OHSU and Legacy Health: A Historic Merger in Oregon Healthcare or an Industry Land Grab?

In a groundbreaking move, Oregon Health & Science University (OHSU) and Legacy Health signed a non-binding letter of intent in the summer of 2023, creating the largest healthcare system in the Portland metro area. The Legacy Health-OHSU merger marks a pivotal moment in Oregon’s healthcare landscape–but is it for the best?

Some proponents say the merger will combine the strengths of both institutions, bringing together OHSU’s robust academic and research capabilities with Legacy Health’s community-focused care model. But while this collaboration promises significant benefits, it also raises important questions about the future of healthcare delivery in Oregon.

A Closer Look at the OHSU-Legacy Health Merger

The proposed merger between Oregon Health & Science University (OHSU) and Legacy Health has garnered significant attention, with its potential implications sparking debate among healthcare providers, policymakers, and the public.

While the merger aims to enhance healthcare delivery, it raises serious concerns about competition, consumer costs, and the equitable use of resources. MBA Medical joins a growing number of critics who believe the merger poses risks that must be carefully scrutinized.

Anti-Competitive Concerns: A Near-Monopoly in Portland

Dominance in the Healthcare Market
If the merger proceeds, the combined entity would control the majority of hospitals and healthcare facilities in the Portland area. This dominance could stifle competition, leaving patients and healthcare providers with fewer choices.

Impact on Consumer Costs
When competition decreases, costs often rise. With limited alternatives, patients may face higher healthcare prices, fewer innovative options, and potentially longer wait times for services. Employers offering health insurance could also see increased premiums, impacting Oregon’s workforce.

Public Institution Advantages: An Uneven Playing Field

State Funding and Tax Subsidies
OHSU is a state-affiliated institution that receives public funding and enjoys statutory exemptions, such as immunity from certain taxes and regulatory requirements. These benefits provide OHSU with a significant financial advantage over private healthcare providers.

Distortion of Competitive Landscape
Combining a publicly subsidized entity with a private healthcare system like Legacy Health could create an uneven playing field. Competitors might struggle to match the financial flexibility of the merged organization, further consolidating market power in the hands of one entity.

Concerns from Industry Leaders and Policymakers

John Kitzhaber’s Warning
Former Oregon Governor John Kitzhaber has publicly voiced his concerns about the merger, suggesting that it could lead to higher healthcare costs due to increased market power. Kitzhaber’s perspective underscores the need for a thorough and transparent review of the merger’s potential effects on competition and accessibility.

Broader Implications for Healthcare Equity
Critics argue that the merger may not address, and could even exacerbate, existing disparities in healthcare access. Communities that rely on Legacy Health’s services might face disruptions or reduced access to affordable care if the focus shifts toward profit-driven operations.

Regulatory Oversight: The Role of the Oregon Health Authority

Comprehensive Review in Progress
The Oregon Health Authority (OHA) is conducting a detailed evaluation of the proposed merger. This review will assess key factors, including its impact on health equity, consumer costs, quality of care, and access.

Public Input and Transparency
During this process, stakeholders—including patients, healthcare professionals, and competing providers—are encouraged to share their perspectives. A transparent review is essential to ensure that decisions align with the best interests of the community.

What’s at Stake: Ensuring a Fair Healthcare Environment

Maintaining Competition
A competitive healthcare market fosters innovation, keeps costs manageable, and ensures patients have access to a wide range of services. Allowing one entity to dominate could jeopardize these benefits for Oregonians.

Balancing Public and Private Interests
Mergers between publicly funded and private entities require careful consideration to prevent unfair advantages. Regulators must ensure that public resources are used responsibly and equitably, without hurting other providers or the community.

A Merger That Demands Scrutiny

While the OHSU-Legacy Health merger is positioned as a step toward expanded healthcare access and improved outcomes, the risks associated with reduced competition, higher costs, and inequitable advantages cannot be ignored. MBA Medical believes that a comprehensive, transparent review is essential to protect the interests of patients, healthcare providers, and the broader Oregon community.

FAQs About the OHSU and Legacy Health Merger

Why are OHSU and Legacy Health merging?
The merger claims to expand access to care, improve patient outcomes, and address financial sustainability through combined resources and expertise.

Will the merger impact patient care?
Yes, the merger is expected to enhance care delivery by increasing access to specialized services and improving healthcare infrastructure. However, it could also have adverse effects on patient care by limiting the number of options.

How will this merger affect healthcare costs?
While the merger aims to improve efficiency and reduce operational costs, there is a possibility that reduced competition could influence pricing.

What happens to existing employees at OHSU and Legacy Health?
The merger emphasizes workforce support, including training, retention, and recruitment, to ensure employees are integral to the new system’s success. However, while unionized workers will be protected, the same can’t be said for others.

When will the merger be finalized?
The merger is currently under regulatory review, with a decision expected following the 180 days of review process by the Oregon Health Authority.

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