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The Oregon Health Authority has shot down a request by St. Charles Health System, a nonprofit that runs four hospitals in and around Bend, to fast-track its acquisition of a chain of doctor-owned neurosurgery centers.
St. Charles Health System has filed for an “emergency exemption” to a new state regulatory review process, saying the chain, known as “The Center,” was in danger of going under due to an exodus of doctors and declining payments from insurance.
The Center has 200 employees, and St. Charles executives had said they would employ “a substantial number” of them following the deal’s conclusion.
OHA, however, said St. Charles hadn’t provided “concrete statements” that existing staff would be brought on at competitive salaries. Furthermore, regulators reviewed The Center’s financials and, in an Aug. 2 letter, concluded they showed a degree of financial stability and did “not indicate an immediate threat of insolvency.”
OHA’s action precludes a fast-track approval only. A regular approval is still in the offing. But the St. Charles action indicates that OHA’s Health Care Market Oversight office may take a hard look at mergers as industry consolidation gathers pace.
Among the deals it is expected to consider soon is Oregon Health & Science University’s blockbuster acquisition of Legacy Health. OHSU and Legacy have yet to apply for approval from the health authority.
In a statement to WW, St. Charles Health System chief executive Dr. Steve Gordon said he was disappointed in the decision—and then went on the offensive.
“I believe this action raises serious questions regarding the HCMO Program itself and whether some sort of legislative reevaluation is merited,” he wrote.