Two major hospital systems in Western Washington are combining into what will become the largest medical provider in the state.
Perhaps as early as next year, Seattle’s Swedish Health Services will affiliate with Catholic hospital group Providence Health & Services, creating a super-sized organization officials hope can withstand the financial uncertainties of health reform and continue providing top-tier medical services.
The move will make Providence the fifth largest nonprofit health care organization in the country. It operates several divisions – including Providence Health Care in Eastern Washington, which runs Sacred Heart Medical Center and Holy Family Hospital in Spokane.
The affiliation with Swedish is not expected to alter the day-to-day operations of the Eastern Washington group.
Rather, the five Swedish hospitals and its dozens of clinics will work closely with Providence properties in Western Washington in a separate division.
Both nonprofit hospital systems have been treating patients in Washington for more than a century. Swedish was started by the Nordstrom family and will retain its identity and status as a non-religious hospital system.
Mike Butler, executive vice president and chief operating officer for Providence, said the agreement will be reviewed by the Federal Trade Commission for anti-trust concerns.
Under the agreement, the two hospital groups will create a new nonprofit organization. Butler said 10 directors of Providence’s existing board will be kept. Swedish will appoint five. The board will oversee all of Providence’s operations, finances and policies across the country.
No money is being exchanged as part of the affiliation. Executives from both institutions declined to describe the arrangement as a merger or acquisition.
Dr. John Koster, chief executive of Providence, called the move a “local solution to a national problem.”
“Health care in this country is at a crossroads,” said Dr. Rod Hochman, CEO of Swedish. “Having served (Seattle) for more than a century, we believe it is our responsibility to lead the region through these challenging times.”
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