An agreement to separate Providence's home health and hospice services into a private equity-backed joint venture is being considered by state regulators under Oregon's mergers and acquisitions law.
Oregon Health Authority officials said in a letter to a Washington, D.C., attorney representing Providence's trading partner Compassus that the deal requires review by the Healthcare Market Oversight (HCMO) program. I admitted something.
Providence St. Vincent Medical Center, Portland, Oregon, August 2, 2023.
Christina Wentz Graf / OPB
The program gives state regulators the power to impose conditions on mergers and acquisitions. It can also refuse to approve transactions it deems to be anticompetitive or harmful to the health of consumers or the nation.
Providence is the fifth largest nonprofit health care provider in the country. Compassus is a private equity-backed provider of home care services in more than 30 states.
The state's review of the contract is a victory for opponents, including the Oregon Nursing Association and some staff and patients of Providence's current program. They argue that the joint venture will lead to cost savings, increased workload for staff and reduced services for patients. .
Providence and Compassus originally intended to complete the transaction by the end of the year, according to licensing records obtained by the Oregon Nurses Association and posted on HCMO's website.
That schedule is likely to be disrupted by the state's review. HCMO requires at least 30 days and up to 180 days to complete the review.
Earlier this month, the nurses union's general counsel, Thomas Doyle, sent a letter to state regulators saying that even though Providence had begun an internal reorganization and filed a written report, it had not yet given the required notice regarding the joint venture. I filed a complaint that I had not submitted to the HCMO program. On November 8th, it sent a letter to the licensing authority stating that the deal would be completed on December 29th.
“There is a strong case that the proposed transaction requires HCMO approval;
“Providence is attempting to create a sense of urgency by either circumventing the approval process or filing for approval at the last minute,” Doyle wrote.
Providence spokesman Gary Walker said the nonprofit submitted the necessary documents. Lawyers representing Compass requested an evaluation of whether the transaction required review on Nov. 21, according to state regulators.
“We intend to work closely with OHA and follow all requirements of the review process,” Walker said.
Officials of the monitoring program are posting online the public comments they have received regarding the proposed joint venture.
Dozens of comments submitted so far all oppose the deal. Many of them are written by employees of Providence's home health and hospice teams.
In one such comment, Gina Nelson, a nurse, said that as part of the Providence Benedictine home health team based in Mount Angel, she works with elderly people and children who need home care in rural areas. I wrote that I am collaborating with
She expressed concern that the joint venture would result in staff being laid off, especially experienced nurses like her who command higher wages, and that home care workers would be limited in the time they could spend with patients.
“Let’s say no to this,” Nelson wrote. “Oregon is unique. We care about our people and we need to make sure that too much money goes into health care.”
In response to previous public comments, Walker said Compassus shares Providence's values and commitment to patients.
“While it is accurate that Compassus is partially backed by private equity funds, the company is primarily owned by other faith-based health systems, including Ascension Health and Bonn, to name a few. It is important to note that we have a similar joint venture with Secours Mercy Health,'' Walker wrote.
License records provided by Providence show that Compassus has a complex ownership structure. Its two biggest stakeholders are investors in St. Louis-based Ascension Health Alliance and private equity fund TowerBrook V.
TowerBrook Capital Partners, which manages the fund, said in a 2018 press release that TowerBrook V investors include “public pension funds, sovereign wealth funds, financial institutions, endowments and families in the United States, Europe and Asia. It includes “offices”.
In October, Providence announced plans to retain a 50% stake in a new joint venture called Providence at Home with Compassus, while handing over management of home health care and hospice operations to Compassus.
The deal includes locations in Oregon, Washington, California, Alaska and Texas.
In the two years since the HCMO program began, states have reviewed or initiated reviews of 43 health care transactions. Regulators have not yet tried to block them, but they have imposed conditions on some deals. A controversial proposed merger between Medicare providers Care Oregon and California's SCAN Group was voluntarily withdrawn last year after public opposition.
