Health and Fitness

Nurses Urge Oregon Attorney General to Investigate Proposed Merger of Providence Health & Services and St. Joseph

OREGON–(ENEWSPF)–Januyary 12, 2016. The nation’s largest nurses organization, National Nurses United (NNU), is calling on Oregon Attorney General Ellen Rosenblum to reject efforts by two large Catholic hospital systems to block public oversight into a merger that NNU warns could have a major impact on the cost, quality and availability of critical hospital services, NNU announced today.

Providence Health & Services (PHS) and St. Joseph Health System (SJHS) have asked Rosenblum to waive scrutiny of the proposed merger affecting governance and control of over 50 hospitals and numerous affiliated entities, in seven states—including eight Oregon hospitals, creating one of the largest Catholic hospital systems in the U.S.

NNU, which represents thousands of Providence and St. Joseph registered nurses in California and is also challenging the merger before the California Attorney General, says the merger needs the highest level of scrutiny — not a pro forma green light.

The request to Oregon’s AG for a waiver of a thorough review of the merger is concerning, nurses say, given the size of the chains, a potential reduction of services for Oregon patients, and St. Joseph’s history of patient care concerns—including providing the least amount of charity care of any Catholic system in the state of California, says Malinda Markowitz, an NNU vice president.

“NNU has substantial concerns about the impact of the proposed merger of these two hospital systems on patients, taxpayers, RNs and other employees, and the affected communities. The effort by the two hospital systems to block public review symbolizes exactly why careful scrutiny is needed,” Markowitz said.

In conducting a full review, NNU is urging Rosenblum to assess the impact of the proposed merger on:

  • Charity care and other community benefits in Oregon. In their application for waiver, the hospital systems have only described in the vaguest terms how the consolidation would enhance healthcare for underserved populations, including the poor and vulnerable. However, data submitted by PHS to the Oregon Health Authority shows PHS’s charity care spending as a percent of its operating expenses in 2014 (just 4.4%, below the 5.62% average—declining from PHS’s 10.4% in 2012 and 11.28% in 2013) was far below the state average.
  • Reduction of reproductive and end of life care. Ethical and religious directives for Catholic healthcare prohibit Catholic healthcare providers from offering a range of “beginning of life” and “end of life” services.
  • Negative impacts on cost and accessibility of healthcare services. Though the health systems contend that this is a mission-based merger, it is clear from their “Request for Written Waiver,” say nurses, that PHS and SJHS will reap financial benefits from an optimized borrowing strategy enabled by the consolidation. Meanwhile, the hospital systems have not specified what will happen with increased profits, and whether they will benefit the communities they serve. According to several studies, including a 2007 Journal of Economics study, mergers help bring costs down for health systems, but those savings don’t trickle down to the patient, and can actually cause patient costs to go up.

“This merger must ensure that all the hospitals remain open, that all jobs and services are maintained—and that the new organization is held accountable for providing charity care and community benefits to the communities it serves,” said Markowitz.

Nurses say they are especially concerned about a merger when the California-based St. Joseph Health System has already been the subject of a report, issued in August, “Falling from Grace: St. Joseph Health RNs Raise Ethical and Patient Care Concerns,” in which NNU cites a number of areas that reflect “priorities of present day corporate management who increasingly value maximized profits at the expense of patients, RNs, taxpayers and SJH’s own stated principles.”

In particular, SJH and its hospitals, the report asserts, have:

  • Reaped millions in tax subsidies from California taxpayers, while providing among the lowest amount of charity care of any Catholic system;
  • Invested patient care and tax subsidized funds into for-profit companies, including hedge funds in the Cayman Islands;
  • Launched a system-wide campaign to restrict the rights of its RNs to organize a union to advocate for improved treatment of patients and RNs;
  • Been charged with scores of violations of federal law in the past year as a result of their anti-union campaign against their RNs;
  • Imposed sweeping cuts in disability, medical leave, and retirement security on thousands of SJH employees, while paying exorbitant executive salaries and benefits.

The full report is available at:

“We are opposed to any and all mergers that don’t guarantee patients and their communities a higher standard of care,” Markowitz said. “Until the issues of concern to RNs and patients are adequately addressed, NNU strongly urges Attorney General Rosenblum not to waive an investigation—and instead to conduct a full review of the transaction, including holding public hearings, to ensure this is the right move. The communities served by these hospitals deserve no less.”

NNU/National Nurses United is the largest organization of registered nurses in the United States with 186,000 members in all 50 states.