Two of Western Washington’s largest health care organizations announced plans Wednesday to join together to try to save money and provide better service for patients.
The parent organization of Providence Regional Medical Center Everett and Seattle-based Swedish Health Services would team up to form a new nonprofit health care system. The health care organizations have a combined revenue of $3.4 billion and employ thousands in Snohomish County.
Under the proposal, Swedish would join a newly created regional division of Providence Health & Services. Both organizations would continue to operate somewhat independently.
“The names and heritage and identity of both organizations will stay the same,” Rod Hochman, Swedish’s president and chief executive said Wednesday. “Swedish will remain Swedish. Providence will remain Providence and remain Catholic.”
“That makes this an affiliation versus an acquisition,” Hochman added.
Providence is expected to create a new Western Washington region “and Swedish will have its own identity within that region,” said John Koster, president and chief executive of Providence Health & Services.
The new health care system could be launched as soon as January, Hochman said.
The two organizations will keep their names, but share resources. As one example, a Swedish brain surgeon might come to Everett to treat a Providence Regional Medical Center Everett patient, Hochman and Koster said.
And a blood conservation program pioneered in Everett and which has gained international attention could be shared with the Swedish organization.
Even though the blood program, which seeks to limit blood transfusions, has been written up in medical journals for having patients heal quicker while reducing medical costs, it’s taken about a decade for the word to spread, Koster said.
Such life-saving — and ultimately money-saving — practices have to be adopted much quicker in health care, he said, to help stem rising medical costs.
“We have a limited amount of resources to help our citizens get affordable, quality health care,” Koster said. “We’re looking at those solutions. We’re trying to do the best thing for the community.”
Many details of the proposal have yet to be worked out. Currently, only a preliminary memo of understanding exists between the two organizations. Issues such as who will lead the new organization or how, exactly, it will be governed aren’t known, Hochman said.
He and Koster said the proposal to form a cooperative organization between one religious-based nonprofit health care organization, and one with no religious affiliation may be the first of its kind in the nation.
“When we look around the country, we can’t find something quite like this,” Hochman said.
The proposal could face significant regulatory review by state and federal agencies, which may raise questions over how the proposal could affect competition in western Washington.
Neither Hochman nor Koster, however, said they knew on Wednesday exactly which agencies may be involved in reviewing the proposal.
The move comes as the two health care organizations, like many across the country, are caught in a financial squeeze. They face a stagnant economy and have battled a long recession.
In September, Swedish, facing a $19 million shortfall, announced it was eliminating about 300 positions.
Providence Regional Medical Center Everett last month announced it was about $10 million short of its budgeted revenue, and said it would have to cut up to 175 jobs.
In addition, health care organizations have been hit with cutbacks in government spending for providing medical services to the uninsured and patients on Medicaid, the government program that provides health care to low-income families. This is at a time when more people are losing their health care benefits and requiring health care without the means of paying for it.
The collaboration of the Catholic and non-Catholic based health care organizations could raise some thorny questions over women’s reproductive issues.
If the proposal goes forward, abortions would not be conducted at Swedish, but would be done at an off-site clinic, Hochman said, similar to what other area hospitals are now doing. Swedish does a limited number of abortions now.
Providence and Swedish employees learned of the proposed change in announcements sent out Wednesday evening. Additional briefings are expected on Thursday.
Hochman said no layoffs are now anticipated as a direct result of the affiliation between the two organizations.
Since the proposed new nonprofit is not an outright merger, it is a hard concept to try to explain, Koster acknowledged.
“We are really doing some things in a very innovative way,” he added.
Sharon Salyer: 425-339-3486 or salyer@heraldnet.com
At A Glance
Providence Health & Services and Swedish Health Services
Providence Health & Services, based in Renton, was founded by the Catholic Sisters of Providence. It has 27 hospitals and other medical facilities in five Western states stretching from Alaska to California. It has nearly 53,000 employees, including 3,500 at Providence Regional Medical Center Everett.
Seattle-based Swedish Health Services has 11,000 employees and operates five hospitals and more than 70 primary care clinics, mostly in the Puget Sound region. In Snohomish County, it operates Swedish/Edmonds, the former Stevens Hospital, and a satellite emergency room near the 128th exit of I-5 south of Everett, which opened in February.
Combined, the two organizations have combined revenues of $3.4 billion.
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