BEND, Ore. (KTVZ) – The Oregon Health Authority has reviewed and approved St. Charles Health System’s proposed acquisition and combination with The Center, a group of physician-owned orthopedic and neurosurgical centers – but , the hospital group plans to appeal with several conditions.
OHA’s Healthcare Market Oversight Program, created by lawmakers two years ago to consider such merger proposals, issued the order Thursday after examining impacts across four areas: cost, access, quality, and capital. and approved the transaction with conditions.
St. Charles and The Center announced in July that they had signed a letter of intent seeking an emergency exemption from the review process while seeking an expanded relationship to accelerate their integration plans.
But OHA rejected the emergency route in August, saying there was no imminent threat of bankruptcy and St. Charles had not presented solid evidence that existing employees would join at competitive salaries.
Regarding one of the conditions included in the post-preliminary order, OHA stated: “It is important that St. Charles does not increase costs for patients by imposing new facility fees on outpatient services provided by center providers.”
OHA noted in its findings that patients at the center are not charged facility fees for services provided by providers in outpatient settings. Meanwhile, it read: Charles receives higher commercial fees compared to centers for many of the same outpatient procedures, in some cases more than five times as much as centers. ”
Therefore, OHA stated that for 10 years after the acquisition, “St. Charles shall not charge facility fees for services provided by the former The Center provider that currently do not have facility fees.”
OHA reviewers also said the deal was “unlikely” to impair access to services currently provided by the center. However, “Given the overwhelming market share of companies, it is important that healthcare providers be able to determine the appropriate environment in which to treat patients, and that healthcare providers are able to maintain relationships with other hospitals and facilities.” “It will be,” he added. There are several conditions to ensure that this condition lasts for at least five years.
In other areas related to quality of care, OHA found that this partnership could actually improve quality in the community, including in areas such as fall risk screening, smoking cessation, and providing patient access. , he pointed out that St. Charles performed better than Center. Even health information.
Regarding capital, OHA said the acquisition could actually “increase the number of patients receiving charity care and potentially reduce costs for patients with incomes up to four times the poverty level.” Ta.
Health officials will also direct the preservation of various records to review the impact of the St. Charles-the-Center agreement one, two and five years after its conclusion, to determine whether the parties are keeping their commitments. He said he would follow up by evaluating the situation.
St. Charles Health System provided this statement to NewsChannel 21 on Saturday, saying it plans to appeal the decision and at least one condition.
“Overall, we believe the approval from OHA’s Healthcare Market Oversight Program is good news because the integration of the Center and St. Charles is critical to maintaining essential health care in our community. Masu.
“However, we are not in full compliance with all of the conditions outlined in the approval. In particular, one provision restricts the way we provide orthopedic services to our community for a period of 10 years. This is longer than most trading conditions we have, but we believe this is unreasonable given the rapidly changing healthcare landscape. I am.
“We are moving forward with the OHA process to appeal this decision, which will require a contested case hearing.Regardless of the hearing, the transaction has been approved and we will continue to work with the center team. We will continue to move forward with our integration plans,” the hospital system said.
Willamette Week, which tracks St. Charles and The Center deals, said in a report Friday that OHA’s Healthcare Market Oversight Program was created by the Oregon Legislature in 2022 to review major healthcare mergers and acquisitions. He pointed out.
The report said the order reviewing and approving the agreement with Central Oregon State “provides some insight into HCMO’s thinking as it considers a “major merger” between Legacy Health University and Oregon Health & Science University. ”
The HCMO report says the agreement between St. Charles and The Center creates a “vertically integrated system” that could lead to higher prices without improving care, Willamette Week reported. did. “As such, the HCMO restricts St. Charles from engaging in certain common anticompetitive strategies in the health care industry, such as requiring newly acquired physicians to use St. Charles facilities.”
