the Portland area and has operations extending from Medford to Hood River to Seaside and is among the state’s top employers. Kaiser Permanente and a number of smaller organizations also account for a significant share. With the merger, one actor in regional health care would become a clear leader. 

Something like this may have become inevitable, but the motivation behind this buyout to create a regionally comprehensive health care organization is different from the strictly financial impetus that drives most large-scale commercial mergers.

OHSU would be taking over a Legacy Health that has had some aches and pains in recent years. It has had serious budget and finance problems, reporting a loss of $172 million in the most recent fiscal year, enough for concerns about outright failure – which would be catastrophic for health care in Oregon. 

Those financial problems apparently have been related to a series of other problems, such as a much-criticized closing of a birthing center at the Legacy Mount Hood Medical Center. The criticism even went further over the top when a visitor at another facility shot to death a security guard. 

The Oregon Nurses Association said on Aug. 17 that it “does not have any faith in Legacy’s management, so a merger with a public institution like OHSU – which will come with more requirements related to transparency and accountability – is likely to be in the best interests of Legacy’s patients and their 13,000 staff members.”

At least some positive effects would be likely. OHSU is a public institution and has a mandate for public service as it says on its website: “OHSU is Oregon’s only public academic health center. We are a system of hospitals and clinics across Oregon and southwest Washington. We are an institution of higher learning, with schools of medicine, nursing, pharmacy, dentistry and public health – and with a network of campuses and partners throughout Oregon. We are a national research hub, with thousands of scientists developing lifesaving therapies and deeper understanding.” 

But the nurses union also points out, “This merger brings up more questions than answers, and ONA is committed to being a thoughtful partner with nurses and health care workers across OHSU and Legacy while the details of this agreement are hammered out.”

Details to consider will be plentiful. Besides going on the hook for a billion-dollar acquisition, OHSU would have to deal with Legacy’s existing financial problems. 

Patients and medical professionals would want to know how the merger would affect access to doctors and insurance. The early responses seem to suggest those wouldn’t change much, but watch closely. We’re talking about health care here, where complexity is baked in. Don’t be sure that all would remain exactly the same, even if that’s the intent right now. The jostling of organizations, finances and contractual agreements would likely cause some kind of shifting. 

How would the Portland-area medical provider picture look afterward?


To go through, the takeover would need approval from a batch of regulators, including the Federal Trade Commission, the Oregon Health Authority and the Washington Health Department. Oregonians would be wise to watch those developments closely. This major proposal could reshape health care in Oregon for a long time to come.  


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Randy Stapilus

Randy Stapilus has researched and written about Northwest politics and issues since 1976 for a long list of newspapers and other publications. A former newspaper reporter and editor, and more recently an author and book publisher, he lives in Carlton.