Oregon Health and Science University (OHSU) publicly announced its intention to acquire Legacy Health and merge into one large healthcare system in August of 2023. Later, in May 2024, OHSU and Legacy Health signed a binding agreement of their intention to combine. According to OHSU, the proposed date of transaction is Mar. 30, 2025.
In accordance with Oregon Revised Statutes 415.501., requests by healthcare entities to take part in material change transactions and procedures are required to be reviewed by the Oregon Health Authority (OHA). After announcing this possible acquisition, both organizations collaborated to file a Health Care Market Oversight notice to the OHA. In the case of OHSU, the proposed transaction constitutes a material change, which is defined as a transaction involving two entities where one entity had a minimum average revenue of over $25 million in the preceding three years, and the other had an average of over $10 million in the preceding three years.
According to OHSU, on Friday, Oct. 4, 2024, OHA confirmed that they had received their notice of material change and would begin preliminary review. Currently, they are conducting a minimum 180-day comprehensive review. This intensive process is required for the merger to occur to ensure that healthcare businesses operate fairly. In this case, the process is to make certain that OHSU and Legacy Health are actually achieving what they vocalize as their goal of merging for the benefit of the public. OHSU and OHA communication and media teams were unable to provide an interview.
OHA is also creating a community review board for the proposed purchase. The purpose of this board is to provide input about how the Oregon community would be affected by this business deal. In addition, they will give recommendations to OHA about whether they believe the transaction should be denied, amended, or passed as planned.
Currently, on the OHA website, there is a document spanning over 50 pages that includes all the public comments since OHA accepted the notice, with a majority of the comments stating their opposition to the transaction. Six public comments were filed prior to the notice being accepted by OHA, all of which were in opposition to the purchase moving forward. Much of the dissent stemmed from worries about pre-existing healthcare issues in Oregon being amplified by OHSU’s spending.
One of the comments in opposition was submitted by Brown University and the American Economic Liberties Project. Brown University’s comment reads, “The state should block [the transaction]. Substantial if not overwhelming research indicates that transactions of this sort increase costs without improving quality.” Many worry that less competition between healthcare businesses will result in higher costs for patients. Public comments are still being accepted.
On Dec. 3, 2024, OHSU announced that Chief Executive Officer of the OHSU Knight Cancer Institute Brain Druker, M.D., had resigned. Druker is well known for helping revolutionize the treatment for leukemia, pioneering work on the drug Gleevec which has had groundbreaking success rates. His resignation came as a surprise to many, and in their statement, OHSU says he “leaves an indelible legacy.” Druker told Willamette Week that OHSU had “forgotten our mission” and later explained his concern about their priorities.
Contrary to this, a significant letter of support for the acquisition was submitted on behalf of unions such as Service Employees International Union (SEIU) Local 49, American Federation of State, County and Municipal Employees (AFSCME), Basic Rights Oregon, and Oregon Nurses Association, who worked together to write the joint endorsement.
According to OHSU, patients will benefit from this acquisition in a variety of ways, including more equitable access to care and improvements in care quality. Their website reads, “OHSU and Legacy Health share a vision for an integrated, full-service public university health system to expand access to high-quality, essential care throughout Oregon and beyond.”
In addition, SEIU Local 49, AFSCME, Basic Rights Oregon, and Oregon Nurses Association’s statement argues that the reality of the situation is that Legacy Health is struggling financially. They assert, “We believe OHSU is the best entity to make this acquisition because Legacy will continue to be accountable to the people of Oregon unlike acquisitions by private equity or large, out-of-state, for-profit hospital operators that are becoming increasingly common in our state.”
As of now, OHSU writes that there should be no immediate impact on patients and their receiving of care. The review process that they are currently in will take a minimum of 180 days; until then, information will be provided via the OHSU website dedicated to the acquisition.
