Partnership between Swedish and Providence approved

Two of Western Washington’s largest health care organizations announced Wednesday that their proposed business partnership is now a reality.

Swedish Health Services, which operates four hospitals in King County, and Swedish/Edmonds in south Snohomish County, has joined with Providence Health & Services, which runs 27 hospitals in five Western states, including Providence Regional Medical Center Everett.

Since October, when the partnership was first proposed, both organizations said patients would be better served through lower costs and improved medical services.

The two organizations are entering into what is being called an unusual, perhaps unique collaboration. It brings together Providence, a large Catholic health care organization based in Renton, with Swedish, a Seattle-based nonprofit without religious affiliation which, in Edmonds, also runs a tax-supported hospital.

The collaboration allows them to keep each of their names while sharing medical services.

“This is a novel approach,” said Dr. John F. Koster, president and chief executive of Providence Health & Services.

The two organizations announced that the new partnership was effective beginning Wednesday.

Swedish is joining a new Providence region serving the greater Puget Sound area. It includes all of Swedish’s operations in King and south Snohomish counties and Providence’s operations in King, Snohomish, Thurston and Lewis counties.

But even as they announced the completion of the deal on Wednesday, representatives of the two organizations said that neither patients nor employees will see any big, immediate changes.

Planning and organizational changes must come first. Financial, technology and information systems from both organizations will look for ways their systems can work together.

Five of the current Swedish board members will join the 19-member Providence Health & Services board, which will meet within the next month, Koster said.

Physicians from both organizations are excited about the ways they can learn from each other and share innovations, he said.

Eventually, patients from one organization will be able to receive services from the other.

“I would envision that they would now have (Swedish) doctors working at Providence Everett, and vice versa,” said Rod Hochman, Swedish’s president and chief executive.

And a blood conservation program pioneered at Providence Everett, which has gained international attention, may now be shared with Swedish.

The program reduced blood loss during surgery, in many cases decreasing or even eliminating the need for blood transfusions. And on average, patients recovered quicker.

Dave Brooks, chief executive of Providence Everett, said on Wednesday that it’s too early to know whether staff will need to be added or cut at the hospital because of the collaboration.

The Swedish-Providence partnership was reviewed by state and federal agencies, examining how both patient services and competition might be affected.

On Dec. 19, the state Department of Health told the two organizations that it had decided not to require a review process called a certificate of need, which can be lengthy.

On Dec. 29, the state Attorney General’s office decided it would not take action to block the proposed affiliation, but reserved the right to ask question or take actions as the alliance proceeds.

The Federal Trade Commission was actually the first government agency to decide not to raise anti-trust questions, a decision that was made on Nov. 29.

But both Providence and Swedish remained tight-lipped, declining to comment on whether action had been taken by the federal agency.

Prior to final approval, Providence had discussions with the Seattle archdiocese on the proposal. It also was reviewed by the boards of both organizations.

Initially, concerns were raised over how the collaboration might affect women’s reproductive issues. A limited number of elective abortions have been conducted at one of Swedish’s downtown hospitals, but the practice is now discontinued.

Instead, Swedish said it would make a donation to Planned Parenthood of the Great Northwest to open a new Seattle clinic, which would perform a variety of women’s health services, including birth control and abortion. It was planned in a building not owned by Swedish, but near one of its downtown campuses.

On Wednesday, Hochman said that the site of the clinic has yet to be determined.

Kristen Glundberg-Prossor, a Planned Parenthood spokeswoman, said that plans for the clinic are continuing. One site had been proposed but then fell through, she said.

“I think it’s Swedish making the transition, and they all have to deal with how the new affiliation is going to go,” she said.

Swedish and Providence also announced new roles for some of its administrators: Swedish’s Hochman will now serve as one of two group presidents for Providence’s five-state system; Providence’s newly created Western Washington Region will be headed by Arnie Schaffer, who previously oversaw its regional operations; and Kevin Brown, who has served as Swedish’s chief strategy officer, will become the new chief executive for Swedish Health Services.