Providence to affiliate with multispecialty clinic operator

February 15, 2014

Providence Health & Services and Pacific Medical Centers have announced plans to form an affiliation. The goal of the affiliation is to improve health outcomes for people in the northwestern U.S. while reducing the cost of care, according to the leaders of Providence and the secular nonprofit Pacific Medical Centers, known as PacMed. Providence and PacMed leaders expect to finalize their affiliation in late March.

To allow secular affiliates to remain secular and Providence Health & Services to maintain its Catholic identity, Providence Health & Services created a secular organization — legally referred to as Western HealthConnect. Under the affiliation, Western HealthConnect will become PacMed's sole corporate member. The structure allows PacMed to remain a separate secular 501c3 organization. This is the same model successfully used for Providence's secular affiliation with Swedish Health Services.

PacMed, which operates nine multispecialty clinics in the Puget Sound area, will remain a not-for-profit. Its clinicians will not be subject to the Ethical and Religious Directives for Catholic Health Care Services.

Under the affiliation, PacMed's current board of directors will become the PacMed community board. That community board will share governance responsibility for PacMed with Western HealthConnect.

Harvey Smith, president and chief executive of PacMed, said during a press call that PacMed has developed a successful health care delivery model in which patient satisfaction is high, as is reflected in surveys, and costs are reduced. However, without the scale that Providence brings, PacMed is unable to achieve broader improvements in the way health care is delivered. He said in a statement issued jointly by Providence and PacMed, "We need to collaborate with an organization that has sufficient resources and a similar community-minded mission and vision to succeed." Providence and PacMed said the affiliation will enable them to share best practices and take advantage of economies of scale in order to improve and expand their health care services.

Dr. Rod Hochman, president and chief executive of Providence, said in the statement that the affiliation "directly aligns with our core strategy to create healthier communities by collaborating with innovative partners. Only by working together will we improve health care and make it more affordable.

"Providence was drawn to PacMed because it is an example of an organization that has a successful model for delivering high quality coordinated care at an affordable cost and we want to support that in our community and increase access to this model," Hochman said.

Providence and its affiliates include 32 hospitals, more than 400 physician clinics and a network of other facilities in five states.

The Providence-PacMed affiliation requires the approval of the Pacific Hospital Preservation and Development Authority, an organization charged with supporting effective health care delivery for the vulnerable in Seattle-King County, and currently PacMed's sole corporate member. Until 2003, when it became a private, nonprofit organization, PacMed had been part of a city-affiliated public development authority.


Copyright © 2014 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.

Copyright © 2014 by the Catholic Health Association of the United States

For reprint permission, contact Betty Crosby or call (314) 253-3490.